Politics: Economics: G8 Summit agrees to write off much Africa debt, World Bank agrees

Yesterday the G8 Finance Ministers in advance of July's Summit meeting in Gleneagles, Scotland UK, agreed to write off the full indebtedness of several African countries which had maximized democracy and minimized corruption. Today, the new head of the World Bank, Paul Wolfowitz, praised the G8 action from Abuja, capital of Nigeria, one of the most corrupt and most indebted African states with large resources - that was not included on the list to be helped in this round.

All figures are in USA Dollars

Wolfowitz expressed hope that Nigeria would get the help it needs in due course in getting out from under the $35 billion, the largest national indebtedness on the African continent. But that is a unique problem to be handled by the Paris Club, since Nigeria is also the seventh-largest in national income among the world's oil-producing states. It further neglects the very areas where the oil is extracted, and has created a rebel movement because of its siphoning of huge amounts away from the producing areas and into the pockets of state officials. More than that, two large international megacorporations who extract oil there have admitted to serious misconduct and human-rights violations against the surrounding populace.

But today's lead story is a much happier one for the recipients. 18 of the world's poorest countries, most in Africa, will have their debts cancelled outright, and this will not affect future income from donor countries. Daniel Balint-Kurti (AP) reports in The Washington Times:

Britain's Treasury chief Gordon Brown said Saturday the G8 finance ministers had agreed to write off 100 percent of the debt of 18 impoverished countries that had met minimum standards of good governance on condition that savings would be used for health, hospitals, nurses, education, schools, teachers and infrastructure - rather than lining the pockets of government officials.

Fiscal conservatives may not want to follow the leadership of Tony Blair and his second-in-command Gordon Brown, nor George Bush and the new American neo-con heading the World Bank, Paul Wolfowitz, but the simple fact is that these monies were not recoverable. I signed the petition to the G8 Summit leaders, but doubt it had any more value than that of a public confirmatory statement for what G8 had to do. All unpayable debt can do generate itself into an ever larger statistic; and on the dark side, if forgiven, fool other states into thinking they can wrack up any amount of debt they can hustle, and never pay. The middle-class clerical movement and leftwing outfits sponsoring the petition never once mentioned the serious ambiguity of urging the action we urged. On the other hand, the nations to be helped are in large part closer to status too aptly described by the cruel term "basket cases." But, they have all of them being debt-cancelled and helped in this round, this one redeeming feature beyond the basic co-humanity we all share - that is, they have maintained and in some cases imporived basic democratic insitutions thru all this difficulty. $40 billion dollars of debt have been erased from the books of international finanicial institutions, chiefly the World Bank.

Now, this act does not result magicallty in proposperity for the 18 nations who benefit. In a way, the benefit is merely to remove the bad ink, rather the bad digits following their names in the computerized ledgers of the account-keeping bodies.
And those bodies have to write off as well those same figures as "assets," if long ago they neglected to have done so. Perhaps a little reality for some of them, as well.

But how do the countries thus "liberated" from the bad numbers in archaic ledgers become productive in an economy interactive with the world economy today? Back to square one, but it's the real square one. - Owlb


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