Bush, Blair push African debt relief

[vern_humphrey]

Philip P:

I applaud your taking the time to read these materials. I’m sure you also continued reading, where it says

"In other cases, although the money was used for legitimate purposes, financial conditions beyond the government’s control made loan repayment impossible"

Talk to any commercial loan officer and he will spend hours on his favorite subject – how to make sure that the person borrowing the money doesn’t face “financial conditions beyond his control that make repayment impossible.”

That’s part-and-parcel of the business plan, and both the borrower and lender work together to ensure the plan is realistic, takes forseeable contingencies into account, and can be expected to produce a profit, not a loss.

Much of the money that WAS used in international debt went to unrealistic and sometimes disasterous projects. For example, the deforistation of the Amazon rain forest was financed by the World Bank.
Philip P:

I
“countries cannot file for bankruptcy. There is no such procedure, no arbitrator. At the international level, the creditors, not a court, decide whether and under what conditions to require a country to pay its debt.”

Bankruptcy is not a GOOD thing. And much of the bankrupt status of the countries in question is due to bad government, bad management, and outright theft.

We should therefore NOT re-start this cycle. If we are to lend money, it must be with appropriate controls, and with guarentees that can be activated if money is ripped off or mis-spent.
Philip P:

IMany of the creditors are in the U.S. and Europe. It is incumbent on us, then, to pay attention to such distinctions and not to allow the irresponsibility of some governments to doom the people of all indebted nations.

But here’s the problem – the sound nations, those that used the money wisely, don’t HAVE any debt! (Or at least not much.) They, like good businessmen have used the money properly, and paid off much or all of the debt.

They nations that are struggling under huge debt loads are the very govenrments who should have never been given the money in the first place.

So the “solution” only benefits the BAD governments, not the good ones.