MIM NOTES No. 197,		November 1, 1999

Clinton's call for debt relief doesn't amount to much

President Clinton has spoken for debt cancellation to the poorest 
36 countries of the Third World. The only practical implication 
Clinton's statement seems to have though is that he will press 
Congress for $1 billion to pay for debts owed to U.$. agencies, 
debt which makes up only 3% of the total debt burden of these poor 
countries. Of course $1 billion is a drop in the bucket relative 
to the debts and super-exploitation of the Third World.

Although Clinton's announcement at the annual meeting of the World 
Bank and International Monetary Fund was widely hailed as a big 
offer, this is not much of a change from the original G7 agreement 
announced in July to forgive 90 percent of the debts of Heavily 
Indebted Poor Countries (HIPC). These debts are generally 
considered unpayable. Even after the currently planned debt relief 
these poor countries will still owe about $45 billion.(1)

The HIPC countries "owe" $5.7 billion to the U.$. but even the 
U.$. government understands that this is not going to be repayed 
by countries in severe poverty so they formally value this debt at 
$1 billion.

The G7 debt relief plan would only cut $70 billion off of the poor 
countries' $214 billion debt burden.(2) Half the total debt of 
these countries is owed to the U.$., Japan, Britain, Canada, 
France, Germany and Italy (the G7 countries), the other half is 
owed to the World Bank and IMF.

The Clinton administration has also made this 100% debt relief 
conditional: only debt accumulated before a cut-off date (in the 
late 1980s or early 1990s) will be canceled and interest 
accumulated after these dates and fresh loans to cover this 
interest will not be covered.(3)

Clinton's offer requires countries to use the debt relief to 
"finance basic human needs." Clinton said "Any country committed 
to reforming its economy, to educating and vaccinating its 
children, should be able to make those commitments and keep 
them."(2) This nice rhetoric means Clinton is requiring these 
countries to do what the U.$. wants for a small price: forgiveness 
of a debt that was never going to be repayed.

While the goal of educating and vaccinating children in the Third 
World is clearly a good one, these nice words from President 
Clinton should not be taken to mean that the imperialists have had 
a change of heart and now care about the Third World peoples who 
they exploit and oppress daily.

Reforming the economy of a Third World country to meet the 
standards of the capitalist world generally means worsening the 
standard of living and health of the general population of the 
country. It's not clear how Clinton expects to reconcile this 
requirement of economic reform with the requirement of social 
programs for children.

As the international imperialists fall into step Britain announced 
that it would consider 100% debt relief on a case-by-case basis 
for poor countries.(4) This is even less committal than Clinton's 
pledge, although the net result will likely be similar. Clinton's 
wording makes his 100% debt relief sound universal for poor 
countries but the conditions attached will require case-by-case 
approval.

According to the United Nations Development Program, canceling the 
external debt of the 20 poorest countries in the world could save 
21 million children's lives before the year 2000. As the Jubilee 
2000 campaign points out, "that means the uncancelled debt could 
be responsible for the deaths of 130,000 children a week till 
2000."(5)

An unscientific poll of 45,153 people visiting CNN's web site 
found only 10% agreeing with MIM that Clinton's cancellation of 
debts to the Third World did not go far enough. 54% said it was 
overly generous and 36% said it was about right.(6)

What was especially interesting about the poll running on the web 
site the afternoon of September 30th is that it was accompanied by 
no article explaining Clinton's actions. Indeed the last available 
article on debt relief was three days prior and had nothing to do 
with Clinton's actions on September 29th. Hence we conclude the 
response of the mostly imperialist country visitors to the CNN 
site was knee-jerk.

Note:
1. Dallas Morning News 30 Sep 1999.
2. BBC 29 Sep 1999.
3. Irish Times, Oct 1, 1999.
4. BBC 30 Sep 1999.
5. www.jubilee2000uk.org/action_today. html
6. www.financialtimes.com/ 30Sept99