Iraq and Global Debt Relief
Despite the military setbacks in Iraq, President Bush can cite one success: The Iraqi economy will be more secure because the US has won pledges from many nations to reduce Iraq's huge debt.Skip to next paragraph
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The obvious question, though, is: Why stop with Iraq?
If poverty helps drive terrorism, then many other nations saddled with unpayable debts are deserving of financial forgiveness by richer nations, since terrorists can and do hide and train themselves in many of the world's poorest areas.
This past weekend, during the spring meeting of the International Monetary Fund and the World Bank, the US came under renewed pressure to support further debt relief.
The widespread forgiveness of much of Iraq's debts has set an example of what the US can do when it musters its political will.
By the time the IMF meets again this fall, the Bush administration will, it is hoped, have broadened its horizons in the global war on terrorism to see debt relief as a prime weapon of mass enrichment, and protection.
The US must make that commitment because an international program launched in 1996, known as the Heavily Indebted Poor Countries Initiative, expires at the end of the year. The initiative called on rich nations to reduce the debt of the most financially strapped nations, especially in Africa. But only a handful of such countries have been relieved of massive debt burdens, either by outright forgiveness of some $31 billion so far, or indirectly through large grants.
And while it's at it, the Bush administration can help revive the Millennium Development Goals set in 2000 by some 189 countries. The primary goals are to cut poverty rates in half by 2015 and achieve universal primary education. "On current trends, most of the goals will not be met by most countries," said World Bank President James Wolfensohn.
The bank chief noted that the world spends $900 billion a year on defense but only $50-60 billion on development. "I suggested humorously the other day that if we spent $900 billion on development, we probably wouldn't need to spend more than $50 billion on defense." That's the US logic behind Iraq's debt relief, too.
Much progress has been made to reduce poverty. The percentage of people living on less than $1 a day fell by almost half between 1981 and 2001, down to 21 percent. China's and India's adoption of market economies accounts for much of that progress.
But with more aid and debt relief, the rest of the world's poor can get a leg up, too.