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we can invest in a better, more just and sustainable world
Money makes the world go round but what happens
when millions of people dont have enough? What happens when they
pay more for debt service than health care and education?
continue to mortgage the future for millions of people.
How it started
Developing countries loaned billions of dollars, with interest, to nations with developing
economies. Much of this money was not properly supervised. Dictators often used it for
wasteful, corrupt projects.
The situation worsened in the 1970's. Oil-exporting countries invested growing oil profits
in European and U.S. banks. The banks loaned this money to developing nations for a
profit. Interest rates soared in the 1980s, outpacing developing countries' ability to pay.
A growing concern
By 1997, developing nations' total debt to developed nations, the World Bank and the IMF
was $2.17 trillion, up from $1.4 trillion in 1990. Developing countries were paying rich
nations $717 million in debt service every day.
This money is
unavailable for the health, education and economic development of the worlds poorest
nations. The burden hits the poor the hardest.
Solutions for a better future
Something is being done, though we need to do more. In March 1989, the Brady Plan, named
after the U.S. Treasury Secretary at the time, began allowing countries to negotiate
substantial reductions in debt and debt service. It encouraged many emerging market
countries to adopt and pursue ambitious economic reform programs while regaining access to
international capital markets.
According to a
recent statement made by the Guardian newspaper, Britain will spend 100 million pounds a
year on debt relief, helping more than 30 countries repay debts to the World Bank and
African Development Bank.
Theres more we can do
A new British-USA proposal would cancel debt from
developing countries. Britain would
write off ten percent of the debt owed by 32 of the world's poorest countries to the World
Bank and others by putting aside $180 million a year. The IMF would also sell $85 billion
in gold to pay for those countries' debt. A lot of money, but readily affordable after a
small adjustment in military spending.
Rising military spending
The UN states that annual military spending will rise to nearly $950 billion by the end of
2004 - a substantial amount of the world's resources. Reducing this by just 10% would be
enough to pay down the entire Third World debt in less than 20 years.
Support this program and make a difference in the lives of millions of people.
This will help ensure a better, more just, sustainable world for all of us.
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by Denessa Bachelor, Hearts & Minds Volunteer
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http://www.heartsandminds.org/articles/worlddebt.htm - online November 19, 2004,
latest changes October 8, 2006