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From: •••@••.•••
Date: Fri, 1 Oct 1999 14:25:22 EDT
Subject: Re: rn: Jubilee success- foreign debt relief
To: •••@••.•••
In a message dated 10/1/99 10:58:40 AM, •••@••.••• writes:
<< He's forgiving debts owed to "the United States", which presumably has
nothing to do with money owed to private US banks or to the IMF. He may be
making a significant gesture, or he may be talking about peanuts. Does
anyone know? >>
probably peanuts to us, worlds to them. And if it allows them to have a
monetary policy not geared to paying bank funds probably ill-used in the
first place, it is agood, a small good perhaps but still a good.
jim
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Dear Jim,
We live under a regime in which humanitarian sympathies are exploited in
order to bomb nations back to the stone age and spatter them nuclear
pellets. Every policy of our imperialist governments is justified by one
noble excuse or the other. In such an environment I cannot take relief
from nice-sounding announcements without at least finding out what the
annoucement is really about.
Here are a few statements from Jan's original posting and from Ian's
posting below...
Clinton said funding for the expanded debt relief was
included in his request to Congress last week for almost $1
billion to fund the U.S. contribution to debt relief.
The countries in question owe the United States about $5.7
billion. But since the debt is valued at much less than its
face value, the entire amount could be financed with the $1
billion budget request, Summers said.
Some $40 billion of debt relief had already been agreed
several years ago. Most of the $70 billion now agreed to
still appears to be debt that was not being repayed anyway.
What we have, then, is a situation where there is lots of uncollectable
paper debt - money which the third third-world owes to Western banks and
governments but which they have no ability to pay.
One of the first thing worth noticing here is that we aren't being told how
much the total debt of these third-world countries is. With all the
forgiveness, are they still strapped with overwhelming debt payments, or
not? We should look this up, but in the meantime my assumption would be
that the debt has been reduced to a level where the countries can just
barely make their payments. There is no evidence, in what we've seen, that
they will be able to adopt a "monetary policy not geared to paying bank
funds".
Another thing worth noting is the fact that forgiving these debts does _not
transfer funds into the coffers of third-world countries. Forgiveness
means that the debts will be torn up, debts which couldn't be repaid
anyway. It reduces the long-term worry level, perhaps, but it does not
provide a windfall of funds which can be used for 'social programs'. I
think Clinton's statement was very misleading in this regard, demagogary in
fact, and that this should taken into consideration in assessing the
sincerity of the whole annoucement. In fact, if forgiveness means the
countries will be required to launch programs they can't afford, then even
the silver lining in this arrangement is a farce.
Another thing to note is the fact that $1 billion dollars must be allocated
to 'finance' the relief of the $5.7 billion. If the debt were to the US
government, it could simply be forgiven without any corresponding budget
allocation. What this apparently means is that $5.7 billion is owed to
private banks, and that the US governemnt (ie, us taxpayers) is going to
give $1 billion dollars to these banks in return for the debts being
written off. Thus what's _really going on, is that _banks are being given
a windfall. They are being given $1 billion dollars to reimburse them for
loans which they never should have made in the first place, and which have
already been written off. This is a corporate bail-out, not a
poor-people's bail-out.
The land of happiness is tempting, but the land of truth is more useful in
the long run.
rkm
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From: Ian Burn <•••@••.•••>
To: "'•••@••.•••'"
<•••@••.•••>
Subject: RE: Jubilee success- foreign debt relief
Date: Sat, 2 Oct 1999 09:29:27 +1200
Dear RN
following is comment from a friend who runs a Latin America watch
organisation here in New Zealand
Some $40 billion od debt relief had already been agreed several years ago.
Most of the $70 billion now agreed to still appears to be debt that was
not being repayed anyway.
IMF has just visited Colombia which has a contracting economy (-6%).
Still, like global warming, it is good to hear Clinton saying the right
things, even if reality is something different.
$1 billion is not much ......how much do they owe the United Nations?? ...
Paul Bruce
Ian Burn
International Secretary - Green Party of Aotearoa New Zealand
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