Debt Relief For Poor Countries – Archive Article
December 13, 2008

BROADCAST ON FRIDAY AUGUST 6 1999 ON RADIO 2GB’S “BRIAN WILSHIRE PROGRAMME” AT 9 PM, AND ON AUGUST 8 1999 ON “SUNDAY NIGHT LIVE” AT 10.30 PM.

RADIO 2GB NEWS COMMENTARY

Debt relief for poor countries has become an important issue for the world’s wealthiest countries. But a great deal more remains to be done in ending the debts.

One of the biggest scandals in the world today is the way in which poor Third World countries pay more money to the West than they get from the West as foreign aid. They help our development far more than we help theirs.

This is called the “debt crisis”. It began largely after the 1973 Arab oil price increase. Throughout the 1960s, the price of oil actually went down and so the Arabs assisted the West’s rapid economic growth. But then during the 1973 Middle East war, the Arabs used the oil as a weapon. They had the West over a barrel. The West therefore had to pay far more for the oil.

But the money that poured into the Arab world created many problems: there was too much money in too little time. Western banks said to the Arab leaders that there was a moral duty to lend the money to poor Third World countries. They did so.

But the Third World have had problems repaying the debt. Or, more accurately, the interest. In many cases a sum of money equal to the original sum has been repaid – but the poor countries have been locked into a spiral based on their interest repayments.

Linked to this, some Third World leaders were corrupt and so used the money for their own purposes. They may now be out of power but the money has still to be repaid.

A good example of this is the Bataan nuclear power station near Manila, the capital of the Philippines. This was built by President Marcos on an earthquake fault only 100 KMs from Manila. The plant cost three times its original price because so much money went out in bribes.

I was with Mrs Aquino in January 1986 on the night of her final election rally when she promised not to proceed with the reactor. She kept that promise as President. The reactor has never been used. Indeed, a team of international inspectors has said that it can never be used because of the dangers involved.

But the Philippines to this day pays the equivalent of A$250,000 per day as the interest on the loan that has never produced – and will never produce – one watt of electricity.

Jubilee 2000 is an international campaign run by churches and others pushing for the cancellation of debts by Third World countries. Members of Wesley Mission were among the 300,000 signatures collected for a petition that went to the Australian Parliament and to this year’s June meeting of the G7: the leaders of the seven richest industrial countries, who met in Cologne, Germany.

President Clinton and Prime Minister Tony Blair were among the G7 leaders that expressed sympathy for the aspirations of the Jubilee 2000 campaign. The Cologne Summit agreed to do some debt relief. But much more remains to be done.

The Jubilee 2000 campaign shows what can be achieved when international public opinion is aroused. Wesley Mission has been pleased to be involved in that campaign and looks forward to the next stage.