Cancel the debts!

Issue 

Cancel the debts!

In the aftermath of catastrophic destruction by hurricane Mitch, foreign governments have now pledged some US$200 million in assistance to Nicaragua and Honduras, the countries worst hit. This sum, while considerably more than the derisory amounts first offered, still falls well short of what is required.

Even if the US$200 million were doubled, it would be inadequate while these countries remain burdened by debt: Nicaragua alone pays some US$3 million per day in debt servicing.

The hurricane destruction has made obvious what was already true: Nicaragua and Honduras cannot pay their debts. The French and British governments have, realistically, written off what they are owed.

The British government has called for a global moratorium on the two countries' debts — that is, a delay in repayment. This is too little, because the people of those countries cannot pay, because they should not have to pay and because this is true of Third World debt in general, not just that of Honduras and Nicaragua.

Much Third World debt is the result of theft by dictators like Suharto in Indonesia and Mobutu in Zaire, in which creditor banks and governments frequently connived. But even where that is not the case, the debts have in reality been repaid many times already.

The Third World countries are trapped in perpetual poverty by a debt that drains their wealth and leaves them even further in debt. According to IMF figures, the "developing countries" in the eight years 1990-97 paid a total of more than US$1.6 trillion in interest and principal; during the same period, their debt increased by some US$600 billion.

These figures tell us not only that the governments and corporations which are bleeding the Third World dry should cancel the debt, but that they should inject a massive amount of funds into real development in the Third World.

Cuba, itself a poor country and one that suffered hurricane damage earlier this year, has already set an example of generosity by cancelling the US$50 million that Nicaragua owed it.

If Cuba, labouring under a decades-long US economic blockade that has cost it US$60 billion, can make such a gesture, why cannot the wealthy US afford to be similarly magnanimous to its debtors? At the moment, the US$80 million that the US has pledged for Central American hurricane relief is rather paltry compared to the US$17 billion that the US-organised contra war is estimated to have cost Nicaragua in the 1980s.

Predictably, the Howard government has outdone even the US for sheer meanness. Foreign minister Alexander Downer announced on November 12 that the government would not cancel Nicaragua's $5.8 million debt to it. Australia has given only an insulting $1 million to hurricane relief — less than the lump sum given to a single retiring politician like Ian Sinclair.

Justice, common sense and simple humanity demand at the very least the unconditional cancellation of the entire Third World debt. Since none of these qualities is very common in governments of imperialist countries like Australia, it's up to all of us to fight for this demand, against those governments.

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