By Corey Boles
When the Chretien Liberals campaigned for re-election in 1997, there was no mention in their platform of radically changing Canada’s foreign aid policy. The Canadian public dutifully voted them back into office, oblivious to the fact that our elected officials were planning to forgive the majority of its loans to small, impoverished nations.
In a speech in Winnipeg last month, Prime Minister Jean Chretien announced his government’s intention to forgive loans to small nations, who because of their state of poverty, are unable to repay the debts they owe to Western nations.
So great is the burden these loans place on the fragile economies of these third-world countries, that the interest alone that they pay on these debts is often larger than all other national spending. In Honduras, for example, 80 per cent of government revenue goes towards debt repayment.
There are two immediate concerns with this proposal that come to mind. Quite often these debt-ridden countries are run by military autocracies that have little concern for the poverty which their people live in.
If Western nations simply give more money to these governments, what will stop them from spending money in less-than-ethical ways, such as increasing their military capabilities? Perhaps Canada should look at home first, at our own social problems, before we think about helping others.
The federal government press release said: “Canada and its G-7 partners must continue working on ways to better assist the poorest countries in reducing their debts. But relief must be targeted wisely so that it will not underwrite military spending in the receiving countries.”
What guarantee does the Canadian public have that these countries will be significantly better off if they are not compelled to pay back these loans?
Many third-world nations aren’t exactly stellar examples of modern democracies. More often, they are autocratic or military regimes, whose governments have little concern about the welfare of their people. What proof is there that if Canada and other countries absolve these debts, there will be any change in the economies of these poor nations? Surely, promises from third-world dictators aren’t sufficient.
The Canadian government is not alone in considering this idea.
Other G-7 nations, such as Germany and Britain, have similar plans regarding third-world debt absolution. Religious organizations are, for the most part, leading the charge, with the Pope making the proposal his personal crusade.
And the movement is gaining steam as the turn of the millennium charges forward. Its goal is to urge industrialized nations around the world to forgive poor countries the money they have loaned them over the years.
The World Bank and IMF released a list of 41 countries to be considered for debt absolution. As far as Canada is concerned, there are currently eight nations that top its list: Bolivia, Guyana, Burkina Faso, Cote d’Ivoire, Mali, Mozambique and Uganda. Bolivia and Uganda have already received $1.4 billion US in absolution. The government hopes to expand this list to include names like Honduras, Haiti, Malawi and even Afghanistan.
The argument in favour of third-world debt absolution states that debt repayment prevents these poor nations from rising out of their impoverished state because of the crippling interest payments they are forced to make.
According to Bishop John Baycroft, head of the Ottawa Anglican Church, it is the moral obligation of industrialized nations to forgive these loans.
“We need a moratorium on debt,” Baycroft has been quoted as saying.
On the surface, it would be hard to argue that forgiving the debts of these countries is a negative thing. But, there are serious considerations that must be weighed before such a decision should be made.
The moral argument Baycroft and other religious leaders make isn’t one that is easily defensible. The idea that Canada has a obligation to absolve third-world debts simply won’t fly.
Canada has many social ills that plague its own development that it should deal with before it starts offering help to other nations.
While it may be true that our country’s problems aren’t on the same scale as the poverty that affects third-world nations, they still should not be ignored. All one has to do is look at some of the native reserves, where residents live in squalid conditions, or at the homeless problem in large urban centres like Toronto or Vancouver. Perhaps our government should be more concerned with solving its own problems, before it proposes to hand out more money to others. Canada is owed about $1.2 billion by 15 of the poorest nations around the world. That is a fair chunk of money that would go a long way in solving some of Canada’s social problems.
It’s not realistic to argue that all aid to foreign countries should be cut — serious problems do exist in African and Central and South American countries. But to consider forgiving all debts incurred by these poor countries, while on the surface may be an admirable idea, needs much more debate before it is accepted.
The Canadian public should be given the opportunity to vote on this proposal. The Chretien government should go back to the people that put them in office to get their opinion on the matter. Until this happens, a responsible government would resist the urges of religious and other groups to unilaterally forgive debts owed to it.