PHA-Exchange> The terrorism of debt

[claudio]

From: "Marc Bombois" <mbombois at telus.net> (edited)
>
> THE TERRORISM OF DEBT
> By Wanda Fish
> Posted at http://www.informationclearinghouse.info/article4368.htm
>
> Over the past fifty years, the IMF and the World Bank have forced
> economic 'development' that benefits the wealthy lenders and
> multinational corporations in the industrialized north and enslaves
> the world's poor majority in developing and third world countries.
> These international lenders have hijacked the economies of more
> than 60 countries. Loans, international assistance, and debt relief are
> given only when countries agree to conditions set by the Bank and
> Fund. Free trade, market liberalization, and privatisation of essential
> resources and services are demanded if 'financial stability' is to be
> achieved. While crippling interest payments force cuts in health care,
> education and other social services for millions of people around
> the globe; the banks and corporations that 'rescued' those countries
> report record profits. Humanitarian crises, like wars, have become
> lucrative business for those who have money to lend.
>
> Ten years ago, economist J. W. Smith warned, "The size of the debt
> trap can be controlled to claim all surplus production of a society, but
> if allowed to continue to grow the magic of compound interest dictates
> it is unsustainable. The third world debt has been compounding at over
> 20 percent per year between 1973 and 1993, from $100 billion to $1.5
> trillion [only $400 billion of the $1.5 trillion was actually borrowed
> money. The rest was runaway compound interest]. If Third World
> debt continues to compound at  per year, debt will reach the quadrillions.
>
> More shocking than the magnitude of the figures (how does one fathom
> a quadrillion dollars?) is the chilling fact that the debt trap robs all
the
> surplus production of an entire society. Debt does much more than
> forcing a country to work for nothing. This form of terrorism punishes
> the children, abandons the sick, and enslaves the adults.
>
> While indebted countries struggle to pay mounting interest on debt
> loans, their hospitals, schools, water supply, electricity, and public
> transport deteriorate rapidly with reduced budgets. Disease, destitution
> and general lack of sanitation characterise many Third World cities.
> Sub-Saharan Africa pays $10 billion every year in debt service.
> Despite their extreme health crisis, 23 African countries spend more
> money on debt repayment than they spend on healthcare, which attracts
> only $2.5 billion, or a quarter of their debt service. This does not
> concern the banks that loaned the money.

> By contrast, the wealthiest individuals in the world can choose or buy
> anything they want.  The world's 497 billionaires in 2001
> registered a combined wealth of $1.54 trillion, well over the combined
> gross national products of all the nations of sub-Saharan Africa ($929.3
> billion) or those of the oil-rich regions of the Middle East and North
> Africa ($1.34 trillion). These five hundred people also possess greater
> wealth than the combined incomes of the poorest half of humanity.  While
five
> hundred people have enough money to buy several countries, half of
> humanity struggles on less than $2 a day and can barely buy enough
> food to stay alive.
> While most people would be aware of the debt burden of the third
> world, they would be surprised to learn that the United States is also a
> heavily indebted country. The accumulated debt of the world's 'richest'
> country, the USA, is more than two trillion dollars. The exact amount
> owed by the whole of the developing world, including India, China
> and Brazil, is $2.5 trillion. This means that three hundred million
> Americans owe as much to the rest of the world as do five billion
> people in all the developing countries.
>
> The system is 'successful' as long as it returns more wealth to the
> wealthy. Bu the
> current level of debt worldwide is unsustainable and must eventually
> lead to the total collapse of a global economy.
>
 Those of us who live comfortable lives in developed countries
> are part of the crime. Our lifestyle, and our expectation that our savings
> will grow, feed  debt.

> It is time to reclaim our humanity and to 'equalize' the economy so
> that we can fairly run, not unfairly ruin, our world.
> The current system is doomed to fail and will cost more millions of lives.
> If we start now, our grandchildren will be able to enjoy a world where
> human dignity is the most valued currency.
>
> Let's start to fix it today.
> --
> Wanda Fish is a freelance journalist  cleverfish at eftel.com