G8 Debt Relief...

[Aidan Siobhan Madigan-Curtis]

Hi Hido Board and HIDO HR! :)

I"m not sure who is around, or who has frequent email access these days,
but i thoughts that I'd open a dialogue on a recent decision by the G8
which has the potential to make a huge impact in the developing world.

As most of you have probably heard, the G8 has just decided to grant $40
billion worth of debt relief for poor, struggling countries. I am curious
as to how this move is perceived by other members of the Harvard
development-minded community. I am going to put my thoughts out there -
and would love it if you would respond to the group/me with your thoughts
and responses.

So... although debt relief is an irrefutably good thing - I have my doubts
that this debt relief will significantly aid the development and progress
of the nations of the world where extreme poverty is most rampant. I fear
that the debt relief will, in fact, be harmful for these countries,
contrary to all of the hype surrounding the debt relief and how wonderful
it is for these nations.

Why?

several reasons:

1) Debt relief is a purely economic move. Many developing nations
struggle with a plethora of problems such as geographical barriers
(mountains, deserts or bodies of water that make transport/technological
advancement difficult), a lack of technology, ethnic
tensions, volunterability to disease
(due to geographical location - ie equatorial/tropical countries),
governmental corruption, and a general lack of resources to deal with the
kind of economic impact that debt relief means, because they struggle to
participate in the global market period.

Also, some countries which could have greatly benefitted from debt relief
(ie malawi, where 26% of pregnant women are infected with HIV/AIDS) were
neglected from debt relief, due to "governmental corruption." Well - i ask
what comes first, the chicken or the egg? Without support towards the
development of market participition in malawi, healthcare initiatives and
economic allowances- how is a civil society supposed to form?? How are
people - most of whom are suffering with AIDS or other
diseases/malnutrition, supposed to lift themselves fto the first rung of
the economic ladder? How can a people overthrow their corrupt government,
if they are uneducated and sick? It doesn't make SENSE!

To me, this debt relief has potential to be extremely helpful, if handled
properly. If economic advisors a la Jeffrey Sachs, who believe in
examining the individual characteristics (politically, geograhpically and
socially) of a country, are sent to help these nations sort out the debt
relief and begin fortifying their tracks towards development, then debt
relief will be a positive thing. Unfortunately, my guess is that this debt
relief is mostly propaganda for Britain and the US, who are currently
perceived as international bullies. My prediction is that it will be
handled just like all of the economic advising/dealings of the IMF, in a
one-size-fits all manner that will overshadow the positive potential of
this decision and leave countries worse off than they were before (in the
vein of how the IMF caused Argentina's market failure and economic
disintegration...).

Also, the majority of the population of the world following this decision,
probably are not familiar with how fragile developing nations are to
economic decisios of developed nations - and if these countries that have
been granted debt relief fail to progress (for the aforementioned,
extremely logical reasons), they will be criticized and it will appear to
the average citizen of the world that all of the stereotypes of developing
nations are true - that they just cannot develop due to whichever
ridiculous reasons people choose to believe in order to shift
responsibility from developed nations to help developing nations.

So... what do you all think? :) PLease share your thoughts - this is both
an exciting and tense time in the world of development...

:)

~Aidan