"I.O.U. The debt threat and why we must defuse it", Noreena Hertz

Résumé du document

NOREENA HERTZ is a British economist who teaches political economy at the University Of Utrecht, Netherlands. Her last book is I.O.U. The debt threat. In this book, she talks about Bono, the lead singer of U2 (real name Paul Hewson), who will challenge the rich world to help eradicate Third World debt. She explains the various ways to follow to understand the reasons of this debt and the manner to cancel it. Bono will argue that the technology and financial resources now exist, for the first time in human history, to wipe out global poverty, and that the only thing lacking is the political will. Mrs Hertz can describe him as someone who has tenacity. He's prepared to pound up and down the corridors of power, attend meetings and do what has to be done to move these ideas forward. He's not into playing politics to sell records.

Extraits

[...] It was at the period when appeared the danger of breaking down for some world's biggest banks. World Bank and IMF were concerned by saving the banks rather than safeguarding the developing countries interests. In 1999, the Wall Street Journal titled IMF is impoverishing people in a way that is morally indefensible and politically unsustainable”. So it underlined the role of both institutions in the impossible threat of debt on developing countries. Indeed, for Nicaragua, the poverty reduction programme was not even translated into Spanish: inaccessible to the majority of population. [...]

[...] In June 1999, the G8 came to a new international deal on debt cancellation that corresponds to a new scheme: debtor governments would have to consult local churches, trade-unions, NGOs, parliaments about debt cancellation or new loans. Only a third has so far been delivered. The countries which are eligible are decided about creditors' interests and not debtors needs. So they can feel and say are just statistics”. In fact, this is not a political issue. This is about the responsibility of developed countries which are the only ones to decide, on the rest of the world. [...]

[...] The two main characters were JM Keynes and Dexter White. The World Bank has been invented to help a bombed out Europe rebuild herself. Keynes and Dexter White proposed to return to the Gold Standard: fixed exchange rates could be put in place to prevent countries from devaluing their currency at will. Another institution has been created to preserve stability in international balance of payments: the International Monetary Fund, which was the idea of Dexter White (not Keynes), and that consisted in a bank to which deficit countries could go to borrow short-term funds. [...]

[...] In 1995, the G8 demanded to the institutions to develop a comprehensive approach with flexible implementation. Then, Nawal Kamel (World Bank counsellor) made a programme to cancel the conditions of structural adjustment of the debt but it was never adopted. On the contrary, Stanley Fischer argued in favour of more highly conditional loans. As a result, Latin America countries assisted to their growth decrease by 50% between 1960-1980 and 1980-2000. Sub-Saharan Africa: incomes of 20% poorest decreased by each year between 1980 and 2000. [...]

[...] The responsibility engaged is the one of the government. In the 1980's, Saddam made contract about arms and now it is the Iraqi people who are being told to repay the debt. Now, we can evaluate that 80% of financing for projects/investment in developing countries comes from ECA. Export credits are used to pay bribes, support dictatorial regime or support environmentally unsound or socially undesirable projects. The interest paid on export credits is particularly onerous for developing countries because it is commercial rates and not the lower rates of bilateral or multilateral loans (World Bank, International Monetary Fund). [...]