The majority of us in these countries live far below the poverty line, having to survive on about a dollar a day. Life expectancy has reduced drastically in Third World countries to below 55 years, with many people dying of malaria, which can easily be prevented, and of the scourging AIDS syndrome. People do not have access to basic education, safe drinking water, drugs, justice and they live degrading lives that is not suitable for rodents.
The clamour for cancellation of debts for poor nations is not a bad proposition in itself, but a cursory look should be carried out, to see if it is a viable prescription for Third World counties to actually develop. Feasibility studies must be carried out to find out if debt cancellation and relief would actually make poor countries more prosperous economically.
First, we should consider some facts about debt. Two parties, a lender and a borrower, who agree to an exchange out of rational self-interest, usually facilitate debts. In situations whereby the borrowers investment thrives, the lender will be the happiest for it, through rapid loan repayment and payment of interests. In most cases as it concerns International finance, loan exchange is usually borne out of irrational self-interest. International funding organizations, mostly multi-government subsidized development banks such as IMF, World Bank, and ADB are usually steered out of good intentions, but often times they lend money out to countries unwisely. Borrower nations do not do well, they invest the funds in white elephant projects and so they usually default in the repayment of such loans.
Giving aid without proper assessment would always amount to giving a drug addict a lot of money; you will only end up destroying what is left of his already wasted life.
The major trouble with developing countries that are usually loan defaulters is our leadership. Majority of our leaders are dictators with a network of cronies. We usually claim to run a “democratic” government, but this is usually make-believe as elections are bought, sold, exchanged and coerced. Leaders stay in power by distributing ill-gotten wealth to their narrow circle of party members rather than providing roads, educational facilities and other services that will make the whole society comfortable.
Our leaders extract wealth from the society and use it to terrorize even the poor masses they govern. They receive loans and grants from International agencies and utilize them in building their power base. We also have leaders who are insensitive to people’s plight.
A vivid example occurred in Nigeria, when a serving minister was interviewed late last year. The minister holds an important portfolio, and when asked about the issues concerning how the governments policies has impoverished Nigerians he said,” That is not true. It is only in Nigeria that people do not die of poverty.” He claimed that it was possible to get a balanced meal with less than N20, which is just about 15 cents when converted to dollars.
This is the mindset of our leaders. The indispensable key to development is good governance. We will do better, when we have leaders that will put in place smart economic policies and put many efforts into implementing such policies.
The campaign for unconditional debt relief is not justifiable and it has many flaws.
First, it does not address the fundamental issues that gave birth to poverty and underdevelopment. The root cause is not the debt as it were, it is not the making of an unfair world system neither is it due to exploitation by rich nations and international lending organizations. It cannot be traced to accident of geography or partiality in the occurrence and availability of natural resources, because it can not explain why,
Botswana with its diamonds has achieved rapid economic growth while Nigeria, Sierra-Leone and Liberia respectively with their crude-oil, diamonds and Iron-Ore have a lacklustre economy. I find it hard to understand why Nigeria being the sixth largest oil producer in OPEC and the thirteenth largest producer of the commodity in the world, still battles with a huge debt burden. We have made over a trillion dollars from oil sales since it was discovered in Oloibiri.
Looking at the last quarter century, the aid received by African countries, has grown to an all time high of almost 10 percent. We now have to finance our economy, by solely depending on foreign assistance. Over 10 percent of our Gross Domestic Product is from aid. With these, our government has been able to shy away from its key responsibilities.
Our educational sector and health expenditures are funded by donor agencies. We cannot conduct our own elections and population census without seeking for assistance from the developed countries in terms of financial commitments to these programmes. I even wonder why Nigeria did not request for a World Bank grant to organize the National Political Reform Conference.
If the people supporting us in our clamour for debt relief want to really assist us, in getting out of the shackles of poverty, they must help us in attaining a good and encouraging political climate plus conditions that facilitate and nurture sustainable economic development. Without any formal policy direction and rapid and result oriented implementation, no amount of loans, aid and other forms of financial assistance can turn poor nations around. It is only when political leaders are motivated to use a country’s resources to develop the country rather than enriching themselves, that development would no longer be a mirage.
The organizations that donate funds must make sure that the fund recipients meet accountability standards. They should also put in place agencies that will be empowered to strictly monitor compliance and enforcement of anti-corruption laws. Public officials in all cadres, in borrowing countries that are mapped out for debt relief, should be made to declare their assets and how they were acquired before assuming office. Assets declaration should be a yearly affair for people occupying public offices. The veracity of the claims in the declaration of assets must also be investigated and found to be authentic.
If proper monitoring is not in place, government subsidized unaccountable banks will continue to lend money to small, poor and corrupt countries with our leaders using the funds to maintain a bankrupt economy and increase their personal wealth.
Without changes in recipient nations in areas such as economic change, transparency and other conditions that will be set for debt relief, borrowing countries will continue to do things in unethical ways and fall back into the mess of borrowing money again from perpetual free-spirited lenders. The whole procedure will amount to funding a moribund system to stay alive and this will result in much harm to the people. When our leaders are accountable, our people will be able to climb out of poverty.
Although I am against any form of Neo-Colonialism, or undue interference, I still believe that “He who pays the piper dictates the tune.” Any intervention from outside should be in good faith and genuine interest of the masses of people in the Third World countries who are being cheated out of genuine opportunities for development.
When we now meet the requirements for debt relief, donor agencies, should assist us through institutional assistance to develop and train our administrators, judiciary and journalists about how they can be useful in bringing about lasting and sustainable developments in the rule of law and good governance. They should also assist us in acquiring infrastructure and technology that are needed for our economy to function effectively.
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