The advocacy for debt relief and poverty reduction
Editorial
THE CLAMOUR for debt forgiveness for countries struggling to bring their citizens out of the worst manifestations of poverty and deprivation has not only reached the ears of the international donor agencies such as the World Bank and the International Monetary Fund (IMF) but has also prompted them to actively explore mechanisms for helping poor countries. But as one economist noted some months ago when the IMF proposed selling off some of its gold, this is not very easy to work out since such sales would serve to further depress the price of gold on the world market and would indeed cripple some of the very poor countries the exercise was intended to help. In fact, since the idea was floated there was a further drop in the price of gold worldwide. Just last week, an article out of Washington, where the annual meetings of the World Bank and the International Monetary Fund are being held, quoted Mr Michel Camdessus, Managing Director of the IMF, outlining a complex gold selling plan which was designed specifically not to cause any upheaval in the world price for the metal. While the developing countries wait with bated breaths to learn of the intricacies of this plan and to relate it to their own economies, they have to continue coping with the realities of poverty suffered by their people. Commenting last week on the effects of the global financial crisis which began in Asia two years ago and then spread to Russia and later Brazil, World Bank President Mr James Wolfensohn stated that there has been some resurgence in growth and world trade. He, however, disclosed that the situation which is still a cause of concern to the World Bank, was the fact that poverty levels were still high. The economic tide had turned, but Wolfensohn felt that the impact the crisis had exerted on the poor has not been fully addressed. The figures he quoted were indeed startling. Of the six billion people on the planet, three billion people were existing on just US$2 a day, while another 1.3 billion were making do on less than US$1 per day. Poverty exists in many countries of the world and is observed even in the industrialised societies. However, what is so disconcerting about the levels of poverty in developing nations is that these levels remain unaffected despite a decade of structural adjustment programmes. Even when some economies record modest areas of growth, the much-vaunted "trickle down" effect of 1970s economic theory remains elusive and the material conditions of the poor show no improvement. In fact, the dog-eared line about the "rich getting richer and the poor getting poorer" is unfortunately proving a concept all to true in this the age of global capitalism. How are underdeveloped countries to cope with meeting the basic needs of their people when they are burdened by debt-servicing and debt repayment obligations? Even when there is some debt write-off as in the case of Guyana, it is still a formidable task for those countries to initiate and maintain social sector programmes, give workers a living wage and plough enough investment in the economy to stimulate growth and development. There is, we believe, a direct correlation between a country's debt burden and the level of poverty afflicting sections of the population. That is why the advocacy for debt reduction and poverty alleviation must be continued.
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