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The smokescreen of Debt Cancellation

June 24th, 2005 | No Comments | Categories: Uncategorized |

This is all getting very murky.

the G8 have pledged $50 million dollars in debt relief for Africa.

Sounds good? Yes, of course. Until you start to break it down. Firstly, it only goes to 18 countries – lots more needed. Secondly, it’s condition on ‘economic reforms’ in the country, under the IMF’s HIPC scheme, which require increasing privatisation and opening up of nationalised industries and services to outside tender (guaranteeing that american and european companies get to start syphoning money out of those countries again, in return for provide water, energy, transport infrastructure as a profit making venture – now call me naive, but surely in a situation where poverty is as rife as it is in those 18 countries, the last thing they need to be worrying about is their water supply breaking down or being held to ransom because the share-holders of the parent company aren’t making enough?? That’s as bad as being in the debts they are already in.

It’s so galling that the twin evils of the IMF and World Bank go around telling countries how to run their economic affairs to the advantage of the rich. This is why trade law reform is THE big issue for the Make Poverty History campaign. Debt relief is all well and good, but if the cancellations are off-set against falling aid packages and industrial contracts to outside investors, they’re still utterly screwed.

The bottom line is, a share-holder based economic model is never going to favour the poor. It can’t, it is institutionally programmed to reward those with more money for their investments, to protect their investments from doo-gooders who seek to put the wellbeing of the stake-holders ahead of the balance sheet of the share-holders. It’s evil, pernicious and it needs to be challenged before anything is going to change substantially for the world’s poor.

If you are a share holder, use your power and vote at the company AGM to push for reforms. That’s the only way things can change on a company level – the directors and managers of a company are legally bound to maximise investors profits above all else. So they can’t even start to use recycled office paper unless it saves money or it’s cleared by a vote. So vote.

And if you don’t own any shares (I don’t, and never will) support co-operatives instead – organisations that operate on a stake-holder basis, where decisions are made considering the effects those decisions will have on all affected, not just those with a financial interest.

Debt cancellation is a wonderful thing, I’m glad it’s been announced, but I hope it becomes part of a MUCH bigger package of reforms, cos right now, it’s not making anyone’s poverty history.

and while we’re on the subject, consider this t-shirt, from Philosophy Football

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