This past Sunday, at a committee meeting of the International Monetary Fund (IMF) in Prague, Canadian Finance Minister Paul Martin issued a proposal that surprised the 14 representatives from the world’s wealthiest countries.
This proposal calls for an immediate moratorium on the repayment of debts by Third World countries.
In a written statement to the IMF committee, Martin stated, “At a time of unprecedented prosperity in many industrial economies, it is unacceptable that the promised debt relief has not been delivered.” This proposal has garnered the support of U2 frontman Bono. He is the chairman of Jubilee 2000, a church-affiliated group that initiated the quest to eliminate the debts of thirty-seven of the world’s poorest countries. Bono specially requested a meeting with Martin to discuss his proposal on Monday, and has expressed gratitude for Martin’s plan.
The way the moratorium would work, according to Martin, is that countries would only become eligible if they make a noticeable effort to cut poverty and increase funding for social responsibilities. Countries that “are not currently committed to the principles of good governance,” like Congo and Sudan, would not be eligible for the moratorium. Although it may seem like this will erase all debts, that is not the plan. Debt levels would remain fixed while the interest, which is the financially crippling aspect, would be cancelled.
The issue has been raised that Martin has not stated whether or not Canada will go through with this proposal without backing from other countries. “The greater the pressure we can build on individual countries to move with us, the better off the poorest of the poor will be,” he stated on Monday. Regardless of that fact, Canada is owed approximately $1-billion dolllars from impoverished countries. Surely, that would help the situation that Martin previously expressed was “unacceptable.”
And how did other countries react to this idealistic proposal? Martin did say that interest was shown, but did not indicate from whom. The area of dissent seems to be whether or not the moratorium would help or hinder poverty. If there is no pressure from industrial countries to pay the debts, then there is no tool they can use against the non-industrial countries in order to get them to lessen poverty.
This is what I don’t understand. Why should the debt be a tool of enforcement? Why can’t it be a reward, which is essentially what Martin’s proposal suggests. Those countries that make the effort will be rewarded with a freeze on their debts. And one reason these countries are so poor is because the majority of their revenue goes towards paying off the interest of these debts. So enforcing the payment really doesn’t benefit anyone because how can they improve poverty if they simply do not have the money? I say bravo to Paul Martin for springing this on the IMF. It’s time that a powerful, wealthy country stood up and said something about this issue. And I am proud to say that Canada, the international nice guy, was the one to do it.
All final editorial decisions are made by the Editor(s) in Chief and/or the Managing Editor. Authors should not be contacted, targeted, or harassed under any circumstances. If you have any grievances with this article, please direct your comments to journal_editors@ams.queensu.ca.