Last Updated: Friday - 09/24/2010

Debt crisis should be of concern to all

The Interfaith Social Reform Coalition reports that 1.7 million people are living in poverty in Ontario. The coalition was severely critical of the government's scandalous payment of $180 million to Anderson Consulting which received a commission for every person who was cut off welfare.

The citizenry of the province was encouraged to use a hotline to squeal on their neighbours if there was any hint of abuse of taxpayers' money. The poor better look and act poor or else they are reported to the authorities, like they are in some oppressive regimes, as potential subver-sives. Difficult economic times cultivate such paranoia.

If there is talk of an uncertain economic future for some of the most vulnerable groups in Canada (single mothers, the elderly and various minorities), then we should consider what has been a reality in certain sectors in Asia, Africa and Latin America for a long time.

There the poorest sectors of the population have been rudely confronted with the consequences of an international lending mania of governments and banks since the 1970s. The bill for these loans comes in the form of unemployment, stark poverty, breakdown of the social safety net and rising prices for the most elementary foods.

Take the case of 11-year-old Marvin Gonzales who earns $1 on a good day shining shoes near the Continental Hotel in Managua where Howard Hughes had rented an entire floor to spend his last days staring at the ceiling of the room where he eventually died. Hughes made some of his millions on the prolonged war on Southeast Asia.

Marvin on the other hand is deeply in debt to his country's foreign creditors. In Nicaragua this debt equals six times the gross domestic product.

Marvin is one of the lucky people with an income, 74 per cent of the people live in poverty, 44 per cent live in extreme poverty, 30 per cent of the children are undernourished and there is a 60 per cent unemployment rate.

Government spending on education dropped from $42 per pupil in 1984 to $18 in 1997. Only 23 per cent of children finish Grade 6. Health care spending dropped from $58 per patient in 1988 to a mere $14 in 1997. Infant and maternal mortality rates are among the highest in the world.

In plain accountant's terms, the payment of the external debt of Nicaragua and of other Latin American countries is only possible if large sectors of the population are simply eliminated.

The same is true for many countries in Asia and Africa. The World Bank announced in 1996 that 40 countries carry an "unsustainable debt." Since that announcement only two countries received some attention.

The situation not only looks hopeless, but also absurd. The poorest nations in the world have become capital exporters while the richest nations in the world are capital importers.

This upside down world was created because in the 1970s dollars were lent that were worth less and at a lower interest rate. The value of the dollar has risen by more than 30 per cent and the local currencies have been devalued as part of the IMF restructuring programs.

As the world's churches are advocating a broad-based forgiveness of debt, as part of the year of jubilee, they are really advocating a political solution. The question in such a debate is whether the interests of the banks or the interests of marginalized peoples receive priority.

That is why it is so important for all of us to become informed and concerned, so that we can, with the churches, influence the decision in favour of people. France, Germany, Holland and Belgium have already made encouraging moves in that direction.

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