From PATRICK MCCULLY
Tam Dalyell finds Midland Bank director Kit McMahon, ‘pretty convincing’
in claiming that cancelling Third World debt would be neither ‘fair nor
effective’ (Thistle Diary, 12 January). The only convincing aspect of this
statement is its sheer hypocrisy. Is it fair that the hundreds of millions
of poor people in the Third World should be made to suffer what McMahon
refers to as ‘fundamental – if painful – economic reforms’ to repay debt
incurred by unaccountable governments?
In the seven years after 1978, IMF ‘stabilisation’ policies (McMahon’s
‘painful reforms’) resulted in a 30 per cent drop in the disposable income
of the average Sudanese peasant and an increase in the country’s debt from
$2 billion to $13 billion. In 1985/86, over 50 per cent of all Sudanese
government expenditure was used to service debt obligations. Sudan is now,
like many other African countries, wrecked by war and facing mass famine,
a fifth of its population being internal refugees.
Similar, if slightly less horrific, stories of the total failure of
IMF/World Bank policies can be told about scores of other countries. Yet
the only method of reducing Third World debt which McMahon mentions – the
meagre concessions offered by the Brady Plan – depends on governments adopting
more of the same fatal medicine prescribed by the same organisations which
have reduced the Third World to debt bondage.
McMahon admits that ‘the debt burden of many developing countries is
considerable’. As this is obviously so, in what way would the removal of
this burden not be ‘effective’? Could McMahon mean that it would not be
‘effective’ in maintaining the present international economic order and
the global influence of bankers such as himself? Could the unfairness McMahon
refers to be unfairness to the shareholders of the Midland Bank?
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When Dalyell considers statements from bankers he would do well to try
and separate self-interest from economic reality.
Patrick McCully The Ecologist Sturminster Newton Dorset
