[lbo-talk] G8 debt plan

[Marvin Gandall]

Are there such provisions in the agreement, which I haven't read or seen reported in any detail? When the IMF imposes an austerity plan, that is certainly "tied" relief. But my sense is that the Western lenders have been grudgingly recognizing (as governments and policymakers did in the 30s) that austerity mostly deepens the crisis, and that the thrust of the current move is to establish "governance criteria" to stem the corrupt and wasteful way the political and economic elites in the highly indebted countries divert loans and grants for their own purposes. I don't think paper performance benchmarks will solve the problem - for one thing, the Western banks and international financial agencies are deeply implicated with those elites and would almost certainly cooperate in individual cases to circumvent any new rules - but that doesn't contradict the more general lending concern about elite corruption, or render it illegitimate. In any case, the debt relief is necessary, even if in most situations it is just writing off dead loans.  The real keys remain altering the international terms of trade, and increasing OECD acceptance that interference with markets by developing states is often essential to their progress and the long-term interests of the global capitalist economy.  

MG

Joanna wrote:

  You got it Michael. It's not a gift; it's blackmail.

  Of course, that's not the play it gets in the press.

  Joanna

  Michael Perelman wrote:

What problem?  Isn't that the purpose of he whole thing?

On Sun, Jun 12, 2005 at 07:50:11PM -0700, Jim Devine wrote:

  One problem, as I understand it, with this is that countries have to
follow G8 dictates (i.e., free market economics) in order to get their
debt written off. Is that a valid understanding?
JD

On 6/12/05, Doug Henwood <dhenwood at panix.com> wrote:

    FT.com - June 12, 2005

Caution over G8 debt plan for poor countries
By Chris Giles and Friederike Tiesenhausen Cave

While the Group of Eight finance ministers were hailing a "historic
breakthrough" at the weekend after they agreed to cancel the debts of
18 poor but well-governed countries, doubts were already being raised
about how great an impact the deal would have.
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