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Straight Talk about a World in Need

July 1, 1987 -

In a recent article in Challenge magazine, John Phillips takes a frank look at what is wrong with a great deal of the foreign aid to Third World countries.

Phillips begins by pointing out that the external debt-load of developing countries, which topped U.S $1 trillion in 1986 "poses a catastrophic threat to our financial system." He ascribes the high level of Third World indebtedness both to the foolish lending policies of Western banks during the affluent 1970s as well as to the corruption and wasteful spending practices of many Third World governments. An example is a dam in Surinam that was supposed to help generate electricity but resulted in immense ecological damage. Phillips writes that such instances of disastrous investments are numerous and are often the result of what he calls "vanity projects" by political leaders. Our politicians are also to blame, writes Phillips, for while they eagerly dole out aid packages, they seldom require any accountability from the recipients, nor do they "insist on Third World governments setting their house in order when it comes to food production." For example, both Kenneth Kaunda of Zambia and Alan Garcia of Peru have suppressed farm product prices in order to gain the support of their urban population. The result has been that formerly self-sufficient food suppliers or even food exporters are now suffering serious shortages and hunger. Phillips writes:

Not a single American, Canadian or West European leader has told President Kaunda that he has to drop his "adventure into scientific socialism," a euphemism he uses for Marxism dressed up in its Sunday best. Aid continues pouring into his country, and little pressure is used to make him return to highly successful peasant agriculture. 

A recent report of the Pontifical Justice and Peace Commission, titled At the Service of the Human Community: An Ethical Approach to the International Debt Question, lays much of the blame for the debt crisis at the door of the international banking community. The Commission argues that the repayment schedules of poor countries must be renegotiated to lighten the burden. They warn against the advice of Cuba's Castro who has called for unilateral payment defaults. They point out that systematic defaults of payments "would cause the collapse of the world credit system and the first victims would be developing countries."

At the same time, the Pontifical Commission study does not spare the foolish and self-serving practices of Third World leaders. It calls for "civic and moral" courage and for an end to blaming other (Western) countries for all their own mistakes and abuses. Unfortunately, most Third World leaders are unlikely to embrace the sound advice of this Commission. Nevertheless, this report thoroughly dispels the widely held notion that the West is solely responsible for the economic woes of the Third World, and offers helpful suggestions on how to resolve the international debt (John Phillips ,"New Perspectives of World Need," Challenge, May, 1987.)