Race Against Time: Context for a Crisis

[This blog post covers the chapter “Context: It Shames and Diminishes Us All” in Race Against Time. I have a series of these posts lined up.]

Stephen Lewis has had a 30-year career with the UN. Over that time he has been witness to absolutely horrible things. Before his role as the special envoy for HIV/AIDS, he was participating in a study on the Rwanda Genocide. None of that, he says, compares to the soul-destroying magnitude of the AIDS crisis. And the agony of the situation is all the maddening because the Western World, in the guise of helping, is making the situation worse.

So when I heard about aid being sent to developing countries, before this book, I had this naive idea that it was just given. Like a grant, you know? We see that people are in horrible situations, and so we GIVE money to help. But no. In this lecture I was introduced to the concepts of conditional aid loans.

Under this idea, the World Bank or the IMF will take money (which will be reported to us as “aid”), and loan it to struggling countries on the condition that they do some things to their economy. Usually these things involve privatization. For example, they would privatize their healthcare system, or put user-fees on their schools. There are “macroeconomic limits” on the amount of doctors and nurses that can be hired, and limits on the amount of GDP that can be spent by the government on the “social sectors.” Many of these loans were negotiated before the AIDS crisis impacted, (conditionality was very popular in the 1980s), but not all. And the World Bank refuses to relax those conditions.

So in the face of a 20% infection rate, the government of Malawi is not allowed to hire more nurses or doctors.

I think everyone, whether they think social services should be run by governments or the private sector in times of peace, can see that something is very wrong with that situation. You have a slow-wasting fatal disease, something that renders a formerly healthy person unable to work and removes at least that one person from the work force to be a caregiver, and those people are supposed to be able to just pay for medicines?

The amazing thing is that, even with economies crumbling under the weight of dead and dying bodies, the money was paid backBetween 1970 and 2002, African countries acquired two hundred and ninety four billion dollars in debt. This debt was mostly taken on by military dictators. (Because lending money to dictators to buy guns and palaces is the definition of the concept of “aid.) Over that same time, the amount of those loans paid back was two hundred and sixty billion. And of that, one hundred and ninety six billion went to interest, sixty four billion went against the principle and two hundred and thirty billion is still owed.

So we have: $294,000,000,000.00 loaned (for aid.)

Paid back: $260,000,000,000.00

And that breaks out to;

Paid on the principle: $64,000,000,000.00

Paid in interest: $196,000,000,000.00

Still owing: $230,000,000,000.00

Again, that just seems wrong, somehow. Something is not right with this picture. It’s hard to fight a massive medical battle with this as your standing point.

(This isn’t even counting the effects of agricultural subsidies. In the EU and US, in 2005, three hundred and fifty billion dollars ($350,000,000,000.00 USD) were ploughed into agricultural subsidies. That’s five times more than goes to foreign aid. Hard to attain a “global partnership for development” with an “open, rule-based, predictable, non-discriminatory trading and financial system” on that footing. I guess we’re giving up on that Millennium Development Goal.)

2 thoughts on “Race Against Time: Context for a Crisis

  1. Kenmore

    When Brazil went to modernize (a questionable idea to begin with) they got a loan from the IMF. When complications arose and things went wrong the IMF, in order to prevent Brazil from defaulting on the loan, renegotiated (in the 80’s, I believe). In order to get an easier pay-back scheme, Brazil had to make massive cuts to infrastructure, education, and healthcare.

    Similarly, a huge portion of Haiti’s problems involve foreign debt, but they started long ago. In order to have France recognize them as a sovereign country (without such recognition other nations would never recognize them) they agreed to a massive repayment deal. It took them over a hundred years to pay that off, and then walked straight into the same IMF trap that Brazil is in.

    I think the developed world needs to understand that global security (and by extension, THEIR security) is closely tied to quality of life in the developing world. It’s not a coincidence that Bin Laden and a huge number of Al Queda recruits originate from Yemen, one of the poorest countries in the Arab world.

    Reply
    1. Jazz Post author

      And I do get decried as terribly idealistic for thinking that it’s not exactly just to doom another country to years of poverty and crime, increasing their likelihood of a civil war or just unhappiness? Not to mention not Merciful, which I like.

      I LIKE mercy. Can’t we use it?

      Reply

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