The Case for Canceling the Debt of Developing Countries

What are the moral arguments in favor of canceling the debt of developing countries ?

Though countries of the South are often generously provided with human and natural resources, the burden of the debt has led to general impoverishment, made much worse by organized plunder. Repaying the debt is an essential obstacle to satisfying basic human needs, such as access to clean water, decent food, basic health care, primary education, decent accommodation, and satisfactory infrastructures. Without any doubt, the satisfaction of basic human needs must take priority over all other considerations, be they geopolitical or financial. From a moral point of view, the rights of creditors, shareholders, or speculators are insignificant in comparison with the fundamental rights of five billion citizens. It is immoral to demand that the developing countries devote what available resources they have to repaying well-heeled creditors (whether in the North or the South) rather than to satisfying fundamental needs. The issue of the moral responsibility of the creditors was particularly apparent in the case of Cold War loans. When the IMF and the World Bank lent money to the Democratic Republic of the Congo’s notorious ruler Mobutu, they knew (or should have known) that most of the money would not go to help that country’s poor people, but rather would be used to enrich Mobutu. It was money paid to ensure that this corrupt leader would keep his country aligned with the West. To many, it doesn’t seem fair for ordinary taxpayers in countries with corrupt governments to have to repay loans that were made to leaders who did not represent them. —JOSEPH STIGLITZ, Globalization and Its Discontents, 2002

Debt is one of the main mechanisms through which a new form of economic colonization operates to the detriment of the developing countries. It is one more brick in the edifice of historic abuses, also carried out by the rich countries: slavery, pillage of raw materials and cultural goods, extermination of indigenous populations, and colonial servitude. The time is overdue to replace the logic of domination by the logic of redistribution of wealth in the name of justice. The G8, the IMF, the World Bank, and the Paris Club impose their own truth, their own justice, where they call the tune. The time has come to put an end to this phony justice of conquerors and oppressors. The immorality of the debt is also a consequence of the fact that it was frequently contracted by undemocratic regimes that did not use the money received in the interests of their populations, and often organized embezzlement on a massive scale, with the tacit or active agreement of the states of the North, the World Bank, and the IMF. Creditors of the industrialized countries, who took advantage of the high interest rates in 1979 and the low prices of raw materials on the international market, knowingly lent money to often corrupt regimes. They have no right to demand that the people repay such loans. Let them address the fallen dictators, or those still in place, and their accomplices. Let us risk a comparison. The activists who fought against slavery were moved by an ideal of justice and were fiercely opposed to this

Toussaint, Eric. Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers (pp. 216-240). Monthly Review Press. Kindle Edition.