Courtesy Reuters

BLESSED ARE THE POOR?

Today 41 of the world's poorest countries are bankrupt. These nations, identified by the World Bank as "heavily indebted poor countries" (HIPCS), owe some $170 billion to foreign creditors, while half of their 600 million citizens get by on less than $1 a day. Nine out of ten HIPCS cannot sustain their debts, given their low export earnings and GNPs. Unless some of this debt is forgiven, they will be paying in perpetuity. Their creditors, on the other hand, include the wealthiest countries in the world, as well as the international financial institutions that are meant to support economic development.

In the spirit of the Jubilee (a semicentennial forgiveness of debts described in the Old Testament), a diverse and powerful coalition of political and religious leaders, Nobel Peace Prize winners, economists, rock stars, and rioting activists has rallied for a complete debt write-off. Arguing that high interest payments "crowd out"

This article is part of our premium archives.

To continue reading and get full access to our entire archive, you must subscribe.

Subscribe
  • M. A. Thomas is Associate Director of the Center for Institutional Reform and the Informal Sector in the Department of Economics at the University of Maryland at College Park.
  • More By M. A. Thomas