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Debt cancellation: the wrong signal for fighting poverty Printable Version PRINTABLE VERSION
by Yambwa, Nziya Jean-Pierre, United States Jun 13, 2005
Poverty , Human Rights , International Aggreements   Opinions


Defining poverty varies and depends from one place to another, from one time to another and from one year to another, from household to another… A poor person in my village, Kpala, owns land, has shelter, eats fresh food but does not have health care and cannot afford to send his children to school. A poor person in Rwanda does not have land, cannot send his children to school, does not have access to health care but has access to a telephone. A poor person in Canada has shelter, basic health care but will live on junk food; his children will have access to a free and compulsory primary school. We all know that poverty exists, changing parameters from one place to another. But how do we measure poverty?

Agencies, organizations and countries measure poverty differently. But UNDP has made a rule that someone or a household unable to have 1 US dollar a day is poor or under the line of poverty. That’s still a working definition. It does not render all the reality about poverty. In Canada, alone, there are seven instances including the Fraser Institute, defining differently what poverty means.

For sure, poverty is linked to a deficit between the income and the size of essential expenses one should make. If it is easy to define income, it is not as easy to define “essential and legitimate expenditures.” However we will agree with one another that sheltering (housing), health, food and education constitute basic needs for every human being today. So a person who spends more than half of his income on essential needs or basic needs is poor.

Author Christopher Sarlo (Poverty in Canada, 1997) defines poverty as lack of any item required for maintaining the long term physical well-being of a person. This definition has the value of including shelter, clothing, food, education, personal hygiene needs, health care, telephone and maybe a car!

Whatever definition we might find, we will agree that today to outline poverty one should be able to have the minimum adequate income to maintain his family as unit, to preserve his health and to live in dignity or self-respect of the individual. The minimum requirement needed for social support and self-respect is essential in any space one is living.

Debt Cancellation: The Insufficient Signal

To cancel debt for the most poor countries whose majority are in Africa will not be the end of Calvary for the African population. Even though I agree that the burden of paying debts was too heavy on the shoulders of African countries. I am still convinced that the new deal reached between G8 to cancel debts of 18 countries is not the right signal. And I have enough reasons

Ethical Justice

Debt is tied to an obligation of reimbursement from the contractor as an act of reparation, trust, justice and earning respect and protecting his dignity. Saying so, it is unfortunate that African countries who have not been able to pay their debts have pulled down the esteem they had to gain from their peers of the West. Not paying one's debts is a failure to justice and treason of trust.

Saying this, I must also agree that these debts for some of the countries were too heavy and quite impossible to be repaid even in a hundred years from now. However, bad governance, corruption and leadership deficit going on in most of the indebted countries reveal that debt is not the main and principal reason for Africa's poverty. While Congo Kinshasa owes 14 billion dollars to Western countries, Mobutu's fortune alone equals that debt. And according to the UN investigations on looting of Congo's riches by AFDL and Kabila's regime, this regime has stolen, only after five years in power, a colossal amount of five billion dollars! So the two put together will give a total of nineteen billion able to pay the external debt and also to build roads and foster free primary education in Congo-Kinshasa.

We can see clearly that bad governance with its corollaries corruption and negative leadership are the main causes of poverty in Africa. And that cannot be fixed by canceling the debts. It can be fixed only by stopping bribery and thievery. Corruption, bribery, and theft would end if and only if the international community agreed to find and repatriate the money stolen from African regimes. The impact of such a coordinate campaign will have more impact than canceling debts. This is the only way to tackle the problem of corruption by tackling the infrastructure that supports it.

By Jean Pierre Nziya Yambwa



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Franziska Seel | Jun 19th, 2005
Hi Jean-Pierre, thanks for sharing your thoughts on debt cancellation. First of all, I would like to provide you with an (in my opinion) excellent definition of poverty, taken from the book "The end of poverty" by Jeffrey Sachs: Jeff Sachs differentiates between "extreme poverty", "moderate poverty" and "relative poverty". Extreme poverty means that households cannot meet basic needs for survival (such as food, health care, safe drinking water and sanitation and education). You can also define extreme poor by those who live on less than $1 per day. Moderate poverty means that basic needs are met, but just barely (these are the poor living on less than $2 a day). Relative poverty finally means that the household income level is below a given proportion of average national income - so poor people in Canada would fall under this category. On the second issue you talk about in your article, I would like to comment that I find this a very interesting idea. You are right when you say that Western countries need to stop covering African dictators and hold them accountable for literally stealing so much money from their states. In fact, I wasn't really aware about the amount that is still vanishing into the pockets of some African leaders today. Did Congo-Kinshasa actually receive debt cancellation as well? It shouldn't... Only those countries who are commited to good governance should receive debt cancellation and more aid. I'm a bit confused about this. Wouldn't you agree that it makes sense to cancel debt of those countries who are good governed and who have a low level of corruption?

The debt in Africa
Samori Sombel Sy | Jul 6th, 2005
Franzika Seel, I just wanted to live a comment on your response to Jean Pierre's paper. Any country in Africa who is in debt, also has bad governance. So if they should cancel the debts for countries with good governance alone, they won't cancel anything because good governance doesn't reign in the African continent. Just like Jean Pierre said we have to stop the bad governance and go straight to the point. But than again the way I see it is that the World Bank and the IMF which are lending money to african countries don't want to stop bad governance. Because clearly they know these governments are corrupt but yet they put a budget in there hands. It's almost as if it's purposefully done to gain much more out of what they gave. So basically everybody is corrupt in this case. My question to you is how do you stop corruption that grows from the roots? Jean Pierre I think your absolutely right. The reason we are in debt is because the head of countries are putting the money in there pockets, it's very simple. And it is no news that the wealth of these crooked people could pay off much of the debt. But it is irrational and impossible for the countries in debt to pay back the money they own. Because basically it will be paying back money they have no idea what happen to. When debt payments come first, with macro-economic adjustment policies imposed by creditors, health and education budgets are squeezed to the bone. So are other long-term investments necessary for development. Most ominously, international efforts to address the debt burden offer no exit strategy for most indebted African countries

Max | Oct 17th, 2010
Thanks for great article!!! Very useful information!

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