There has been a lot of talk recently about writing off debts to "third world" countries.  Those in power in "the west" have been touting this idea as some great favour to celebrate the beginning of the third millennium.  But is it such a big favour?  Have the countries involved any real moral responsibility to continue payments on debts which may well have been taken out in their name, but which benefited very few individuals in the countries concerned.

When we lived in Nigeria in the 1960s my mother was a catering manageress.  We always knew when the latest aid package had arrived in the country because one of the government representatives would call my mother and asked her to provide catering  for mammoth parties.  The orders were usually worth thousands of pounds..... the equivalent of hundreds of thousands today.

That pattern of squandered aid was probably repeated across at least half of Africa, if not the world.  Billions of dollars in aid must have found their way into Swiss bank accounts, or else funded oppressive secret police organizations or ruthless counter insurgency groups.

The money in question was lent to countries, but received by individuals.  Those individuals may have signed on behalf of their country, but they often spent the money on themselves and their cohorts.  Is it still fair to expect countries to honour debts acquired dishonourably?

Let me put it this on a personal level to try and illustrate how I see the issue.  If a bank were to lend me money, it would surely be up to them to assess if I represented a bad credit risk or not.  Were I to demand a huge sum, the normal procedure would be to ask me to provide some sort of collateral... such as the deeds to a property I own... or jewellery or something else tangible.  If the bank failed to insist on such guarantees and I were to decide to simply take the money and run, would it not be the bank who would have to bear the loss and not members of my family or friends who could in no way be held morally responsible for my individual actions.  Yet this is exactly what millions of people throughout the developing world are being asked to do.... to carry the burden for tin pot dictators who bled their countries dry for their own personal gain.

The banks and countries who made such high risk loans to corrupt leaders must have known that the money was being siphoned off.  Apparently this concerned them little, since the leaders in question were accepting their money on behalf of their nation and it was the nation which was guaranteeing to pay back the loan.... no matter how it was spent.

It seems obvious to me that those lending organizations took foolish risks and made little or no effort to control how money was spent and where it went. Effectively they agreed to loan individual criminals billions and expect millions of people who saw no benefit from such schemes to bear the brunt of the repayments for generations to come.  That was an immoral act and a less than honourable deed.  I feel there is no moral obligation on countries burdened with such debts to pay them back.  The burden of the repayments should fall on those who benefited from the loans... who doubtless still have millions making money in international investment schemes out of the Cayman Islands.  If the creditors cannot trace these debtors they should do what they would do if it was me who had swindled them.... write off the loan and instigate criminal proceedings against the swindler.  They should certainly not go around claiming the moral high ground for having made immoral loans in the first place.
 

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