Review of Susan George's - A fate worse than debt - Environments & Societies A - Dr. Lynne Brydon

SRN: 513355   Word Count - 1489

	The lively, journalistic, and occasional entertaining prose in George's book is not merely a stylistic coincidence, but a deliberate feature of this work of economic, sociological and political analysis. In this work, she overviews and examines various features of what she terms the 'debt crisis', but she also goes beyond impartial analysis in compiling a manifesto; a call to arms to fight what in what she sees as a very real war. It is the book's explicitly radical agenda that requires her write in such an impassioned way; and in doing so, she has created an insightful and potentially important work. To consider whether writing with such an overt agenda assists or hampers the accuracy and clarity of her work, an overview of the book's content is required.

	The 'debt crisis' which is the subject of the text is interpreted by George as being far more than just an economic issue. Instead, she argues, it is one which has origins in the politics of the decolonization period. She deliberately avoids a detailed analysis of the origins of debt here, justifying her "rather cursory...attitude” by pointing to “the thousands of pages exant elsewhere on the subject"(p.3). It is a sound assumption, she argues, that the large amounts of money that have been lent to the third world have led to great levels of human suffering. She also outlines how much of the money lent to third world nations was done so illegitimately. In many cases loans were made to oppressive dictactors, and in others, vast sums of money were poured in what were often ridiculously inappropriate and often harmful 'white elephant' projects. She reminds us that debt is a "normal economic phenomenon" (p.11), and therefore explains that the focus of her enquiry will be how the 'debt crisis' has been allowed to mutate into such an "intractable problem" (p.11); in other words, why has the money not been invested effectively; or to pose an even blunter question, 'where has the money gone?'. Poor governance, is one of her answers, particularly militarization (21-27)  and corruption (15-17). The phenomenon of 'captial flight', a process whereby a loan to a Southern country is made, and "almost instantaneously, a large proportion of it returns to [the bank's] coffers as deposits" (p.15), transferred their by corrupt officials and national companies, is also described. However, she also explains that "there were some completely unavoidable reasons for incurring debt, which had nothing to do with the choices of the borrowers themselves" (p.27), in particular, oil prices and interest rates. Either way, George asserts, the poor of the South are harmed unjustly by the debt that has been ascribed to their nations.

	In the final section of the book George gives her own personal interpretation of the debt crisis, and a suggested solution to it. She argues that mantaining the status quo is in virtually no-ones interest. The only people who benefit from the debt in the long term fall into two categories. Firstly, there are the wealthy elites within the South, the often corrupt minorities who feather their own nests. It is interesting to see how her identification of this "thin layer at the top of society" (15) compares with Frank's comprador class, who, as summarised by Webster, have  "wealth and lifestyles were heavily dependent on the activities of the economic elite in the centre" (1990: 85). Despite this analytical similarity,  her solution, which is dependent on Northern management and enforcement of development programmes, could hardly be more different from Frank's hopes for "alternative development paths pursued by particular countries or regions delinked from [the metropole centre]" (Leys: 33).

	Similarly, she deconstructs the idea of defaulting on debt payments, either through creditor cancellation or debtor repudiation. Her belief that this is a "psuedo-solution" (p.244) is explained in two ways. Firstly, she attacks the worth of any plan which cancels out only part of a debt. This, she says, will have no effect, as the part cancelled is probably the part going unpaid anyway; a false show of largess by the creditors. Not only will this have no impact on the debt payments, it will help to legitmate the debt that remains. She also goes further, arguing that even total debt cancellation would be an inadequate solution. She asserts that this is the case because the debt crisis, for the South, "is not one, but two huge problems: how to pay back wha they owe, of course, but also ... how to ensure continued access to new money" (p.199). If new money cannot be found, she argues, governments will have to choose between bankcrupcy or simply lending more money over again, probably, because of their less credit-worthy status, as even worse rates. A truly effective solution, that is, one which address fundamental global inequalities and offers the peoples of the third world a opportunity for development, has to go further than mere cancellation. 

	Her proposal is called 'the 3-D solution', the eponymous Ds being Debt, Development and Democracy. She proposes a "negotiated settlement [between the North and the South] recognizing that debt is not an economic but a political problem, and that it can be in everyone's interest to resolve it" (p.243). Her solution is essentially a process that frees the South of debt payments and enables access to funds, but within a controlled framework that is "calculated so as not to create inflation" and specific to "national development funds whose uses are determined by authentic representatives of the state". Such a programme would be designed to promote social welfare and invest in the future, with particular attention to "primary health care, literacy, education and the promotion of women" (p.245). 

	George's analysis of her own programme points towards several avenues of criticism. Firstly; her programme of 'creative reimbursement' appears to make several assumptions about what the people of the South want. Social justice, democracy, health-care, education and so on are not intrinsically objectionable goals, yet imposing them, by forcing Third World governments to adopt them, on others could well be seen as neo-colonialism, a form of cultural imperialism. Her observations regarding the IMF repeatedly "violate[ing] the principle of national sovereignty" (p.257) as well as a one-size-fits-all model of its Structural Adjustment programmes appear to contridict her own solution. If her criticism of the IMF is to follow Milton Freidman's assertion that "a continued movement towards centralized economic control would prove The Road to Serfdom", then we must question whether her own '3-D solution' might be undermined by the same Hayekian flaws as the austerity programmes she depises.

	She hopes to avoid "rigid, IMF-type conditionality"  (p.249), ands misdirected funds in the form of "corruption and government deck-stacking" largely through the participation of NGOs and some form of democractic public accountablility (p.247). Her goal here is admirable; that is to give the vast, previously unvoiced, majority a real say in their own development. However, it is difficult to be certain how sucessful her safeguards would be in preventing corrupt or misguided developments. Many development sociologists, such as Craig and Mayo, argue that NGOs "almost universal[ly argue in favour of] empowering the poor" (cf. Potter et al 2003: 313), yet, as Potter et al comment, "it cannot be assumed that all interests are served equitably [through NGO intervention" (2003: 313).

	Perhaps a more fundamental issue is here the assumption of democracy's superiority. While few mainstream social theorists argue in favour of oppressive, oligarchic modes of governance, the ability of democracy to offer each citizen each access to power appears unproven in an African, or Third World, context. We must consider the possibility that it is intellectual arrogance that has helped create situations such as the debt crisis, and by adopting a programme whose goals have been pre-defined by a Western development theorist, we will be simply making the same mistake again, even if the programme is as well-intentioned as George's appears to be. 

	A final evaluation of this work should recognise that it is a hybrid of analysis of events, and synthesis of various theories and explainations for, the debt crisis. But more importantly, it puts forward a plan, a suggested road-map for the future. Most of the flaws in her analysis and synthesis are acknowledged within the text, for example, she registers her unease at using "broad-brush geopolitical analysis" (p.229). These problems are mainly ones which could not be altered without serious compromising the book's concise, accessible quality. Allowing for these issues, one can see the text as an excellent introduction to the main issues of the debt crisis. Her treatment of theories that she clearly disagrees with, for example, the free-market economic values behind the IMF's structural adjustment programmes, is balanaced and insightful rather than dismissive. Her explainations of the economic processes driving the debt crisis are insightful and easily adaquate for presenting an accurate analysis of the global structures and systems in place. One could perhaps offer a harsher criticism of her suggested solution, as it appears to be somewhat piecemeal, and it sketchs out future in insufficient depth to be immeadiately useful. However, one should ultimately praise this work , because despite the problems that significantly weaken her '3-D solution',  her for courage in contributing so boldly and optimistically to an academic debate often characterised by negativity and pessimism is admirable, certainly more so than those who resign themselves to the inevitable ‘fate’ of the debt crisis sarcastically refered to in the title.	

A Fate Worse Than Debt essay bibliograpy

George, S 1994 A fate worse than debt - A radical analysis of the Third World debt crisis. London: Penguin.

Freidman, M 2002 Capitalism and Freedom. Chicago and London;  The University of Chicago Press.

Leys, C 1996 The Rise and Fall of Development Theory Nairobi, Bloomington, Indianapolis, Oxford: EAEP, Indiana University Press, James Currey.

Potter RB, Binns T, Elliot J, Smith D 2003 Geographies of development – Second Edition. Harlow :Prentice Hall.

Webster, A 1990 Introduction to the Sociology of Development - Second Edition. Basingstoke, New York: Palgrave.