Marketplace, December 17, 2003
Iraq owes about $120 billion to the rest of the world. Unless that debt isreduced, there's almost no chance Iraq can get back on its feet. A lot ofIraq's future earnings would have to be spent servicing the debt rather thanmodernizing itself. This is why James Baker, President Bush's new envoy, isfocusing on debt relief as the most important first step in rebuilding Iraq'seconomy, thereby stabilizing the country and, presumably, warding offterrorism.
Follow the logic: Erasing Iraq's debt means more money available for schools,roads, health care, reliable electricity, and other basics that Iraq needs tobecome prosperous. And with prosperity will come stability and democracy, andless risk of terrorism.
The Bush administration should extend the same formula elsewhere around theworld. Over 700 million people live in extreme poverty in 42 countries. Thesenations are so heavily burdened with foreign debt that they spend more moneyservicing the debt than addressing their citizen's basic needs. Debt paymentsare sucking up about 60 percent of these nations' budgets. Yet reducing ThirdWorld debt is simply not on the United States agenda.
As the Bush administration spends billions modernizing Iraq, America's aid topoor nations is a joke. The President wants $200 million to fight AIDS,tuberculosis, and Malaria in developing countries. We spend that much in Iraqin a day and a half.
I'm not suggesting global poverty is the cause of terrorism or that helpingspread prosperity will itself deter terrorism. But we fool ourselves if wethink there's no relationship between Third World poverty and the spread ofIslamic fundamentalism. Or between poverty and the anger and despair on whichterrorism feeds.
While the global economy has grown at an ave of 2.3 percent a year for past 3decades, the gap between best-off and worst-off countries is ten times widernow than it was 30 years ago. Of the 6 billion inhabitants of the planet today,almost half are struggling to survive on less than $2 a day.
Coincidentally this week -- as Jim Baker tries to persuade other rich nations toreduce Iraq's debt burden -- the world's poor nations are meeting in Marrakesh,Morocco. On their agenda: Their crushing debt burdens to rich nations. Americawould be wise to respond.
