# Is there any legitimate reason for \*not\* forgiving third world loan debts? **URL:** \ **Category:** Great Debates\ **Created:** [January 31, 2010, 2:28am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080 "2010-01-31T02:28:13Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Simplicio](https://avatars.discourse-cdn.com/v4/letter/s/c37758/32.png) [@Simplicio](https://boards.straightdope.com/u/Simplicio)\ **Post date:** [January 31, 2010, 4:09am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/21 "2010-01-31T04:09:58Z")
> [@sleeping](#): > > And, the fact that South Africa had a _majority_ that was ruled by a minority, not the other way around. S. Africa’s external debt in 2005 (the last year I could find a number for) was only 25 billion (like 10% of their GDP), and presumably a good part of that was accumulated post-apartied. I don’t think there’s much argument that they’re currently being crippled by debts left over from minority rule. Again, I’m not totally against debt forgiveness if the money was truly misspent by dictators and the like, but I think you need to put forward specific and convincing cases where that was the case, instead of vaguely gestering towards the entire debt load of the third world. S Africa doesn’t seem to be a great case. For example, after the latest Iraq War, the US convinced several countries to forgive Iraq’s debts. This was in part because these countries had basically lent money to Saddam so that he could fight Iran and keep unrest down in his own country, because his Sunni neighbors didn’t want him being overrun by Shia. Once Saddam was gone, it seemed somewhat perverse to make the new Shia led gov’t repay the money that had been borrowed partially to finance their own oppression. In cases like that, I see a pretty strong case for debt forgiveness. If you want to get your money repaid, you shouldn’t lend it to shady dictators. ---
**Author:** ![sleeping](https://avatars.discourse-cdn.com/v4/letter/s/839c29/32.png) [@sleeping](https://boards.straightdope.com/u/sleeping)\ **Post date:** [January 31, 2010, 4:12am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/22 "2010-01-31T04:12:34Z")
> [@Captain\_Amazing](#): > > Right, but the debt is owed by the country, not the particular government. The money was still borrowed by South Africa. If the government at the time chose to use that money to only benefit a minority of the people, that’s not the fault of the lenders. If the South African government in 1950, say, found a new diamond mine, mined and sold all the diamonds in it off and then used the money to benefit only the whites, then when the government became black controlled, that doesn’t mean that the diamonds should be given back to the new South African government. That the debt is being transferred to the next government is precisely the problem. In what way is any of this an argument against debt forgiveness? As for the lenders, they knew what they were getting into, and that they were funding an oppressive, racist regime. If such debts were cancelled, it would give lenders an incentive to actually care about the consequences of their actions. Hardly a bad thing. ---
**Author:** ![sleeping](https://avatars.discourse-cdn.com/v4/letter/s/839c29/32.png) [@sleeping](https://boards.straightdope.com/u/sleeping)\ **Post date:** [January 31, 2010, 4:29am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/23 "2010-01-31T04:29:52Z")
> [@Simplicio](#): > > S. Africa’s external debt in 2005 (the last year I could find a number for) was only 25 billion (like 10% of their GDP), and presumably a good part of that was accumulated post-apartied. I don’t think there’s much argument that they’re currently being crippled by debts left over from minority rule. It’s not only the debts themselves, it’s also the dictating of the internal policies of these countries in the name of ensuring profits. South Africa being a great example of this, too. > [@](#): > > Again, I’m not totally against debt forgiveness if the money was truly misspent by dictators and the like, but I think you need to put forward specific and convincing cases where that was the case, instead of vaguely gestering towards the entire debt load of the third world. Fair enough. I’ll add Honduras to South Africa for now. More later. > [@](#): > > For example, after the latest Iraq War, the US convinced several countries to forgive Iraq’s debts. This was in part because these countries had basically lent money to Saddam so that he could fight Iran and keep unrest down in his own country, because his Sunni neighbors didn’t want him being overrun by Shia. Once Saddam was gone, it seemed somewhat perverse to make the new Shia led gov’t repay the money that had been borrowed partially to finance their own oppression. In cases like that, I see a pretty strong case for debt forgiveness. If you want to get your money repaid, you shouldn’t lend it to shady dictators. [About that:](http://www.thenation.com/doc/20041101/klein) > [@](#): > > When President Bush appointed former Secretary of State James Baker III as his envoy on Iraq’s debt on December 5, 2003, he called Baker’s job “a noble mission.” At the time, there was widespread concern about whether Baker’s extensive business dealings in the Middle East would compromise that mission, which is to meet with heads of state and persuade them to forgive the debts owed to them by Iraq. Of particular concern was his relationship with merchant bank and defense contractor the Carlyle Group, where Baker is senior counselor and an equity partner with an estimated $180 million stake. > … > The secret deal involves a complex transaction to transfer ownership of as much as $57 billion in unpaid Iraqi debts. The debts, now owed to the government of Kuwait, would be assigned to a foundation created and controlled by a consortium in which the key players are the Carlyle Group, the Albright Group (headed by another former Secretary of State, Madeleine Albright) and several other well-connected firms. Under the deal, the government of Kuwait would also give the consortium $2 billion up front to invest in a private equity fund devised by the consortium, with half of it going to Carlyle. > … > According to Kathleen Clark, a law professor at Washington University and a leading expert on government ethics and regulations, this means that Baker is in a “classic conflict of interest. Baker is on two sides of this transaction: He is supposed to be representing the interests of the United States, but he is also a senior counselor at Carlyle, and Carlyle wants to get paid to help Kuwait recover its debts from Iraq.” After examining the documents, Clark called them “extraordinary.” She said, “Carlyle and the other companies are exploiting Baker’s current position to try to land a deal with Kuwait that would undermine the interests of the US government.” ---
**Author:** ![Odesio](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/odesio/32/20003_2.png) [@Odesio](https://boards.straightdope.com/u/Odesio)\ **Post date:** [January 31, 2010, 4:31am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/24 "2010-01-31T04:31:57Z")
> [@sleeping](#): > > In the U.S., if John borrows a loan from the bank, and then becomes bankrupt, he can file for Chapter 11 and have the debt cancelled. > > The position of the IMF and World Bank seems to be that if Bob borrows money in John’s name, uses for his ends, and then leaves John bankrupt, John is still on the hook for the money. > > That’s the essence of the situation, distilled to a mundane example. I understand that but that wasn’t what I asked. I asked, what’s to stop these 3rd world countries from simply defaulting on their loans? “Sorry, IMF, we’re simply not going to pay those loans back.” Especially, as you said, many of them don’t want IMF loans anyway because of the strings attached to them. Note: I’m not fishing for a specific response from you or trying to grab you in an “ah-ha!” moment. I’m genuinely curious. ---
**Author:** ![Der\_Trihs](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/der_trihs/32/233_2.png) [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)\ **Post date:** [January 31, 2010, 4:35am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/25 "2010-01-31T04:35:55Z")
> [@Chessic\_Sense](#): > > You may call it “forgiving debt”, but it’s really “defaulting on debt”. Do you know what happens when countries default on their loans? No one wants to loan them money anymore. It’s the same as if you or I declare bankruptcy. We can’t get loans anymore because no one trusts us to pay it back. Forgiving a country’s debt stings its “credit rating” in the same bad way. > > No private loans= no new businesses = no climb out of poverty. See? Except that not defaulting on debt just means that they can’t climb out of poverty because paying the interest on the interest on loans whose principle they repaid decades ago crushes them. They are better off not accepting loans from the international version of loan sharks, aka us and our friends the IMF. In the long run they will default on their debt or be forgiven their debts, even if they never see another penny of foreign money; they aren’t going to put up with eternal debt. ---
**Author:** ![Simplicio](https://avatars.discourse-cdn.com/v4/letter/s/c37758/32.png) [@Simplicio](https://boards.straightdope.com/u/Simplicio)\ **Post date:** [January 31, 2010, 4:42am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/26 "2010-01-31T04:42:44Z")
> [@sleeping](#): > > It’s not only the debts themselves, it’s also the dictating of the internal policies of these countries in the name of ensuring profits. South Africa being a great example of this, too. In what way is it a great example? Of what specifically? S. Africa doesn’t seem to owe that much money, I have trouble seeing why they’d agree to terms that they didn’t want to regarding their internal affairs to get loans. > [@](#): > > Fair enough. I’ll add Honduras to South Africa for now. More later. OK, Honduras is… also a country? What is their debt situation, and why do you think it should be forgiven? Just throwing out the names of third world countries isn’t really informing the debate much > [@](#): > > [About that:](http://www.thenation.com/doc/20041101/klein) Even if the accusations are true, I don’t really see the relevance to what I said about Iraq’s debt relief (which was supporting your position, in any case.) ---
**Author:** ![sleeping](https://avatars.discourse-cdn.com/v4/letter/s/839c29/32.png) [@sleeping](https://boards.straightdope.com/u/sleeping)\ **Post date:** [January 31, 2010, 4:43am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/27 "2010-01-31T04:43:53Z")
> [@Odesio](#): > > I understand that but that wasn’t what I asked. I asked, what’s to stop these 3rd world countries from simply defaulting on their loans? “Sorry, IMF, we’re simply not going to pay those loans back.” Especially, as you said, many of them don’t want IMF loans anyway because of the strings attached to them. > > Note: I’m not fishing for a specific response from you or trying to grab you in an “ah-ha!” moment. I’m genuinely curious. No, it’s a fair question, **Odesio**. I guess I have a couple of responses to it: One is simply the moral one, that if these countries are poor, we owe it to raise them up, without exploiting the situation for our benefit. But, along pragmatic lines, I suppose the argument would be that it would create new consumers: > [@](#): > > Ever since 1996, when the World Bank, the International Monetary Fund (IMF), and their member nations agreed on a program to reduce the debts of the highly indebted poor countries, the economic case for forgiveness has become more widely accepted. Nations struggling at the bottom of the totem pole find it harder to pay for schools and healthcare while they’re repaying huge loans. And the world is better off - and will have new consumer markets - if these countries develop. > > [Why it pays to forgive poor nations' debts - CSMonitor.com](http://www.csmonitor.com/2005/0113/p17s02-cogn.html) As I said in the OP, “the credit-based consumer glut that’s been created in the U.S. necessitates consumption by people in other countries.” There was an enormous expansion of output that was based on the assumption of ever-increasing consumption, with Americans as the consumers of last resort. Now that the China-financed credit bubble has collapsed, and Americans can’t keep buying on credit, consumption must be fueled by other countries. Debt forgiveness would allow for the kind of economic growth that would permit the emergence of a middle class in these LDCs to fill that gap between production and consumption. ---
**Author:** ![Captain\_Amazing](https://avatars.discourse-cdn.com/v4/letter/c/6de8d8/32.png) [@Captain\_Amazing](https://boards.straightdope.com/u/Captain_Amazing)\ **Post date:** [January 31, 2010, 4:48am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/28 "2010-01-31T04:48:24Z")
> [@sleeping](#): > > As for the lenders, they knew what they were getting into, and that they were funding an oppressive, racist regime. If such debts were cancelled, it would give lenders an incentive to actually care about the consequences of their actions. Hardly a bad thing. It would make sure the lenders never loaned money to these countries again. Would you loan money to a country if you thought that it would default the next time the government changed? ---
**Author:** ![Der\_Trihs](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/der_trihs/32/233_2.png) [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)\ **Post date:** [January 31, 2010, 4:51am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/29 "2010-01-31T04:51:00Z")
> [@Captain\_Amazing](#): > > It would make sure the lenders never loaned money to these countries again. Would you loan money to a country if you thought that it would default the next time the government changed? Would that be a bad thing, considering how much harm those debts are causing? ---
**Author:** ![bri1600bv](https://avatars.discourse-cdn.com/v4/letter/b/9fc29f/32.png) [@bri1600bv](https://boards.straightdope.com/u/bri1600bv)\ **Post date:** [January 31, 2010, 4:51am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/30 "2010-01-31T04:51:02Z")
> [@sleeping](#): > > [$14.4 trillion and counting](http://motherjones.com/politics/2010/01/real-size-bailout-treasury-fed) I don’t think that’s apples to apples comparison. OP is talking about 2.1T in forgiven money. That chart has a guarantee of the money market funds (which aren’t guaranteed anymore afaik) of 3T when the actual cash cost to the government is a big fat zero as there haven’t been any defaults. The fed has purchased hundreds of billions of interest bearing assets from freddie and fannie, but that’s not a “bailout” as those assets are paying money. The fed is actually earning a profit on them. So while it’s cash out the door now, the fed has interest bearing securities which are worth what they paid for them. ---
**Author:** ![sleeping](https://avatars.discourse-cdn.com/v4/letter/s/839c29/32.png) [@sleeping](https://boards.straightdope.com/u/sleeping)\ **Post date:** [January 31, 2010, 4:55am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/31 "2010-01-31T04:55:06Z")
> [@Simplicio](#): > > In what way is it a great example? Of what specifically? S. Africa doesn’t seem to owe that much money, I have trouble seeing why they’d agree to terms that they didn’t want to regarding their internal affairs to get loans. Well, that has to do with the arrangements that we made during the transfer of power between the de Clerk government, and the democratic one. The African National Congress leaders were so keen on merely gaining civil rights that they did not realize what they were giving away during conferences. Economic advisers actually did realize that agreeing to World Bank debt repayment terms would preclude the new government from redistributing wealth to address the economic inequalities that were the long-term consequence of the apartheid state. And they warned their political leaders. But, the concessions were nevertheless made, mostly due to exhuberance and lack of awareness. > [@](#): > > OK, Honduras is… also a country? What is their debt situation, and why do you think it should be forgiven? Just throwing out the names of third world countries isn’t really informing the debate much > [@](#): > > The Fund and its advocates argue that the IMF has changed. The IMF is “back in a new guise”, says the Economist. This time, we are told, it’s really going to act as a multilateral organisation that looks out for the countries and people of the world, and not just for Washington, Wall Street or European banks. > > But it’s looking more and more like the same old IMF on steroids. Last week the IMF disbursed $150m to the de facto government of Honduras, and it plans to disburse another $13.8m on 9 September. The de facto government has no legitimacy in the world. It took power on 28 June in a military coup, in which the elected President Manuel Zelaya was taken from his home at gunpoint and flown out of the country. > > [IMF: stop funding Honduras | Mark Weisbrot | The Guardian](http://www.guardian.co.uk/commentisfree/cifamerica/2009/sep/03/imf-honduras-aid-zelaya) ---
**Author:** ![Captain\_Amazing](https://avatars.discourse-cdn.com/v4/letter/c/6de8d8/32.png) [@Captain\_Amazing](https://boards.straightdope.com/u/Captain_Amazing)\ **Post date:** [January 31, 2010, 4:55am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/32 "2010-01-31T04:55:27Z")
> [@Der\_Trihs](#): > > Except that not defaulting on debt just means that they can’t climb out of poverty because paying the interest on the interest on loans whose principle they repaid decades ago crushes them. They are better off not accepting loans from the international version of loan sharks, aka us and our friends the IMF. In the long run they will default on their debt or be forgiven their debts, even if they never see another penny of foreign money; they aren’t going to put up with eternal debt. The IMF only loans money to countries who can’t receive loans from anyone else, and it requires that the money from those loans be invested in projects that will make money so that the country can repay the debt, as well as reforming their economies. What happens though, is that the governments take the money and then don’t follow through on the rest of it. ---
**Author:** ![Moirai](https://avatars.discourse-cdn.com/v4/letter/m/96bed5/32.png) [@Moirai](https://boards.straightdope.com/u/Moirai)\ **Post date:** [January 31, 2010, 4:55am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/33 "2010-01-31T04:55:51Z")
May I make a suggestion for a bit of light reading? [Confessions of an Economic Hitman](http://www.amazon.com/gp/product/0452287081/ref=pd_lpo_k2_dp_sr_1?pf_rd_p=486539851&pf_rd_s=lpo-top-stripe-1&pf_rd_t=201&pf_rd_i=1576753018&pf_rd_m=ATVPDKIKX0DER&pf_rd_r=1XW5N8DX7442FMTYDE3M) by John Perkins- it will make you think twice (or more) about the way we “spread democracy” to the rest of the world. Whether you agree or disagree, it’s a very good read. Basically, poor countries are pressured to take IMF or World Bank loans we KNOW they cannot afford to pay back, ever (yes, I said WE- the US runs both). The contracts stipulate that certain infrastructure and other projects (that the countries actually DO desperately need) will be won by certain companies (KBR, Halliburton, etc), making those companies lots of money. Then, when the country defaults on the loan (as it must) or prepares to default, it is forced to give various concessions to the US as punishment… er, I mean, as security against the loan, usually involving land, mineral rights, oil licenses, military bases, UN votes, whatever. We force the poor to stay poor, plus we extort them in the process. Nice. _Allegedly_. ---
**Author:** ![Captain\_Amazing](https://avatars.discourse-cdn.com/v4/letter/c/6de8d8/32.png) [@Captain\_Amazing](https://boards.straightdope.com/u/Captain_Amazing)\ **Post date:** [January 31, 2010, 4:57am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/34 "2010-01-31T04:57:10Z")
> [@Der\_Trihs](#): > > Would that be a bad thing, considering how much harm those debts are causing? Yes, it would be a terrible thing. Without external investment, these countries will never rise out of poverty. ---
**Author:** ![Simplicio](https://avatars.discourse-cdn.com/v4/letter/s/c37758/32.png) [@Simplicio](https://boards.straightdope.com/u/Simplicio)\ **Post date:** [January 31, 2010, 5:08am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/35 "2010-01-31T05:08:34Z")
> [@sleeping](#): > > Well, that has to do with the arrangements that we made during the transfer of power between the de Clerk government, and the democratic one. The African National Congress leaders were so keen on merely gaining civil rights that they did not realize what they were giving away during conferences. Economic advisers actually did realize that agreeing to World Bank debt repayment terms would preclude the new government from redistributing wealth to address the economic inequalities that were the long-term consequence of the apartheid state. And they warned their political leaders. But, the concessions were nevertheless made, mostly due to exhuberance and lack of awareness. But in that case the new gov’t agreed to the terms of the loans, against the advice of their advisors, even if it was a dumb idea for them to do so. Even if they did get a raw deal, it seems to be one they entered into on the level. A loan signed under the influence of “exhuberence” still needs to be repaid. And in anycase, they appear to have paid most of them back at this point, so it seems even if the lonas should’ve been forgiven, the time for doing so is probably past. ---
**Author:** ![Captain\_Amazing](https://avatars.discourse-cdn.com/v4/letter/c/6de8d8/32.png) [@Captain\_Amazing](https://boards.straightdope.com/u/Captain_Amazing)\ **Post date:** [January 31, 2010, 5:16am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/36 "2010-01-31T05:16:06Z")
> [@Moirai](#): > > May I make a suggestion for a bit of light reading? [Confessions of an Economic Hitman](http://www.amazon.com/gp/product/0452287081/ref=pd_lpo_k2_dp_sr_1?pf_rd_p=486539851&pf_rd_s=lpo-top-stripe-1&pf_rd_t=201&pf_rd_i=1576753018&pf_rd_m=ATVPDKIKX0DER&pf_rd_r=1XW5N8DX7442FMTYDE3M) by John Perkins- it will make you think twice (or more) about the way we “spread democracy” to the rest of the world. Whether you agree or disagree, it’s a very good read. It’s a good read for a novel. Perkins makes a lot of unsubstantiated claims in that book, and there’s not much evidence that he actually told the truth about a lot of the things he was claiming. ---
**Author:** ![Dissonance](https://avatars.discourse-cdn.com/v4/letter/d/85f322/32.png) [@Dissonance](https://boards.straightdope.com/u/Dissonance)\ **Post date:** [January 31, 2010, 6:16am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/37 "2010-01-31T06:16:28Z")
> [@sleeping](#): > > That the debt is being transferred to the next government is precisely the problem. In what way is any of this an argument against debt forgiveness? I see. So the US should default on its debt every 4 or 8 years; after all it’s just debt transferred from the previous government. Care to make any guesses about what doing that would do? ---
**Author:** ![Der\_Trihs](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/der_trihs/32/233_2.png) [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)\ **Post date:** [January 31, 2010, 7:14am UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/38 "2010-01-31T07:14:30Z")
> [@Captain\_Amazing](#): > > The IMF only loans money to countries who can’t receive loans from anyone else, and it requires that the money from those loans be invested in projects that will make money so that the country can repay the debt, as well as reforming their economies. “Reforming” meaning “twisting them into an economy designed to benefit the wealthy countries, regardless of the harm done”. Which is one reason why so many don’t want the IMF’s money; they aren’t interested in becoming the subjects of economic imperialism. > [@Captain\_Amazing](#): > > Yes, it would be a terrible thing. Without external investment, these countries will never rise out of poverty. And they’ll never rise out of poverty if they are kept in permanent debt, either. They’d be more likely to succeed without such poisonous loans. ---
**Author:** ![sleeping](https://avatars.discourse-cdn.com/v4/letter/s/839c29/32.png) [@sleeping](https://boards.straightdope.com/u/sleeping)\ **Post date:** [January 31, 2010, 2:01pm UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/39 "2010-01-31T14:01:00Z")
> [@Dissonance](#): > > I see. So the US should default on its debt every 4 or 8 years; after all it’s just debt transferred from the previous government. Care to make any guesses about what doing that would do? Incorrect. We still have the same government, we are simply choosing its next incarnation in a democratic process. Whereas the change from white-minority oligarchy to democracy really is a change in government. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [January 31, 2010, 2:59pm UTC](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080/40 "2010-01-31T14:59:38Z")
> [@sleeping](#): > > But many in these countries don’t even want the IMF loans because they are aware of the strings that are attached; in other words, they would rather have no financial support and be able to manage their own affairs, than have onerous debt and the required “restructuring.” That’s the argument from democracy. Name three. I’m sure lots of developing countries would like the loans with fewer strings attached. Who wouldn’t? Name three countries who’d rather have no loans at all and “be able to manage their own affairs.” It seems to me like that’s an easily solved problem; don’t accept the loans. Poor countries are poor largely because they’re badly run. There’s a remarkably strong correlation between a country’s poverty and its level of corruption, political instability, economic stupidity, and the number of its leaders who wear military uniforms. Look at sub-Saharan African countries. Botswana, which is 70% desert, struggles with AIDS and isn’t any more blessed in natural resources than most of its neighbours, has a per capita GDP about ten times higher than many other African countries. Not coincidentally, Botswana’s been run by a stable, practical, non-corrupt civilian government more or less from the day it became independent. > [@](#): > > The other reason is that this very debt is a significant cause of their poverty. And yet developed nations often have very high levels of debt and don’t look like Malawi. For all the “poisonous loan” talk, there’s a curious lack of examples. What countries - please be specific - have these poisonous loans? And what, might I be so bold to ask, is their level of foreign aid acceptance? [Previous page](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080.md?page=1) [Next page](https://boards.straightdope.com/t/is-there-any-legitimate-reason-for-not-forgiving-third-world-loan-debts/527080.md?page=3)