A year or two ago, the big thing was forgiving the 3rd world’s debt. It was the cause celebre.
Yet the almighty media and rock stars seem to have not been talking about it for quite some time.
So was it a success and they closed shop? Or was it a failure and they’ve moved on?
What ever happened to the 3rd world debt issue?
It’s been pushed out of the headlines by the 1st world debt issue.
Debt forgiveness has happened several times in several places. It doesn’t really work because they just get into debt again.
I seem to recall that the Bush administration forgave debt for a number of countries in order to get Coalition of the Willing support during the run-up to the Iraq war, but I don’t have a cite.
How does a country forgive a debt? Aren’t the loans made by banks, with US government guarantees? “Forgiving” the debt would be a big F-you to the banks, who’d never accept US bonds securing the debt again.
On edit: or, does “forgiveness” mean the government pays off the loan to the bank itself?
We’re talking about conditional foreign aid, between governments- very little foreign aid is a simple cash gift. Most of it comes in the form of low-interest loans for building infrastructure and the like… and it comes from governments rather than banks.
Private banks don’t generally lend to third world countries. It’s like lending money to your Uncle Frank who you know will blow it on hookers and booze, only this Uncle Frank has tanks and fighter planes and doesn’t have any US assets for you to freeze.