If You Think the Third World Debt Crisis was Solved Last Summer at the G8, Think Again

Last July, debt relief was all the rage. Bono crooned at the Live 8 benefit concert in London--one of almost a dozen taking place worldwide--and the leaders of the G8 nations met in Scotland to negotiate a response to the issue. In the end, the elected officials agreed to a breakthrough debt relief deal for some of the poorest countries in the world. They unanimously declared that providing relief, especially for sub-Saharan Africa, was a moral and economic imperative. President George W. Bush remarked that struggling nations "should not be burdened by mountains of debt" and announced that the G8 proposal would "eliminate 100 percent of that debt." All that was left, the rhetoric suggested, was for the heads of state to congratulate themselves for their high-minded deeds.

Fast forward to the present. Public attention has shifted elsewhere and, while some genuine gains have been secured, much more work remains to be done to eliminate unjust debts that stifle countries in the developing world.

The on-going task has boiled down to addressing three problems. First, until this week, the World Bank had yet to follow through on its part of the G8 deal. Pressuring the Bank to implement in a fair way has required continued pressure. Second, many desperately poor countries do not qualify for relief from the World Bank, IMF, or regional banks under last year's agreement; G8 leaders must expand the deal to include timely cancellation for more nations. Third, citizens in countries that have overthrown undemocratic leaders are still stuck paying the debts of their past oppressors--because even after proclaiming that the Iraqi people should not be burdened with Saddam Hussein's debts and rallying creditors to forgive Iraq's "odious" obligations, President Bush has failed to apply the same standard of forgiveness to countries the U.S. army has not recently invaded.

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