Email this article

Arias Foundation for Peace and Human Progress

Overwhelming debt and irresponsible military spending are two of the greatest barriers to human development in the world's poorest countries. This past weekend, leaders of the G7 nations announced a plan for significant debt relief. While this plan is an important first step, there remains a desperate need for a broader program of reform that acknowledges the relationship between debt, defense, and development. The international community needs an ambitious new regime of debt forgiveness, one that would reward countries committed to cutting their military budgets.

The foreign ministers of the G7 countries, along with a plethora of humanitarian organizations, have already recognized that poor countries' huge debt obligations perpetuate human suffering. The United Nations Development Program tells us that millions of children could be saved if African countries were relieved of debt payments. In my own region of Central America, the two countries hit hardest by Hurricane Mitch, Honduras and Nicaragua, have a combined foreign debt of over ten billion dollars. And last year, each paid approximately one million dollars a day to service its debt.

Even under the G7's current program for reform, poor governments may be forced to pay large percentages of their budgets on debt payments while children starve and neighborhoods lie in ruin. In a best case scenario, this plan would relieve approximately half of the debt owed by poor nations. But it would leave intact well over $50 billion in dehabilitating obligations. In an age when the wealth of the most fortunate countries (measured by stock market gains) soars by over a trillion dollars each year, and when bankers benefit from huge bailouts for troubled investments, reservations about eliminating unjust debts are morally indefensible.

Moreover, the present plan for debt forgiveness maintains the wrong kind of conditionality. Countries desiring aid would still be subject to years of economic adjustment before receiving substantial relief. Sadly, many developing countries have seen that restrictive financial measures tend to favor wealthy investors over struggling communities, and that outstanding loans represent for some creditors a means of gaining unfair leverage in trade negotiations. Indeed, with past restrictions, only two of the 42 heavily-indebted poor countries were able to receive much-needed aid.

A new program of debt forgiveness must end these punitive requirements, and instead promote conditions to ensure that available funds will be devoted to health and education. Toward this end, leaders must recognize the crucial link between poverty, debt, and military spending.

Tragically, as much as $400 billion worth of the loans taken between 1960 and 1987 was used to finance arms purchases, rather than to benefit impoverished citizens. Half of the world's governments, in the face of tremendous human need, spend more on soldiers and weapons than on doctors and vaccinations. As countries build sophisticated arsenals, and deploy them in regional and civil conflicts, the depths of human misery only grow more profound. Sadly, many of the same nations that exact imposing debt payments also encourage arms build-up by aggressively vending their weaponry on the international market.

To end this nefarious state of affairs, the creditor countries should reward debtor nations that agree to reduce military spending and instead invest in human development. While the world's poorest countries must benefit immediately from debt forgiveness, other developing countries' debts should be relieved at a rate proportional to decreases in their military budgets.

The struggle for humane debt relief is not over. As they implement their agreements, the G7 nations must see that eligible countries indeed qualify quickly for aid. The many organizations in civil society have joined in the Jubilee 2000 coalition must continue pressuring for debt cancellation. Finally, domestic leaders should support the ambitious debt-relief legislation that Representative Cynthia McKinney has brought before Congress.

The two-fold crisis of excessive military expenditure and massive indebtedness has perpetuated evils that affect us all - poverty, political instability, environmental destruction, drug trafficking, and violence. Fortunately for the international community, we can advance promising solutions to these problems. We simply must have the ethical foresight to stop the vicious cycle of debt and militarization.

back to the top