Debt and the world's children
THIRD-world debt has anguished politicians, economists, bankers. But now we find where the anguish has really been felt - among the poor whose children have lacked nutrition, health care, and education because their country's resources have increasingly gone to paying off foreign debt instead of building better lives. A United Nations Children's Fund (UNICEF) report released this week estimates that half a million young children in the developing world died over the past year because of this allocation of resources. That's a small fraction of the millions taken yearly by famine and disease, but it's startling nonetheless. Countries that should be gearing up for economic growth are sliding toward economic and political chaos instead.
Add to the UNICEF report the World Bank's recent study showing the rate at which resources are draining out of the world's poorer countries, and the need to adjust priorities and policies becomes even clearer. The bank finds debtor nations paying out $31 billion more than they're taking in - triple the ratio of five years ago.
Easing the debt burden on developing countries is not in itself a full answer to their complicated economic problems, but it is an unavoidable first step toward stability and growth.
George Bush has said his administration will undertake a thorough review of United States policy on third-world debt. That's a crucial, and long overdue, step. The current US approach is embodied in the Baker Plan, named after James Baker III, soon to take charge of the State Department. This plan tied increased loans to debtor nations to economic reforms within those nations - the idea being that this combination would stimulate growth. But leery bankers have been reluctant to sign on. Loans to the developing world have been drying up.
Some form of debt relief - writing down the loans, extending payments, canceling some debt - is urgently needed. Ideas are percolating, heated by political turmoil in Latin America and by the recognition among creditors that taking some losses now is a fair price to pay for helping a huge segment of the world's people become economically productive down the road.
It will be a tough road. Political leaders who've been trying to put national economies on a firmer footing are being challenged to show that austerity measures have a pay-off. Difficult environmental issues arise as development is pushed - as seen in the pillaging of the Amazon region in Brazil. And the benefits of development must be enjoyed by vast numbers of poor families, not just by already affluent elites.
UNICEF has proposed a summit of world leaders next year to work on debt relief and increased aid to poorer countries as means of improving the well-being of children. We are all for that, and for any other efforts to direct attention toward reversing the economic slide in the third world. The world's children must be given a brighter future.