Third World Poverty

I want to congratulate Bruce for his excellent column. I want to add that Third World countries are not the only ones to blame for the present world-debt crisis.

Banks can only make money by loaning money. After a long influx of petro-dollars after OPEC’s success in raising oil prices, banks had to lend these newly deposited funds out to make money on them. Since “countries do not cede to exist” (former Citibank bank official), countries were considered an excellent credit risk. When banks loan out money for commercial purposes, this money is generally used for production equipment that can generate income in the future. Banks are very particular when loaning money to companies. They weren’t that particular with countries though. Funds were used for prestige projects, military spending (that does not create future income), Mercedes cars for families of influence and bribes, among other things.

Now the International Monetary Fund is forcing the poorest people in these countries, the people who reaped little benefit from the loans to begin with, to pay back the debt of their previous rulers. They are expected to reduce imports of medical supplies to preserve foreign reserve in spite of their already dismal health situation. They are expected to substitute their present food crops like grain with export crops like soybeans to feed cattle in Europe and America. And this when 40,000 children die each day of hunger and hunger-related diseases.

Bruce gives some excellent suggestions on alternate courses of action. So does the Global Poverty Reduction Act, presently pending before Congress.

REINHARD CLEVER

Redondo Beach