Sunday, June 05, 2005

Bush snubs Blair on debt relief

Poor Tony Blair. The British prime minister threw his lot in with President Bush's ill-conceived aggression against Iraq. Blair essentially threw away his credibility with the British people to cozy up to Bush on a war based on discredited rationale. It was a gamble and he lost. His party won re-election earlier this year only because of the weakness of the main opposition Conservative Party but Blair's legacy is in tatters, his reputation in shreds. He stayed loyal to Bush much longer than common sense would have dictated presumably because he felt it in his government's or Britain's interests to have a good relationship with the US president.

Decent men like Kofi Annan, Scott Ritter and Hans Blix have suffered vicious character assassinations by American conservatives because they dared say the Emperor has no clothes... even though they've all been vindicated by the course of events. Bush's style of governance values personal loyalty over competence, forethought or rigorous analysis. Blair seemed to feel that by backing the president to the hilt on Iraq, he could avoid being victim of the same smear campaign as Blix and company. Perhaps even it might buy Blair some credit with Bush for one of his pet initiatives.

How wrong he was.

As part of a poverty reduction effort, Blair and his chancellor (finance minister) Gordon Brown are pushing a plan to eliminate 100% of the debt of African countries. As I explained before, I support such an effort provided it be structured in such a way to prevent another debt crisis from reoccuring in a decade or two. Specifically, future loans should be conditioned on criteria like good governance, democracy, human rights, respect for private property and the loan money being spent on its state purpose.

In order for such comprehensive debt relief to occur, Blair and Brown's plan needs the support of the United States, who has decisive influence in the main international financial institutions, the World Bank and International Monetary Fund.

But Blair's ridiculously excessive loyalty to Bush on Iraq has proven worthless on this issue. The administration in Washington has expressed its strong opposition to the British plan.

The British want to sell some of the IMF's take advantage of a rise in the price of gold by selling off some of the IMF's reserves to fund debt relief. The US, along with a few other key economic players, is cold to the idea.

The US has already pledged to increase development aid through its own Millennium Challenge Account but little of the money has been spent so far, reports the BBC. And as I mentioned before, increasing development aid and erasing debt, as laudable as they may be, are unlikely to have any significant impact on the lives of ordinary Africans by themselves.

Critical to the British plan is the coupling of debt relief and development aid with an end to many trade subsidies, an idea which France and other European Union members have always strongly opposed. The British have also proposed funding a mass immunization campaign in Africa against communicable diseases.

The real question is this: does Washington oppose debt relief in principle or simply the mechanism proposed by the British? I can't believe that the Christianity-based Bush administration would really advocate a status quo that enslaves hundreds of millions of people in poverty. If the Bush administration really supports debt relief for desperately poor countries but think that the British plan is technically flawed, then perhaps it's time they provide an alternative.

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