http://www.makepovertyhistory.org The Northern Wing: July 2005

Thursday, July 14, 2005

Call for Economic Justice

The people of the world need to call for a world with economic justice. To achieve this, we should abolish all barriers to free trade, including the various "free trade" organizations who actually support protectionist policies. To NAFTA, CAFTA, someday SAFTA, we need to 'just say no.' Instead, we should engage in free trade. Through free trade, we would stop bankrupting our government through policies that provide little if any benefit to Americans, and cripple economies in other parts of the world. Why should the government pay to subsidize United States grain exports? Without such subsidies, this grain would not be exported, because the local markets would be able to offer the more competitive price. This would increase the supply of home grown grain in the US, driving other countries out of our markets. If there is no market for the produce of our farmers, then we need to either diversify the crops that our farmers grow or simply grow less.
The only instances in which action against free trade may be necessary is to prevent it from being utilized as a tool by governments who do not support such a policy. If western nations would restrict trade to states abiding by free-trade, then more and more states would join in. Eventually, it would be impossible for a country to pull away from free-trade policies. Farm subsidies need to be stopped, while the world needs to work to convince China to abandon its state-run industry and protectionist policies. Africa needs to be allowed to grow. Through free trade, the world has a virtually endless supply of wealth. There is no need for poverty.
By allowing the people of Africa, and the majority of the people of China, to climb out of poverty and amass some minimal amount of wealth, we will be welcoming them into the global marketplace. This increases the supply and demand for goods and services, inherently increasing the world's wealth.
Well targeted aid is necessary in Africa to update its infrastructure before it can realistically become an economic force. Then, by allowing free-trade, Africa will be able to end its dependance on Western aid. The people of Africa will begin to climb out of poverty. This allows for the building blocks of democracy, and will help to topple the totalitarian regimes in power. It all starts with trade. Tell your representatives that you support free trade, with your voice, vote, and dollar.

Wednesday, July 13, 2005

Debt Relief

Many small government advocates like myself were against the G8 decision to approve debt reliefe to 18 poor countries. They believe that countries should be held responsible for their loans, and anyway, why should USAID be using our tax dollars for its charity work.
The problem with this point of view is that these loans should never have been given. Most of them were given through a joint project between the World Bank and International Monetary Fund. Both organizations are backed by the G8 nations, the President of the United States is even responsible for appointing the World Bank president. They loaned money to the corrupt regimes of various brutal dictators. The dictators then spent this money on their lavish lifestyle, and in many of the cases were ousted from power. When they were ousted, they took the remaining money and ran. The people of the state never saw the benefits of that money. In fact, it was often used as an oppressive tool to prolong the reign of the cruel regimes.
While the people of the country never saw the money, the World Bank and IMF held the people responsible for paying back the debt. Thus, any future government had to spend the majority of their income paying back the debt. In some countries it was 80% of their tax income. When the governments were unable to make payments, the WB/IMF would give them another loan to make the payments through the HIPC (Heavily Indebted Poor Countries) program. These loans came with many strings attatched, pushing the government to undertake projects which were proven unsuccessful, putting the country into deeper financial arrears. The World Bank even admitted that the HIPC program was a failure, yet they continued to act as loan sharks demanding payments on their loans.
These loans should never have been given, and the World Bank and IMF should have been forced to relieve the loans themselves, using their rather large untaxed coffers. But, because this would have taken money from their more successful programs, the G8 states are picking up the tab. My only regrettes towards the G8 action is that it works through the disfunctional HIPC program. This means that in order to recieve the debt relief, the countries must still undertake World Bank/IMF mandated programs. Hopefully, the program will at least improve its reccomendations, focusing on improving education, medical care, etc. in rather than building unnecessary damns and the like.