African Debt Relief
Neither a borrower nor a lender be, for a loan oft loses both itself and friend.
-- William Shakespeare
Almost two weeks ago, several musical artists gathered together to perform the "Live 8", a series of concerts in 10 cities around the world in advance of the G8 summit in Scotland last week. One of the main goals of the organizers of this concert series was African debt relief: getting rich countries like those in the G8 to forgive debt owed by poor African countries.
On the surface, African debt relief may seem to make sense, but when you dig a bit deeper, things start to break down. Many African countries have had abysmal records of corruption, fiscal irresponsibility, and misuse of funds over the past several years. African leaders have squandered Western aid money with impunity. By forgiving the debt these African leaders have racked up, we are, in essence, giving them a "get out of jail free" card. I am not convinced this is a good idea.
Let's look at some examples. Perhaps the worst example is King Mswati III of Swaziland. With the highest AIDS infection rate of any country (33% of the population), and many of his subjects starving, King Mswati spent $45 million of his country's funds on a private jet for himself, and another $15 million building palaces for each of his dozen wives. Just a few months ago, King Mswati spent another $500,000 of his country's money buying himself a new Maybach 62 luxury limousine.
Then there is Robert Mugabe, the president of Zimbabwe, who over the past two years has caused chaos in his own economy, evicting white farmers from their land (many of whom had farmed on that land for generations), giving the land to black supporters of his own party. Zimbabwe had previously been a net food exporter and a successful economy, but under Mugabe, the economy has been decimated. Recently, Mugabe has launched a program his government euphamistically calls, "Operation Drive Out Rubbish", where they are demolishing slum areas with bulldozers and throwing thousands of poor people out on the street.
When foreign countries spend their own money on foolish projects, it is their problem. But, if they fund these projects by borrowing money from us, and we subsequently forgive that debt, we have just agreed to pay for all of these past excesses out of our own tax money. Do leaders like this deserve a "get out of jail free" card from us? I think not. By forgiving the debt these irresponsible leaders have racked up, we are turning a blind eye to their abuses, and are paying for their excesses through our tax dollars. I personally do not like the idea of my tax dollars going to pay for King Mswati III's private jet, or Mugabe's brutal actions against his own citizens, or similar abuses elsewhere on the African continent.
Don't get me wrong, I do think we should help Africa. But, this help should come with strings attached, so we can be sure the hard-earned money that we donate is used for worthwhile causes, and not to build a palace for the local despot's fourteenth wife or buy the local despot the latest luxury car. We, the people in the West, work hard for our money, and when we part with it for charitable causes, we have the right to demand that it is used properly to benefit the people we want it to benefit.
As the old saying goes, "he who pays the piper picks the tune."
Blindly forgiving African debt sends a message to African leaders that the excesses that led to this debt are okay. This is precisely the wrong message to send. Some of these African despots have been irresponsibly borrowing money from us and spending it on lavish excesses and ill-conceived pet projects that have not served their people well, and have squandered the money they borrowed from us on foolishness with no accountability.
Rather than perpetuating this problem by loaning out money with little chance of getting it back, Western countries need to cut off the source of this problem. Stop loaning African despots money to do what they want with it, and instead give targeted donations (not loans) towards infrastructure projects of our choosing. And, especially in countries with high corruption rates, these donations should come with lots of strings attached: if we donate money, we decide precisely what it is used for, and get to manage the project to whatever degree we like (ensuring none of the money is siphoned off). And, if the recipient country doesn't like these conditions, tough. If they don't like the conditions, don't accept the money - we'll find someone else who will.
This "tough love" recipe may sound harsh, but it is necessary. Otherwise, our tax dollars will continue being thrown into the bottomless pit of despotic greed, while the African people who we so desperately want to help see none of it.