(THIS ARTICLE IS MACHINE TRANSLATED by Google from Norwegian)
[debt slavery] Hooray for the Norwegians. While Africa is decaying and the mantra during last year's G8 meeting – debt, trade and aid – is an ever weaker memory, it is great to see that at least one country raises the list.
I refer to the statements of Erik Solheim, Norway's Minister of Development. At a hearing in the Norwegian parliament, Solheim revealed that he had finally succeeded in getting the World Bank to commit to conduct a study on "illegitimate debt", a study his predecessor, Christian Democrat Hilde Frafjord Johnson, had requested. He also said he would put pressure on the UN to get them to do similar studies.
Illegitimate debt is a difficult concept, so I offer the World Bank and the UN my definition: Illegal loans are those loans that are taken out by undemocratic regimes and where the funds are used across the interests of the population – and where lenders know it.
Why should the Congolese people – one of the poorest in the world – pay for the loans that have accumulated after the former tyrannical dictator Mobutu Seke Seke? Why should the Filipino people pay down what Imelda Marcos borrowed to buy shoes?
Of course, negotiating what a country should or should not pay is complex. Deleting Saddam Hussein's debt because it is illegitimate is much easier than, for example, clearing Robert Mugabe's debt. Mugabe had the support of the people in the first time he had power. My definition will elicit reactions because it sets aside the notion that national sovereignty should be sacred, always. But national sovereignty should not always be the most important thing. Whether a regime is recognized by its population should have something to say about the validity of the contracts they enter into.
My definition of illegitimacy is disputed for another reason. It places the responsibility for the stupid loans not only on the bad lender but also on the lenders. It means that loans granted without regard to the political situation should be deleted.
I therefore argue that the three million pounds the British government borrowed from Nigeria at the time the country was led by Abacha and General Ibrahim Babangida should not be repaid. It was easy to imagine that these notoriously shameless and kleptomaniac military regimes would misuse the money. The same with the World Bank and the money they borrowed from the Suharto regime in Indonesia. Their own documents show that they knew more than well enough how ingrained corruption was in Indonesia at that time. The same goes for the loans The International Monetary Fund and commercial banks gave to the South African apartheid regime after the Soweto uprising. They had every reason to believe that they were supporting a regime known for gross repression and crimes against humanity. It should be a matter of principle that these forms of illegitimate debt – and the list is long – are not demanded to be repaid.
A new attitude towards illegitimate debt does not just mean that some of the world's poorest people will not have to pay double – by first living under a cruel regime, and then having to pay back the money the regime has spent on itself. Perhaps more importantly, it would show lenders that they can no longer lend completely uncritically. Therefore, I would like to thank Solheim and the others in the Norwegian government. What you do is absolutely crucial, and the international civil society is behind you.
When it comes down to it, however, Norway must receive support from larger countries if the World Bank and UN studies are to lead to action. So come on, Tony Blair, with your raucous reputation. Come on, Prodi, show us that Italian politics is now of a different brand. Merkel, support what another Christian Democrat has started. Chirac, you're not going to budge when it comes to trade, so join this here. Nordic countries, drive on. And Bush – you were the one who started this when you decided that Iraqi debt was illegitimate. In the name of justice, support Norway in terms of the great demand, too.
It is so all too clear that the need is there. Even today, oppressive regimes receive loans – for example, Japan lends to Burma. We should break this circle once and for all – not as charity, but as justice.
Economist Noreena Hertz is a Cambridge researcher and critic of globalization. She writes exclusively for Ny Tid.
Translated by Gro Stueland Skorpen