10/24/00 9:55 a.m.
Forgiveness Time
“It’s time to forgive uncollectible Third World Debt.”

By Brett Wagner, president of the California Center for Strategic Studies, & Jesse Lorenzo, research analyst with the Program for Promoting Sustainable Prosperity

undreds of millions of people throughout the Third World are trapped in suffocating and dehumanizing poverty in no small part because domestic resources that could be used for health, education, sanitation, and agricultural-modernization programs are being diverted to service uncollectible international debt. Zambia, for example, is spending more than 25% of its GDP on debt servicing and only 5% on education. Compounding the problem, Zambia's payments don't even cover the interest portion of the debt, let alone decrease the principal. And, sadly, there are dozens of countries in even worse shape.

Jubilee 2000, a coalition of religious organizations, is urging the world's wealthiest nations to forgive billions of dollars in debts that the world's poorest nations have proven incapable of paying back. President Clinton recently embraced this idea, asking Congress to provide $435 million to fund America's share, and at the second presidential debate Gov. Bush agreed in principle. Unfortunately, the House thus far has approved only about half that amount, while the Senate has approved less than one-fifth. Key players on Capitol Hill remain hopeful, however, that a compromise can still be reached before Congress adjourns.

America has more than enough money to pay its fair share of Third World debt relief. As Congress prepares to wrap up the 2001 budget, the nonpartisan Congressional Budget Office is now projecting $232 billion in federal surpluses for the current year, increasing its previous estimates by $53 billion. Perhaps even more significant, the so-called "on-budget surplus" (which excludes Social Security) is now expected to rise to $84 billion this year, more than tripling previous estimates. Needless to say, that's a lot of unexpected extra revenue.

If America truly aspires to be a 21st century world leader, the time to lead is now. Congress should seize the opportunity before it adjourns to demonstrate that America can once again serve as a shining city on the hill — by allocating the full $435 million to fund America's share of Third World debt relief. This one act would go a long way toward demonstrating to the world, and especially impoverished countries, that America is dedicated to helping build a new global community defined not by a growing gap between the "haves and have-nots," but by coordinated efforts to grow sustainable prosperity for all. Allocating the full $435 million would also help put renewed pressure on the world's other wealthy nations to pay their fair shares too.

Otherwise, should America and the other "haves" turn a deaf ear to the pleas of the world's "have-nots," the 21st century will likely be increasingly plagued by famine, failed states, massive transnational flows of refugees, and growing regional instability. And that bodes well for no one.