The effects of theThird World Debt

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A Silent War?

The effects of the debt crisis

*Debt is tearing down schools, clinics and hospitals and the effects are no less devastating than war.*

Since the debt crisis hit in the I980’s, spending on healthcare in the world’s poorest countries has fallen dramatically
In Zimbabwe, the reduction has been over 30%. Uganda spends more than four times as much on debt service as it does on health care.	More than 40,000 African healthcare workers have been forced to emigrate to seek work abroad, as their own countries health services have been curtailed.

My daughter is sick, but what am I supposed to do? If I take her to the clinic I cannot afford to pay for the treatment - so what is the point? If I stay at home to care for her, how will we buy the food we need to stay alive? ( Zimbabwean women living in Harare) Oxfam Poverty Report 1995
"And we the housewives ask ourselves: What have we done to incur this foreign debt? Is it possible that our children have eaten too much? Is it possible that they have studied in the best colleges? Have our wages become too great? Together we say: No, no we have not eaten too much. No we have not dressed any better. We do not have better medical assistance. Then to whom have the benefits gone? Why are we the ones who have to pay for this debt?" Dominga de Valasques, Bolivia
Life expectancy in Uganda is in the low forties. One out of every five children dies before it is five,mainly from preventable diseases like malaria, diarrhoea, and acute respiratory infections. A comprehensive health care system would cost a per capita investment of US$12. Currently, only US$3 per capita is invested in health, while US$16.7 per capita is used to service debts, mainly to multi-lateral creditors.
Maud lives in a rural area south of Kampala. She and her husband, like most of their neighbours, have a small patch of land. The income from selling their maize crop was never sufficient to support them and their four children completely so Tom went to Kampala during the week to find work. All the same life was good and Maud felt confident about providing all her family’s basic needs. There were no school fees so, although it was rather a strain on the family budget to buy the uniforms, the children were being educated. They were a healthy family; the children had all had their inoculations and when Tom cut himself badly at work, the local health clinic treated it without charge. Like the other women in her neighbourhood Maud grew her own special crop, beans. Some of these were used immediately to supplement the family diet (beans are very rich in protein) and some were sold in the local market or bartered for essential family requirements. The rest was stored in case of emergency and to see the family through the lean part of each year before the maize harvest. The beans were planted under the maize crop so did not take up extra land; as well as that the bean plants were ploughed back into the soil and kept it healthy just as the beans themselves "insured" the family against scarcity in the future.
Ecological disaster The tropical forests of the Philippines are among the richest biosystems in the world. One square kilometre of forest in the Philippines contains more species of trees than the whole of the North American sub-continent. In 1968 there were sixteen million hectares of forests in the Philippines. In 1993 there were less than four million hectares. The need to earn foreign exchange to deal with the debt crisis has lead to extensive loss of biodiversity. On the island of Cebu alone, 90% of the indigenous species of birds became extinct when the forests were cut down. It is not just the forests that have suffered. About 40 of the country’s 400 rivers are dead. Pollution, siltation, and salination have been caused by debt-driven development. Fishing communities that were until recently self-sustainable have become impoverished. 50% of the coral reefs around the Philippines are now in an advanced stage of destruction. The has meant the loss of an adequate source of food to over 3 million Filipinos. Mang Lupo Maslacao remembers a time, not so long ago, when Laguna Lake was generous to all. "You didn’t need a college degree to live on the lake. If you were industrious and you had the will to sustain your family, all you had to do was get into the lake and harness its bounty". In the mid-1970’s it was still possible for people to derive a relatively comfortable income from the lake. Average incomes then were equivalent to nearly ten times the minimum wage. The situation changed drastically. The introduction of fish-farming, pollution from rivers, dumping of industrial waste - all by-products of the economic adjustment forced upon the Filipino people has meant that Laguna Lake is all but dead. *Mang Lupo now works as a shoemaker. He depends on loans from friendly shopkeepers and traders, as well as from money-lenders to survive.*
Since the debt crisis began there have been major political changes around the world. The bravery of unarmed demonstrators in the Philippines that lead to the overthrow of a brutal dictator, and the courageous and principled leadership of Nelson Mandela that allowed for the peaceful dismantling of apartheid were extraordinary and inspiring for many people. Unfortunately, those who have control of the debt of these countries were not so moved that they could see fit to act free them from their crippling burdens.
"When Nelson Mandela Walked from prison eight years ago, it marked the success of one of the biggest grassroots international campaigns. Working together we freed Nelson Mandela.It also marked the beginning of a remarkable period of reconciliation and forgiveness. South Africans are working together to build a new and fairer nation and to redresss the heritage of nearly a century of apartheid. Most important, South Africans have decided that the best way to build and to move forward is to forgive the crimes committed by the apartheid regime and not to dwell on the past.One group has refused to forgive, however the international bankers.When Manila became president, they presented him with a bill for more then 10,000 million. In effect the bankers said to Manila: "It was expensive to keep you in prison, sir. It cost a lot to maintain apartheid, to keep White rule, to suppress the majority. The apartheid government borrowed a lot in order to get round international sanctions and import the oil and arms needed to keep you on Robbin Island...............In 1985 we were very understanding, we realised the high cost of maintaining apartheid, and we agreed that the White government could temporarily stop making debt repayments. But now that South Africa has majority rule, the bill must be paid"......10,000 million would pay a large part of the African National Congress’s Reconstruction and Development Programme, providing houses, water, electricity and schools for most South Africans." (From Joseph Hanlon. Jubilee 2000)