Debt relief: cui bono?

The G8’s debt reduction plan is little better than an extortion racket.

We’ve heard a lot of self-congratulatory talk in the media recently about the G8 announcement of some $40B in “debt relief” for third-world countries. You might have wondered about the motivations behind such a move; what’s in it for the creditors?

George Monbiot reads the fine print and writes in the Guardian,

The idea swallowed by most commentators – that the conditions our governments impose help to prevent corruption – is laughable. To qualify for World Bank funding, our model client Uganda was forced to privatise most of its state-owned companies, before it had any means of regulating their sale. A sell-off which should have raised $500m for the Ugandan exchequer instead raised $2m. The rest was nicked by government officials. Unchastened, the World Bank insisted that – to qualify for the debt relief programme the G8 has now extended – the Ugandan government sell off its water supplies, agricultural services and commercial bank, again with minimal regulation.

Paul Wolfowitz, new president of the World Bank, is satisfied. “I’m really delighted … because I think it’s a very important, successful outcome.”

Cui bono? Follow the money.

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