A Golden Opportunity

CAMBRIDGE: The rich countries meeting in June at the G-7 Economic Summit in Cologne had some interesting things to declare about their relations with the poor countries. First, they acknowledged -- without ever quite admitting it -- that their earlier attempts to reduce developing-country debt had failed. Therefore they signaled the start of a new program, immediately dubbed the Cologne Initiative, to reduce further the debt burden of the so-called Highly Indebted Poor Countries (HIPCs). Second, they instructed the IMF and the World Bank to re-think their development strategies, in order to put more focus on social problems, particularly health and education.

One could of course be quite cynical about both announcements. After all, it has been clear to most objective observers for many years that the rich countries had no realistic strategy for reducing the unpayable debts of the poor countries, yet such critics were told to be patient, that everything was okay. Moreover, only the finance ministers of the G-7 could possibly have believed that the IMF and World Bank were doing a good job in the poorest countries. In truth, their record is often disastrous, or simply irrelevant. The IMF in particular doesn't have a strategy for long-term economic development, even though the United States has assigned the IMF the lead role in economic development in dozens of poor countries.

Another reason for cynicism is that the G-7 didn't move mainly on their own initiative, but rather in response to a growing cry of international civil society for action on behalf of the world's poorest. The credit for the Cologne Initiative goes strongly to the worldwide movement known as Jubilee 2000, a grass-roots movement based on the biblical concept of Jubilee, in which unpayable debts should be forgiven in order to allow a debtor to have a fresh start in life. The Jubilee 2000 movement has adherents in all parts of the world, including Pope John Paul II, rock stars such as Bono of the Irish group U2, and non-governmental organizations representing many religions and professions.

We should move beyond cynicism, however, in embracing the new Cologne Initiative, especially to push the G-7 countries to do all that needs to be done to make the Initiative successful. The details of the Initiative announced in Cologne were disappointing, but these details can still be changed under international public pressure. At least the Initiative pointed in the right direction.