“Debt, grinding debt, whose iron face the widow, the orphan, and the sons of genius fear and hate.”
 —Ralph Waldo Emerson
“There is no debt with so much prejudice put off as that of justice.”
Current Problem
Least Developed countries owe over $500 billion to wealthy countries; over 3 billion people are without access to credit.

Preferred State/What the World Wants
An economically vibrant and growing set of opportunities for 100% of humanitY.
Over the past few decades, numerous nations, particularly in Africa and Latin America, funded their development projects through loans from the banks of industrialized nations, the World Bank, regional development banks, and other government agencies.  Total debt of the developing countries is $2.4 trillion.  The debt of the poorest countries in the world is  $536 billion.[1] Debt and interest payments from these loans of the world’s developing countries amounts to about $280 billion per year.[2]  This is over five times the total amount of aid received from the developed countries.[3]  After many development efforts failed, in large part as a consequence of low commodity prices that reduced the earnings of many developing countries (caused by subsidies given to wealthy countries commodities which, among other things, stimulated over production and subsequent price drops; see Chapter 5, Food for All), the debts remained, stifling productivity and creating an impediment to further investment in the future. 
Credit for Humanity Strategy 1: Debt Retirement
A comprehensive debt retirement and forgiveness program will enable debt-stricken nations to meet or renegotiate their repayment schedules, thereby avoiding or getting out of bankruptcy.  More importantly, it will free up capital that will enable domestic investments in social services and infrastructure for meeting basic human needs of people living in these countries. 
A lack of confidence in the ability of many nations to repay their debts has precipitated a devaluation of these outstanding debts on world markets.  Devaluation of developing nations’ debts has given rise to an opportunity to retire substantial amounts of debt at a fraction of their face value. 
By investing an average of $25 billion per year for ten years on retiring all current debts of the poorest countries in the world $500 billion or more of current debt discounted to at least 50% face value,[4] rich countries can succeed in returning the heavily indebted nations of the developing world to a position from which they can afford to repay any additional debts and make strategic investments that will strengthen their economies and produce the growth needed to provide jobs, social services, and additional revenues. 
To insure that debt forgiveness and debt retirement works for the individual citizens of heavily in-debt countries, and that it does not fuel corruption, those countries receiving debt relief need to formally adopt a series of measures that increase the transparency and democracy of their governmental processes. These measures include budgeting and the budgeting process transparency—where every dollar is spent needs to be public knowledge and how decisions are made that determine where funds are allocated needs to also be known.  Measures to increase the democracy of a country also need to be implemented (see Chapter 16, Building Democracy), along with agreements to spend freed up resources on providing social services for the poorest segments of each country’s society.

With some developing nations paying upwards of 30% of their foreign exchange earnings on servicing debts, they are not in the position to import goods from developed countries, or more importantly, to fund basic services for their citizens.[5]  The U.S., with its enormous trade deficit, would stand to gain by any reduction in the international debt crisis that increased its customers buying power.  More than the bankers, it is the manufacturers of the developed world that are suffering the consequences of the developing world’s debt.[6]
Credit for Humanity Strategy 2: Debt for Nature
In addition to the agreements from heavily indebted poor countries to meet the above requirements for transparency, democracy and social services spending in return for debt retirement, another agreement would be negotiated for some developing countries with especially valuable and endangered natural resources.  This agreement would stipulate that the debtor country preserve a given section of natural resources—for example, a tract of rainforest, for posterity.  Such segments of the country’s natural endowments would be protected from development and preserved as a trust for all humanity.
“You can have wealth concentrated in the hands of a few, or democracy. But you cannot have both.”
—Louis Brandeis
Credit for Humanity Strategy 3: Credit for Humanity
Retiring a country’s past debts is crucial for laying a solid economic foundation for future sustainable development, but even more important is getting individual citizens access to credit—especially the poor in the poorest countries.
Micro-loans to the poor have been in wide use and hugely successful in many parts of the world. 41 million people in 65 countries have benefited from microfinance.[7]  Adding $5 billion per year for ten years to the micro-loan programs of the world, thereby expanding them by an order of magnitude, would light the innumerable fires of sustainable development that are needed for getting the world what it wants.

Costs/Benefits—Credit for Humanity
The amount needed to retire the major portion of the developing world’s debt and to provide access to credit for those without access is about 9% of the annual interest payments on the U.S. government’s debt,[8] 6.7% of what the world spends on advertising,[9] or 3.3% of the world’s total annual military expenditures.
Benefits include more stable national economies better able to attract outside investment, more revenues from internal sources for investment in social programs, expansion of the economy, more jobs, increased standard of living and social stability and more international financial stability.
So everyone in the world has access to some form of credit and is not part of a society being crushed by heavy debt burdens.  And we all have access to food, water and the other vital necessities of a healthy life. Are we rich, are we the equivalent of a contemporary “millionaire” or “billionaire?”  What if we have all this but we lack human rights?  What if all this is delivered to us by a totalitarian dictatorship? Could we be “rich” yet impoverished when it comes to our political and personal options? What if our world still has refugees, landmines, genocide and war?
The next chapters look at how much wealth will be added to our world in ways that increase our collective and personal rights as well as increase the security of our world.

[1] World Bank, Global Development Finance 2002 (Washington DC: 2002, p.188-189) and World Watch Institute, Vital Signs 2003. (Washington DC: 2003 p. 46)
[2] UNDP Human Development Report 2001
[3] Total aid in 2001 was 51.4 billion in “Flows of aid” (UNDP, Human Development Report 2003, p. 294).
[4] Brown et al., 1988, pp. 183-85. Also: much of the developing world’s current debt is already discounted to 10-20% face value.
[5] Zambia used 30% of its budget each year to repay its debts in the 1990s. It used 10% of its budget to fund social services for its citizens. From: Jeffrey Sachs, et al., Implementing Debt Relief for the HIPCs (Cambridge, MA: Harvard University Center for International Development, August 1999).
[6] UNICEF, State of the World’s Children 1990 , p. 63.
[7] Unleashing Entrepreneurship: Making business work for the poor, (Report to the Secretary General of the United Nations, February 2004).
[8] U.S. government interest payments in 2002: $332,536,958,599.42; at Public Debt Direct,
$230 billion per year.
[9] $444 billion; World Watch Institute, Vital Signs 2003. (Washington DC: 2003 p. 48)

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