Forgiving the debtors


Here is an excerpt of an editorial from the Chicago Tribune, which was published Friday.

PRESIDENT Clinton surprised the annual meeting of the International Monetary Fund and World Bank by proposing to forgive all of the debts owed to the United States by three dozen of the poorest nations on earth.

The gesture by the most prosperous nation on earth affirms and expands a commitment made in June and, by example, encourages other well-off countries to do likewise.

It increases the chances that these poorest of the poor may direct more of their limited revenues to development of their nations.

Of course, the majority of these debts owed to Western nations, private lenders and global financial organizations, such as the IMF and the World Bank, were taken on years -- even decades -- ago by regimes long gone.

However, this debt relief comes, as it should, with strings attached. The poor countries must commit to tough economic reforms and the savings must be spent on health, education and other social needs.

The countries' social spending must be approved by the IMF and the countries must adhere to IMF-set financial conditions to assure the debt relief is "well used," said U.S. Treasury Secretary Lawrence Summers.

These conditions have been criticized by some religious and anti-poverty groups as being too strict. They are not. Relieving these countries of past debts they can never repay is a bold gesture from the world's haves to the have-nots that acknowledges, as Mr. Clinton said, "unsustainable debt is helping to keep too many poor countries and poor people in poverty."

That's true. But in going forward the former lenders and former borrowers have an obligation to make sure past mistakes that led to this hopeless state of affairs aren't repeated.

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