was a time, some decades ago, when analysts could
write of "aid as imperialism". Today, when
official aid is all but defunct, it is more correct
to describe the current tendency of debt-forgiveness
as imperialism. There is much that is appalling about
imperialism today – the dastardly occupation of Iraq
which has brutalised the entire society, is but one
particularly telling example. But the militaristic
and resource-grabbing aspects of imperialism may be
distracting from other deep and continuing features
which are also doing great damage to countries across
What is even more obscene is when imperialism is not
naked in its violence, but disguised as charity and
empathy for the oppressed, and when the rest of the
world is made to applaud the benevolent concern expressed
by the great powers. This is what has been happening
around the recent G-8 Summit meeting, which made it
a point to continue despite the London bombings, in
order to push through what it claimed was a "historic"
and "unprecedented" debt relief package
for some of the poorest countries of the world.
This was accompanied by a concert extravaganza of
the trendiest "feel-good" pop stars around,
such as Bob Geldof and Bono, to provide entertainment
to accompany the good deed, as well as a media blitz
supported by almost the entire world's press and television.
So much so that even otherwise well-informed and progressive
people in the developing world were fooled into thinking
that, for a change, the leaders of the core capitalist
countries were actually thinking about doing some
good for people desperately in need of it.
Unfortunately, a more cynical perspective is actually
the correct one. The G-8 debt relief deal is actually
a paltry and niggardly reduction of a small part of
a debt that has grown to gigantic proportions more
because of adding on unpaid interest than because
of any recent flows of fresh resources. And this pathetic
amount is being traded for yet more major concession
made by the debtor countries, in terms of sweeping
and extensive privatisation of public services and
utilities, which is about all that is left for governments
to sell in these countries, as well as large increases
in indirect taxes which fall disproportionately on
Consider the main elements of this "generous"
deal. To begin with, only 18 countries are to "benefit"
from the G8's so-called generosity. They are all countries
that have been through this before – most recently
through the highly publicised HIPC initiative (for
heavily indebted poor countries) launched in 1996.
The HIPC initiative, which was greeted with similar
if less musical fanfare, has since failed utterly,
either in relieving the burden of debt or improving
conditions in the countries concerned. Estimates by
UNCTAD suggest that the 27 HIPC beneficiary countries,
for example, will be making bigger debt repayments
in 2005 than in 2003.
Even for these 18 countries, the debt relief is very
partial and is nowhere near complete cancellation.
It mainly concerns only some bilateral debt and the
debt held by the World Bank and the African Development
Bank, which amounts to a very small proportion of
the total debt of the concerned countries. The British
proposal only intended to take over repayments between
now and 2015.
The total financial burden on the G-8 of the entire
operation would amount to some $2 billion a year,
which should be compared to the estimated $350 billion
annually devoted by the G8 to farming subsidies or
the $700 billion spent by the G-8 on military expenditure.
The annual amount spent by all these G-8 countries
put together for the announced cancellation is less
than half of the amount the US government spends every
month on its continued illegal occupation of Iraq.
Even this trivial amount for the US would be financed
through the US development aid budget, reducing aid
provided elsewhere and not involving any additional
It is true that the current deal is an improvement
on the HIPC initiative in that what has been agreed
upon is a real cancellation that would bear on the
principal of the debt, rather than simply a financial
contribution towards the debt service paid to multilateral
institutions. But even so, the announced cancellations
would not even amount to a complete cancellation of
debt for these 18 countries, who would still have
to deal with a large amount of multilateral debt.
What do the recipient countries have to provide in
return for this munificence which will not even be
noticed in the budgets of the governments of rich
countries? The answer is that they will have to further
sell their natural resources, their public assets,
and deprive their people of the basic conditions of
a decent life, in order to advance the profiteering
by large corporations from the G-8 countries and elsewhere.
The G8 decision represents a continuation of the HIPC
initiative, which insisted upon the imposition and
intensification of heavily neoliberal policies that
have already ravaged poor debtor countries. Consuder
some of the main elements of the conditionalities:
• privatisation of natural resources and of strategic
economic sectors to the benefit of large multinational
• higher cost of health care and education, directly
affecting the access of the poor to these basic socio-economic
• increases in VAT, a regressive tax, which means
increased costs and lower real incomes of ordinary
• free flow of capital, which leads to great volatility
of exchange rates and capital flight by the elite;
• lower tariff protection, which leads to thousands
of small and middle producers losing their livelihoods
because they cannot compete with imported goods.
It is not hard to see that this is a deal designed
to further the economic interests of imperialism,
which has once again been sold across the world as
a huge concession made to the world's poor. In the
words of the poet, "After such knowledge, what