[stop-imf] IPS Report: How Poor Country Debts Affect Americans

[robert weissman]

*PRESS RELEASE FROM THE INSTITUTE FOR POLICY STUDIES*

*
=E2=80=9CDebt Boomerang=E2=80=9D Report Documents the Impacts of
Impoverished Country Debts on the United States*

*/Debt Cancellation Abroad Would Benefit
American Jobs, Environment, Health, and Security/*


Financial leaders gathering at the World Bank and International Monetary
Fund on April 22-23 have an opportunity to build on the momentum of last
year's G-8 debt agreement by extending debt cancellation to the 50 or so
other countries that are also drowning in unmanageable debts.

According to *=E2=80=9CDebt Boomerang 2006,=E2=80=9D* a new report by the I=
nstitute for
Policy Studies, this would be both the right thing to do and in the
interest of people in the United States.

While the impacts of these debts are most direct and life-threatening in
the Global South, they also boomerang back to the United States, costing
jobs, undermining health and security, and contributing to global warming.

A summary of key findings is below.
*For a full copy of the 40-page report:
http://www.ips-dc.org/boomerang/DB2006.pdf
*
IPS=E2=80=99s Debt Boomerang research is part of a collaborative project wi=
th
other allied organizations to raise awareness of the impacts of
impoverished country debts on the United States. Our goal is to mobilize
broader support for debt cancellation among the general public and local
elected officials. Some of our key partners in this work include: 50
Years is Enough, Africa Action, Enlaces Am=C3=A9rica, the Ethiopian Communi=
ty
Development Council, and Jubilee USA.

For toolkits, a sample city council resolution, and other =E2=80=9CDebt
Boomerang=E2=80=9D materials:  http://www.ips-dc.org/boomerang/index.htm

Key Findings of =E2=80=9CDebt Boomerang 2006=E2=80=9D:

*IMPACTS OF IMPOVERISHED COUNTRY DEBTS*



*JOBS*

=E2=80=A2    *On Impoverished Countries*
Manufacturing wages dropped in 69% of heavily indebted countries in the
1990s, compared to only 35% of other low- and middle-income countries.
The World Bank and IMF routinely require debtor countries to limit pay
for government employees and to "privatize" state enterprises, which
results in mass layoffs.

=E2=80=A2    *On the United States*
Declining wages in heavily indebted countries boomerang back to
Americans through increased competition with cheap imports and job loss
to lower wage countries.  The burden of debt also means less money to
buy U.S.-made products.  Heavily indebted countries' share of U.S.
exports dropped from 11.1% in 1980 to 7.7% in 2003.

*HEALTH*

=E2=80=A2   * On Impoverished Countries*
Nearly 70% of heavily indebted countries spent more on debt interest
payments than on public health in 2002.  Systematic under-investment in
health has crippled their ability to respond to the AIDS epidemic that
killed 2.2 million sub-Saharan Africans in 2003, to fight diseases like
tuberculosis and malaria, and to provide routine preventive care.  A
severe =E2=80=9Cbrain drain=E2=80=9D of frustrated health professionals is =
one more link
in a vicious cycle that incapacitates impoverished country health
systems.

=E2=80=A2    *On the United States*
U.S. taxpayers contribute several billion dollars per year to help
heavily indebted governments fight diseases.  This aid is vital, but the
problems are still severe, and sometimes boomerang back.  There were
15,000 new tuberculosis cases in the US in 2003, and more than 1,000
Americans per year contract malaria in developing countries.  Weak
health infrastructure in impoverished countries also increases the odds
that diseases like avian flu will spread to the United States.


*GLOBAL WARMING*

*=E2=80=A2    On Impoverished Countries*
Extreme debt burdens pressure governments to exploit resources for
export.  Heavily indebted countries make up 15 of the top 20
deforesters.  Climate change is already damaging agriculture and
contributing to the spread of disease.

=E2=80=A2    *On the United States*
The US needs to change its own energy practices to reduce climate
change, which is causing more intense storms like Katrina.  But our
response should also include debt cancellation to allow poor countries
more flexibility in handling their resources.

*GLOBAL INSECURITY*

*=E2=80=A2    On Impoverished Countries*
Heavy debts make it more difficult for governments to prevent and
recover from war and conflict.  They also make it harder to afford a
social safety net, leaving the poorest more vulnerable to criminals,
from traffickers to terrorists.

=E2=80=A2    *On the United States*
Debt-linked poverty doesn't always lead to violence.  But, combined with
other factors, it can create more fertile recruiting grounds for
terrorists and other criminals who often operate across borders.

*IMMIGRATION*

*=E2=80=A2    On Impoverished Countries*
Millions of people in heavily indebted countries lack the rights to
access to adequate housing and income that would allow them to stay in
their home country.  Those who wind up as undocumented workers in the US
are vulnerable to employer abuse and painful separation from family.

=E2=80=A2    *On the United States*
The U.S. government response to immigration pressures has created a
negative boomerang effect.  As much as $3 billion has been spent
annually on anti-immigrant measures =E2=80=94 3 times what was spent on U.S=
.
vocational education and workplace health and safety.

=E2=80=9CDebt Boomerang 2006=E2=80=9D is based on a sample of 77 countries =
that owe a
combined total of $1.25 trillion to rich governments and institutions
like the World Bank and International Monetary Fund.  Sixty-seven of
them need debt cancellation to achieve the UN Millennium Development
Goals, while the other ten are saddled with =E2=80=9Codious=E2=80=9D debts =
accumulated
under dictatorships.  Included in the sample are the 17 countries that,
under a 2005 G-8 agreement,  are scheduled to receive cancellation of
debts to the International Monetary Fund, World Bank, and African
Development Bank in 2006.

The Institute for Policy Studies is an independent center for research
linked to activism founded in Washington, DC in 1963.  For more
information on IPS, see:  http://www.ips-dc.org.

*For a full copy of the 40-page "Debt Boomerang 2006" report:
http://www.ips-dc.org/boomerang/DB2006.pdf
*
For more information on IPS's Debt Boomerang work, contact:

Sarah Anderson

Director, Global Economy Program

Institute for Policy Studies

Tel:  202 234-9382x227

Email:  saraha@igc.org <mailto:saraha@igc.org>

Web:  www.ips-dc.org <http://www.ips-dc.org>