Communist Web Wednesday 12th April 2000 9.30pm gmt What's behind the debt crisis By Wadi'h Halabi Thousands of demonstrators in Washington this week will be adding their voices to the jubilee 2000 movement. This worldwide movement calls for canceling the unpayable debt of the poorest countries. What is behind the debt crisis, and what is the way out? On whose terms will it be resolved? Jubilee 2000 estimates that the world's 52 poorest countries, with a total population of 1 billion, alone owe an average of $354 per person. Debt service commonly consumes more than the education or health budgets of these countries, and in some cases, such as Rwanda, more than both combined. Despite massive payments to lenders, the debt burden continues to grow. Worse yet, income in these countries is falling, not rising, from the pitiful average of barely $300 a year. The economic historian Angus Maddison has estimated that in 144 capitalist countries, income per person declined almost one percent per year between 1973 and 1998. Per capita income in Nigeria fell from $1,000 in the early '80s to $300 in 1998. The phenomenon of debt outgrowing economy and income is not limited to the poorest countries. Between 1990 and 1999, the Japanese government's debt rose over 100 percent while the economy remained stagnant or fell in recession. This debt is now much larger than Japan's entire economy, and rising rapidly, while the Japanese economy is in recession. The U.S. economy is in its longest expansion ever. But total debt owed by households and businesses grew at least 11.7 percent last year, more than twice as fast as the economy as a whole, four times the growth in wages. One third of poor households in the U.S. spent 40 percent of their incomes on debt payments last year. With housing commonly devouring another 50 percent of... http://www.billkath.demon.co.uk/cw/whatsbehind/whatsbehind.html
