External Debt and Financing for Development
Author: Hellen Grace Akwii-Wangusa, Anglican Observer and Personal Representative of the Arch Bishop of Canterbury to the United Nations
This article critiques three instruments used by IFIs for managing development country debt (and used by other donors and private parties to engage with them). They are the concept of debt sustainability, the Highly Indebted Poor Countries (HIPC) Initiative and Conditionality.The are deemed ineffective in effectively managing debt. New instruments and systems have been developed to improve debt management, including safer debt structure, new forms of lending and credit default swaps. However, at best, these new "instruments" are inadequate remedies for the debt condition that have reached desperate and chronic levels.Instead, the author ultimately calls for amongst other things, cancellation of debt guided by the Jubilee principle, since the external debt burden was entered into dishonestly by both donors and recipients who are no longer in positions of decision making and power. These unjustified unsustainable debts continue to breed angers and discontent.
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