July 18, 2001

9:46 AM

Compassionate Conservatism?George W Bush has called on the World Bank to offer more grants (as opposed to loans) to developing countries. "The needs are many and undeniable, and they're a challenge to our conscience and to complacency. A world where some live in comfort and plenty while half of the human race lives on less than $2 a day is neither just nor stable." Copied from the always-excellent NextDraft. NYT registration required.
posted by gd779 (11 comments total)

My apologies to those of you who get NextDraft and have already seen this.
posted by gd779 at 9:47 AM on July 18, 2001

Hooray for George W. Bush! Now what's the catch?
posted by muta at 10:16 AM on July 18, 2001

While I certainly think this is interesting and don't want to bash out of hand here (and it's kind of hard for me) I do remember being up late last night and watching the ABC News Now coverage, which made the same point as the article:

But supporters of the bank and the monetary fund have insisted that they have done much good and that mistakes are always easy to see in retrospect. They say, too, that loans to needy countries are vital, since the repayments generate money to provide further loans.

Still, I think it would be a good idea to, in at least some cases, forgive a few loans that are a burden to those that received them, and I think in this case the President has said something interesting. (Interesting without being a really odd statement like his Jefferson Memorial speech was.)
posted by Ezrael at 10:28 AM on July 18, 2001

Hooray for George W. Bush! Now what's the catch?

Yeah tell me about it! I immediately thought geez, this has to be a parody :)
posted by DiplomaticImmunity at 10:34 AM on July 18, 2001

Good on him. I'm especially glad that he raised the issue of "unsustainable debt": freeing developing nations of that burden, especially in cases where it was incurred by corrupt regimes that have long been overthrown, is one of the best ways to ensure that democracy becomes engrained. It's essentially an acceptance of the de facto position that most loans are never actually repaid, although debt interest strips the coffers of foreign exchange.

The catch? Well, as the BBC reports it, the shift from grants to loans would mean cutting World Bank lending to "middle income" countries such as China and Brazil. And I don't know anywhere near enough about the repercussions of that to know whether it's smart economics or clever politics.
posted by holgate at 10:36 AM on July 18, 2001

loans to needy countries are vital, since the repayments generate money to provide further loans.

the question is should other countries be giving out loans or grants? i don't know enouph about how these loans are financed to know whether or not what Bush is proposing is smart.
posted by xammerboy at 11:38 AM on July 18, 2001

My problem with Bush's plan is that it doesn't guarantee debt relief.

Giving impoverished countries additional money in the form of grants means that the money will be spent elsewhere, leaving the original debt intact. The "other human needs" loophole is gigantic. Just look at how Clinton classified Apache attack helicopters to Columbia as 'agricultural aid.'

Just like the original loans, I'm sure this money will be misused by various US-friendly dictatorships to oppress the peasants, not repay existing debt.
posted by snakey at 11:47 AM on July 18, 2001

A friend of mine works for IFC, which is like a scaled down version of the World Bank, and from what I hear from him, they are not spending nearly enough on auditing the projects after the money is granted to prevent misuse/waste. In the end, even though all the projects have a lot of merit to them, money is wasted left and right all too often.
posted by Witold at 11:56 AM on July 18, 2001

More important than grants, I think, would be cancelling debt outright for the poorest nations -- many of whom would only be forced to use most grants not specifically earmarked for certain projects to repay debt. The money just keeps going round and round, and never actually gets anywhere near the people that need it most.
posted by lia at 12:06 AM on July 19, 2001

This sounds great. But then Dubya sounded great advocating programs like the Boy's Clubs (while at said clubs for photo shoots) but when actual funding for them came up they became lonely orphans with no federal funds.

Show me the money! Words are meaningless without actions to support them. This program would cost much more than the current administration would be willing to fund.

Empty rhetoric may just be the enduring mark of this guy. Consider the moderate campaign words to the actual deeds we observe each day for confirmation.

The double standard oligarchs and aristocrats apply to the common masses is well documented throughout history. We're just the latest to be trickled down on. Do as I say, not as I do. "Poor countries and poor people need help? Let them help themselves, I'm keeping my millions!" -Caution-compassionate conservatism at work-
posted by nofundy at 5:54 AM on July 19, 2001