Canceling debt is inadequate aid

Canceling debt is inadequate aid

With an official aid package of A$1 billion for Indonesia on
the table, and an extraordinary popular push to support tsunami
victims, nobody should call Australia mean. But because the
Howard Government is at odds with most members of the Paris Club
of creditor nations, which support debt relief, the allegation
may well be made at their meeting.

But for all its easy attractions, abolishing debt is not an
effective alternative to other forms of assistance. Debt relief
is a boon to national treasuries, with no guarantee that the
money freed up will meet the people in greatest need.

It punishes poor countries that have prudently managed to pay
back what they have borrowed. And it creates a dangerous
precedent. If debt relief is adopted for any of the nations
harmed by the tsunamis, specious reasons will be found for why
the same concessions should be granted to other countries.

The best international assistance is that which reaches the
people who are poorest, and that is rarely the officials who find
their ministerial coffers swell when debts are forgiven.
-- The Australian, Sydney