Loans like those made to the Philippines have been a standard part of the post-disaster playbook for decades. Proponents, who often describe the loans in more attractive terms, such as financing or assistance, say the money helps impoverished nations recover from storms, earthquakes and other catastrophes while helping build credit and develop economies over the long term. Others counter that its a politically safe way for donor countries to appear compassionate while reassuring their own citizens and creditors that the money —at least theoretically — will be paid back. Critics say the loans are nothing more than new debt imposed at a time when poor countries are most vulnerable. As in Haiti, much of the Philippines debt can be traced back to a dictatorship — in this case, that of Ferdinand Marcos, who, like Jean-Claude Duvalier, was overthrown in 1986. Marcos piled up loans from the World Bank, the International Monetary Fund and assorted friendly countries, including the United States. Some funds were spent on ridiculous projects, like a never used nuclear power plant built next to a volcano, or stolen outright by Marcos. After he was overthrown and convicted of corruption, successor governments were stuck with the bill.
Posted on: Thu, 16 Jan 2014 04:50:00 +0000
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