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Monday, December 25, 2000

Loans to the
poorest nations
are forgiven

Bullet The issue: The world's poorest countries are in no position to repay their loans.
Bullet Our view: The decision of the world's industrial powers to forgive loans to 22 poor countries is welcome, particularly in this holiday season.

IN an action befitting the Christmas season, the United States and other industrial powers have agreed to forgive loans to 22 of the world's poorest countries this year. The U.S. obligation this year under the debt forgiveness program is $435 million, an amount that was fully funded in the 2001 budget.

International finance officials have said that they will forgive two-thirds of the total debt the poorest nations -- all in Africa and Latin America -- owe to foreign governments and multilateral lenders. This has an estimated value of $125 billion. So far, about $20 billion of that amount has been forgiven.

Many of the people in the poorest countries live on $1 a day or less. As charitable groups have argued, it is morally wrong to require governments of these countries to devote large portions of their revenues to repaying foreign debts when the needs of their people are so pressing.

Treasury Secretary Lawrence H. Summers welcomed the news, but said it was just one element of what wealthy nations must do. Health problems and inadequate education hamper poor countries' ability to take advantage of debt relief, he noted. "Our challenge now is to build on the momentum of the extraordinary coalition that came together around debt relief to help every country seize the opportunities that global economic integration affords," Summers said.

The World Bank and the International Monetary Fund rushed completion of reviews in order to provide relief to at least 20 nations by the end of this year. As the New York Times noted, the goal has had symbolic value for religious organizations in 2000, a jubilee year for the Roman Catholic Church.

The forgiveness program is not simply a giveaway. The lender nations have devised a system to ensure that money no longer used to pay debts will be devoted instead to education, health care or economic development. It makes sense to keep the money from being squandered -- a real possibility in some countries.

Because of these requirements, only one of the 22 nations that have been granted relief -- Uganda -- has received all benefits thus far.

The 22 nations receiving debt relief are Benin, Burkina Faso, Cameroon, Gambia, Guinea, Guinea-Bissau, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Rwanda, Sao Tome and Principe, Senegal, Tanzania, Uganda and Zambia in Africa; and Bolivia, Guyana, Honduras and Nicaragua in Latin America. At least a dozen more nations are considered eligible to get relief in the future.

For the poor people of these countries, the outlook is a little brighter on this Christmas Day. But much more remains to be done to relieve their misery.

China must
do more to fight

Bullet The issue: Tuberculosis has reached epidemic proportions in China.
Bullet Our view: The government must commit more resources to the anti-TB campaign.

DESPITE its spectacular economic growth over the last 20 years, China still has vast numbers of poor people. Tuberculosis, a dreaded disease usually associated with poverty, is making a comeback there and in other Asian countries.

For decades tuberculosis was on the wane as the result of modern medicines and improved hygiene and nutrition. Now it's back, helped by the increasing resistance of some TB strains to drugs and the AIDS epidemic, the victims of which often develop TB.

Dr. Daniel Chin, adviser on tuberculosis for the World Health Organization, called China's TB problem "a full-scale epidemic." He said 40 percent of the population is infected and 5 percent will die of the disease. Annually, 250,000 people die of tuberculosis in China.

The Far Eastern Economic Review reports that despite the massive scale of the problem, there is little political will in China to do anything about it.

The TB prevention system is badly underfunded. TB is more prevalent in rural areas than in cities, but there is no redistribution of funds from rich provinces to poor ones.

Compounding the problem is the migration of workers from rural areas to the cities. The workers bring the disease with them. One official estimated that 50 to 60 percent of Beijing's residents are now infected.

The problem could soon get worse. There is a danger that funding for the anti-TB program will dry up. The Review reports that a 1992 World Bank loan that has provided much of the funding expires next June. China will have to find another international source or provide the money itself.

The latter alternative is preferable. Dr. Chin said, "The key is to get the Chinese government to consider health care. A program can't depend on external funds and be viable."

With its growing prosperity, China can afford to deal with the tuberculosis problem without relying on international aid. If it ignores the problem, it will get worse, with severe consequences both for the Chinese people and the nation's future.

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John M. Flanagan, Editor & Publisher

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Diane Yukihiro Chang, Senior Editor & Editorial Page Editor

Frank Bridgewater & Michael Rovner, Assistant Managing Editors

A.A. Smyser, Contributing Editor

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