Tuesday, December 31 08:50:16
As if the recent typhoon was not enough for the unfortunate people of the Philippines to contend with, they have ongoing problems which are unique in some respects.
The people of the Philippines have been saddled with a large debt since the 1980s, when Ferdinand Marcos, the dictator who held the presidency from 1965 to 1986, was loaned large amounts by western governments and institutions such as the World Bank in order to keep him onside during the cold war. During his rule, Marcos is thought to have stolen up to $10 billion of Filipino money. But after he was deposed in 1986, the lenders who were complicit in this corruption continued to demand repayment.
The impact of chronic debt has been devastating for the Filipino people, with public services such as health and education persistently underfunded. Today, about 16 million Filipinos are estimated to be living in extreme poverty and malnourished. Meanwhile, more than 20 per cent of government revenue is spent on foreign debt payments each year, almost as much as on health and education combined.
But the impact of high debt payments is not the only reason Filipino debt should be cancelled. Following the end of Marcos's dictatorship, many of those who had resisted his rule formed the Freedom from Debt Coalition, calling for the non-payment of his odious debts. Loans to Marcos to build the Batan nuclear power plant - which never generated any electricity, and was built on an earthquake faultline - merely represent the most absurd example.
In the past decade there have been important debt write-downs across Africa and South-America but nothing of the sort has happened for The Philippines which is dealing with the economic disaster that was The Marcos years along with natural disasters and a desperate need for infrastructure spending which is virtually impossible as 20per cent of all revenues go to service the National debt.
In response to Typhoon Haiyan, the World Bank and Asian Development Bank rapidly announced they would LEND $1.9 billion for emergency assistance and reconstruction. That this much-needed money will be given as loans rather than grants means the impact of the disaster will continue through another generation because of the high debt payments.
Chinese investment and overseas payments by emigrants are two of the most important areas of revenue and potential growth for the economy while debt and the natural world impact negatively on an ongoing and all too regular basis.