A Way to Solve the Debt Crisis

In response to John Broder’s article (June 12), “Way Open to Solve Global Debt Crisis,” I would like to point out that there is perhaps a once-in-a-generation opportunity now for the World Bank to take action that could substantially help Third World countries to overcome their horrendous debt burdens.

As the article pointed out, what is lacking in many of the countries is an economic base, a necessity for the repayment of loans such as those made in recent years by commercial banks. An economic base can only be created from the bottom up, and the bottom in the Third World is the peasant, the rural farmer, the woman.

With Barber Conable now at the helm of the World Bank, there is the possibility for change in the bank’s lending policies toward extending more loans directly to the world’s poorest people. He has created a high level task force on poverty within the bank and has publicly called for the need to extend lending to women. Earlier this year in Nairobi, he stated:

“In developing nations . . . too many women are at the bottom. Their arms hold the family together. Their hands build the foundation of stable growing communities. But development efforts have not lent enough strength to those arms . . . enough resources to those hands. And, along with women, development itself has suffered.”

The World Bank’s vehicles for such lending are the International Development Agency (IDA) and the International Bank for Reconstruction and Development (IBRD). Because they make loans at low interest rates, they cannot borrow on the world market and therefore rely on donations. Congress has agreed to $1 billion replenishment for IDA but has not appropriated the money. Congress’ funding of IDA, helping Third World countries to build an economic base (which would then allow them to repay their debts), is a much sounder investment than to bail U.S. banks out of their bad Third-World loans.

As the recent actions of U.S. banks have made clear, we do not live in a vacuum. What happens in poor countries does affect us. Realistic and long-term solutions to economic development in the Third World are essential. We should let our congressmen know that we support the World Bank’s poverty lending through IDA and IBRD. It’s a good investment.

JEANNE SURBER

Santa Barbara