Should third world ex-dictatorships have their debts forgiven?

[Pekka]

In general, No they should not be forgiven. But, they should be thought case by case, and given different solutions like take the interest away and help them to pay the lender back, like further business deals or so, and not be forced too hard to pay back too early. But not just forgiven like that.

Besides, they could just give the money to third world poor countries, we lend it. Just give it then, you don't see a dime coming back anyway. At least not in our lifetime. I'm all for helping them to pay back though, like cutting sweet deals and so, without exploiting their country too much.

[Zylka]

The fruits of this grown-up debate are overwhelming my feable mind

[David Floyd]

But if there rights are indeed naturally existant, do their political views really change that? Do you have a right to go rob Che because he wants to take away your freedom? The fact is I don't see how you are justifying making the people pay a debt they never agreed to.

That's true, I do believe in natural rights. I just find it hypocritical that those who deny natural rights would try to claim certain rights for themselves at the expense of others.

Further, it's not as if forcing debt repayment is robbery - the money was never their's to begin with. In fact, NOT paying it back is robbery.

Now, if you want to argue interest rates, that's certainly different, and I would see little wrong with forgiving INTEREST on debts, in certain cases.

[David Floyd]

The fruits of this grown-up debate are overwhelming my feable mind

You misspelled "feeble"

[Zylka]

I'd like to, but then I'd be spelling things properly in a post in which I desperately need to

[Spiffor]

Third world countries should have their debts erased if these debts are a significant weight over their development, no matter if they are dictatorships, democratic, whatnot.

If the debt isn't a real hindrance to the develoment, I fail to see why the debts contracted by former dictatorships shouldn't be followed after the overthrow. It can only ruin the reputation of the country as a borrower, especially if there is a political instability which threatens to overthrow the new government.

[David Floyd]

Third world countries should have their debts erased if these debts are a significant weight over their development, no matter if they are dictatorships, democratic, whatnot.

So if repaying a bank for my house loan or car loan is a "significant weight on my development", I shouldn't have to pay the bank back?

I like the way you think!

[Spiffor]

Originally posted by David Floyd
So if repaying a bank for my house loan or car loan is a "significant weight on my development", I shouldn't have to pay the bank back?

With the right definition of "significant weight", Yes.

[Ramo]

They should definitely be forgiven. Why should the people of a state have to pay for the actions of a despot who subjagated them?

[Ramo]

To come up with a concrete example, in the 60's, the CIA knocked off the hope for democracy in the Belgian Congo Patrice Lumumba, and insured the rule of ruthless dictator, Mobutu. Mobutu ruled Zaire for about 30 years. In the course of his rule, Mobutu secured lots of western loans. One of the earliest involved a billion dollar loan for a huge bridge across vast expanses of jungle; it quickly fell into disrepair (big suprise). The same thing repeated itself over and over again; either through bull**** "development" projects or Mobutu outright depositing the money into his bank account. He has lots of castles and private planes, etc., etc. for his personal amusement, but we've been forcing the people of Congo to pay for his greed. Congo is still several billion dollars in debt.

[David Floyd]

With the right definition of "significant weight", Yes.

At least you're consistent, as long as you don't try to define your idea as "freedom" - it totally destroys the idea of both property and contractual agreements. Surely you aren't really telling me that if I lose my job, I shouldn't be forced to make a house/car payment or lose my house/car, are you?

[Spiffor]

DF :
You have a reference point of an American Middle Class, i.e someone who has very little challenge towards his daily survival

I indeed don't consider my ideas to be paragon of freedom, and property is very far from being a moral value in my book.

If you want a better comparison than the nonsense you are spouting, I indeed think that if you're a bum who has just got laid off of a kebab house, you shouldn't be forced to sell all your clothing and a kidney in order to repay for past loans.

[Ramo]

David, if Shrub decides to use a loan to buy a few castles in Europe and writes them off as a state expense, should you be forced to pay back that loan?

[Worthingtons]

I dont think David is 'spouting rubbish' he simply beleives that what is lent should be repayed, it's a fair enough principle.
Guys, it might sound all nice to free Third world countries of debt but the ludicrous idea will never happen. But as I say, i doesnt matter how much the Fee is, When you wipe Interest on the debt and relax the timescales then the lender get THIER money back (Eventually) and the Nation isnt crippled with repayments - the Comprimise that suits everyone.

Spiffor makes an Interesting personal comparison, and in his situation he woudnt have to sell his kidney but rather be declared Bankrupt - the problem is that the consquences of allowing a 'bankrupcy norm' to be extended from Individuals to entire nations could be devastating.... World trade under credit terms would suffer a catastrophic loss of confidence.

[TCO]

Re: Should third world ex-dictatorships have their debts forgiven?

Originally posted by Shi Huangdi
What do you guys think about the collection of debt in third world countries, which used to by a dictator, but have since lost their dictatorship? I think in such cases we should not continue collecting on their debts for loans taken out by dictators. Dictators, IMO, are not legitmate representatives of their people and in fact often through their regimes plunder their own country. It is not right to hold their people accountable for what the dictators do. Furthermore, if third world countries have their debt removed upon becoming a democracy, they will be in a better economic situation, and economic stability aids political stability, helping to ensure the safety of the new democracy.

I think that the people of the country can default on bad debts from situations like that. Perhaps this is a simpler way, than officially "forgiving them". My understanding is that countries renounce debts at times. And that pretty much the debtholders have to lump it. Just as investors have to lump it if a government nationalizes (i.e. seizes) their property.

In fact, I see a lot more moral justification for a newly free country to renounce old debts, than for a newly unfree country to seize assets.

This would have the good effect of eliminating some of the moral hazard of bankers lending to dictators and of World Bank and such going to insane efforts to paper over bad loans.