Phillip Inman tells us that it’s all very bad indeed, the manner in which “austerity” has been exported from the rich countries to the poor. The thing is, he uses Mozambique as one of his examples:
It is in this atmosphere that the west has turned away from even the most emotional pleading, such as the calls for Mozambique to be supported with a debt write-off following the devastation left by cyclone Idai. According to the IMF, Mozambique is among six out of 35 low-income countries in the region that are in “debt distress” – in default and unable to service outstanding loans.
Well, yes, very poor place, badly hit by that cyclone, very high debts too. Except, except, therre is more to this, something we should know:
Mozambique’s Minister of Economy and Finance, Adriano Maleiane, has said the country’s foreign public debt, until December 31, 2017, was $10.6 billion.
Maleiane said it is to date the highest debt to GDP ratio in Africa.
Speaking in parliament on Thursday, Maleiane said this amount includes bilateral debt, which is 4.6 billion, corresponding to 43 percent of total debt; alongside the multilateral debt contracted with institutions such as the World Bank and the African Development Bank (ADB) which is pegged at $4.2 billion, representing 39 percent.
The minister said the remaining part is commercial debt amounting to $1.8 billion, which the Mozambique admitted as previously undisclosed loans, much of which was spent on building a state tuna-fishing company and enhancing maritime security, a discovery prompted the International Monetary Fund (IMF) and foreign donors to cut off support, triggering a currency collapse and leading to a default.
“We are now only paying multilateral and bilateral debt. The commercial is not being paid, since, since 2016, we are in the process of negotiations.
Bilateral here means government to government. And as to why that commercial debt isn’t being paid?
Mozambique announced on Monday the indictment of 18 individuals in connection to the US$2 billion “tuna bonds” scandal that plunged the country into its worst financial crisis since independence.
The scandal is the borrowing of that $2 billion and the theft of it. What wasn’t directly stolen was entirely wasted. This being that debt which leads to the emotional pleading for a write off.
It’s fairly important to the point, isn’t it?
Sure, it could be argued that it’s an odious debt. The rulers simply stole it therefore the people shouldn’t have to pay it. We’d even be supportive - perhaps - if that was being so argued. But we’d insist upon emphasising the corollary, which is that certain poverty problems really are caused by the oligarchy being kleptocrats, not because we in the rich world are meanies for not sending even more money.
Which isn’t the point Inman is trying to argue at all, presumably why those facts don’t get mentioned.