Third World debt reduction does not fulfill the obligation of rich countries, according to Pontifical Council for Justice and Peace secretary Bishop Diarmuid Martin. They should also be thinking of injecting fresh capital into poor countries for development.
    Bishop Martin represented the Holy See at the recent meeting of the International Monetary Fund in Washington, where a reduction of the foreign debt of poor countries was approved.
    He referred to the role of debt reduction as a stabilising factor for the world economy. "It is a real macroeconomic revolution. Up until five years ago, the world financial institutions were very far from thinking about debt reduction as an important economic factor. Not only for the poor countries but for the very balance of the world economy."
    He said that Third World countries also have an obligation to channel freed capital into development: "One of the worst problems of the heavily indebted countries is the investment of the reductions in economic sectors that are non-productive, above all, in military expenditure. The international community should fix a ceiling for this type of expense. Anything in excess should imply a suspension in the debt reduction. In the second place, it is necessary to ratify the obligation to channel resources toward essential social investments. Debt is an obstacle above all because it is non-productive. The financial authorities must recognize the need for the aid packages to finance the social expense -- and not be content with a simple discount -- this is another important novelty of the last few years."

12:23pm 6/5/99 / Zenit


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