The problem behind the problem

As Australia sends troops into “chaotic” East Timor, what are the sources of Timorese grievances? It’s worth remembering that neo-liberal economic policies, set by the world’s supposed superpowers, are at least partly to blame for the country’s economic woes. “Rebel” soldiers are not the main problem. This 2004 article partly explains the predicament of the new nation:

Unlike nearly any other nation in the underdeveloped world, Timor-Leste has refused to borrow money from the international community. At this year’s donors meeting in May, the Prime Minister, Mari Alkatiri, spelled out his Government’s position: “We are not ideologically opposed to borrowing money. But we are opposed to unsustainable borrowing”. These are wise words.

Despite the nations of the South having abundant natural and human resources, the burden of debt for larger developing nations has restricted their development, for smaller nations, it has suffocated it altogether. In 2000, the UNDP and UNICEF calculated that $80 billion a year for ten years would be enough to ensure that the entire population of the world had basic services such as decent food, access to drinking-water, primary education and access to basic health care. Yet in 2001 alone, developing countries spent $382 billion on debt repayments.

In general, indebtedness remains one of the biggest barriers to developing countries’ effort to build strong domestic economies and improve the living standards of their citizens. For every $1 owed in 1980, developing countries have since repaid $7.50 but still owe $4. This is a massive transfer of resources from the South to the North that renders international institutions’ talk about “poverty reduction” and achieving “Millennium Development Goals” meaningless.… 

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