A FATE WORSE THAN DEBT by Susan George

A FATE WORSE THAN DEBT

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KIRKUS REVIEW

A leftist critique of the international ""debt crisis,"" focusing on the ill effects it has had on the lives and prospects of Third World people. In 1982, Mexico's near-default on its $80 billion debt brought the international banking and financial system to the brink of collapse. George, a senior fellow of the Transnational Institute, the international wing of the leftist Institute for Policy Studies, argues that the Mexico crisis forged an alliance--which she calls the ""Consortium""--among the big banks, creditor-country governments and their central banks, the World Bank, and the International Monetary Fund (IMF). One of her central themes is that now the members of the Consortium ""are working together, more or less harmoniously, to keep the Third World in line."" She blames IMF adjustment policies--designed to make it possible for Third World countries to repay their debts--for increasing the poverty and hunger of their citizens. George provides a good survey of how the debt crisis has unfolded, and rejects as self-defeating the proposals that debtor nations simply repudiate their debts. She correctly sees the rapid industrialization and urbanization attempted by Third World nations as ""mal-development,"" but she fails to address the fact that most Third World debtor nations have squandered enormous amounts of money on ineffective and corrupt government development programs. She goes on to cite the success of Peru's huge ""informal"" sector (black market) in providing desperately needed goods and services, apparently without realizing that this is an example of a ""capitalist"" success. And she dismisses proposals like the Baker and Bailey plans for ending the crisis and offers instead what she calls ""the 3-D solution: debt, development, democracy."" Her solution consists of unrealistic proposals for managed trade, debt forgiveness, and the forced repatriation of capital that has fled the Third World. A thoughtful survey of the Third World debt crisis, slightly marred by George's radical agenda.

Pub Date: April 1st, 1988
Publisher: Grove