World Debt with Context


A debt-fed spike of US home prices crashed and sparked the Great Recession/Financial Crisis that is harming the nation’s populace and helping its elites. The country’s laboring counterparts abroad know a thing or two about the debt trap. Amid US austerity economics and politics, mainstream reporting treats foreign debt with scant context. It just exists. Thus it’s a bit like the weather. Such an approach assumes what needs explaining. Help is here: Debt, the IMF, and the World Bank: 60 Questions, 60 Answers by Éric Toussaint and Damien Millet (Monthly Review Press, Sept. 1, 2010).

In the first of the book’s 13 chapters, the authors connect varied aspects developing countries, development, foreign debt and poverty. It’s a complex story. There are facts and figures that can make some readers’ heads spin. But Toussaint and Millet handle the challenge with brevity and clarity. This attention to the basics of inequality and poverty in the global political economy makes this a fine handbook for students. Classroom teachers, take note.

In chapter two, we meet our old friend, history. Toussaint and Millet offer a critical look at origin of the debt crisis plaguing developing nations. To wit, they detail the whys and wherefores of the class forces that design and operate the system of international finance: powerful and rich institutions in the former colonial powers.

What role did the rising borrowing fees and falling commodity prices play in the final 25 years of the past century for indebted foreign nations? And who benefitted there and in the developed nations? Toussaint and Millet survey the record, using official data from the International Monetary Fund and World Bank and other sources. The authors offer a telling indictment of the IMF and WB, calling for “a complete reversal of the current priorities” that privilege the financial investment returns of a relatively few over the living and working standards of many.

Oh, and the Paris Club? Learn about the workings of it and the World Trade Organization in terms of foreign debt and dependence in chapter five. The next chapter is perhaps the most useful of the book, in my view, given the financialization of the global economy since the 1970s. Here, the authors break down the structure of the debt of foreign countries. What’s public and private, internal and external, and what has (not) changed for creditors and debtors over the past four decades. Toussaint and Millet go beyond surface appearances and pronouncements to mine the deep structures of these financial and ultimately social relations.

There is much talk about Third World debt relief currently. But such rhetoric has brought precious little poverty reduction for developing nations. Toussaint and Millet dissect the official discourse and practice, from the Heavily Indebted Poor Countries initiative to micro-credit policies, to show that the same capitalist investors are cunningly behind the financial solutions to the problems that their profit-drive created and recreates. This “talking left and acting right” hides the mis-named agenda of “free-trade.” Its trade pacts protect multi-national industrial corporations and financial institutions from market competition, applying competitive forces to the lives of rural farmers and urban slum dwellers abroad and goods-producing wage workers stateside. With that brand of liberty, who needs tyranny?

What to do? The task is to deepen and broaden the struggle for political democracy. In a chapter on radical alternatives to the status quo of foreign debt and dependence, Toussaint and Millet call for more citizen involvement in policy-making in foreign nations where IMF and World bank loan conditions prevail.

To this end, the global campaign to cancel Third World debt is the final chapter’s focus. Toussaint and Millet know their stuff. They are educators and actively involved in the Committee for the Abolition of the Third World Debt (

They end with two appendices. One is on the nearly 150 developing nations in 2008. The other is a glossary of terms to help readers decode an often arcane language of global creditors and debtors. The “Notes” section helps those who seek further details on sources in the text. The lack of an index is awkward. But that is a minor matter in this informed and informing book.

Seth Sandronsky lives and writes in Sacramento, Calif. Email

From The Progressive Populist, January 1-15, 2011

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