58. Former Debtor Nations

Former Debtor Nations
Bob Komives
::

When we abandon international loans we will see changes outside the walls of treasury departments of national governments. Projects that international loans would finance today may differ when financed locally. Some projects favored and proposed by international lenders will die because the target nation does not forsee enough benefit. Other projects will be designed differently. Local project managers are likely to use and develop local goods and services to replace more expensive foreign options mandated or favored by international lenders. Purchasing departments will make foreign suppliers compete in a free market --rather than in a restricted market that favors suppliers from the lending nations. Conscientious governments in developing nations will feel even greater responsibility for their nations' futures. They will not hesitate to undertake projects that are likely to produce and to distribute justly more wealth than they consume. They will see that newly printed and well invested money out performs newly signed foreign loans.

In setting fiscal policy, developing nations will be subject to foreign political and economic pressure, but perhaps the pressure will be little more than that exerted among developed nations. Officers of foreign lending institutions and the International Monetary Fund will lose their extraordinary influence over the internal policies of the former debtor nations.

"Former debtor nations," I have not suggested what can be done with the present international debt. It exists, built upon false principles and good intentions. I have no magic answer. Diplomacy, rather than economics, must eliminate existing debt. As to the future, in order to promote peaceful paths to mutual prosperity among nations we must eliminate both the practice and the machinery of foreign monetary debt. In its place we can hope for constructive cooperation among former debtor and lender nations who act with discipline and responsibility.

As child and parent the word, discipline, intrigued me. One moment it seems to mean a steady rigor by which an individual or group works through a challenge. The athlete who sticks to a rigorous training routine has discipline. So does the scholar who works methodically for years to uncover the mysteries of genetic inheritance, as does the former smoker working through a successful withdrawal. They have discipline. Calling it, self-discipline, is redundant. Directly related to this meaning is discipline as a profession. The discipline of the athlete is high jump, of the scholar, molecular biology. This discipline is also a verb. The microbiologist disciplines herself when she enters a rigorous experiment.

Another moment, discipline seems to mean punishment, structure, rigor imposed upon the unwilling. Parents who confine their children to their rooms on Saturday night are said to discipline their children. The department head who docks the pay of a scholar who did not follow rules for the use of the photocopy machine is said to discipline her staff. As a noun: "Children and scholars need discipline from their superiors or they will be irresponsible."

So, I chuckle when someone says, "There is a lack of discipline here," and everyone nods the head in agreement. They can agree about lack of discipline, yet they might have profound disagreement if pressed to elaborate their views.

Self financing issues no license for irresponsibility. Poor countries need discipline as much as rich countries. There is no special reason that discipline for poor countries must be imposed by the International Monetary Fund and international lenders. How do we prevent developing countries from acting irresponsibly if we let them print money rather than borrow it? Unfortunately, we cannot, with certainty, prevent countries from acting irresponsibly. Responsibility must be learned from the pain and reward that come after investment. We should not expect a country to borrow money it does not need and risk inflation it does not want so that it might acquire discipline.

To invest in the well being of a nation
requires good judgment.
To invest poorly
is to risk disaster.
Nations that invest well
do improve quality of life.
Those that invest poorly
do suffer.
Therein lies the lesson in responsibility.

The Lesson in Responsibility

:: Bob Komives, Fort Collins © 2006-2008 :: Plum Local IV :: 58. Former Debtor Nations ::
With attribution these words may be freely shared, but permission
is required if quoted in an item for sale or rent

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