The IMF has agreed to follow through with a pledge to erase 55 billion dollars in debt from 19 African countries. This deal was originally proposed during the G8 meetings in Gleneagle, Scotland during July 2005 - thanks in large part to the work of Bono and Jeff Sachs. While 55 billion is not as high as many had hoped for, the amount does help and gives some promise to the future of those African countries most affected by extreme poverty.
Unfortunately, the US, nor any other nation, has met the promises made during the year 2000 which were aimed at reducing world poverty and outlined in the Millennium Development Goals. The G8 countries pledged 0.7% GDP annually to IMF/World Bank/UN programs aimed at reducing poverty (sustainable farming, infrastructure, education, and health initiatives). Yep, 7 cents of every 10 dollars is all it would take and during the Millennium conference the US promised to give just that. Last week at the World Bank meetings, those same countries looked at where they were 5 years later and realized that they were not on track to meet their 10 year goals and therefore, instead of ramping up efforts to follow through on previous commitments, simply SCALED BACK their earlier promises. However, at the same meeting Bush gave a speech citing the extreme burden of poverty on the future of global democracy, global trade, and economic sustainability, giving some hope that the administration at least understands why it is necessary to make serious commitments to future programs - such as Debt Cancellation.
Why is debt cancellation so important? If a country is trying to climb out of poverty, it needs to invest its money into infrastructure and new business. However, with a high debt, the financial price of servicing that debt is so high, that a country can never get ahead, no matter how innovative and successful its citizens, entrepreneurs, and businesses.