With grand announcements, recycled promises and much hype about debt relief by the leaders of the world's rich creditor countries, the IMF and the World Bank, since 1999, many of us can be forgiven for believing that the debt crisis of the world's poor countries is over. Far from it. The debt trap remains a major reason why poor countries remain poor and are unable to make progress towards reaching the millennium development goals of halving the number of people living in extreme poverty. Noreena Hertz explains with remarkable clarity why none of us can afford to ignore the problem. IOU exposes the reasons why countries go into debt in the first place and puts forward clear recommendations that can and must be taken to redress its legacy. As she makes clear, debt cancellation is not a voluntary act of mercy, charity or forgiveness, but a demand of justice. IOU should not go unnoticed. When the truth is told about international debt, then we can begin to overcome the scandalous debt slavery of the world's poor.
"In 1991, a cholera epidemic ravaged Latin America . . . Debt was one of its major causes. The first fatality was Cirila Poma, a 60-year-old woman living on the outskirts of the Peruvian province of Chancay . . . While countries with public health surveillance systems, crisis management structures and a functioning water and sewage infrastructure can contain these sorts of health incidents . . . countries which are poor and under-developed, where water and sanitation systems are inadequate and where healthcare is lacking or inefficient, simply cannot. In 1991, Peru was such a country . . . with 60 per cent of its population living in extreme poverty, it was, at that time, navigating particularly treacherous economic straits. This was because its newly elected . . . president, Alberto Fujimori, was attempting to remove Peru from the IMF's blacklist in order to become eligible for new loans.
Only a few months before Cirila got sick, Fujimori had agreed . . . to allow the IMF to put Peru through a . . . harsh new structural adjustment programme. The impact of this decision was devastating.
[S]tructural adjustment programmes typically worsen living conditions and improve the odds for emergent diseases . . . Cholera is actually a relatively easy disease to contain . . . simply by the washing of hands and the avoidance of untreated water. But the debt/structural adjustment duo was devastatingly effective at putting even these basic preventative measures out of reach . . . the price of basic goods rose exponentially overnight . . . Peruvians awoke to find themselves unable to afford soap to wash their hands. By the end of . . . 1991 . . . Peru's economy had collapsed as tourism withered [and] . . . the epidemic had . . . killed nearly 4,000 - over five times as many as those who died from Sars in 2003."