There is no doubt that poverty is a serious issue in the world today and that a solution is needed. Debt relief, however, has so far proven to be fairly inefficient in terms of getting countries back on the road to development. In fact most countries whose debt has been forgiven have not managed to escape the cycle of poverty.

Debt relief alone will not be a solution in desperate situations where corruption, totalitarian governments and criminal gangs rule. It is better when natural disasters occur to provide short-term humanitarian assistance in the form of emergency supplies, specialist teams and money for rebuilding. Unlike debt relief, such aid can be focused on areas in real need and monitored to ensure it reaches those suffering in the disaster zone.

We need to keep in mind the fact that the need for debt relief is looked upon as a threat of bankruptcy. This means countries that are desperate enough to seek debt relief after a disaster may in future be seen as bad credit risks, and become unable to receive the loans they need in order to rebuild for the long-term after a natural disaster. It is also unclear what qualifies as a “natural disaster”. Earthquakes, hurricanes and tidal waves may be sudden and unpredictable, but as much or even more damage can be done by disease outbreaks such as AIDS, SARS or Avian ‘Flu, or by famine caused by crop failure. Outbreaks of Hepatitis A for example cost up to $36million.[1] And why do disasters have to be “natural” to justify debt relief? What about countries affected by man-made disasters such as war? Tanzania and Chad have both suffered hugely from coping with massive refugee inflows following violence in neighbouring states (Rwanda and Sudan respectively).

While it is true that debt payments place a serious burden on governments, one also needs to consider what kind of governments are talking about. Because current debt-relief programmes such as the HIPC scheme are already rewarding countries for good governance, some of the poorest states will in future have little debt to forgive in the event of a natural disaster.

Only those which refuse to meet international norms for governance and human rights are keeping their debts and so will be in line for debt-forgiveness after a future mass tragedy. Sadly, in many cases these have governments that are involved in civil wars, killing their own populations as well as others; they are governments that waste most of the aid that comes into their countries; governments that use development funds to feed their own foreign bank accounts; and governments that engage in serious human rights violations. Forgiving the debts of such states will do nothing for those struck by disaster and will make a mockery of the existing debt relief schemes.