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April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review June 16, 2005 / 9 Sivan, 5765

Debt relief in Africa subsidizes ineptitude

By Robert Robb

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http://www.JewishWorldReview.com | What's being proposed for Africa isn't just debt relief. Instead, it's also in large measure an assumption of the loans by developed countries. And that makes it a mistake.

It is certainly debt relief from the standpoint of the mostly African nations owing the money. Finance ministers from the United States, Western Europe, Canada and Japan agreed last week that $40 billion in loans to 18 countries should be immediately lifted. An additional 20 countries are eligible to potentially shake off $16 billion more in obligations.

A small portion of the initial debt to be written off is owed to the International Monetary Fund, which is well capitalized. So, the finance ministers propose that the IMF simply eat the loss.

But the bulk of the money is owed to the World Bank, which is not well capitalized. The finance ministers propose that their countries make the bank whole for the loans. The U.S. share might run as high as $1.75 billion.

This is to enable the World Bank to continue loaning money to developing countries, rather than curtailing its activities as a result of its lending losses.

But the non-performing loans being relieved are themselves proof that the World Bank has been an improvident lender. It has also been an utter failure in facilitating economic growth, particularly in Africa.

Since 1980, the World Bank, in conjunction with the African Development Bank, has lent African governments more than $75 billion. Yet half of these countries have seen a decline in real per capita income. Only a handful made any meaningful economic progress.

There's an explanation as to which countries did make meaningful progress, and it doesn't have anything to do with lending by international organizations.

The Heritage Foundation and the Wall Street Journal publish an Economic Freedom Index, comparing the degree of economic liberty that is available in countries. It looks at such things as taxation, regulation, and sound and fair governance as it relates to business activities.

The countries in Africa that are rated mostly free on the index have an average per capita income four times higher than the countries that are not free.

The Bush administration understands this reality. It has made reforms conducive to democratic capitalism a prerequisite to receiving U.S. development assistance. Presumably it expects new President Paul Wolfowitz to do the same at the World Bank. And indeed, there is a bow in that direction in this debt-relief plan.

But there is a paradox to the Bush requirement: Countries that truly make reforms conducive to democratic capitalism don't need foreign aid or subsidized credit through international organizations. Their economies will experience internal growth, and they will be able to attract private-market loans and investment.

That, of course, is the real fuel for economic growth in these countries. Last year, the World Bank lent about $20 billion to developing countries. That same year, developing countries received more than 10 times that, $255 billion, in direct foreign investment.

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Moreover, good governance and free-market reforms are much more likely to be made and stuck with if these countries have to convince private lenders and investors rather than U.S. or international bureaucrats. Private lending and investment is also likely to be much larger and more responsive than loans and grants flowing through governmental institutions. The track record of what one economist has called the "cartel of good intentions" has not been very good.

There is, of course, a humanitarian aspect to all of this, given the wretched conditions in which many Africans live. But there is a tendency among Western governments to conflate humanitarian aid with economic development assistance. Even if Western governments want to stay in the humanitarian aid business, they should get out of the economic development assistance business because they aren't very good at it.

Moreover, being in that business — and attaching conditions relating to internal governance to the assistance — accentuates the sense that the United States, and developed nations generally to a lesser extent, is trying to impose its will on the world.

If there is to be additional, large-scale African debt relief, it would be far better for the World Bank to be required to write off its loans just like any other improvident lender. Making it whole for its imprudence simply funds and encourages more of the same.

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JWR contributor Robert Robb is a columnist for The Arizona Republic. Comment by clicking here.

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