http://news.bbc.co.uk/2/hi/uk_news/politics/3689556.stm
So come on the US, Germany, Japan. Where are you all?
[quote=“TonAng”]http://news.BBC.co.uk/2/hi/uk_news/politics/3689556.stm
So come on the US, Germany, Japan. Where are you all?[/quote]
Perfidious British have yet to pay WWI and WWII debts to Amerikanski capitalists.
:bravo: :bravo: :bravo:
not a good idea
it destroys the countries credibility
take south Korea as an example of how it should be done
True. Perhaps the US should have dropped these due to the huge amount of technology we have given them for nothing, the design of their aircraft carrier decks, advanced aero engine technology, computers, windows, the internet…
Anyway, I’m bitterly going off topic.
I was under the impression that we wiped much of the debt owed to us 4 years ago?
True. Perhaps the US should have dropped these due to the huge amount of technology we have given them for nothing, the design of their aircraft carrier decks, advanced aero engine technology, computers, windows, the internet…
Anyway, I’m bitterly going off topic.
I was under the impression that we wiped much of the debt owed to us 4 years ago?[/quote]
You are incorrect. Off to the gulag with you.
:bravo: :bravo: :bravo:
[quote=“TonAng”]http://news.BBC.co.uk/2/hi/uk_news/politics/3689556.stm
So come on the US, Germany, Japan. Where are you all?[/quote]
Why should anyone ‘forgive’ debt? It only leads to more irresponsibility.
V:
In stunned silence, I agree with you! Argentina, though near and dear to my heart, should NEVER have been allowed to borrow so much money and the people of Argentina must do something about getting a more accountable government that behaves responsibly, something no one there is willing to do since everyone has their nose in the trough in some way or another. Ending corruption not debt writeoffs is the way to go.
[quote=“fred smith”]V:
In stunned silence, I agree with you! Argentina, though near and dear to my heart,[color=red] should NEVER have been allowed to borrow [/color]so much money and the people of Argentina must do something about getting a more accountable government that behaves responsibly, something no one there is willing to do since everyone has their nose in the trough in some way or another. Ending corruption not debt writeoffs is the way to go.[/quote]
So we agree then that both lenders and borrowers should bear responsibility. Nobody forced banks etc to lend the money to these countries. If a bank loans money to a business that then cannot pay it back, the bank takes a loss. The bank didn’t do its homework right so it gets punished. Think about all the bad (actually ridiculous would be a better word) loans that Japanese banks have had to write of recently. A great deal of the problem with third-world debt has arisen because banks didn’t do their homework properly and figured that there home governments would put pressure on to prevent them losing out. The thought they were in a win win situation and so loaned stupidly. Again, look at the domestic situation in Japan. When the shit hit the fan the debts got role over into different forms so that the commercial firms could get away without any real losses. Borrowers and lenders both take a risk. If the lender faces no risk then they become sloppy practitioners of what they believe to be a risk free money machine.
As for Argentina - indeed they do need to learn to elect responsible leaders and not just pork-barrel politicians. But then what do we do about countries whose debt was built up by unelected leaders? Do you support debt relief and forgiveness for Iraq, or will that just make them more ‘irresponsible’?
Vannyel’s statement completely overlooks many of the complexities of the issues (but I think that was probably the point).
BB:
I am in an agreeable mood today and so I see your point entirely and agree with it. Those who lent money to Argentina should suffer as well. The risks were apparent for quite some time.
Now, as to Iraq, I believe that governments not lenders should bail it out and that they should do so because it is in the best interests of strategic Middle East policy for many of them.
France got burned with loans to Saddam but why they were lending him money in the first place…
So, as long as governments agree to these bail outs, then it is a different matter but one that the voting population should keep a very close eye on.
Absent reform in Africa, how is cancelling debt really a solution? Then what? more loans next year? Ditto for countries like Argentina. Though after the most recent fallout, I think most Argentines have finally come to the painful conclusion that the country is no longer First World but Third World. Very painful but realistic nonetheless.
Indeed, but I think a carrot and stick approach is warranted. Why reform if you are going to be fucked in a mountain of debt forever anyway? Why reform if you think you can get your hands on the cash without bothering. Hence the carrot and stick.
Also I believe that part of the problem for Argentines recently was the ridiculous dollar peg that was kept in place long after it’s stabilisng prupose had been achieved. Indeed in was held so long it became destabilising. Their belief that taxes are something that really don’t need to be paid or collected, and the results that we now see is something that Taiwan could do with learning from.
[quote=“butcher boy”]
So we agree then that both lenders and borrowers should bear responsibility. Nobody forced banks etc to lend the money to these countries. If a bank loans money to a business that then cannot pay it back, the bank takes a loss. [/quote]
i believe the debts in question are those held by governments and orgs like the world bank and imf through said government. the government has no authority to write off the debt held by a private bank. not that it matters since banks that lend for profit tend to hold much less in the way of bad loans than organizations which exist to lend to poor countries for political instead of economic reasons.
with some of the debt forgiven and the countries operating under a somewhat better credit rating, how much do you want to bet the first thing those third world governments do is take out new loans? 
Actually, the dollar peg brought us great stability after a period of disastrous inflation. The problem was the spending/borrowing by provincial governments that continued and eventually drove Argentina down the drain.
i think the currency board system actually drove Argentina down
Flipper
I believe that you are right about the source of most of the oustanding loans. However a lot of these were used as part of the mechanism to deal with the debt crises of the early 80s when major western banks recycled ‘petro-dollars’ into loans to developing nations. As interest rates increased these countries could no longer pay the loans back. To prevent default the IFIs gave even bigger loans tied to structural adjustment measures etc. I believe citigroup was particlulary badly exposed but it was not the only bank to have fucked up. As for structural adjustment - well one of the policies they suggested/ordered in one case was for a country to produce only coffee as it was thought that this would generate shit loads of cash to pay of the loans. Unfortunately this course of action was suggested to too many countries and the price of coffee dropped like a led zepplin.
Fred and Robi, I think you are both right. The dollar peg was needed in the early 90s and was brilliant for stopping the hyper-inflation which is what it was intended for. However they kept it too long, so in the end the currency market had a one-way bet and the peso was fucked. Same thing happened with sterling and the ERM during the Major government in the UK.
Robi
I don’t know much about the ‘South Korean example’. would be interested to hear more if you have time.
I expect I have got plenty of this wrong or at least a little confused, but it is an issue I find very interesting, so anybody who wants to pull apart what I have said, feel free (yeah yeah, I know you will 
)
When the south Korean government was unable to pay of the dept the people did it. It became a national duty. The land did not loose its credibility and foreign investment did not stop but speed up.
The currency peg worked like a charm. The architect Domingo Cavallo knew what he was doing. He told the government that it had to rein in the overspending by provincial governors and nothing happened. He resigned in 1996, some five years before the peg went because he said it was unsustainable given the excessive borrowing by provincial governments and he was right. The peg was also supposed to curtail such spending. It was in the original plan. ERGO the peg was not the problem, the lack of financial discipline was.
Argentina also suffers from labor regulations that make France, Germany and Italy look like free-wheeling capitalist societies.
sounds like everybody’s problem…
[quote]
Argentina also suffers from labor regulations that make France, Germany and Italy look like free-wheeling capitalist societies.[/quote]
Just curious, which regulations that might be, because i always thought the German labor regulations are much to social.
Actually, it is very costly to hire anyone in Argentina since the government forces everyone to pay for social, retirement, insurance costs that make it next to impossible for anyone to hire anyone. Also, it is impossible to fire someone. The labor unions in Argentina (oh surprise, surprise) are all corrupt filthy patronage machines. We need Margaret Thatcher to turn things around. If it could be done in England, it can be done in Argentina.