[#] An Axe to Grind about World Poverty

There’s a chapter in the Bono book about African relief, and it is both touching and infuriating and, I think, incomplete.

Bono has two very large axes to grind over Africa: AIDS relief, and debt relief. I’m not sure I’m equipped to talk about AIDS relief yet, but as a knee-jerk person who claims to know something about Jesus Christ I’d say that we should be giving them AIDS relief. We should be finding ways to give them medical comfort – which ought to be paired with spiritual comfort and discipleship.

What I want to write about briefly is the matter of debt. Much has been made about the billions in debt owed by the poorest African nations and how it is crippling them economically. Well, whenever we talk about economics, there is of course the matter of “real people” who are either starving or dying from being fat pigs, and somehow the argument is always that the fat pigs are to blame for the ones who are starving. Let’s just take that “argument” as one side for a moment and frame another side.

I just did a quick Google for the total amount of debt (converted to US dollars) owed by the African continent, and came up with the number $40 billion. I couldn’t find it on the “Make Poverty History” website, which is odd since they are demanding that the only economic justice is to forgive all the debt; one would think that the scope of the demand would be outlined in a little more detail than simply saying “all”. So: $40 billion in debt. A quick scan of the World Factbook says that there are roughly (which is to say, rounding down for the sake of the argument) 800 million people living in Africa. fao.org says that the GDP per person in Africa is $736.

To get all terms in the same denomination, the debt per person for the continent of Africa is $40 billion / 800 million = $50. So here’s the comparison: the GDP per person is $736, and the debt per person is $50. Those of you with quick calculators can see that the debt-to-GDP percent of the African continent is 6.7934% -- we’ll round it up to 7% to keep things simple.

Now let’s look at the United States. The Population of the United States as I type this note (according to the US census bureau) is 296 million – give or take 500,000. The GDP for the United States for FYE 2004 was $10.841 trillion, and the nation debt of the US as I type this $7.849 trillion.

To get all the terms in the same denomination, the GDP per person for 2004 for the US was $36,625; the national debt per person in the US is $26,516. So the debt to GDP percent per person for the US is 72.4%.

To bring it all together, the debt per person in Africa is about 7% of what they generate in production of goods and services, and the debt per person in the United States is almost 73% of what they generate in production of goods and services. That is to say: the debt burden of the US per person is 10 times what it is per person on the African continent – as a percent of their productive output, not as measured in dollar-for-dollar comparisons. The dollar-to-dollar comparison says that the debt burden per person in the US is more than 500 times what it is in Africa.

There are probably a billion directions in which this discussion could go at this point – like the justice of making a nation pay back the debts of a despotic ruler they have overthrown, or the wisdom of making loans or “relief payments” to despotic rulers in the first place without demanding some accountability from them – but the question of debt “burden” seems to be one that does not account for the proportional matters of economic scale.

Listen: there is no doubt that there are people dying from poverty in Africa. Proving mathematically that their debt burden is really pretty small is the worst excuse to do nothing at all about the problem. In exactly the same spirit and mind, it is also the same kind of stupid to relieve the debt as if that debt was the cause of the problem – because it is not at all the cause of the economic black hole these people live in – it can’t be, because it is not large enough to create that kind of force.

I have dozens of Post-it notes in my copy of the Bono book, and I’m only about 1/3 through it. This was the first major take-away I had, so I thought I break the silence this morning to keep you readers properly informed on world events.


Note to RSS feeders: soory about the edits. MSWord does stupid things with quotes, and it was messing up the links. All fixed now, and back to your business.