The Geography of Debt

1
The Geography of Debt

• According to the UNDP (2000), the debt owed by
  all developing countries in 1998 was 2.05
  trillion, up from 857 billion in 1985, some 448
  per person.
• This works out to be an average of 43 of annual
  GNP although the share of the least developed
  nations represents 99.5 of their GNP (T18).
• Depending on their exports, the interest payments
  alone on this debt varies from less than 10 to
  more than 33 of export revenues by region,
  averaging 20.1 for all developing countries.
• In the worst cases it may exceed 30-50 of
  earnings (e.g. Brazil 74, Zimbabwe 38).

2
Debt and AID

• It appears that the Medium and Low HDI nations
  are obliged to pay out around 366 billion in
  debt servicing (calculating their revenues from
  exports multiplied by 18.9 and 15.4).
• In 1998, the developing countries received some
  34 billion in grants or loans for economic
  development and welfare (ODA), not including
  other types of AID (military, etc.) - around 7.5
  per Third World recipient or 3.2 of their GNP.
• It seems that ODA was down from 48 billion in
  1990 or 12.5 per recipient.

3
ODA - from where?

• The 21 countries of the OECD Development
  Assistance Committee gave 52 billion to other
  nations in 1998, some 0.24 of their combined
  GNP, down from 0.33 in 1987/88.
• Spending on the military by OECD was 504 billion
  or 2.2 of GNP.
• The UN expects the industrialized nations to
  devote at least 0.7 of their GNP to ODA.
• Only four nations meet this target each year -
  Norway, Sweden, Netherlands, and Denmark.

4
Who gives what?

• The US has the lowest ODA as of GNP (although
  the second largest after Japan in ) at 0.1 -
  some 8.8 billion or 29 per person.
• This is down from 52 per person only 10 years
  ago.
• Norwegians gave 309 and Danes 316, both up from
  1988.
• Japanese gave 82 and Canadians 64.
• Even the cheapskate Brits gave 61 in 1998.

5
Who gets what?

• The UK announced in 1999 that it would give the
  majority of its ODA to the 20 poorest nations.
• HDR 2000 shows that the least developed nations
  got only 21 of the 1998 money, compared to 28
  in 1986/87 and 24 in 1987/88.
• The US gives only 15 of its ODA to the poorest
  nations, Norway 37.
• More than 3.3 billion is given to countries that
  have High HDI status (e.g. 1 billion to Israel)
  and 25.3 billion to Medium HDI status nations.
• Low HDI nations got 12.4 billion.

6
Aid per person

• Incredible inequities exist concerning who gets
  what kind of hand-out and why.
• The greatest aid per capita goes to the Cape
  Verde Islanders at 315, No. 105 in the HDI list,
  a whopping 29 of GNP.
• By region, aid varies from 1.9/cap in East Asia
  to 21.4 for SS Africa.
• Note that Eastern Europe and the old Soviet
  states get 14/cap.
• Also note that the medium income nations get
  almost 50 more per capita than the low income
  nations!

7
How much is that debt worth to us?

• The total external debt of all developing
  countries is 2 trillion and payment obligations
  are thus somewhere around 354 billion (by my
  estimates from T14, T15, T18).
• Put in context, US Federal Foreign Debt was 3.6
  trillion in March 2000 according to the Federal
  Reserve Board (13,256 per person).
• Total GNP of the High HDI nations was 23.3
  trillion in 1998 and their population 882
  million.
• Thus all the annual debt payments represent some
  401 per capita of combined High HDI annual
  income or 1.5.
• Subtracting existing aid (which wouldnt be
  necessary if the debt was dropped), military
  assistance, disaster relief, etc. and this goes
  down further to perhaps 200 or even less.