IOU: The Debt Threat and Why We Must Defuse It. Noreena Hertz

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      The difference is this. The US may be the world’s most highly indebted nation, but it can afford to service its loans, for now at least. The world’s poorest countries in Africa, Asia, and Latin America cannot. Because to do so they have to pay an unacceptably high price, mainly at the expense of their poor or sick. Botswana, in which 40 per cent of adults are now HIV positive, pays more today on debt servicing than it can afford to pay on health care or provision. Niger, the country with the highest child mortality in the world, continues to spend more on debt servicing than on public health. Countries that can’t afford to provide basic health care, education or shelter to their people have to use their pitiful resources, including, in many cases, all their aid flows, to repay debts typically racked up by authoritarian, unelected regimes long since gone. Children in Africa die every single day because their governments are spending more on debt servicing than they do on health or education. The injustice of this situation made Bono mad.

      It made him mad too that most developing countries had become so indebted only because the world’s superpowers had callously used them as pawns in the days of the Cold War. And that the rich world continues to lend to dictatorships and corrupt regimes in the poor, despite the fact that it is the ordinary people who live under them who bear the cost. It made him even angrier that the West continues to lend monies to the developing world under the condition that they use them to buy arms, or military hardware. And that to the traders on Wall Street and the vultures who hover over highly indebted countries, debt is just another product to be bought and sold, regardless of the damage their actions so often cause.

      But this still doesn’t explain why a rock star turned political lobbyist? Bono could’ve kept his politicking confined to music biz events, and still played a part.

      To understand that, we must understand the state of the debt cancellation movement in 1999, the year Bono and Gelb met. In Europe, it enjoyed a very high profile. From inauspicious beginnings at Keele University in central England, in just a few years it had evolved into a broad based alliance – the Jubilee Coalition – which counted churches, the Mothers Union, the British Medical Association, trade unions and aid agencies amongst its members. In Britain, 500,000 ‘Cancel the Debt’ postcards had been sent to Gordon Brown, the British Chancellor of the Exchequer, including one from his own mother; in Italy, rival soccer teams wore debt relief t-shirts; on the same day that Frank Sinatra died, 70,000 Jubilee supporters formed a human chain around the G8 Summit of the world’s wealthiest democracies, to protest against the shackling of the developing world by its rich world creditors.

      In the United States, however, despite the support of various religious groups, the Jubilee coalition had almost no profile, and its campaign – to get the world’s richest countries to commemorate the millennium by cancelling the debts owed them by the world’s poorest countries – had completely failed to take off. But without the US making a serious commitment to debt relief, the whole Jubilee campaign would falter. The $6 billion debt owed to the US by the poor countries was an albatross around their already scrawny necks. More critically, there could be little progress towards cancelling the $70 billion the world’s poorest countries owed the World Bank, the IMF, and regional development banks unless America played a major role.

      Jamie Drummond, a young British debt campaigner, who had been charged with getting the United States more engaged, decided to think outside the envelope. He saw that there wasn’t time to rally the kind of mass public support that had proven so effective in getting debt on to the European political agenda. It was early 1999 and the millennium clock that marked the deadline for the Jubilee campaign was ticking very loudly. And so he decided to go a completely different route.

      In the States, celebrity was, he figured, the quickest way of entering doors and ramping up support. And Bono, the Irish singer, whose band U2 had sold over 100 million records, and who was known for his staunch support of human rights, the environment and development issues was, Jamie believed, his man.

      Luckily, Jamie’s father had a useful neighbour on the west coast of Ireland. Through Chris Blackwell, the legendary founder of Island Records, Drummond managed to reach Bono.

      Bono was excited. He cared about Africa. After headlining at Bob Geldof’s revolutionary Live Aid concert in 1985, which raised $70 million for famine-stricken Ethiopia, he and his wife Ali spent a summer working in an orphanage there. Bono had seen first hand the immense strain of repayment of debt and thought it absurd that, for every dollar of government aid the West sent to developing nations, several times that amount was coming back to them in debt repayments. But perhaps what clinched it for Bono was that he was also, despite his rock and roll pedigree, a deeply religious man, and the biblical notion of ‘Jubilee’, the idea that you have the right to begin again, appealed to him with its combination of moral force and profound simplicity.

      ‘Great ideas have a lot in common with great melodies,’ recalls Bono. ‘They have a certain clarity, a certain inevitability, and an instant memorability. And I couldn’t get this one out of my head. I knew it was right, and that the time was right for this and I couldn’t let it go.’

      But while the pierced and sunglasses-wearing rock star might have been able to fill giant stadiums, Bono was a nobody as far as American politics was concerned. If he was to play a part in putting debt relief on the US political agenda, he needed help. So he phoned a woman he thought might be able to do just that. Bono knew Eunice Shriver – the founder of the Special Olympics, and daughter of Rose and Joseph Kennedy – from a charity recording project, describing her as a ‘Hibernophile’, a person who knows more about Irish culture and politics than most Irish people. She told him that she’d love to help, and suggested that he get in touch with her son: ‘I think Bobby would be good at this,’ Bono recalls her saying. ‘And I knew Bobby, but hadn’t thought to ring him. And he was good. He was more than good.’

      For while Bono had passion, Bobby had political savvy. Shriver immediately knew that in order to get the United States to really commit to debt cancellation, it was essential that not just the Democrats, but also the Republicans, right-wing journalists and, most importantly, Wall Street blessed their proposal. With this in mind, one of the first things Bobby did was set up the meeting between Bono and the well-connected Gelb.

      But Bobby also knew that Bono couldn’t just go and meet the men on Gelb’s list until they both knew their subject back-to-front. ‘I had been minding my own business,’ Bobby recalls, ‘making records, producing movies, when I got Bono’s call. I knew nothing about debt, but I did know I wasn’t going to Washington with him, or to see anyone at all, unless we really knew what we were doing. We really had to know what we were doing.’ So Shriver picked up the phone to ‘a guy I knew who was doing a lot of work on this subject.’ That guy was Jeffrey Sachs, one of Harvard’s most famous economics professors.

      ‘I called Jeff up and I said, “I have this friend that I did the Christmas record with, a musician called Bono, and if he comes over to Cambridge, will you spend a couple of days with him and try to get him up to speed on the actual numbers?”’

      Sachs was forthcoming. ‘Sure I wanted to meet Bono,’ he recalls. But debt cancellation had been something he had been advocating for years, to little avail and he was sceptical of the impact the musician could have. ‘It’s never going to work,’ Bobby remembers him saying. ‘No one in Washington will pay any attention to you. We can’t get anyone to pay attention to this issue.’

      But by the end of their two-day crammer session Sachs felt differently. Shriver recalls Sachs’ palpable excitement: ‘He said, “This guy is a very persuasive guy you know, maybe something can be done.”’

      With Bono thoroughly briefed, it was time for Shriver to start spinning his Rolodex.

      His first call was to James Wolfensohn, the head of the World Bank, a man who Bono had been СКАЧАТЬ