“Rich Man, Poor Man”
Speech No. 4 in the Toastmasters “Speaking to Inform” Manual
Date presented: 9 February, 1999.
The objectives of this speech were:
- To prepare a report on a situation, event or problem of interest to the audience
- To deliver sufficient factual information in the report so the audience could base valid conclusions or a sound decision on it.
Time 10 to 12 minutes.
Rich Man, Poor Man
As most of you know, I have been fund raising for World Vision for over 25 years. I know that the money donated to famine relief and development aid projects has made a tremendous difference to many people in Third World countries. But I have become increasingly aware that we need to redress the causes of poverty and injustice. I was shocked to learn that although Western Governments give grants to Third World countries, they take back 9 times as much in debt repayments! And that each person in Sub-Saharan Africa owes 30 times more than they will earn in a lifetime! I decided to find out more. I got most of the information from the Internet, on the Jubilee 2000 site. Also from World Vision, Tearfund, One World and Community Aid Abroad. The main points I decided to research were:
- How did these countries get into debt?
- What effect does it have on us?
- What can be done about it?
First of all, How did they get into debt?
The same way any of us could. They were conned by attractive offers of low interest rates at a time when they needed it.
During the 70’s, rich countries such as U.S. had a surplus of dollars in their banks. This was affecting the economy and they needed to offload it fast. So they offered low interest loans to the poorer countries. The fact that those rates would soar once all the money had been lent out was conveniently forgotten. It got the rich out of a hole, and the poor into one.By the 1980’s the poor countries were finding it impossible to meet payments of just the interest of these loans. Now if you or I were in that position, we would be declared bankrupt and allowed to make a fresh start. But the Western banks didn’t want to lose their money. Then rescue arrived. No, it wasn’t superman. The World Bank and International Monetary Fund (or IMF) came to rescue - not the poor, but the rich! They made imposed drastic economic measures on the poor countries to ensure they could continue to pay. These measures are called Structural Adjustment Programmes. - or SAPs. And they are aptly named, because they truly sap the poor.
The same way any of us could. They were conned by attractive offers of low interest rates at a time when they needed it.During the 70’s, rich countries such as U.S. had a surplus of dollars in their banks. This was affecting the economy and they needed to offload it fast. So they offered low interest loans to the poorer countries. The fact that those rates would soar once all the money had been lent out was conveniently forgotten. It got the rich out of a hole, and the poor into one.By the 1980’s the poor countries were finding it impossible to meet payments of just the interest of these loans. Now if you or I were in that position, we would be declared bankrupt and allowed to make a fresh start. But the Western banks didn’t want to lose their money. Then rescue arrived. No, it wasn’t superman. The World Bank and International Monetary Fund (or IMF) came to rescue - not the poor, but the rich! They made imposed drastic economic measures on the poor countries to ensure they could continue to pay. These measures are called Structural Adjustment Programmes. - or SAPs. And they are aptly named, because they truly sap the poor.
Effect on poor
SAPs are designed to help a country repay its debts by earning more hard currency - by increasing exports and decreasing imports. While cutting back on unproductive social services like health and education.
The same way any of us could. They were conned by attractive offers of low interest rates at a time when they needed it.During the 70’s, rich countries such as U.S. had a surplus of dollars in their banks. This was affecting the economy and they needed to offload it fast. So they offered low interest loans to the poorer countries. The fact that those rates would soar once all the money had been lent out was conveniently forgotten. It got the rich out of a hole, and the poor into one.By the 1980’s the poor countries were finding it impossible to meet payments of just the interest of these loans. Now if you or I were in that position, we would be declared bankrupt and allowed to make a fresh start. But the Western banks didn’t want to lose their money. Then rescue arrived. No, it wasn’t superman. The World Bank and International Monetary Fund (or IMF) came to rescue - not the poor, but the rich! They made imposed drastic economic measures on the poor countries to ensure they could continue to pay. These measures are called Structural Adjustment Programmes. - or SAPs. And they are aptly named, because they truly sap the poor.SAPs are designed to help a country repay its debts by earning more hard currency - by increasing exports and decreasing imports. While cutting back on unproductive social services like health and education.
Health
So those who can’t afford healthcare simply go without. Infant mortality rates have risen alarmingly since these programmes have been introduced, and diseases that were thought to be irradicated are making a comeback.
The same way any of us could. They were conned by attractive offers of low interest rates at a time when they needed it.During the 70’s, rich countries such as U.S. had a surplus of dollars in their banks. This was affecting the economy and they needed to offload it fast. So they offered low interest loans to the poorer countries. The fact that those rates would soar once all the money had been lent out was conveniently forgotten. It got the rich out of a hole, and the poor into one.By the 1980’s the poor countries were finding it impossible to meet payments of just the interest of these loans. Now if you or I were in that position, we would be declared bankrupt and allowed to make a fresh start. But the Western banks didn’t want to lose their money. Then rescue arrived. No, it wasn’t superman. The World Bank and International Monetary Fund (or IMF) came to rescue - not the poor, but the rich! They made imposed drastic economic measures on the poor countries to ensure they could continue to pay. These measures are called Structural Adjustment Programmes. - or SAPs. And they are aptly named, because they truly sap the poor.SAPs are designed to help a country repay its debts by earning more hard currency - by increasing exports and decreasing imports. While cutting back on unproductive social services like health and education.So those who can’t afford healthcare simply go without. Infant mortality rates have risen alarmingly since these programmes have been introduced, and diseases that were thought to be irradicated are making a comeback.Education
School fees are often more than an average worker can earn. In some countries, an entire generation of children is losing the opportunity to get an education or learn a trade.
Employment
Hard-pressed governments cut back spending and downsize government departments. This leads to a rise in unemployment and a cut in wages.
High unemployment means there are fewer taxpayers to contribute to the public purse.
Trade
Countries that once grew staple crops for their own people, are now forced to grow cash crops for export. And because many indebted countries are encouraged to grow the same crops, this causes a glut on the international market and prices fall. So the workers get lower wages than ever. The obligation to meet debt service payments also means that aid from other countries is often used to refinance debt payments rather than for improving health care, education and other social services. The total debt burden also discourages foreign investment, which is necessary to stimulate growth.
And it’s no use us thinking “I’m alright, Jack”. Many of the results of international debt boomerang back to hurt the rich world as well as the poor.
Effect on us
1. Environmental destruction affects us all.
Farmers are under pressure to produce more crops on small areas of land. Chemical fertilizers degrade the soil. Fish stocks are damaged through overfishing. Forests are destroyed. Mineral resources are exploited and water supplies poisoned by toxic waste.
2. Lost Jobs and markets Because so many countries are forced to export similar products, the prices have plummeted. Our country also loses out because cheaper products from the Third World compete with our own. At the same time, we are not able to export our products to Third World countries because they have no money to buy them. So Australian jobs are lost and unemployment rises.
3. Illegal Drugs. If a poor country can’t get a fair price for it’s legal exports, it is likely to turn to the drugs trade to earn foreign currency and to survive. This contributes to social breakdown and violent crime worldwide.
4. Taxation. Commercial banks suffer very little from these debts. Most are able to avoid substantial tax costs by writing down the unpaid debts as losses. This is made good in part by you, the taxpayer. Yet the debt still remains and the debtor country has to continue paying for it.
5. Immigration Growing poverty is linked with migration as people seek to find a better way of life. This can increase the spread of social problems and communicable diseases.
6. Conflict and war As countries become poorer, one route that people can take is protest and violence. As this escalates, it can lead to war- and does in many countries of the Third World.
So What can be done about the problem?
An international movement in over 40 countries is advocating a debt-free start to the Millennium for a billion people. This movement is called Jubilee 2000
Jubilee 2000 derives its name from the “year of Jubilee” that the people of Israel were Old Testament times. Slaves and the indebted were to be freed every 50 years and allowed to make a fresh start.
The Jubilee 2000 movement is calling for:
- a one-off cancellation of the unpayable debts
- of the world’s poorest countries
- by the year 2000,
- under a fair and transparent process.
The phrasing is important:
a one-off cancellation -
the cancellation will be once and only once, to avoid encouraging complacency in the governments of poor countries and discouraging loans by credit agencies.
by the year 2000 -
this would start the new millennium with a clean slate.
of the backlog of unpayable debt -
It does not advocate a blanket cancellation of the debt. It has worked out in detail with highly trained economists the specific portion of the debt that is “unpayable”.
Under an independent transparent procedure -
The overseeing of the process should not be left to the IMF and the World Bank who are the main creditors. It should be overseen by an independent agency.
The Jubilee 2000 Campaign promotes the responsibility of both creditors and debtors and searches for ways to prevent the accumulation of such high levels of debt again.
So what can we as individuals do?
There are many ways to get involved in the movement. You can find out more from the Jubilee 2000 Campaign. But you can begin by signing this petition calling for leaders of lending nations to write off these debts by the year 2000. And you can take a copy of the petition for your friends to sign it too.
We stand at the threshold of a new millennium. What better way to celebrate it than to give crippled nations an opportunity to get off their knees and walk again!
COMMENTS This speech went over really well, although I would have liked more time to prepare and rehearse it. I used a lot of visual aids which made it more interesting and easier for me to keep on track. But was it a really a success? Not many people signed the petition!
