[SOCIALIST ACTION AUGUST 1991 13 welfare and subsidies…]

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SOCIALIST ACTION AUGUST 1991 13 welfare and subsidies on food and housing, cut wages, deflate and restrict credit, devalue the currency, and of course encourage "free enterprise" and foreign investment.

In order to force through these austerity measures state terrorism and repression are often used against workers and peasants who organize or who are suspected of organizing opposition to the onslaught.

The facts speak for themselves. In 1970 Africa fed itself. By 1984, 140 million out of 531 million African people were being fed on imported grain. Today, 29 million people on this continent face starvation.

Disease and epidemics

Millions of people worldwide die from preventable diseases each year. The cholera epidemic now sweeping [through] Latin America is not caused by an "act of God." It is caused by poor sanitation and lack of investment in local infrastructure and healthcare—all of which have been cut back because of the IMF-imposed austerity programs.

The AIDS crisis in many Third World countries, and events like the disaster in Bangladesh, have the same roots in world poverty.

There is increasing concer that the debt will never be finally repaid. As a result, new and not-so-new methods are being employed to seize the assets of debtor nations. The secondary market in foreign debt is growing rapidly. This means that a third party buys up a portion of debt at discount, and then trades it for some asset of the debtor.

Another idea, which is already widely being put into practice, is "debt for equity" swaps. In other words, the banks annul part of the debt in exchange for ownership of industries and businesses in the debtor countries. This just increases the stranglehold of the capitalist world over the semi-colonial world.

How can the Third World break out of the debt crisis? For an individual country it is incredibly difficult to repudiate its debt. Repudiation of the debt would lead to an immediate cut-off of credits, and the debtor country would be unable to gain loans and foreign currency to buy imports. Trade sanctions by the United States and other Western countries would devastate the economy of a country which defaulted on its debt.

Repudiating the debt could only be realistically achieved by a series of major countries like Brazil and Mexico acting together. The main obstacle to that, of course, is that a full-scale confrontation with the imperialist powers is not in the interests of the capitalist leaders of most Third World countries.

Repudiating the debt is a task of revolutionary proportions, which needs revolutionary answers in the Third World. Meanwhile, it is an elementary duty for socialists in the West to demand that the debt be cancelled.

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ensconced within the "free" enterprise sys-