Philanthropy and self-serving

The Globe and Mail printed a list of the current tsunami relief aid by various governments (not private donations) to date. Australia leads the list, both in absolute terms (US$ 765 million) and as a percentage of GDP (0.13). Germany comes second in dollar value (680 million) but only fifth in GDP (0.03 percent). The United States comes fourth in dollar value (350 million) but fourteenth in GDP with only 0.003 percent. Canada's 66 million puts us eleventh by amount and tenth by GDP (0.006 percent).

All very sweet. Unfortunately, the article continues:

Canada said last week it would use part of its aid contribution to cover payments on official debt owed to Canada by countries in the region. The measure was expected to save them as much as $40 million in interest.

So the "donation" is a transfer of money from one branch of the Canadian government to another branch of the Canadian government? To the bureaucratic mind this proposal is probably very sensible, but I believe most human beings would find the use of the word "donation" in this context to be duplicitous. It's true that the countries concerned probably would not be meeting their interest payments, because they have better things to do - like finding and burying their dead, or getting food and water to the living.

Let's simplify this by considering the case of two people: Fred and yourself. Fred owes you money, which he has been slowly repaying (with interest). Fred has quite suddenly become homeless and unemployed, since both his house and his workplace were destroyed in a flood. Fred has nothing to eat and nowhere to sleep. What would you say to him? (a) "Here's a bottle of water, a sandwich and a blanket"; or (b) "I'll forgive you a few debt payments, but you must resume as soon as you can".

However, let's stick with the concept of my donating money to you by paying it to myself. If this is what the Canadian government really wishes to do in our name, then let us at least buy something worthwhile for the money. Why not write down the debt by 40 million dollars? That would save them money every year.

The great unspoken truth of world finance is that the Third World debt cannot and will not be repaid. Why not take this opportunity to face reality?