Economic assistance should help recipient countries to achieve economic self-sufficiency, ecological sustainability and a democratic management of development projects. Peace cannot be achieved without economic security and general welfare for all countries.
The enormous external debt of many Low-Income Countries (LICs) not only endangers international economic stability, but also places undue pressure on the debtor nations to commercialize their natural resources. The debts make raising their citizens' living standards very difficult. These huge debts are largely a result of the capitalistic philosophy of accumulation of wealth by exploiting labor and resources. The effects of these predatory policies are compounded by exporting profits to foreign creditors. Currently, the net negative transfer of capital from LICs to advanced countries is over $42 Billion a year. Such capital flight has caused poverty to reach unprecedented levels.
Current debt relief policies center around "debt for development" swaps. The basic assumption in these schemes is that LIC debts have reached the point where they are unpayable. The high interest rates of the past decade, and the refinancing of debts, have driven the debt service to unmanageable levels. In debt swaps, external debts are sold to agencies or corporations at discounted rates. The debt bonds are redeemed in the LIC for local currencies and are used for development and/or conservation projects. These are ostensibly altruistic plans, but these swaps result in converting the external debt to internal debt, a process that causes inflation. Also the LIC must then redeem these bonds with public funds that had often been budgeted for social services and education. All too often, the swap-financed projects are managed by foreign interests with no local control over the projects. This maintains the existing debtor/creditor power structure.
The Green Party supports measures to ease such debts:
Initiate UN, OAS (Organization of American States) and World Court investigations into the legality of such debts. In most cases the principal has been paid many times over, and the debt has been increased through artificial mechanisms.
Allow LICs to buy back their own debts and to participate in managing swap-financed projects.
Write off debts when they are recognized as unpayable. Debt ceilings should be negotiated between LICs and their creditors.
Increase the participation of NGOs (Non-Government Organizations) in swap-for-development projects.
Link foreign aid and loans to demilitarization, land reforms, ecological preservation, democracy and human rights. Non-Government agencies should monitor the implementation of such programs.