Pakistan: POVERTY ALLEVAITION

DEBT

THE FIRST

5,000 YEARS

DAVID GRAEBER

In this chapter author discusses debt and the moral confusion attached to the debt in present age. He started his argument by discussing a meeting with an anti-poverty activist and in conversation with her he told her that he is anti-globalization activist and his achievement is the destruction of IMF but he found out that lady is unaware of role of IMF then he explained her the role of IMF and its operations and history that how this institution is making the conditions of third world worst. He mentioned their role during economic crises of 70’s and how the interest rate has increased over the period of time which is not letting the poor countries to come out of this curse of indebtness. But the activist was of the view that poor nations must pay their debts as it is their responsibility as “one has to pay one’s debts”. The author builds his argument on this phrase and he argued that it is a moral statement not an economic one but its implications are not applicable to all.
Morality related to debt is defined by the powerful in history, as the one who lends money is always powerful in some way than debtors and some kind of violence is also associated it with the moneylending practices. He mentioned example of Madagascar where France after invasion introduces taxes for building bridges and plantations etc and they told Malagasy people that they owed money to France and those people are facing those debts till now. So debt is always justified as ‘victor’s justice’ but this is not the case in Haiti’s situation because they were unwanted winners when they resisted against France and they won but France put sanctions on them and make them debtors by accusing them for destruction of plantations etc. and international community also sided with France on this. So throughout history, certain sorts of debt, and certain sorts of debtor, have always been treated differently than others.
Author stresses on the history of human kind as he argued that in past we see that wars, rebels of slaves were the ways through which the people want to get rid of debt and ensure even distribution of land. Rich always lend money to the people in extreme poverty and on very strict conditions sometimes people owe their lives to the creditors.
If one looks at the history of debt, then, what one discovers first of all is profound moral confusion. There are two arguments related to this i) paying back borrowed money is a matter of morality ii) anybody in the habit of lending money is an evil. Jean-Claude Galey explains the latter opinion by giving example from Himalayas where people living in extreme poverty have to do the menial jobs for those to whom they owe money. And during weddings and funerals on which high amount is needed situations got worse when high caste moneylenders ask for the daughters as security and in some cases the bride herself. It seems immoral, unjust but nobody use to say a word because according to them it was just as things go that way in their areas. So the powerful has its own meaning of justifying things and there is a great moral confusion associated with the debt, debtors and the creditors so according to author global institutions like the IMF designed to protect not debtors, but creditors. After reading the chapter and the closely analyzing the author stance I consider myself very confused regarding debt and the ways it has been defined and linked with the morality. Debt is always for those are suppressed and who have no voice and are weak in one way or the other throughout the history, as we seen the case of Haiti the people there were weaker than France so they remained debtor even after their victory. But France has remained a colonizer and it was a powerful nation throughout the history so it was successful in putting pressure on Haiti people with the help of international community. In my opinion paying one’s debt is not a matter of morality but one is forced to pay the debts otherwise one has to face worst consequences, of moneylenders are not the evil one’s the scenario would be different throughout the history, and it is not only the actual amount which one has to pay but the heavy interest rates are also to be paid which sometimes exceeds the actual or principle amount. IMF is doing the same those nations who owed money to IMF are trapped in a vicious circle and they are not able to come out of it after so many years.
In my opinion rules of the games are set by those who are in power not by the principles of morality or if they are being set by the principles of morality then morality is not universal, it has different implications for poor and rich. History tells us the same story that the rule of might is always right whatever has been told or decided by the powerful ones is always right.
I would conclude this by arguing that one has to pay his debts is not amoral statement but a statement which has different definitions in different context, if the country like Pakistan owed money to America Pakistan HAS to pay its debts but if AMERICA owes something to PAKISTAN then it is not necessary to apply the same statement on them and the difference between two countries is that America is the economically and militarily more stronger than Pakistan. So paying one’s debt is not issue of morality but it is embedded in the power structures.