94/YOUR MONEY OR YOUR LIFE!
billion (Khor, 1994). By the end of 1995, the figure was SI,940
billion (SI.9 trillion).
According to the UN, between 1980 and 1992 interest payments
totalled S771.3 billion, to which should be added S890.9 billion in
repayment of principal. In other words, during these twelve years
Third World countries made SI,662.2 billion (SI.7 trillion) in debt
payments. During this period, they paid three times more than their
1980 debt - only to find themselves three times more in debt. The
external debt has become an eternal debt, with new loans serving
only to pay off old ones.
How is it that principal repayment could possibly be greater than
the amount originally owing in 1980? We come to the heart of the
transfer mechanism set up by the North's bankers, with the help of
the Paris Club and the IMF-World Bank duo. The IMF and the World
Bank actually take in more money than they give out in loans, and
have done so since 1986.
Year in, year out, debt servicing soaks up between SI60 and 200
billion (of which S 70 billion in principal repayment) go to private
banks, other institutional investors, the IMF, the World Bank and
the most industrialised countries. This is more than 3.5 times the
money disbursed in official development assistance (ODA - see end of
chapter). In 1994, Third World debt servicing totalled S200 billion
and has actually increased since.
Debt repayment works like a vacuum which sucks away a portion
of the social surplus produced by the South's working men and
women (be they waged workers, individual or families of small
producers, or service sector workers in the informal sector). It sends
off these vast sums to holders of capital in the North and to dominant
sectors in the South. The South's dominant classes grow rich off the
sums transiting through and out of their countries, while the
national economies they head stagnate or decline and the local
populations become impoverished.
BOX 3 A KEY PARALLEL: REPAYMENT OF THE NORTH'S
PUBLIC DEBT
While this is not the focus of this section of the book, it seems
appropriate to mention here the parallel between repayment of the
Third World debt and repayment of the public debt in the indus
trialised countries. Public debt repayment in the North is a