Is capital flight a serious problem?
Not so much in the U S, though even here the threat is able to
constrain government planning (Clinton in 1993 is a w ell-know n
case). But look at virtually any country south of the R io Grande.
T ake Brazil.
As happened almost everyw here in the T hird World, Brazil’s
generals, their cronies and the super-rich borrow ed huge amounts
of money and sent much of it abroad. T he need to pay off that debt is
a stranglehold that prevents Brazil from doing anything to solve its
problems; it’s w hat limits social spending and equitable, sustainable
development.
But if I borrow money and send it to a Sw iss bank, and then can’t
pay my creditors, is that your problem or mine? T he people in the
slums didn’t borrow the money, nor did the landless w orkers. In my
view, it’s no more the debt of 90% of the people of Brazil than it is
the man in the moon’s.
Discussions about a debt moratorium are not really the main
point. If the w ealthy of Brazil hadn’t been out of control, Brazil
w ouldn’t have the debt in the first place. Let the people w ho
borrowed the money pay it back. It’s nobody else’s problem.
I discussed these matters all over Brazil—w ith poor people, at
the national bishops’ conference, w ith elite television reporters and
high officials. T hey didn’t consider it very surprising. In educated
circles here, you could hardly get the basic issues taken seriously.
One of the very striking differences you notice as soon as you get
out of the First World is that minds are much less open here. We
live in a highly indoctrinated society.
Breaking out of doctrinal shackles isn’t easy. W hen you have as
much w ealth and pow er as w e do, you can be blind and selfrighteous;
you don’t have to think about anything. In the T hird World, even
w ealthy and pow erful people tend to have much more open minds.
W hy hasn’t foreign debt held back the developing countries of East
Asia?
Japan, South Korea and Taiw an not only controlled labor and the
poor, but also capital and the rich. T heir debt w ent for internal