CAPITALISM'S ACHILLES HEEL Dirty Money and How to

254 CAPITALISM’S ACHILLES HEEL
The World Bank in particular faces a problem—global dirty money—
which negates its mission to succeed in the struggle against poverty.
Whether it will find the courage to address the issue in the future is an
open question.
DEBTOR’S PRISON
Dirty money going abroad has contributed to severe indebtedness for billions
of people left behind. The total external debt owed by developing and
transitional countries is $2.3 trillion! And this debt continues to mount.
The World Bank separates poor countries into four categories, as shown
in Table 6.1. Severely indebted countries, 39 in number, encompass most of
the population of Sub-Saharan Africa and some of Latin America, as well as
two of the Central Asian “stans” and a few other states. These are countries
where debt at present values is greater than 220 percent of exports and 80
percent of gross national income. Moderately indebted countries are supposedly
much better off. For them, debt falls between 220 percent and 132 percent
of earnings on exports. The debt of severely indebted and so-called
moderately indebted countries combined is more than $1.5 trillion.
Hundreds of books and papers have been written about this debt. It’s an
enormously complex subject. However, in the next two sentences you will
grasp 99 percent of what you need to know about this debt. First, 98 percent
of what’s important to understand is that it will never be repaid in full. Sec-
TABLE 6.1 DEBTS OF POOR COUNTRIES, 2002
External Indebtedness
Classification (in US$ billions)
Severely indebted $ 898
Moderately indebted $ 630
Less indebted $ 732
Indebted but unclassified $ 40
Total $2,299
Source: World Development Indicators 2004.