CITY AND SUBURBAN
Selling gold to help the world's worst governments I'm sorry, I'll lend that again
CHRISTOPHER FILDES
Touching down in Malta on his way to Madrid, Kenneth Clarke put forward plans to bail out some of the world's most cor- rupt and incompetent governments. I'm son-y, I'll read that again: some of the world's poorest countries. They owe money to anybody who was kind or rash enough to lend it to them, and that of course includes the International Monetary Fund and World Bank, now converging on Madrid for their annual meetings. Mr Clarke wants the IMF to turn such loans into Kathleen Mavourneens (`it may be for years and it may be for ever') and to finance this by sell- ing off some of its gold. The lucky debtors must, he says, have shown commitment to sustained economic reform. I wonder how they did that. There are countries on his list which have grown poorer as their ruling elites have grown richer. Money flows in through their front door — from the IMF, the World Bank, donor governments, aid agencies — and runs out through their back door into offshore bank accounts, hid- den far away. In countries like Guyana or Sierra Leone (both on the Clarke list) over- seas debt is more than matched by these overseas assets, sometimes called flight capital. The quickest way to get some for yourself is, of course, to take commissions, and your best chance of that is to take a job in government: the higher, the better. Some of the world's hardest-pressed coun- tries, in and out of Africa, are poor and in debt because their rulers have, quite literal- ly, sold them short. Debt forgiveness helps to keep the cycle going. What these coun- tries need is their money back.
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