Yet, the debt crisis is definitely not over for the poor in Lima, Sao Paolo and Manila. Their governments continue to pay out billions of scarce dollars on loans taken out by military regimes during the 1970s. These debt payments not only absorb resources essential for sustainable development, they also have failed to reduce the debt. After 1980, sharply higher interest rates radically increased the amounts countries owed their northern creditors. And because exports earnings fell during the global recession, most countries have had to borrow new money to repay old debts.
Debt continues to pile up on top of debt, leaving poor countries with little hope of escape.
The IMF's mission is to insure that countries pay back their debts. Countries are told to cut their budget deficits and increase exports, even if it means cutting down the remains of their forests, encouraging highly pollutive strip-mining, or exporting their teachers to work as housemaids overseas so the government can tax the money sent back to the families. Southern governments are given some leeway in making budget cuts, but the heaviest burden of structural adjustment falls on the poor. Money otherwise used to provide immunizations and medicines to fight preventable diseases, to promote child nutrition, clean water, education, and to build basic infrastucture for development is shifted out of social service programs in order to pay the debt. Meanwhile, raising new funds by taxing the rich is usually rejected by wealthy legislators.