The Debt Threat

January 3, 2005
The debt of poor countries causes terrorism, argues economist Hertz in this follow-up to The Silent Takeover
. The first nine chapters give considerable anecdotal evidence of poverty, injustice and disease but fail to link them to indebtedness. Assuming that money borrowed by poor governments is stolen by elites, and that repayment comes from cutting social services to the poor, Hertz compares health-care budgets of countries to their debt service payments. The chapters fail to distinguish among types of debt: direct and indirect, internal and external, infrastructure and export financing, for example. Horror stories from the 1940s to the 1990s are mixed indiscriminately. Chapter 10 is the first mention of the terrorism link; the argument turns out to be little more than that misery causes terrorism. The following chapter is the first part that draws on Hertz's full strengths as an economist, where debt "is very complex stuff, conceptually and politically, and it takes us into difficult, alien terrain." She navigates this terrain with precision and clarity, presenting inspiring visions for change. Her blueprint for development has little to do with debt, and nothing to do with terrorism, but it's the reason to buy this book.