A way to help heal storm-tossed countries Mitch's victims: Debt relief is vital prerequisite to rebuilding Honduras and Nicaragua.

November 12, 1998

THEIR economies ruined, Honduras and Nicaragua cannot begin reconstruction without massive forgiveness or postponement of their combined $10 billion international debt.

They cannot possibly make payments for two years because the countries' production was wiped out by Hurricane Mitch. If they are penalized for not doing so, hopes of reconstruction from new borrowing will be set back.

Needed airlifts of food and medicine are growing. The promise of U.S. Army engineers' help in erecting temporary bridges will help.

But in addition to the 10,000 dead, more than a fifth of the two countries' people are homeless; farms and jobs are wiped out. The big banana plantations of the Chiquita and Dole corporations, ruined for two seasons at least, laid off thousands of workers. Honduras, the harder hit country, had nearly 50 percent unemployment before. Now most of its people lack work.

To restart life and economy in those two countries, and in less hard hit Guatemala and El Salvador, the United States should postpone debt repayments for years if not cancel some.

The International Monetary Fund and World Bank should go along.

For their part, the devastated countries should reconstruct wisely. One aim should be to move toward integrating their economies.

Another is to redesign and relocate homes for the poor that would withstand wind and rain, away from the ecological disaster areas of mountainsides and flood plains.

The $70 million that the United States has pledged is a worthy humanitarian response, but a drop in the bucket. The reeling countries are seeking debt relief, free trade for exports to the United States and Europe and an amnesty for illegal immigrants in the United States.

Humanitarian impulses aside, the U.S. national interest is in the rapid reconstruction of these countries into healthy economies that would repay debts, buy U.S. goods and services and keep their young people employed at home. That should guide administration and congressional responses to the requests of the presidents of the stricken nations.

Pub Date: 11/12/98

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