African Debt Relief

[Orwell]

Debt is bad, but debt relief is worse

This column is by a Globe & Mail chronicler. I quite enjoyed reading it.

But the problem is not, and has never really been, aid. Cash helps temporarily. What crushes Africa are the trade policies of the rich nations. Africa is asked to open its markets to the massively subsidized goods of the rich, thus destroying their own agriculture and attempts at export. “Trade is the root of the problem,” the Make Poverty History campaign has told the BBC. But trade is not mentioned.

Debt is bad. But debt relief is worse somehow because Africans are supposed to thank us. The nations we have plundered for centuries deserved unconditional debt relief. Instead, they get “conditionalities,” even as we use computers and cellphones made with precious African metals that strangely have not made Africans rich.

 

[Jon_in_london]

I lived in Africa for a quarter of a century so perhaps I am qualified to comment?

Cash helps temporarily. What crushes Africa are the trade policies of the rich nations. Africa is asked to open its markets to the massively subsidized goods of the rich, thus destroying their own agriculture and attempts at export. “Trade is the root of the problem,” the Make Poverty History campaign has told the BBC. But trade is not mentioned.

This is quite correct. Some say that "free trade" is impoverishing Africa. Not so. What impoverishes Africa is "un-free trade" subsidies and trade barriers thrown up by rich nations to protect their own un-competitive industries. I give 40% of the EU budget as an example. Also remember when Vietnamese catfish imporats were banned in the US on the grounds that they were "dumping" goods on the US? Yeah. Right.

Even so, unfree can be overcome- as the tiger ecomomies of Asia will attest.

Debt is bad. But debt relief is worse somehow because Africans are supposed to thank us. The nations we have plundered for centuries deserved unconditional debt relief. Instead, they get “conditionalities,” even as we use computers and cellphones made with precious African metals that strangely have not made Africans rich.

This is nonsense. Africa doesnt deserve debt relief as some kind of apology for Imperialism.

The "precious African metals" could well have made Africa rich if thge proceeds were re-invested into infrastructure; roads, rail, telecomms, clean water, schools, hospitals, universities and housing. Had these investments been made, they would have paid for themselves many times over by now and transformed Africa from a cesspit of grinding poverty, ignorance and disease into a continent of afluent, peacefull nations.

As it turned out, most African rulers would rather spend the money on themselves and their kin- massive palaces, presidential jets, fleets of luxury cars, shopping bonanzas to Harrods while renting out a whole floor of the Ritz....

In addition, the African nations, enthralled by marxist ideology, pursued a course of self-sufficiency- starting firstly with agriculture. At the same time- and in the name of reclaiming "Africa for the Africans" -booting out European farmers who held large, productive, profitable and efficient farms. The result has been to condemn the vast majority of Africans to a life of subsistance farming and the crushing poverty, hunger and disease that resulted. Nations like Korea, Taiwan and Malaysia on the other hand, pursued a course that would enable them to excel in areas like hi-tech industry, using the profits thereof to import what they couldnt produce. Which is why Asia is getting richer while Africa gets poorer.

So the whole "Make Poverty History" is doomed to failure. Because debt relief and aid has no "conditionalities" like investment and good governance. It pains me to say it, but the Bush Admininstration is 100% right.

 

[Jon_in_london]

Take up the White man's burden
The savage wars of peace
fill full the mouth of famine
and bid the sickness cease


Somehow when a 19th century English Imperialist says this, its rascist, but when an unhinged Irish pop "musician" says the same, hes some kind of messiah.

Perhaps Geldof should read the end of the verse though....


And when your goal is nearest
The end for others sought,
Watch sloth and heathen Folly
Bring all your hopes to nought.

 

[a_unique_person]

The problem is partly that the debt does nothing but punish the poor. you can complain about the fact that the corrupt have taken it all, but you can't then expect those who didn't get it to pay for it. Removing the debt doesn't give the corrupt more money, as such.

Much aid is apparently the in one pocket and out the other type, that is, loans to build a dam that is built by some company from a western nation. If the dam is not appropriate aid, then too bad.

The world bank has apparently done a lot of work on how to make itself more relevant for what is actually needed, and directing the aid to those who can use it productively, rather than seeing it just wind up in the pockets of the corrupt. "Microloans" for small enterprises that provide a quick return in a short period of time.

 

[Jon_in_london]

The problem is partly that the debt does nothing but punish the poor. you can complain about the fact that the corrupt have taken it all, but you can't then expect those who didn't get it to pay for it. Removing the debt doesn't give the corrupt more money, as such.

I beg to differ- it gives them carte blanche to start from the begging and make the horse's of it again.

The reason I say that Bush is right is becuase he is linking aid and debt relief to good government. All of this Live8 tosh might help a bit- about as much as giving an alcoholic £100. Pretty soon, its all going to be pissed up the wall in anycase......

 

[a_unique_person]

I beg to differ- it gives them carte blanche to start from the begging and make the horse's of it again.

The reason I say that Bush is right is becuase he is linking aid and debt relief to good government. All of this Live8 tosh might help a bit- about as much as giving an alcoholic £100. Pretty soon, its all going to be pissed up the wall in anycase......

The world bank is already doing just that, and has been long before Dubya thought of it. The problem is not that the money is lent to afrcans, but to the wrong people. Micro loans direct to the people in the villages are all the fasion now.

 

[Jon_in_london]

The world bank is already doing just that, and has been long before Dubya thought of it. The problem is not that the money is lent to afrcans, but to the wrong people. Micro loans direct to the people in the villages are all the fasion now.

I question that. Can you demonstrate that the majority of aid sent to Africa does not go to governments?

 

[Rob Lister]

I lived in Africa for a quarter of a century so perhaps I am qualified to comment?



This is quite correct. Some say that "free trade" is impoverishing Africa. Not so. What impoverishes Africa is "un-free trade" subsidies and trade barriers thrown up by rich nations to protect their own un-competitive industries. I give 40% of the EU budget as an example. Also remember when Vietnamese catfish imporats were banned in the US on the grounds that they were "dumping" goods on the US? Yeah. Right.

Even so, unfree can be overcome- as the tiger ecomomies of Asia will attest.



This is nonsense. Africa doesnt deserve debt relief as some kind of apology for Imperialism.

The "precious African metals" could well have made Africa rich if thge proceeds were re-invested into infrastructure; roads, rail, telecomms, clean water, schools, hospitals, universities and housing. Had these investments been made, they would have paid for themselves many times over by now and transformed Africa from a cesspit of grinding poverty, ignorance and disease into a continent of afluent, peacefull nations.

As it turned out, most African rulers would rather spend the money on themselves and their kin- massive palaces, presidential jets, fleets of luxury cars, shopping bonanzas to Harrods while renting out a whole floor of the Ritz....

In addition, the African nations, enthralled by marxist ideology, pursued a course of self-sufficiency- starting firstly with agriculture. At the same time- and in the name of reclaiming "Africa for the Africans" -booting out European farmers who held large, productive, profitable and efficient farms. The result has been to condemn the vast majority of Africans to a life of subsistance farming and the crushing poverty, hunger and disease that resulted. Nations like Korea, Taiwan and Malaysia on the other hand, pursued a course that would enable them to excel in areas like hi-tech industry, using the profits thereof to import what they couldnt produce. Which is why Asia is getting richer while Africa gets poorer.

So the whole "Make Poverty History" is doomed to failure. Because debt relief and aid has no "conditionalities" like investment and good governance. It pains me to say it, but the Bush Admininstration is 100% right.

I just felt that post needed repeating.

 

[Darat]

I question that. Can you demonstrate that the majority of aid sent to Africa does not go to governments?

I agree with you, as far as I am aware most "western" (ha) aid goes to African governments, however the UK has been making a lot of progress in ensuring that the aid we provide is conditional on sound government and reforms.

I think at times many of the European countries that had colonial empires are over cautious and too sensitive about “Africa” (I use quotes since Africa is such a diverse continent and it’s very difficult to make generalisation that apply to all the countries in Africa), it seems to stem from a modern-day understanding of what terrible atrocities, harm and disruption our colonial empires caused.

However that is the past and we can’t for ever more allow ourselves to be shackled by “our” past deeds. I believe we need to be incredibly harsh and ruthlessly calculating with our dealings with certain countries, aid should be available but under our terms and conditions and if our conditions aren’t met there should be no second chance for that government. (And yes that could lead to imperialism in all but name however we can guard against that.)


(Edited for words.)

 

[a_unique_person]

I question that. Can you demonstrate that the majority of aid sent to Africa does not go to governments?

http://www.on-the-net.com/interskills/minis/thirdw.htm

The World Bank, after years of trying eradicate poverty in developing countries, has adopted a new strategy of channelling tiny loans to "the poorest of the poor" through grass-roots organisations. Using as a model, programmes like the Grameen Bank in Bangladesh, the World Bank and other international donors have pledged $200 million to be disbursed through non-governmental organisations over the next several years. The Grameen Bank has won international praise for providing "micro-loans" -- about $100 -- mostly to women, to set up their own small businesses.

The donors, who met in Washington last month have set up the Consultative Group to Assist the Poorest (CGAP) as a vehicle to co-ordinate the lending and pour new resources into the scheme. The group includes several development banks and countries. The World Bank will contribute $30 million and oversee the harmonisation of a patchwork of programmes which have developed around the world. The object is to create "enabling environments" among the governments to assist micro-lending.

An estimated one billion people in the world still live in severe poverty. The World Bank sees micro-lending as an important complement to health and education projects it funds in developing countries. For some time, the large development agencies have believed that getting money to women is crucial to sustainable development. Many are heads of household and are less likely than men to leave the family. The Grameen Bank lends mostly to women, who have a higher repayment record -- 97 per cent -- than men. Half the loans have gone to livestock- and poultry-raising enterprises, while 25 per cent have entered processing or manufacturing and the other 25 per cent have set borrowers up in trading and shopkeeping enterprises. It is believed that 500 million micro-entrepreneurs want credit. No one knows how much is available. The Kenya Rural Enterprise Programme opened its first branch in the largest slum in Nairobi in 1990, and disbursed $450,000 to 1,253 borrowers in its first 16 months. Its repayment rate was 98.2 per cent.

Financial Times 18 July 1995

 

[Jon_in_london]

the World Bank and other international donors have pledged $200 million to be disbursed through non-governmental organisations over the next several years.

I'm sorry AUP, but this is a drop in the ocean of the swimming sums of western taxpayer's money being funneled into the coffers of African governments. $200 is small change. Pennies.

 

[richardm]

All of this Live8 tosh might help a bit- about as much as giving an alcoholic £100. Pretty soon, its all going to be pissed up the wall in anycase......

The whole point of the much-derided Live 8 thing is not to raise money but to raise awareness about what is needed, and to try to impress upon the politicians involved that the populations they represent want action taken.

So the whole "Make Poverty History" is doomed to failure. Because debt relief and aid has no "conditionalities" like investment and good governance.

In fairness they are attempting to address this, though:

Nine other countries should benefit from 100% debt relief within 12-18 months, Mr Brown said. After that, 11 more countries could be eligible to join if they met targets for good governance and tackling corruption.

(From here )

 

[Flo]

I lived in Africa for a quarter of a century so perhaps I am qualified to comment?

Not necessarily. You refer to the problems of a few countries as if they were exactly the same for all and every countries in Africa, and as if African history started less than 40 years ago.

In addition, the African nations, enthralled by marxist ideology, ...

all and every single one of them ?

... in the name of reclaiming "Africa for the Africans" -booting out European farmers who held large, productive, profitable and efficient farms. The result has been to condemn the vast majority of Africans to a life of subsistance farming and the crushing poverty, hunger and disease that resulted.

Same old, same old : On the day of their independence, Africans were left with a sound and safe economic, technological, educational, and political basis, the examples and training of centuries of perfect democracy they had benefited from and become familiar with, normally leading to the free choice of competent, honest and unbribable governments devoid of any links with European governments and businesses, etc. They just had to copy everything Europeans had taught them and, presto, they could have become as rich as Thailand in less than 30 years. Of course, as soon as the European left them to their own devices, those vile Africans decided to destroy it all, deliberately electing dictators and encouraging them to spend their ill gotten money on castles and Ferraris in Europe, etc., etc.

[sarcasm]Now, of course, if only they would let the laws of the market rule, and if the French farmers finally stop sponging EU subsidies, and if Mugabe and his thugs stop stealing Europeans' lands so they can show Africans how to be efficient and democratic, and if corruption stops (on the African side - no European has ever had any responsibilité about that), and ....., all would be well in no time at all[/sarcasm]


Aren't simple explanations and generalisations good ?

 

[Drooper]

One thing that people rarely pay attention to is that aid can have negative effects.

Look at Uganda. They get so much aid it is creating rpblems with inflation and creating a massive disincentive for the government to clean up their tax agency (why bother collecitng taxes if someone is going to throw money at you)

I have said on this board before and I will say it again:

The high profile campaign od debt relief and increased aid payments are completely misguided. Not only does it fail to address the real problems (the highest on the list is governance), but it will continue to reinforce the problems if followed.

The solution needs to come from African nations themselves. I still see no comittment to good governance, rule of law, equality of opportunity or an stand against corruption across the continent. You only have to look at the ongoing shameful attitude towards Zimbabwe to as ample evidence of that.

 

[a_unique_person]

I'm sorry AUP, but this is a drop in the ocean of the swimming sums of western taxpayer's money being funneled into the coffers of African governments. $200 is small change. Pennies.

The article I quoted from is quite old, I believe that was just the start of the program. It was just one of the first the google popped up.

One thing that I believe would help is control of the international arms trade, which is a disgrace. Many countries around the world profit from arms sales to African countries.

Another is education. Half of the problems in africa, as far as I can tell, is just sheer lack of education on such basic matters as health, eg, controlling the spread of AIDS.

 

[Jon_in_london]

The article I quoted from is quite old, I believe that was just the start of the program. It was just one of the first the google popped up.

One thing that I believe would help is control of the international arms trade, which is a disgrace. Many countries around the world profit from arms sales to African countries.

Another is education. Half of the problems in africa, as far as I can tell, is just sheer lack of education on such basic matters as health, eg, controlling the spread of AIDS.

Its not my fault your article is old! If you want to prove a point, post a link that proves it- otherwise shut the hell up!

Arms spending is one area of waste by Afrcan governments- If they had the management skills of a slug, African governments would not buy arms but would rather invest in healthcase, infrastucture and education. Insisting that the arms trade is all the West's fault for keeping Africa poor is deeply patronising and frankly rascist. You are basically saying that Africans are too childish and irresponsible to be trusted with arms....

Yes, education is a problem. Yes, AIDS is a problem. Perhaps you would like to take this up with Thabo Mbeki who believes HIV has nothing to do with sex but was invented by Martians to discredit the revolution?

 

[Drooper]

Its not my fault your article is old! If you want to prove a point, post a link that proves it- otherwise shut the hell up!

Arms spending is one area of waste by Afrcan governments- If they had the management skills of a slug, African governments would not buy arms but would rather invest in healthcase, infrastucture and education. Insisting that the arms trade is all the West's fault for keeping Africa poor is deeply patronising and frankly rascist. You are basically saying that Africans are too childish and irresponsible to be trusted with arms....

Yes, education is a problem. Yes, AIDS is a problem. Perhaps you would like to take this up with Thabo Mbeki who believes HIV has nothing to do with sex but was invented by Martians to discredit the revolution?

Jon, did you see the Channel 4 doco a week or two back made by a Ugandan journalist. His message was that they needed less, not more aid and that debt relief was a complete red herring.

 

[Ed]

The article I quoted from is quite old, I believe that was just the start of the program. It was just one of the first the google popped up.

One thing that I believe would help is control of the international arms trade, which is a disgrace. Many countries around the world profit from arms sales to African countries.

Another is education. Half of the problems in africa, as far as I can tell, is just sheer lack of education on such basic matters as health, eg, controlling the spread of AIDS.

You do realize that you are putting responsibility everywhere but where it should reside, don't you? You do realize that your attitudes are elementally racist, don't you?

 

[Flo]

Arms spending is one area of waste by Afrcan governments- If they had the management skills of a slug, African governments would not buy arms but would rather invest in healthcase, infrastucture and education. Insisting that the arms trade is all the West's fault for keeping Africa poor is deeply patronising and frankly rascist. You are basically saying that Africans are too childish and irresponsible to be trusted with arms....

Of course, the various countries that have sold and keep on selling them those arms would applaud to such a resolution, and have kept on pointing this out to the various govts in Africa all those years. Pity those nasty Africans didn't take the hint.


And given how debt relief and help are linked to solutions that have insured everywhere that only the current "elites" will have access to education, healthcare and infrastructure, we can be assured that African governments will be positively encouraged to start programs ensuring these commodities are accessible to the majority of the population the way "the West" got its head start (state run waterworks, roads, and education systems), we're sure we'll see a steady progress in the near future ...


BTW, you'll have to explain how you reconcile your opinion of African politicians not even having the brains of slugs when it comes to management, but it is racist to assume they are too childish and irresponsible with arms ...

 

[richardm]

Jon, did you see the Channel 4 doco a week or two back made by a Ugandan journalist. His message was that they needed less, not more aid and that debt relief was a complete red herring.

There is a lot of talk about suspending aid to Uganda, because the opposition parties there see it as a way to pressure the government into accepting democracy. The UK has already held back some aid, in fact.

But it's not necessarily the best plan for other African nations. Rather than cutting the money and saying "That's an end to it" we should use it (a) as leverage (as in Uganda) and (b) in directly funded projects (as the Live Aid and Comic Relief funds do) rather than into government pockets.