Ibrahim Seaga Shaw

A Talking Shop: New African, Oct 2000

  

As expected, no real mention was made at the UN Millennium Summit (6-8 September) about the burning debt and aid dependency problems afflicting Africa. Deja vu.

 

Africa is too poor to get out of poverty on its own, and the donors are keeping it on the short list. This is why aid dependency is continuing... It's not enough, the size is small, and the conditions attached to them are not right". These words coated in loose threads of emotions, and the usual rhetoric, caught my attention recently for some obvious reasons.

 

The place was the 21 st floor conference room of the United Nations located in London's famous Millbank Tower where the ruling Labour Parry has its communications centre. The speaker was Yilmaz Akyuz, an UNCTAD expert, who was there to defend the UNCTAD report on "Capital Flows and Growth in Africa", released on that same day - 27 July.

 

"Its like climbing a palm tree", said Akyuz, "if you don't put enough water in it, you will never get the water out and you can spend your life getting a ladder and getting out nothing. This is what aid is like in Africa".

 

On the surface, I was refreshed by Aky-'s words but after a snappy bottom-up reflection, I was quick to behold that the words were too beautiful to be true.

 

According to the UNCTAD 43page report, doubling the current amount of aid to Africa could end the continent's aid dependence within a decade.

 

"The only feasible way to end aid dependence," the report argues, "is to launch a massive aid programme and to sustain rapid growth for a sufficiently long period so as to allow domestic savings and external private flows to gradually replace official flows."

 

It says an increase in official flows to $20bn could trigger a virtuous circle of rising national savings, investment and faster growth of about 6% per annum in sub-Sahara Africa.

 

Fine words! But the problem is how long are we going to wait for these hot-chocolate words to kickstart action from the donor community? Given the current parsimony of donors towards Africa, one doesn't need much to predict where the wind is going to blow.

 

In fact, the UN Millennium Summit in New York (68 September) delivered the answer. As widely expected, no real mention was made about the burning debt and aid dependency problems afflicting Africa. Save for a reference to the UN's failing peacekeeping missions in Africa, no real African concerns were tackled at the Summit.

 

Which prompted the Zimbabwean president, Robert Mugabe, to say in New York: "If the new millennium, like the last, remains the age of the master race, of the master economy and the master state, then I am afraid we in developing countries will have to stand up and say: Not again!"

 

Debt relief

 

UNCTAD's report itself does not treat debt relief with enough attention. No wonder, Akyuz was at a loss when cornered by a representative of jubilee 2000 (the debt cancellation pressure group) on how donors would receive the report, especially coming just a week after the Okinawa G8 summit in Japan (21-23 July), where world leaders had failed to heed appeals by jubilee 2000 and other groups for debt relief for developing countries.

 

Some time ago, America promised $600 million in debt relief for 25 countries by the end of this year. Yet not a penny has changed hands nine months into the year because the US Congress is refusing to play ball. As a result, even Uganda, Washington's "blue-eye" ally, is still waiting to receive its share of the promised relief.

 

The European Union and Japan are no better. If America, the world's richest country, which has seen a 3% growth in GNP in the last five years hasn't paid, what do you expect from the others?

 

What chance then has the UNCTAD appeal that aid to Africa should be doubled?

 

There are those who say the $750m spent in hosting the Okinawa G8 Summit should have been better spent in paying some of the debts of poor African states.

 

The Okinawa Summit made several promises - tackling world poverty, disease and promoting sustainable economic growth in the developing world, especially in Africa by the year 2015. But the Summit failed to say how these targets could be achieved without resolving the debt issue.

 

You only need to look at the 1999 UN Human Development Report which said Tanzania's debt service payments "are nine times what it spends on primary health care and four times what it spends on primary education", to see what I mean about debt relief.

 

UNCTAD is not new at the game of issuing reports that do not stand the test of time. On 15 September 1997, it released a report documenting SEVEN "troublesome" features of the contemporary global economy. But nobody paid any heed to the report. Three years on, the situation of the global economy remains unchanged, if not gone worse.

Marshall Plan

 

Most analysts say for Africa to lift itself up from aid dependency, the continent needs the European-style recovery programme codenamed the "Marshall Plan" under which Washington provided massive reconstruction aid to Europe which involved bilateral programmes outside the framework of the World Bank/IMF system.

 

The Marshall Plan was initiated and bankrolled by America for two reasons: First, to quickly arrest the fall-out of the 1930s economic recession in Western Europe on the world economy; and second, to check communist advances in Europe after World War II.

 

These two reasons also spurred Washington and its allies into action to save the Asian economies during the 1997/98 economic crisis, which saw massive aid poured into Asia to shore up Asia's crumbling currencies.

 

One is left to ask what the donor community is waiting for to start a similar thing in Africa, where natural and man-made disasters have made it difficult, if not impossible, to turn the worsening economic tide for the better?

 

The recent UNCTAD report attempts an answer: "The fact that any adverse consequences outside the continent are small has meant a corresponding lack of interest by the international community when financial distress has hit the region," it says.

 

With the end of the Cold War, Africa means little or nothing to the G8 save for the random exploitation of its natural resources. Africa can go to hell for all it cares. President Clinton's cold-shoulder to Nigeria's appeal for debt relief during his recent visit to that country, thus came as no surprise.

 

The admirably simple-minded solution of the Marshall Plan "to provide 80% of the assistance on a grant basis and end the period of dependence as soon as possible" is still the best way forward for Africa. If the UNCTAD report is to stand the test of time, it must follow the pattern of the Marshall Plan. The report sounds good but, so far, only on paper.

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Seaga Shaw © 2001. All Rights Reserved.