Africa's Debt - Who Owes Whom?

[Thinkerman]

Africa is center stage in the struggle for human and economic rights. It is home to the world's gravest health crises- including the HIV/AIDS pandemic and chronic famine. Even though Africa has only 5 percent of the developing world's income, it carries about two thirds of the debt - over $300 billion. Because of this, the average African country spends three times more of its scarce resources on repaying debt than it does on providing basic services. In addressing Africa's struggle for relief from its onerous external debt, advocates of global justice have raised a critical question: Who owes whom?

 

"It is unacceptable to spend more on debt servicing to wealthy nations and institutions than on basic social services when millions of people lack access to primary education, preventative health care, adequate food and safe drinking water" Countess said. "It is not just morally wrong, it is also poor economics."

 

On the eve of Black history month, Wednesday, January 28 at 2:00 at the Rayburn House Congressional Office in Washington DC, the American Friends Service Committee, an international social justice organization, launched its Life over Debt campaign to have Africa's debt cancelled.

 

The Life over Debt campaign reaches out to local U.S. communities - especially minority communities - to build understanding of the dilemmas Africa faces and highlight shared experience and common ground. Through building a caring and active constituency the campaign sets out to increase Americans commitment to helping address the Africa debt crisis.

 

That is why on the eve of, and during Black History Month we called for not just reflecting on Africa in terms of the history for the African Diaspora, but also for Africans in Africa today. Given the potential for history to influence or control the perception of the world, it is important to reflect on how the past injustices have impacted the current debt crisis.

 

Current World Bank and International Monetary Fund debt relief initiatives do not adequately address Africa's debt crisis. Not only is relief insufficient for countries included, but also, there are countries excluded from the program that have legitimate cases for debt cancellation. To demonstrate this, the Life over Debt campaign focuses on five Sub-Sahara African countries with very different cases for debt cancellation.

 

Debt relief program poster children dependent on commodity exports are not out of the woods

 

Uganda was the first country to complete the debt relief program, but as coffee prices plummeted it has seen its debt increase again - demonstrating the current relief efforts are not sufficient.

 

Mozambique, with a history of apartheid-caused war, was forced by loan conditionalities to cut support for an infant cashew roasting industry that could have helped stabilize the economy when the raw cashew prices collapsed.

 

Designated as having "sustainable debt" by the World Bank - yet who owes whom?

 

South Africa has $25 billion in foreign debt that is considered sustainable even when it is one of the most unequal countries in the world with 20 percent of adults HIV infected. A large percent of the debt is odious and illegal with an estimated 11.7 billion from interest on loans from the apartheid era.

 

Angola is wealthy from oil and diamond exports and considered to have sustainable debt, but the country ranks near the bottom of the United Nations human development index, 161 out of 173 countries. The majority of the $10 billion debt is owed to countries involved in the cold-war era decades of war.

 

Classic case of "odious" debt

 

Democratic Republic of Congo was promised 80 percent debt relief ($10 billion) but it is one of the strongest cases for full cancellation. Former dictator Mobuto Sese Seko who assassinated the country's elected leader was granted loans that disappeared into foreign banks with few traces.

 

"Our campaign's call for cancellation of odious and illegal debt is no different that President Bush's current pleas to Iraq's creditors" said Imani Countess, coordinator of the AFSC Africa Program and the Life over Debt campaign. "Creditors should forgive the debt that was odious and illegal in the first place when loans were made without the consent of the people and not spent in their interest."

 

AFSC is grounded in Quaker beliefs respecting the dignity and worth of every person and has historically worked with communities of color in the US on civil and human rights. The AFSC has been involved in Africa for decades working in economic development projects, diplomatic exchanges, health promotion, housing, and community reconciliation.

 

For additional information, contact the American Friends Service Committee at (312) 427-2533, or visit our web site at www.afsc.org/Africa-debt.

[Waaq]

This is an important topic, and I don't have the time right now to give its proper due. Debt relief cannot occur without proper governance. Or else, the same problem will occur in another 30 years.

[Nasir]

1

[Dhagax-Tuur]

Assl All Wr Wb

 

The debt, free trade etc, these are all mechanisms that replaced the slavery. None is gonna change, unless Africans educate their people, understand from individual level what they have to do to get out of the vicious circle.

 

I think it is just a trap. The more you look into or listen to the so-called 1st world's run institutions policies, the more one simply despairs. So, Africa needs to forget about expecting others to sort their probs out.

 

May be something like the Cuban system will do. Highly educated, and self-dependant. Of course, we need transparent governance, but that can only come about when people are educated , i.e.low literacy.

 

I guess, it will take centuries to break away from the circle!

 

 

P.S. Waaq, isn't your name "God"? and if yes, is that OK for a human? probably a muslim?..correct if i am wrong.

 

Salaam.

[-Nomadique-]

True debt relief will be useless if Good Governance does not exist in a country. The United Nations Development Program clearly stated that Good Governance is the key to achieving sustainable development in a country.These include characteristics such as the prescence of the rule of law, equality, accountability and so forth

Someting poorly lacking in many African countries.But despite what ive just said Im all for debt relief in Africa.

The IMF and World Bank are two organisations i have lost confidence in these organisations have just ensured Africa has remained economically enslaved to the West.

It was also these organisations that pretty much helped to destroy the somali economy. When the somali currency was doing well on the world market( i think sometime in the 80's) they insisted the Government take several measures that they said would have helped the economy and currency further but all it did was result in the currency deflating out of control now the currency aint even worth the paper its printed on. :mad:

[-Nomadique-]

Yeah i forgot to also place the blame on Somalias economy on the corrupt regime of the day.

[Thinkerman]

Thx for the views Guys.

 

Geel Jire the cuban system hs had a high degree of success but also leaves abit to be desired.

 

Waaq and Urban Nomad

 

You both quite right in saying that debt reilef will not achieve much without good governance in place, and its fair to say that in many african statets and many other third world countries good governance is not a prevelent thought or practise, and simple debt reilef could result in my odious debts being built up by unscrupulous leaders over time.

 

But the below anayalsis is very important in the wide picture..

 

Former dictator Mobuto Sese Seko who assassinated the country's elected leader was granted loans that disappeared into foreign banks with few traces.

 

To allow such a practise, in so many countries to continue, knowing fully well that the funds where not being utillised for in any productive way suggest to me that they we planning ahead.

 

and yet who will be left to pick up the tab on just the interest payements let alone the debt itself??? the average poverty striken worker.

 

And even where you have an attempt to implement good governance as is the case in Ghana the odious debt repayment scheme means that a significant amount of the GDP is spent on debt repayment rather than on Education, Health and the provision for what the western world would consider as basic provision of water and electricity