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African
debt not a sexy affair
James
Shikwati, Director, Inter Region Economic Network
June 15, 2005
Having traversed most
continents of the World, visiting both rich and poor countries, I find
it difficult to fall back into believing that rich nations are honest
in their quest to cancel poor nation’s debts. That, countries that preach
democracy, rule of law, good governance and accountability, can cancel
debts without providing an audit report, and without outlining the type
of transactions that led to the debts in the first place is euphemism
for accepting failure. Have any of the citizens in the countries earmarked
for debt cancellation asked their governments for an audit report?
Foreign aid was meant
to fill the gap between domestic savings and investment. It was based
on misconceived theory of ‘cycle of poverty’ which was believed to rely
on external injections in order to break the cycle. Over 40 years of injections
and the ‘cycle’ goes on. Presently, developed countries have spawned the
most absurd theory popularly referred to as the ‘Power of the Star’. In
this approach, countries are divided into four, the stars, the squares,
the circles and the triangles. Each country is assigned a certain value,
for instance, the industrialized counties have the highest value and the
poor nations have the lowest value, that is, have less or nothing to contribute
to the world of development. With this approach, only the wealthy nations
can salvage countries that have low value. To validate this argument,
poor country elites are normally trained to believe in foreign support
as the main way to get out of underdevelopment.
It is estimated that
for the last 40 years African leaders have stolen and stashed over US$
140 billion in accounts held in developed countries. African countries
owe wealthy nations an estimated US$ 295 billion. Rich nations have resolved
to cancel debts amounting to US$ 40 billion. In the short term, a few
countries that benefit from debt cancellation might put up hospitals,
hire teachers, nurses and fall back in debt again. What the proponents
of debt cancellation do not tell the World is who benefited from these
transactions. To a large extent loans from rich nations have been tied
with conditionality which lead to an estimated two-thirds of the amount
borrowed flowing back to donor countries in purchase of machinery, hiring
of expatriates, procurement and trade policy controls. The little that
seeps in to the recipient is in turn stolen by the leadership and banked
in the very same developed nations. Is it possible for the citizens of
the poor nations to take wealthy nations to the international court for
knowingly handling stolen property?
Modern international
banking regulations are keen to watch out money transfers that could be
linked either to terrorists or drug traffickers. Developed nations will
do a great service to the poor by reviewing accounts of the African leadership
they very well know embezzle money from their subjects. In 2004, an African
Union report indicated that Africa looses US$ 148 billion in corrupt practices
alone. Other reports have shown that Africa looses US$ 20 billion through
capital flight, US$ 15 billion on civil war damages, US$ 18 billion on
food imports, US$ 15 billion on expenditures on arms and military, and
US$ 216 billion on other leakages. How much aid do we African need to
obey our own laws, to shun corruption and to simply put our priorities
right?
The African peasant
is being milked by both her leaders and developed nations who keep imposing
strategies in the economic, agriculture, energy and environmental sector.
The peasant is fighting to get proper representation in parliament and
to have her productivity rewarded by the market. But wealthy nations impose
farm subsidies, flood markets with subsidized products leading to unfair
competition. Wealthy country intellectuals are lobbying to ensure that
people from poor countries do not utilize their natural resources such
as fossil fuels, forests and wildlife among others. Poor country elites
are busy colluding with wealthy nation elites to rob the peasants either
through inflated contracts or simply implementing policies they know will
never work.
Rich nations strategically
teach poor nations to rely on aid for reasons unknown to the aid recipients.
The voices of the targeted recipients are muzzled by either high flying
celebrities and or the poor country elites. The daily struggles of African
farmers whose crops are destroyed by pests, communities that go without
water, and families that seek medicines as their children perish due to
preventable diseases such as malaria go unnoticed. The World needs statistics,
to buttress their warped policies. Unless the poor countries learn to
take responsibility and ownership of their problems, they will always
be chasing new instructions from abroad.
Africa is endowed
with strategic minerals such as tantalite, vanadium, palladium, uranium,
chromium, oil and diamonds. A good portion of Africa has good soils and
fair climate. Africa is not over populated compared to Asiatic countries.
The full potential of the African people has not yet been tapped especially
that of women and the youth. Instead of being hoodwinked by sexy good
looking ideas such as debt relief, Africa should urgently turn inward
for solutions to her problems. We must open up Africa to African business
people and other innovators, we must ask our friends from developed nations
to allow us to travel and learn, we must learn to do business with the
developed nations and steer clear-off the manna from heaven relationship.
I am optimistic that an emerging new generation of Africans will save
this continent from the perpetual fixation on life support machine in
the name of aid. The African leadership is facing the toughest challenge,
they have either to offer leadership or simply act as supervisors for
wealthy nations’ interests.
*James Shikwati
is the Director of the Inter Region Economic Network and Coordinator of
the African Resource Bank. He can be contactec at james@irenkenya.org
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