African Debt Problems on Front Burner
9/23/99
*******************************
RELAYED TEXT STARTS HERE:
Title: DEVELOPMENT-AFRICA: Debt Problems on Front Burner
Source: InterPress Service
Status: Copyright 1999, contact source for permission to reprint
Date: September 23, 1999
Byline: Commentary - By Gumisai Mutume
MEXICO CITY, Sep 23 (IPS) - Africa figures high on the agenda at
the annual meetings of the World Bank and International Monetary
Fund (IMF) in Washington next week and those involved hold a wide
disparity of views on what needs to be done to redeem an
increasingly impoverished continent.
African governments, living with IMF and World Bank structural
adjustment programmes (SAPS) and hoping for further debt
reprieves, most certainly will have their begging bowls out as in
the past.
On the other hand non-governmental organisations (NGOs)
attending a parallel summit in the US capital will be bringing
something new to the negotiations: demands for the cancellation of
total debt and an end to the so-called Washington Consensus.
The annual meetings of the 182-nation IMF and World Bank are
generally seen by African finance ministers as opportunities to
lobby governors at the two agencies for extra financing.
The continent has been subjected to SAP's since the 1980s and,
between 1987 and 1996 countries south of the Sahara received about
110 billion in IMF loans - a figure equal to the sales of the 50
largest multi-media companies in 1993.
During the same period the region transferred about 100 billion
dollars back to the institution in debt and interest servicing.
Africa's foreign debt currently amounts to about 260 billion
dollars and there is little to show for it.
African civil society groups, convinced of their governments'
compliance with Washington have proposed an alternative think-
tank, the African Consensus which is calling for an end to this
"new form of slavery."
The NGOs position is in stark contrast to that of the African
ministers - whom they accuse of auctioning off the continent and
being ill-prepared to negotiate from a powerful African position
with the Bretton Woods institutions.
Kenyan Finance Minister Chris Okemo summarised the priority of
African leaders in Washington this way:
"If I manage to make them (IMF and World Bank) understand our
position, I will have succeeded in my mission. If I come back with
promises on money, it would be a success for the nation," Okemo
told a news conference.
NGOs faulted this method of negotiation.
"African governments don't put enough time and resources into
developing collective negotiating positions and strategies for the
annual World Bank/IMF meetings, or other similarly influential
events," said Salih Booker of the Washington-based think-tank the
Council of Foreign Relations.
"Given the number of countries in Africa, collective action is
difficult to organize, but that's no excuse for not trying given
the severe power imbalance that most individual countries face
when trying to negotiate with the international finance
institutions," he said.
The dominant assumption of the 1990s has been that alignment
with globalisation would guarantee economies more or less
uninterrupted growth.
The standard macro-economic prescriptions were liberalisation,
privatisation, deregulation, flexibility and a 3 per cent budget
deficit, embraced by most of Africa, but that thinking is now in
crisis.
Frustrated with the lack of results, NGOs led by Jubilee 2000
recently set up an Africa Consensus Commission "to challenge the
Washington Consensus and determine a human path to sustainable
development on our continent", even though it is being shot down
in some sectors as too idealistic.
It is the Africa Consensus that is taking to Washington the
demands for cancellation of African and Third World debt which it
says is unsustainable. It also says it will also call on the
wealthy nations of the North to stop using debt as a means to
enforce structural adjustment policies so as to dominate Africa
and the South.
"It will take forward the call for reparations from the IMF,
World Bank, other agencies and governments of the North for the
damage they have caused in Africa and the South," the group says.
Despite evidence of failure in Africa the Washington Consensus
dogmatically promotes free trade, financial liberalisation,
deregulation, fiscal austerity, privatisation and flexible labour
markets in developing countries.
But even Nelson Mandela's first democratic South African
government (1994-99), obedient disciples to IMF and World Bank
preachings, suffered at least half a million lost formal-sector
jobs during its brief life. Under new president Thabo Mbeki the
economy continues to shrink adding to the estimated 50 percent
unemployment rate.
Across the continent the World Bank can only point to three
successful structural adjusters including Ghana, Mozambique and
Uganda. But it continues to offer top-down solutions to the
continent's heavily indebted poor countries (HIPC).
After several years of no relief it became clear that
programmes meant to assist HIPCs were insufficient to free Africa
from debt bondage. The top industrial countries, the so-called
Group of 7, put forward their Cologne initiative in June to
accelerate the relief process - keeping the basic policy reform
requirements of SAPs and proposing gold sales to finance it.
"There was no African alternative position put forward, or an
attempt to collectively negotiate a reformed HIPC process or to go
even further and demand debt cancellation, or even to propose an
African moratorium on debt payments," said Booker.
"At the Washington meetings the question of how to finance the
Cologne initiative is likely to come up, and I have yet to see an
African proposal either on that issue or the larger issue of
whether the Cologne initiative is itself adequate."
But it is not as if there are no voices of defiance, muted as
they may, observed Patrick Bond of the Campaign Against Neo-
Liberalism in South Africa (CANSA).
"From Malaysia to Zimbabwe and to Venezuela, IMF-bashing is
back in style - even if the rhetorical flourishes of their leaders
have different origins...Self-evidently, the trajectory chosen in
these three cases, amounts at best to attempting to join the
system, to play by its rules and, having discovered that the game
is set up unfairly, to adjust these rules somewhat in the Third
World's favour," Bond said.
More typical of a tamed nationalism was the offhand remark by
then South African president Nelson Mandela last year at a
gathering of the Southern Common Market (Mercosur) countries that
"globalisation is a phenomenon we cannot deny; all we can do is
accept it."
The demise of communism has seen the muting of the once defiant
calls in Africa during the 1970s for a New International Economic
Order.
"Most leaders and political parties of Second and Third World
societies who at one point carried the aspirations of a mass-
popular electorate rapidly reversed allegiance, imposing
ineffectual and terribly unpopular structural adjustment
programmes," said Bond.
Whether the voice of the NGOs will have any effect on IMF/World
Bank policy, however, remained open to debate - both in Washington
and elsewhere in the international arena. (END/IPS/gm/mk/99)