A Truckload of Nonsense
The G8 plan to save Africa comes with conditions
that make it little more than an extortion racket
George Monbiot
Tuesday June 14, 2005
The Guardian
An aura of sanctity is descending upon the
world's most powerful men. On Saturday the
finance ministers from seven of the G8 nations
(Russia was not invited) promised to cancel the
debts the poorest countries owe to the World Bank
and the International Monetary Fund. The hand
that holds the sword has been stayed by angels:
angels with guitars rather than harps.
Who, apart from the leader writers of the Daily
Telegraph, could deny that debt relief is a good
thing? Never mind that much of this debt - money
lent by the World Bank and IMF to corrupt
dictators - should never have been pursued in the
first place. Never mind that, in terms of looted
resources, stolen labour and now the damage
caused by climate change, the rich owe the poor
far more than the poor owe the rich. Some of the
poorest countries have been paying more for debt
than for health or education. Whatever the
origins of the problem, that is obscene.
You are waiting for me to say but, and I will
not disappoint you. The but comes in paragraph 2
of the finance ministers' statement. To qualify
for debt relief, developing countries must
"tackle corruption, boost private-sector
development" and eliminate "impediments to
private investment, both domestic and foreign".
These are called conditionalities.
Conditionalities are the policies governments
must follow before they receive aid and loans and
debt relief. At first sight they look like a good
idea. Corruption cripples poor nations,
especially in Africa. The money which could have
given everyone a reasonable standard of living
has instead made a handful unbelievably rich. The
powerful nations are justified in seeking to
discourage it.
That's the theory. In truth, corruption has
seldom been a barrier to foreign aid and loans:
look at the money we have given, directly and
through the World Bank and IMF, to Mobutu,
Suharto, Marcos, Moi and every other
premier-league crook. Robert Mugabe, the west's
demon king, has deservedly been frozen out by the
rich nations. But he has caused less suffering
and is responsible for less corruption than
Rwanda's Paul Kagame or Uganda's Yoweri Museveni,
both of whom are repeatedly cited by the G8
countries as practitioners of "good governance".
Their armies, as the UN has shown, are largely
responsible for the meltdown in the eastern
Democratic Republic of Congo (DRC), which has so
far claimed 4 million lives, and have walked off
with billions of dollars' worth of natural
resources. Yet Britain, which is hosting the G8
summit, remains their main bilateral funder. It
has so far refused to make their withdrawal from
the DRC a conditionality for foreign aid.
The difference, of course, is that Mugabe has not
confined his attacks to black people; he has also
dispossessed white farmers and confiscated
foreign assets. Kagame, on the other hand, has
eagerly supplied us with the materials we need
for our mobile phones and computers: materials
that his troops have stolen from the DRC. "Corrupt" is often used by our governments and
newspapers to mean regimes that won't do what
they're told.
Genuine corruption, on the other hand, is
tolerated and even encouraged. Twenty-five
countries have so far ratified the UN convention
against corruption, but none is a member of the
G8. Why? Because our own corporations do very
nicely out of it. In the UK companies can legally
bribe the governments of Africa if they operate
through our (profoundly corrupt) tax haven of
Jersey. Lord Falconer, the minister responsible
for sorting this out, refuses to act. When you
see the list of the island's clients, many of
which sit in the FTSE 100 index, you begin to
understand.
The idea, swallowed by most commentators, that
the conditions our governments impose help to
prevent corruption is laughable. To qualify for
World Bank funding, our model client Uganda was
forced to privatise most of its state-owned
companies before it had any means of regulating
their sale. A sell-off that should have raised
$500m for the Ugandan exchequer instead raised
$2m. The rest was nicked by government officials.
Unchastened, the World Bank insisted that - to
qualify for the debt-relief programme the G8 has
now extended - the Ugandan government sell off
its water supplies, agricultural services and
commercial bank, again with minimal regulation.
And here we meet the real problem with the G8's
conditionalities. They do not stop at pretending
to prevent corruption, but intrude into every
aspect of sovereign government. When the finance
ministers say "good governance" and "eliminating
impediments to private investment", what they
mean is commercialisation, privatisation and the
liberalisation of trade and capital flows. And
what this means is new opportunities for western
money.
Let's stick for a moment with Uganda. In the late
80s, the IMF and World Bank forced it to impose "user fees" for basic healthcare and primary
education. The purpose appears to have been to
create new markets for private capital. School
attendance, especially for girls, collapsed. So
did health services, particularly for the rural
poor. To stave off a possible revolution,
Museveni reinstated free primary education in
1997 and free basic healthcare in 2001. Enrolment
in primary school leapt from 2.5 million to 6
million, and the number of outpatients almost
doubled. The World Bank and the IMF -which the G8
nations control - were furious. At the donors'
meeting in April 2001, the head of the bank's
delegation made it clear that, as a result of the
change in policy, he now saw the health ministry
as a "bad investment".
There is an obvious conflict of interest in this
relationship. The G8 governments claim they want
to help poor countries develop and compete
successfully. But they have a powerful commercial
incentive to ensure that they compete
unsuccessfully, and that our companies can grab
their public services and obtain their
commodities at rock-bottom prices. The
conditionalities we impose on the poor nations
keep them on a short leash.
That's not the only conflict. The G8 finance
ministers' statement insists that the World Bank
and IMF will monitor the indebted countries'
progress, and decide whether they are fit to be
relieved of their burden. The World Bank and IMF,
of course, are the agencies which have the most
to lose from this redemption. They have a vested
interest in ensuring that debt relief takes place
as slowly as possible.
Attaching conditions like these to aid is bad
enough. It amounts to saying: "We will give you a
trickle of money if you give us the crown
jewels." Attaching them to debt relief is in a
different moral league: "We will stop punching
you in the face if you give us the crown jewels." The G8's plan for saving Africa is little better
than an extortion racket.
Do you still believe our newly sanctified leaders
have earned their haloes? If so, you have
swallowed a truckload of nonsense. Yes, they
should cancel the debt. But they should cancel it
unconditionally.
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