Global Policy Forum

By George Dor*

The upcoming G8 meeting or, more accurately as regards economic matters, the G7, to be held in Edinburgh, UK, will put the spotlight on Tony Blair's Commission for Africa and the issue of debt. Much has been made of the commission on the release of its report in March and the announcement on debt consequent on the meeting of Finance Ministers in preparation for the G7. But, at most, these developments amount to little more than a reflection of the need to react to the persistence of the activities of Jubilee and other social movements over the years. A closer look at these initiatives suggests very little to celebrate.

Debt "Cancellation" and Control of Africa's Economies

Starting with the debt issue, the ministers announced an amount of debt to be cancelled of a mere US$40 billion for African and other countries. This is a fraction of the total debt of African countries of US$300 billion and of countries in the South of US$2 400 billion. It is less than the amount of more than US$50 billion that the United States spends EACH YEAR on its illegitimate occupation of Iraq. It also compares poorly with the G7 offering in Cologne, Germany, in 1999 of US$100 billion. Moreover, the intermittent promises of the G7 include amounts promised before but not fulfilled. In other words, they are little more than recycled promises.

In the case of the Cologne announcement, the real intention was not to provide debt relief but to rescue the International Monetary Fund (IMF) and World Bank from their crisis of legitimacy and enforce their continued control over the economic policies of the countries in the South. The institutions were strengthened in the form of the Poverty Reduction and Growth Facility (PRGF) and Poverty Reduction Strategy Papers (PRSPs). Of course, these new initiatives were also quickly exposed for what they really are, structural adjustment in new guise.

Most importantly, the current offering, like that of 1999, is contingent on countries implementing economic reforms, in other words it is premised on a fundamental difference with the Jubilee South slogan, "total and unconditional debt cancellation". This is cancellation for countries that have gone through the IMF and WB hoops, those that accept these institutions' structural adjustment conditions. In other words, it is another deal to strengthen the IMF and WB.

Previously, the G8, IMF and WB have used debt as an instrument to dictate our economies in the form of making loans for debt servicing conditional on IMF and WB policies. Now debt relief/cancellation and grants are being put forward as the new instruments to dictate our economies. If a country wants relief, it first has to meet the prescribed conditions, it has to toe the line.

A related critical point is that debt relief/cancellation does not necessarily translate into more money to spend on meeting people's needs. The relief may indeed result in less debt servicing, but this is only forthcoming if countries have agreed to the conditions that include cuts in government spending and promotion of the private sector. Indeed, this is the case in Zambia: in order to jump through the hoops to be included in the G7 list of 18 countries, it had to further cut state expenditure over and above the decades of cuts that the debt regime had already forced on the country. That is to say, it will get cancellation with less money to spend on people's needs.

On the word "cancellation", this does seem to be an advance on the previous rhetoric of debt "relief", but the offer only covers 18 countries and it is not yet clear whether it amounts to 100 percent cancellation even for this short list of countries. In the case of the Latin American countries, for example, much of their debt is related to a multilateral institution, the Interamerican Development Bank.

The Blair Commission, Neoliberalism and the International Financial Institutions

As regards the Blair Commission, in its opening lines it states, "For its part, Africa must accelerate reform." There are two important issues here. First, the report suffers from the recurrent syndrome of blaming the victim for corruption, conflict and war. There are indeed too many instances of African leaders who are guilty of one or more of these charges. But, the role of the Northern countries in slavery, colonialism and the imposition of neoliberal policies and the impact of these Northern interventions on poverty and death across the continent are simply ignored.

Secondly, while the report more explicitly refers to reform of political governance in order to address corruption and conflict, it also makes repeated references to various forms of "economic reforms". In other words, in failing to address the neoliberal cause of so much of Africa's current destitution, it simply reiterates that Africa must continue to follow this neoliberal path at a faster pace.

This is perhaps most evident in relation to the report's treatment of the multilateral institutions. It fails dismally to address the negative impact of the World Bank and IMF on the destruction of African economies and the poverty and death that this has led to. It has been estimated that World Bank and IMF structural adjustment programmes are responsible for the deaths of 19 000 children in the world every day. Yet, the report simply asserts that "The African Development Bank needs to be strengthened... The IMF and World Bank need to give higher priority to Africa's development."

Paul Wolfowitz, Military Invasion and Economic War

It is no small surprise that the new President of the World Bank, Paul Wolfowitz, echoed this call and visited the continent immediately on assuming office. Wolfowitz was the architect of the invasion and occupation of Iraq, which led to the expansion of United States military influence in the Middle East and the awarding of multi-million and billion dollar contracts in Iraq to corporations with close ties to the Republican Party leadership. He has a history of being against detente and arms control during the years of the Cold War with the Soviet Union. He supported Asian dictators like the Indonesian General Suharto on behalf of the Reagan administration. He has been a persistently strong proponent of more spending on defense.

Wolfowitz was eagerly pushing for regime change in Iraq well before 9/11. He defined leadership as, "not lecturing and posturing and demanding, but demonstrating that your friends will be protected and taken care of, that your enemies will be punished, and that those who refuse to support you will regret having done so." He helped convince George Bush 1 to use force to remove Saddam Hussein from Kuwait, and urged Bill Clinton to turn his attention "to implementing a strategy for removing Saddam's regime from power."

He lied about the purported weapons of mass destruction and claimed, "Intelligence about terrorism is inherently murky, and the US must be prepared to act on less-then perfect information." He later admitted that oil was a significant reason for the invasion and occupation, stating that North Korea will only be treated to sanctions because it is not sitting on "an ocean of oil".

The sinister combination of George Bush's appointment of his man in Iraq to lead the World Bank with the call for the World Bank to play a more significant role in Africa is now being pushed as a boost for Africa's development. Wolfowitz' role in the destruction of Iraq and the World Bank's role in poverty and death on the African continent are being brushed under the carpet. Trevor Manuel, South Africa's Minister of Finance, described Wolfowitz as a 'wonderful individual, perfectly capable'. Even some critics are suggesting that Wolfowitz be given a chance in his new role and that the World Bank be given yet another chance on the continent.

Wolfowitz visited Nigeria, Burkino Faso, Rwanda and South Africa from 12 to 18 June. Jubilee South Africa and the Anti-War Coalition organised two demonstrations on 17 June, one outside the offices of the World Bank's International Finance Corporation and the other at the Gauteng Provincial Department of Finance and Economic Affairs. The message was clear: "Paul Wolfowitz is not welcome in South Africa, he must go home! The World Bank, its partner, the IMF and related international financial institutions should be shut down!"

For Jubilee South Africa, the opposition to these institutions is based on both their role in the use of debt to impose structural adjustment in the countries of the South as well as their impact on South Africa. The World Bank and IMF supported the Apartheid regime and its institutions in the form of substantial loans until they were instructed to stop doing so. They have returned in the post-Apartheid era to shape the country's neoliberal macroeconomic and social policies, manifesting in rising unemployment and lack of access to social services.

The Blair Commission, Trade and Resources

The Blair Commission's handling of trade issues also reflects its insistence that Africa insert itself into the neoliberal global world. It calls on Africa to produce cheaper goods for the world market and suggests that rich countries allow African goods somewhat more access to their markets. In other words, African countries are being told to continue on the path of orientating their productive activities towards exports at the expense of producing the goods and services needed by the people of Africa.

The report's recommendations on trade must be seen within the broader context of a world in which the World Trade Organisation (WTO) has assumed enormous power and in which unbalanced regional trade agreements are being foisted on African countries. African economies are being opened up to the goods of Northern countries, undermining local production and resulting in increasing unemployment. The report's approach will, at best, offer limited opportunities to larger-scale private sector enterprises with the capacity to engage in export activities, while continuing to undermine small-scale production, rural economic activity, food security and the like.

The commission does highlight some of the most glaring manifestations of Northern exploitation of the continent. For example, it talks of "conflict resources" and implicitly acknowledges that Northern banks are holding stolen assets, Northern corporations are guilty of making bribes, and the oil, minerals and other extractive industries are less than open about their payments. However, its recommendations in this regard are by and large vague. It notes that "assets stolen from the people of Africa by corrupt leaders must be repatriated" and "Firms who bribe should be refused export credits." From previous experience, there just isn't the political will or clout to give effect to these recommendations.

As for resources, the commission is very much in keeping with the meagre offerings of the Finance Ministers in relation to debt. It suggests a mere US$25 billion per year to be committed by donor countries, to be implemented by 2010. This could be doubled by 2015, subject to the condition that "good governance in Africa must continue to advance."

It argues that half of this amount should go to education and health. It makes positive recommendations on removing primary school and patient fees, but instructions of a similar kind by the United States Congress to the Treasury, World Bank and IMF have gone unheeded before. Most significantly, the pennies proposed in the report won't come near to restoring the levels of finance to health and education on the continent so consistently undermined by the World Bank and the IMF in the decades of imposed structural adjustment.

Finally, the report argues that a third of the 25 billion a year should go to "growth and poverty reduction", a euphemism for an increased role for the private sector and a "doubling of expenditure on infrastructure". This includes large, regional transport and power projects. To date, projects of this sort have realised large profits for Northern and South African corporations at the expense of increasing indebtedness and environmental destruction on the continent.

There are substantial similarities and convergences between the Blair Commission and Thabo Mbeki's New Partnership for Africa's Development (Nepad). This is particularly so in their neoliberal orientation towards the World Bank, IMF, trade and large infrastructure projects. The report has no qualms about exposing Mbeki's capitulation to the neoliberal approach in stating that, "The developed world must support the African Union's Nepad programme to build public/private partnerships in order to create a stronger climate for growth, investment and jobs."

The Blair Commission and the G7 Finance Ministers' announcement on debt thus represent no more than two additional moments in the decades of neoliberal exploitation of the continent. This is, in turn, nothing other than a new means of continuing the exploitation initiated under the times of conquest, slavery and colonialism.

About the Author: George Dor is Jubilee South Africa General Secretary.

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