Monbiot: G8 debt relief plan a truckload of nonsense

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" Zepp " <zepp

Mon, 13 Jun 2005 22:13:18 -0700

Subject:[Zepps_News] Monbiot: G8 debt relief plan a truckload of nonsense

 

 

 

 

<http://www.guardian.co.uk/Columnists/Column/0,5673,1505927,00.html>

 

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.

 

Article continues

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.

 

· www.monbiot.com