African debt relief

The discussion on African debt relief sounds hopeful-- celebrities, governments, and politicians are beginning to seriously push for massive* debt relief in some (mainly) African countries. (BBC--African poverty deal in balance) Britain has vowed to make it a central topic at the next G8 summit. Bush has agreed to debt cancellation, in theory (New York Times--US and Britain agree...) although he doesn't want to give any more of our money to do it.

The 18 countries most likely to be given such relief (Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia) currently pay over $1 billion in INTEREST per year to the World Bank. For many of these countries, the money they pay OUT is more than the developmental assistance they RECEIVE-- this as designed by the International Monetary Fund. For every $1 received in grant aid, low income countries pay -$2.30 in debt service. This plan would forgive $16.7b in debt; total African debt is over $300 billion-- less than 6% would be forgiven.

I am also skeptical about the 'qualifications' for this scheme. Where did the list come from? What kind of policies are the governments engaged in? This case, like all others, has strings attached. In order to 'qualify' one must buy into policies as certain countries/ institutions propose them. These often worsen the economic situations of said countries. (Read Globalization and its Discontents by Joseph Stigletz, former WB policy-maker.)

Debt relief is probably the second-best thing we could do for African poverty. It's good. It saves lives. It can tremendously increase standards of living. It gets water to the people. It increases school enrollment. It promotes health. But it is not enough.

With the US politely declining to increase aid, GB is looking towards... Saudi Arabia? This is old wine in new barrels-- these superficial solutions will not get to the heart of the problem. Naomi Klein writes in The Nation "Instead of Saudi Arabia's oil wealth being used to 'save Africa,' how about if Africa's oil wealth was used to save Africa--along with its gas, diamond, gold, platinum, chromium, ferroalloy and coal wealth?" But this solution would be too much of a monetary loss for Western-based corporations.

Sometimes I am awed at how they can keep the sheets pulled over our eyes. The President, in bed with corporate wealth, can promote a superficial system of African debt relief and be heralded as heros while systematically raping Africa of its natural wealth. And we continue life under the covers.

Africa Fact Sheet
Jubilee Debt Campaign

*at most, 2/3rds of debt would be relieved from an individual country.