a good op-ed piece on the "debt relief"

[Jim Devine <jdevine03@xxxxxxxxx>]

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 [U.K.]

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.

· www.monbiot.com
-- 
Jim Devine
"Segui il tuo corso, e lascia dir le genti." (Go your own way and let
people talk.) -- Karl, paraphrasing Dante.