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Debt Cancelled - where now ?

Steel | 12.06.2005 09:16

Well agreement has been reached to cancel the debt, we must now look at the situation re Aid and the amounts we send

Despite massive foreign aid, (often at extremely subsidised interest rates and generous repayment schedules), sub-Saharan Africa has performed dismally.

Of the 45 sub-Saharan African countries for which per capita GDP data are available from 1980 to 2002:

- Twenty-three experienced negative compound annual growth in real per capita GDP;

- Seven experienced marginal compound annual growth between 0 percent and 1 percent in real per capita GDP; and

- Fifteen experienced compound annual growth of more than 1 percent in real per capita GDP, but only three achieved per capita growth over 4 percent.

- The World Bank estimated that halving severe poverty in sub-Saharan Africa by 2015 (a target of the United Nations' Millennium Development Goals [MDG]) would require annual growth of at least 7 percent.

- Sub-Saharan Africa is the only region of the world that is not on track to meet a single target of the Millennium Development Goals--including the goals to reduce poverty, hunger, and infant mortality or to improve secondary school enrolment for girls, immunisation for measles, and access to potable water.

- Over the last 43 years, some $568 billion (in today's dollars) has been given to Africa: a fraction of that would have been sufficient to control malaria in Africa, yet that disease remains one of the continent’s biggest killers.

- Equally, a tiny amount of that would have been sufficient to provide clean drinking water for the entire continent: even that is beyond them.

- Approximately a fifth of US aid to Africa between 1957 and 1995 was provided to Zaire, the Sudan, Somalia and Liberia. This aid was wasted from a developmental perspective – When the Zaire (now called the Democratic Republic of the Congo) became independent in early 1960, it possessed 60,000 km of tarred roads. Today it has less than 9,000 km of tarred roads left.

- The World Bank has reported that, quote “Econometric analyses show that aid has no systematic relationship to growth anywhere in the world. This may not be surprising in countries where aid is small relative to the size of the economy. It is surprising and concerning in Africa—where aid flows have consistently reached 10% or more of gross national product in many countries over an extended period of time.” (World Bank, “Aid Effectiveness: The Problem of Africa”, )

- When the impoverished country of Malawi got its annual aid grant of £52 million from Britain recently, the government's first act was to spend 1.7 million pounds of it to buy 39 brand new S-class Mercedes automobiles for its cabinet ministers.

- Canadian aid paid to build a new international airport in the remote town of El Dorat in Kenya. The only plane that used it was that of then Kenyan President Arap Moi, whose home town is nearby.

- The EU famously funded a salt mine in Uganda. No-one lives there, and no salt was ever mined.

- Under the late President Mobutu Sese Seko, Zaire got nine loans from the World Bank - with Western approval - despite an abysmal economic record. He personally pocketed the vast majority of it, hiring the Concorde to fly his wife and family to Paris for shopping trips, amongst other documented excesses.

- Some $2 billion was given to build roads in Tanzania - a project which is now, famously, in disrepair. Even now, Tanzania receives about £78m in aid every year.

- The majority of the 49 least developed counties are in Africa. Most of their people are unskilled and lack access to medical care and healthy nutrition. 290 million Africans (more than the entire U.S. population) live on less than a dollar a day.

- A recent study by Shell reported that two-thirds of its development and humanitarian assistance projects in the oil- producing region of Nigeria were unsuccessful.

- Africa is wracked by extreme poverty, over-population, under-education, environmental degradation, disease, civil disorder, and crumbling public infrastructures. The very fact that these problems have persisted and in many respects actually worsened despite 50 years of foreign aid is prima facie evidence that such aid has been a waste.

It is therefore clear that Foreign Aid, which if course comes directly from the taxpayer’s pocket, needs to be reduced and controlled, not expanded and written off, as the Labour Government intends.

Future foreign aid should be linked to Third World countries participating in a repatriation program for their nationals in the UK.

Spaced out

* Talking of Space Programs: India is also a recipient of British foreign aid, to the tune of £100 million per year, which makes India the major recipient of British bilateral aid. This aid is supposed to go on helping the poorest – but cynics point out that India recently launched its own satellite.

Now, one has to ask what on earth Britain is doing subsidising a country which has its own satellite program – something that not even the UK has?

Steel

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