African countries come up empty-handed again in attempt to have the industrialized nations forgive the huge bogus loans crippling African nations.
Another G8 meeting has just ended in this resort island [Sea Island, GA]. African leaders came away again disappointed that their problems were not given the same attention like the massive effort being expended in rebuilding the destruction of Iraq, after a war of choice by the United States. They came away again still loaded with a burden of $315 billion in debt, an escalating HIV/AIDS pandemic, the exploitation of Africa's natural resources without due compensation, the arbitrary setting of prices both for raw and finished products by the industrialized nations; and sadly the continued subsidizing of farmers in the developed nations leading to the dumping of their products in Africa, and killing the agricultural sectors in the continent.
Is it any wonder then that some African leaders continue to question the relevance of African leaders' participation in these obviously non-beneficial summits.
Of course, the G8 used to be known as G7 or Group of Seven, but with the admission of the Russian Federation into this rarefied group of materialistic nations, it is now called the G8 or the Group of Eight. The G8 includes Canada, France, Germany, Italy, Japan, the Russian Federation, United Kingdom and the United States of America.
These eight countries make up less than 14 percent of the world's population of 843 million; however in 2000, for which figures are available, it accounted for a net GDP of $21.1 trillion (US$) within a total world GDP of $31.3 trillion. In effect, this means that the G8 countries control about 68 percent of the world's economic output. Due to this economic domination and their militaristic adventures, the G8 sets the global economic agenda and then advances it through institutions like the International Monetary Fund (IMF), the World Bank, the G20 and the WTO, which it dominates.
Paradoxically, when the Group of Seventy-Seven (G77), which more or less represents the so-called third-tier countries or third world, makes a decision, it is hardly binding. This is akin to what happens at the United Nations General Assembly where the 191 member countries can make a decision, but it can be vetoed by any one of the five members of the Security Council.
Proportionally, Africa accounts for almost the same percentage of the world's population as the G8 countries, but accounts for only 1 percent of the world's gross domestic product. Africa continues to be demonized as the poorest continent in the world, yet Africa is the world's richest continent in terms of its natural resources. The continent possesses some of the world's strategic natural resources, including 54 percent of the world's cobalt, 32 percent of bauxite, 52 percent of manganese, 81 percent of chromium stocks, and over 85 percent of the world's total reserve base of the platinum minerals, not to talk of large quantities of gold, diamond and silver. The world is becoming increasingly dependent on Africa's oil.
Unfortunately, the western world continues to control what it pays Africa for its abundant natural resources, as well as dictate what Africa pays for the re-exported finished products. Today, Africa's debt to the West stands at $315 billion, down from $375 billion. It is quite difficult to point to any meaningful projects that the recipients could show as evidence of the loans taken. And it has to be realized that about 60 percent of Africa's debt is due to accumulated interest. For instance, Nigeria's $32 billion debt was originally $6 billion. The country has not only paid an interest of about $24 billion, but still has $32 billion outstanding for which it continues to pay an annual interest rate of $1.8 billion.
It was therefore with great fanfare in 2002 when five African leaders took their newly minted initiative called "New Partnership for Africa's Development" (NEPAD) to the G8 summit when it met in Canada. It asked for a whopping $64 billion in commitments from the industrialized nations, especially in debt forgiveness or, failing that, debt reduction. Africa also proposed that industrialized nations reduce the amount of subsidies they offer to its farmers, so that the excess produce from these countries would not continue to be dumped in Africa, thereby stifling the growth of the agricultural sector in Africa.
They came away with a promise of $6 billion, premised on the condition that the African countries must behave themselves as good boys in promoting good governance across the continent, respecting human rights and working for peace and poverty reduction in return for increased aid, private investment and a reduction of trade barriers by rich countries. In other words, unless they attained these yardsticks of governance arbitrarily set by the G8 members, no dime would be given to African countries.
Russia, on the other hand, was handed a whopping $20 billion, without as much as a cough as to what the Russians would have to do to get this money.
But before the summit came to an end, President George Bush of America had signed off on the farm bill, providing extra an $19 billion a year in subsidies to American farmers, an increase of almost 80 percent over a ten-year period.
This year, though, the African leaders, six of them including President Chissano of Mozambique, Wade of Senegal, Bouteflika of Algeria, Kufuor of Ghana, Mbeki of South Africa, and Obasanjo of Nigeria, came to the summit chafing under the assumption that they were there as beggars, an assumption which has become commonplace when discussing Africa. Said Nigeria's Obasanjo, "The issue is not the issue of handout. The issue is not the issue of one condescending to the other. The issue is the issue of mutual interest, mutual security, common prosperity."
President Thabo Mbeki of South Africa also expressed dismay at the notion that the Africans go to these rich-nations' summits expecting to be "portrayed in some quarters as mendicants. Despite having a seat at the table with leaders of the world's developed nations," Mbeki wrote in article in This Day newspaper, "we will still be poor relations crashing the party." Mbeki, who has continually chided the continent's intellectuals for their attitude of entitlement, said, "Africans will be objects of compassion and contempt until such time as
we have become demonstrable masters of our own destiny."
The most aggravating situation for Africans economically is, of course, the question of the $315 billion debt burden. It would seem that no matter what kind of pressure is being mounted to have the industrialized nations forgive or reduce this debt burden, they are not inclined to undertake what is clearly apparent as fraudulent when these loans were made. There are many Africans as well as other world economists who are beginning to question the wisdom of African nations continuing to spend almost 40 percent of their GDP in servicing these loans.
The alternative to the intransigence of the Western nations is, of course, the utilization of the same methods employed by Russia and Argentina in extricating themselves from the heavy burden of international loans. They both defaulted, Russia in 1999 and Argentina on November 21, 2002.
In an continent where some 60 percent of the population subsists on $1 a day, the governments cannot continue to utilize over 40 percent of their meager revenue in
servicing these loans which, in the first instance, were made fraudulently.
