Aid And Economy
Still Failing Sub-Saharan Africa
By Rajesh Makwana
12 June, 07
recent report by the United Nations has revealed that not a single country
in sub-Saharan Africa is on track to achieve the internationally agreed
target for halving extreme poverty by 2015. This dire failure is unsurprising
given the G8’s undelivered aid commitments, the inability of the
World Trade Organisation (WTO) to negotiate development-friendly trade
rules, and the financial burdens imposed on many African countries by
the International Monetary Fund (IMF) and The World Bank.
According to the report,
published at the midway point in the Millennium Development Goals (MDG)
process, the number of people living on less than one dollar a day has
barely changed over the past seven years, declining less than 5 per
cent to 41.1%. As much of a concern is the increasingly slow rate by
which the number of people living in extreme poverty is reducing.
In line with this disappointing
trend there has been little change in the number of children under five
who remain hungry and underweight; a mere four per cent decrease was
observed between 1990 and 2005. Over the same 15 year period, mortality
rates for children under five dropped by less than three per cent and
only an additional five per cent of the population have gained access
to basic sanitation, leaving 37% of people without this necessity. The
number of deaths from AIDS is also accelerating - a staggering two million
people in 2006.
The report also highlights
the impact of global warming which is already being felt throughout
the region. Recent examples include the intensification of droughts
and desertification in Kenya, the accelerated melting of ice field peaks
in Tanzania, and the increased flooding experienced in the Niger Delta.
The effect of climactic change in sub-Saharan Africa inevitably heightens
the scarcity of resources such as food and water, fuels conflict and
exacerbates poverty. For instance, only 42% of the rural population
presently have access to clean water but this, according to the Intergovernmental
Panel on Climate Change (IPCC), could soon include up to 250 million
Despite important yet limited
improvements in education, healthcare and agricultural productivity
in a few countries, the overall trends for poverty reduction, access
to clean water and basic healthcare are continuing to plummet. The G8
leaders concur in theory that nothing could be more important than preventing
the imminent deaths of millions of Africans who are being indirectly
denied the right to these essential resources. Yet as the failed Gleneagles
promises for increased aid to Africa demonstrate, global political priorities
and economic policy address poverty indirectly, if at all, focusing
instead on creating economic growth and a strong corporate sector.
G8 ministers managed to placate
many campaigners at the end of the 2006 Gleneagles Summit with inflated
promises for more aid. The conclusion of this year’s Heiligendam
summit, however, has once again united civil society in its condemnation
of the G8’s apparent self interest. According to the UN, the MDG
to half extreme poverty will only be achieved if the current pace of
aid donation is doubled. Not only is such commitment extremely unlikely,
but research also shows that economic growth and international aid will
never be sufficient to address poverty to any meaningful extent. The
Chronic Poverty Research Centre has calculated that even if the Millennium
Development Goal for poverty and hunger is achieved by 2015, 900 million
people will still be living on less than one dollar a day.
According to the IMF , Africa
is currently enjoying robust economic growth. It is also exporting more
food than ever before through world trade and corporate investment,
alongside an improvement in productivity. In light of the persistence
and prevalence of extreme poverty, however, the relationship between
these economic improvements and the provision of the most basic welfare
is intangible at best. Although it is undeniable that this equation
is complicated by biased international trade rules and the corruption
of both African governments and multinational corporations, it is also
clear that the neoliberal policies adopted by the IMF, World Banks and
WTO are incapable of addressing poverty in regions where it remains
A new strategy is long overdue
The data on poverty in Africa
strongly suggests that the internationalisation of market forces over
the past quarter century has kept Africa impoverished, whilst simultaneously
creating unimaginable wealth for a relative minority in the global north.
The ‘trickle-down effect’, which claims that financial returns
from commercial exports and growth will eventually benefit lower socio-economic
groups, seems to have been reduced to an ‘intermittent-drip effect’
in the case of Africa. This is unsurprising given that domestic production
is increasingly geared toward exporting cash crops to the international
market, a sector dominated by agribusiness giants. As a consequence
of this arrangement, which is in line with international free trade
rules for developing countries, local producers and economies loose
out as corporate profits are repatriated abroad or paid out in executive
salaries and shareholder dividends.
Any economist can confirm
that a market economy will increase inequality by disproportionately
rewarding those with greater economic, financial or political power.
Only government intervention to redistribute wealth can remedy this
basic flaw, yet redistributive mechanisms are absent both in the global
economy and in many African countries where economic adjustment is geared
to debt repayment and not welfare, courtesy of the IMF.
The good news about economic
growth rates in sub-Saharan Africa is further compromised by the fragility
of booming commodity prices. Being primarily an agricultural continent,
Africa relies on the export of a small number of commodities to create
the growth that can eventually finance welfare services. Not only is
this dependency on exports to global markets a risky way to underwrite
the social safety net, but it undermines the simple logic of prioritising
food security. Instead of securing food for African children, a third
of whom are underweight, the free trade regime redistributes domestic
food production to other parts of the world. Given the urgent needs
of the continent, such measures defy economic, social and moral sense.
Africa has, for the past
25 years, provided a clear demonstration of the dislocation between
economic growth and the provision of basic human needs. The case reveals
overwhelming evidence of the need for an alternative principle upon
which to organise the global economy, yet this fact continues to be
ignored by key policy makers in the US and EU.
Any significant shift in
international economic policy away from a purely market based system
will inevitably be difficult to implement given the political and financial
dominance of the G8 nations. However, a total lack of willingness to
even accept that there may be a more efficient way to organise resource
distribution is negligent in the extreme. This conservative view is
likely to be expounded by those who gain most from a competitive economy,
namely the strongest and fittest nations, their ministers and corporations.
For these vested interests, sharing the resources which they have ownership
or control over would simply mean diluting their strength, reducing
their profits and curtailing their economic growth.
The decision that humanity
as a whole must make is whether we are prepared to serve the needs of
the majority or perpetuate a system that perverts economic democracy
and dismisses any sense of common unity and morality.
is the Director of STWR and can be contacted via firstname.lastname@example.org
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