International Aid and Economy Still Failing Sub-Saharan Africa

A 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% 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 Africans.

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 priority.

A New Strategy is Long Overdue

The data on poverty in Africa strongly suggests that the internationalization 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 organize 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.

Rajesh Makwana is the Director of Share The World's Resources, based in London. He can be reached at: rajesh@sharing.org. Read other articles by Rajesh, or visit Rajesh's website.

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  1. Kim Petersen said on June 16th, 2007 at 4:34pm #

    Remarks delivered by Stephen Lewis, co-director of AIDS-Free World at the RESULTS Educational Fund annual conference, Washington, D.C., June 12, 2007
    Let me take a hard look at the issues arising from the G8.

    The G8 communiqué is deficient in so many ways: fundamentally, it’s intellectually dishonest and riddled with arithmetic sleight-of-hand. It’s hard to know where to begin, but let me at least take a crack in five areas.
    1. The text says: “A vigorous impetus seems necessary to ensure that Africa will meet the Millennium Development Goals.” I shudder at this piece of shameless dishonesty. They have no intention of providing such an impetus: without it, the G8 well knows that all the statistical evidence shows that Africa cannot reach the MDGs … that poverty and disease and conflict are too deeply ingrained to be reversed by 2015. Why go through this abysmal charade of words without meaning?
    2. The text says “Trade is a key engine of growth for Africa.” And except for some fatuous gobbledegook about how the G8 will help African exports, the trade section is empty of meaning. Contrast Germany with what was said at Gleneagles: “An ambitious and balanced conclusion to the DOHA round is the best way to make trade work for Africa. The Hong Kong Ministerial in December (2005) will be a critical step towards a successful outcome of DOHA in 2006. The World Bank estimates that implementing the negotiations could lift 140 million people out of poverty.”
    DOHA has totally disappeared from this year’s G8 communiqué. But the rub is that it should never have been in Gleneagles. The G8 knew in July of 2005 that DOHA was dead. But they were prepared to toy with the rhetoric of 140 million people to fatten their text. Where Africa is concerned, the G8 is a consortium of fabrication.
    3. After describing the carnage of the pandemic which, they point out, apart from the suffering is “causing massive impacts on the economic and social development of the countries concerned,” they make their infamous commitment of $60 billion “over the coming years.”
    Now what in heaven’s name is that supposed to mean? In the inelegant language of diplomacy gone wrong, those are called “weasel words.” They’re meant to convey everything and nothing. No group of counties, let alone countries with the manipulative sophistication of the G8, would use that language unless they were looking for a way out. Some commentators are working on the assumption that the language really means the same five years encompassed by the new PEPFAR initiative. I have a message for the trusting naiveté which that suggestion reveals: if they meant five years, they would have said five years.
    The promise of Gleneagles was an extra $25 billion a year by 2010, with increases every year thereafter, not $60 billion “over the coming years.” Worse, most of the $60 billion isn’t even new money: it encompasses the $30 billion just announced by George Bush, plus additional billions already announced by other G8 countries. To be sure, the original pledge for 2010 is again repeated, but we already know the worth of those words. According to UNAIDS, we’ll need $18 billion this year, $22 billion next year, $30 billion by 2010, with the dollar figures rising after that. The shortfall is astronomic. What in the world will happen to the millions of Africans, struggling with AIDS, for whom the resources are the difference between life and death, let alone the millions upon millions of orphans for whom any kind of life is compromised?
    Allow me a juxtaposition. According to all estimates, including those of the Congressional Research Service of the United States, enhanced by data from the other troop contributors, the G8 countries are spending at least $120 billion each year to fight the wars in Iraq and Afghanistan. The same countries can’t even guarantee a paltry total of $60 billion over an unknown number of years to fight a pandemic that has taken 25 million lives and has 40 million people in its grip. I keep asking, what has happened to the world’s moral anchor?
    4. All of this is crucial, of course, because what hangs in the balance is universal access to treatment by the year 2010. What is ominously instructive in this instance is to compare the language of 2005 with that of 2007.
    In Gleneagles, the text read: “Implement a package for HIV prevention, treatment and care, with the aim of as close as possible to universal access to treatment for all those who need it by 2010.” In Germany, the text reads “The G8 countries will scale up their efforts to contribute towards the goal of universal access by 2010.”
    Two years ago, we were getting “as close as possible” to universal access; now we’re “scaling up our efforts to contribute” to universal access. Language is everything. The current language is frighteningly ambiguous. And it’s not helped by throwing the figure of five million people into the text, when it has become clear, according to UNAIDS, that the numbers requiring treatment by 2010 will be significantly higher.
    It is simply unconscionable for the G8 to be so recklessly cavalier about human life. They have it within their grasp to guarantee full universal access by 2010; if they wanted it to happen, it would happen. They similarly have it within their capacity to guarantee every penny required by the Global Fund to Fight AIDS, Tuberculosis and Malaria, but instead they merely acknowledge the financial targets which the Global Fund has recently set.
    In a highly provocative fashion, the G8 is challenging all of us: we, collectively, have to find a way to force the G8’s hand, to pummel them into sanity. In the annals of social change, it’s rare that advocacy has confronted such an adversary.
    5. There remains, however, one other aspect of the communiqué that requires further elaboration. The text offers obligatory obeisance to the vulnerability of women. And the language is pointed and strong.
    But nowhere — and this is frankly astonishing — nowhere is there mention of the prospective international agency for women, actively under discussion at the United Nations, as a vehicle to make a significant dent on the pandemic. Why? In the final analysis, probably because it would cost money. The deliberate omission of the most significant initiative on behalf of women to emerge in the multilateral system … an initiative proposed with representation from five of the G8 countries, shows the pro forma quality of the paragraphs addressing the desperate dilemma of women and girls.
    And that reality lies at the heart of what we’re dealing with. For some inexplicable reason, the G8 is not prepared to provide the resources to subdue the pandemic in Africa. …

    For all of us, in this grand coalition of civil society, it’s necessary, I think, to take a much tougher road. And to choose our targets carefully. There is hope in the offing.

    You have people of tremendous experience to draw upon. You have all of the Millennium Development Goals to keep you on fire. You have millions of lives, hanging by a thread, begging for your intervention.
    The problem with the G8, it seems to me, is its congenital divorce from reality. We’re part of an era where human life is devalued. Just look at Iraq, just look at Darfur, just look at HIV/AIDS. The international community has lost its bearings. When that happens, the human dimension slides into obscurity. The grandmother who buries her children, the orphan who weeps through the night, the women scarred forever by sexual violence, they recede into the mists of statistical calculation. We dehumanize them, their faces blurred, their identities lost.
    It’s a terrible thing we do to the uprooted and disinherited of the earth. Together, we must bring it to an end.

  2. Max Fields said on June 18th, 2007 at 7:00pm #

    But we know the answers. We know that global corporate capitalism doesn’t work. We’ve empirically proven that time and again.

    So, what is the answer. Look to Cuba. There is a nation – and other Latin American nations are now coming around – that is an example of sustainability. This is not just an in vogue word. It is substantive. Intermediate technologies developed, owned and operated by the communities of Africa to meet African community needs. An economy which is driven to meet the basic needs of the people it serves FIRST. Surpluses can be exported. That is “ditch” the free trade agreements. Plant what you need. Understand water as used in the terrain of Sub-Saharan area.

    Afterall, what is a $1 a day? or $1,000 a day? The point is building communities. Do Sub-Saharan Africa nations need help? Probably. But not from the G8 and their institutions (and make no mistake the World Bank, the IMF, and WTO are G8 institutions).

    Hunger is about distribution. Food is plentiful. While Cuba can show the way, other developing nations such as India with its thousands of years of perfected farming can be a vanguard. We keep looking for intervention by the G8, the money and the goods to solve these problems. And it just never happens. It never will.

    Take health care. The US offers African nations the wonderous idea of franchised health care centers. The Cubans offer just in time medical service – a doctor and nurse at the ready on every corner (or however the population is laid out). While the US market driven innovation demands high performance and a profit, the Cuban system is completely dedicated to wellness (no “middle man” profit/greed paradigm ever enters into the picture). Who do you think produces the better outcomes?

    Mr. Rajesh Makwana, we (universal we) most certainly have the answers, we’re just looking in the wrong places.