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[afro-nets] G8 cancels debt of the world's poorest countries (2)

G8 cancels debt of the world's poorest countries (2)

Please read BMJ article in conjunction with an article by George
Monbiot published on Tuesday June 14, 2005 in The Guardian, Lon-

"A truckload of nonsense - The G8 plan to save Africa comes with
conditions that make it little more than an extortion racket"

Sanjoy K. Nayak


The G8 plan to save Africa comes with conditions that make it
little more than an extortion racket

George Monbiot, Tuesday June 14, 2005 Guardian, London:,3858,5214948-103677,00.html

An aura of sanctity is descending upon the world's most powerful
men. On Saturday the finance ministers from seven of the G8 na-
tions (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 elimi-
nate "impediments to private investment, both domestic and for-

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 pow-
erful nations are justified in seeking to discourage it.

That's the theory. In truth, corruption has seldom been a bar-
rier 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 responsi-
ble 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 host-
ing the G8 summit, remains their main bilateral funder. It has
so far refused to make their withdrawal from the DRC a condi-
tionality 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 newspa-
pers to mean regimes that won't do what they're told.

Genuine corruption, on the other hand, is tolerated and even en-
couraged. Twenty-five countries have so far ratified the UN con-
vention 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 under-

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 pro-
gramme 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 conditionali-
ties. They do not stop at pretending to prevent corruption, but
intrude into every aspect of sovereign government. When the fi-
nance ministers say "good governance" and "eliminating impedi-
ments to private investment", what they mean is commercialisa-
tion, privatisation and the liberalisation of trade and capital
flows. And what this means is new opportunities for western

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 health-
care and primary education. The purpose appears to have been to
create new markets for private capital. School attendance, espe-
cially for girls, collapsed. So did health services, particu-
larly for the rural poor. To stave off a possible revolution,
Museveni reinstated free primary education in 1997 and free ba-
sic 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 con-
trol - 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

There is an obvious conflict of interest in this relationship.
The G8 governments claim they want to help poor countries de-
velop and compete successfully. But they have a powerful commer-
cial 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' state-
ment insists that the World Bank and IMF will monitor the in-
debted 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 redemp-
tion. 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 differ-
ent 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 un-

Guardian Unlimited © Guardian Newspapers Limited 2005

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