Wednesday, May 17, 2006
Thanks Cyrille for that blog on African development. It is one area I have always been interested in, specifically the international financial institutions and their effects on the world, especially Africa. They are the epitome of globalisation and how the West benefits most from this global phenomenon.
But I do find that the negative aspects of this topic are always prominent, and little is said about the successes which programs like structural adjustment policies have obtained. I’m also guilty of this subjectivity. And I must say these programmes have probably been more detrimental than anything else. But as with the implementation of any programme or initiative, the IMF (www.imf.org) experienced various degrees of success in Africa.
The IMF concluded that programmes like the HIPC Initiative (Highly Indebted Poor Countries) marked a major innovation in development finance and that the fundamental goal was to give a fresh start to the world’s poorest countries. The Initiative has resulted in increased spending on social sectors and pro-poor growth. I know this action is limited but it is better than nothing. I saw some stats that showed what has been done a couple of years ago.
- In 2002, Tanzania for example used the initial debt service savings to increase education spending and eliminate school fees for elementary school education. An estimated 1.6 million children have returned to school in Tanzania.
- Mozambique increased health spending by $13.9 million. Half a million children were vaccinated against tetanus, whooping cough and diphtheria, increasing coverage to 80 per cent in two years; $10 million has been spent on electrification of rural schools and hospitals and rehabilitation of infrastructure following the floods; $3.2 million is also being used to increased the number of girls attending school and scores of new primary schools are being build.
In many cases, governments have engaged with civil society in the development of their anti-poverty strategies. Although this new process can create problems, in principle it is making governments more accountable to their electorates, and giving local communities a voice.
One significant design improvement in structural adjustment programmes over the years is that it retains flexibility to review a country’s debt conditions assesses whether additional debt relief is required to cope with unexpected increases in the burden of debt. So in some instances the social aspects of countries have been addressed. The Operations Evaluation Department (OED) of the World Bank has proven that 40 % of the IMF and World Bank (www.worldbank.org) projects have been in collaboration with a more social dimension than before, and that this has been to the benefit of most of the programs.
But here I start with my subjectivity again. Let’s forget about all the good things these programmes have done for certain African countries. Let’s look at who the REAL beneficiaries are of these initiatives.
I find that most of these programmes perplex the illegitimacy of most of Africa’s debt. As such, it fundamentally undermines the strong imperative for debt cancellation. Many of the loans being repaid by African countries today were disbursed for strategic purposes, to pop up repressive and corrupt regimes during the Cold War. Thus, not only do these programs fail to acknowledge the illegitimacy of much of these debts, it actually sanctions the exploitation of indebted countries by rich creditor nations and institutions.
I read a quote the other day and forgive me for not remembering the name, but this person said that the windfall of the programmes goes to the same governments that racked up the debt in the first place, many of which are weak, corrupt and authoritarian - hardly the best intermediaries to carry out a philanthropic agenda.
The argument is not so much that development assistance, like loans, is inappropriate, but rather that the IMF is an inappropriate institution through which to give it. Thus there should be even more possible improvements in the African debt programs that may help the future of African countries look a bit brighter, and the IMF look more humane. Any suggestions?
P.S. A good read will be the book of the author Cyrille was referring to: Peet, R. 2003. The Unholy Trinity: The IMF, World Bank and WTO. Johannesburg: Wits University Press.
This book is for sale at www.kalahari.net. The specific address where the book is available is http://www.kalahari.net/bk/product.asp?toolbar=none&sku=26372457&format=detail.