Africa's endless desert of need

THE BALTIMORE SUN

It is a tale familiar to anyone who has lived in Africa. Someone is gainfully employed, bright, eager, ambitious, apparently ready to climb up capitalism's ladder.

But it never happens. This poster child for free enterprise remains stuck on the bottom rung. Behind the facade of success is a deep abyss of need. Will a similar fate sap the power of a $40 billion African debt relief program just agreed to by the G-8 nations? The plan will free up about $1.5 billion a year that 14 sub-Saharan countries could use to attack widespread social and economic problems.

"This is more than a superficial announcement," says Joseph Siegle, an associate director at Center for Institutional Reform and the Informal Sector (IRIS) at the University of Maryland. "A lot of effort and political energy went into it, especially from Britain. It removes one important obstacle to development and poverty alleviation in Africa."

It might be just the opening act. President Bush met with the heads of five African nations last week. The full G-8 summit in Edinburgh next month is expected to focus on Africa's needs, again pushed by Britain and spurred by hundreds of thousands of demonstrators demanding help for the continent.

Making the most of aid from the world's most developed nations is critically important for the 700 million residents of sub-Saharan Africa, which trails the world in virtually every standard of economic and social well-being.

But will the aid have real impact? Even the best-intentioned African governments and leaders too often seem analogous to this hard-working person who can't get off the bottom rung of the economic ladder.

The problem, it turns out, is that this person is the only one employed in an extended family of 20, 30, maybe 40 people. Strong family ties are reinforced by a tradition of responsibility.

The paycheck that is enough to save toward a house, a car and more education is instead paying school costs for a dozen children. It is committed to the expensive funeral of an elderly relative. It is needed by other kin simply to get by, day to day.

Like so many other Third World paychecks, instead of accumulating like water behind a dam - building up a concentration of capital needed to fuel economic growth - it disappears almost without a trace into the thirsty sands of a desert of need. Instead of creating wealth, it just recycles poverty.

Will that be the fate of this debt relief windfall?

For years, debt relief has been held out as a powerful elixir for Africa's ills. The money paid to service these debts goes from the poorest countries in the world to extraordinarily rich financial institutions. The money buys bankers' Mercedes Benzes instead of vaccine for children.

Industrialized countries send aid to African nations, which, in turn, send the money back to banks in those industrialized states. No wonder aid seemed to have little impact. And no wonder Africa-conscious celebrities such as Bono and Bob Geldolf have hammered on debt relief.

"By my calculations, using World Bank data, on average these countries were spending about 3.5 percent of the [gross domestic product] on debt service alone," Siegle says. "That is a pretty significant drain on resources that were very limited to begin with. It definitely puts a constraint on what they can do in terms of investing in health, agricultural and educational sectors of their societies."

The countries are paying back loans, so the argument goes, that should never have been made, money given to previous repressive "Big Man" regimes, often as a payout for loyalty during the Cold War; money that has long been squandered.

"This was a public debt, but it just created private wealth," says Siba N. Grovogui, a professor of political science at the Johns Hopkins University. "The idea that they are in debt does not make sense to a lot of people in Africa because they never saw the money they are supposed to have borrowed, yet they have to take the painful medicine because of it, things like devaluing the currency."

The legacy of these loans is to help sink the efforts of today's genuine reformers, burdening them with payments that crippled their efforts to help their countries. Debt relief frees them of that burden. It's a bit like someone who had, in an irresponsible youth, run up ruinous credit card debts declaring bankruptcy and starting over.

The question is, can these countries change their ways? The 14 countries - Benin, Burkina Faso, Ethiopia, Ghana, Madagascar, Mali, Mauritania, Mozambique, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia - were chosen because of their poverty and because they have made reforms.

Left off the list were clearly needy, but dysfunctional, nations such as Congo, Sudan and Angola, as well as the continent's most populous country, Nigeria, where even reformminded governments have failed to make a dent in corruption in a country where it has been raised to an art form.

But skeptics point to long histories of corruption on the continent; to figures that show how, in many countries, only pennies of each aid dollar make it to the ground, to build roads and schools and to pay teachers and health care workers.

"Debt relief means that the governments in these countries have the possibility of being able to spend more on things that alleviate poverty and provide social services and investment and so on," says Anthony Lanyi, a senior economist at IRIS who worked for the International Monetary Fund. "The only issue is, will they, in fact, do that? That's what we don't know."

Corruption is the giant fly in the debt relief ointment. "There is certainly the danger that this is just more money made available for leaders and their friends and family to put in their pockets," Lanyi says. "That's the story of the last 40 years."

Some corruption is on a massive scale that has depended upon bankers in the First World who were happy to take in the money that national leaders looted. But a lot of the corruption is the result of many sticky fingers taking bit by bit as the money moves through official pipelines, diminishing it to a trickle by the time it reaches the intended recipients.

It is enough to cause wellmeaning people, who have devoted years, decades, even careers, trying to alleviate the poverty of this continent, to throw up their hands in despair.

"It is true when people say that Africa is rich but Africans are poor," says Grovogui. "It is very true. Africa is a rich continent, full of resources. The reason Africans are poor changes over time, but it is always a combination of things - Africans themselves, obviously you cannot escape that, but also the international environment in which Africans live."

Grovogui's point is that, yes, Africans have often been their own worst enemies, but that they have often been aided and abetted by the rich countries. He points out that the mistakes of the Cold War - when the corruption of allies such as Mobutu Sese Seko of Zaire was ignored - could be repeated in the war on terror, which has led the United States to train armies in African countries.

He also notes that in one of the countries on the debt forgiveness list, Ethiopia, about 35 people were killed when police fired on a demonstration recently. In another, Mali, whose president was at the White House last week, 17 opposition leaders were arrested after demonstrations against rising food prices. Seven remain in custody.

"If you want to encourage the rule of law, what is that president doing in Washington?" Grovogui asks.

The rule of law is important to seeing that the debt forgiveness money is spent properly. As Siegle points out, democratic governance is one of the best antidotes to corruption.

"Corruption diminishes hand in hand with democratic governance," he says. "Countries that are implementing democratic reforms - and by that I mean more than having an election, but that have different checks and balances, that don't have these 'Big Man' systems - are in a much better position to do something with this windfall."

Siegle says that if there is a free press, opposition parties and other such democratic fundamentals in place, you have people watching what happens to the money, asking questions if it doesn't show up in the form of new roads and schools.

But what Grovogui and others note is that many of the decisions that determine the fate of Africans are not in their hands. Much of their economy is dependent on commodity prices that can fluctuate wildly on the international market.

Agricultural subsidies in the United States and Europe handicap Africa on that market. Some argue that if the Bush administration did away with politically popular subsidies to U.S. sugar and cotton producers, it would help Africa more than debt relief would.

Grovogui says that he could go through each of the 14 countries one by one and give a detailed accounting of the changes it needs - internal and external - to get on the track to economic growth. It is foolish, he says, to think of debt relief as a one-size-fits-all cure.

Siegle agrees: "I don't want to minimize the efforts of Bono and Tony Blair and the others who have campaigned for this change.

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