By: Muhammad Shamsaddin Megalommatis
   [ Enlarge ]
The unrepresentative tyrants of Africa who attended the Copenhagen summit must have been an excellent token at the hands of the colonial powers, England and France, that control the US establishment and utilize it in a way to perpetuate their grip on the world’s nations, oppressed peoples, and natural resources.

Although initially siding with China, Brazil and South Africa, the diplomats of many African countries that are mere colonial fabrications became at the end the puppets of Africa’s worst enemies.

An example is offered here:

“After overcoming the African objections in Copenhagen, negotiators appointed pairs of ministers from poor and rich nations to seek solutions to the most contentious issues ahead of the summit.

Ghana and Britain would examine ways to raise billions of dollars in new funds to help the poor, Grenada and Spain would look at disputes about sharing out the burden of emissions cuts by 2020. Singapore and Norway would look at a possible levy on bunker fuels to help raise funds”. (http://propagandapress.wordpress.com/2009/12/14/african-nations-boycott-copenhagen-climate-change-charade/)

In fact, China failed to offer the African peoples a comprehensive interpretation of the climate change and the Chinese stance to environmental matters. Then, the African diplomats turned to their opium, the colonial capitals and diplomats. The reason is simple; China has penetrated the African continent economically but this has little impact on the African policy making because the latter hinges mostly on the complex educational, cultural and political developments that took place in the Black Continent when China was absent.

The African tyrants share the same fate with the African peoples whom they mostly oppress, tyrannize and endanger through a perplex system that China has not even studied. However, the African elites, formed in their outright majority at the colonial capitals, cannot dissociate their interests and their fates from those of their masters who through interference and involvement ensured their socioeconomic and political rise back home. By so doing, the African elites, ignorant of the colonial strategy with respect to Africa (which happens to be most detrimental to all the African nations), actively dissociate themselves from the destiny of the populations they rule, control and oppress.

China’s relationship with the West has been most troublesome as well, for at least the past 170 years, ever since the Opium Wars started. The present leadership of China is aware of the plans of the Western leaderships against Beijing, Moscow, and the rise of an Asiatic landmass alliance; Beijing has also correctly assessed the importance of Africa for the colonial powers.

More recently and more importantly, China actively opposed in Copenhagen the CO2 fallacy that has become the focus of the evil diplomacies of England, France and America. This is greatly significant for the African peoples who have not been taken into account by the schemers who are hidden behind the CO2 fallacy.

Certainly, Africa is the continent par excellence where the climate change can be more evidently attested. But there is no scholarly proof that the CO2 emissions are the principal reason for the devastating environmental collapse. In this regard, recent studies and reports made it clear that the reasons for which the colonial diplomacies support this fallacy are all due to new plans for another bubble in the world’s stock exchanges.

There is no doubt that the Western economies are at the brink of total disintegration and collapse. This is inevitable because of the paranoia that pushed the West’s economic elites to the formation a fake economic circle, namely the derivatives that have been launched in the 80s. For several centuries of capitalist economy, the stock exchanges used to reflect the real economy which evolved around production. The financial products launched in the 80s produced a bubble that exists antagonistically with the real economy, driving it to total dismantlement.

Following the economic contraction, the world’s economic elites put all their hopes for a new lucrative (for them) bubble on a trillion dollar carbon trading system that will use the ecological concerns and the misguided efforts for supposed environmental improvement in order to draw investors to carbon-related derivatives.

One can guess the disappointment of the world’s evil financial elites through many recent publications in the global mass media: http://www.globeinvestor.com/servlet/story/GAM.20091216.IBCREDITS16ART1924/GIStory/.

Carbon ? related derivatives: Ominous for all Africans

As a matter of fact, carbon-related derivatives is the main enemy of all the African nations. The fake financial products will be traded in Derivatives Exchanges allover the world to empower the world’s financers to further persecute the oppressed peoples allover the world and to effectively strengthen local dictators in Africa, Asia and Latin America. It will be the fresh cash that the gangsters of England, France and the pro-colonial, Freemasonic establishment of America simply do not have now!

The Copenhagen-related disappointment of the Canadian media is in this regard great: http://www.inews880.com/News/National/Article.aspx?id=169994. This constitutes a mere example. In fact, the need of the world’s financial elite for fresh cash (in trillions of fake money) is dramatic.

A few days ago, Prof. Michel Chossudovsky underscored the dangers ensuing from the institutionalization of such a trading system that will make the world’s poor poorer and the world’s rich richer. In his ‘Climate Change: What is the Hidden Agenda?’ (www.globalresearch.ca/index.php?context=va&aid=16514, December 12, 2009), he wrote:

“We bring to the attention of our readers, an archive of opinion, news, and analysis on the issue of Global Warming, which is currently being debated in Copenhagen under the auspices of the UN Framework Agreement on Climate Change.

The corporate media, in chorus, is calling upon public opinion to endorse the Global Warming consensus, which supports a multibillion dollar carbon trading system.

CO2 emissions are heralded in the editorial as the single and most important threat to the future of humanity.

The evidence that CO2 is the sole cause of Global Warming is questionable, as revealed by numerous scientific studies.

This archive on Climate Change published by Global Research brings together a vast body of critique, analysis and opinion regarding the Climate Change.

What is the hidden agenda behind the Copenhagen CO15 Summit?

The governments of NATO countries act on behalf of the interests of the financial establishment, the oil companies and the defense contractors. The Global Warming consensus is being used to justify a lucrative multibillion carbon trading scheme which seeks to enrich corporations and financial institutions to the detriment of the developing countries.

This carbon trading scheme does not serve the interests of social justice. Quite the opposite.

While we share the concerns of the environmentalists, there is no reason to uphold something which is untrue or questionable to reach stated environmental goals.

Reducing toxic manmade emissions, preserving biodiversity, protecting wildlife and preventing deforestation are objectives in their own right. The implementation of an environmental program geared explicitly towards reducing environmental contamination and pollution at the national and international levels requires neither the Global Warming Consensus, nor a profit driven carbon trading system”.

China

For China it is vital to put as many obstacles as possible to the new financial scheme. Carbon related derivatives will lead to a new wave of American consumerism, which will burden China with an even greater surplus in foreign currency. This does not necessarily mean that China will have the upper hand; on the contrary, the development would make China more dependent on the US. Full dependence of China on America is the Wall Street elite foremost dream.

Averting the trillion dollar carbon scheme is certainly not enough for China! Particularly in view of the ongoing travel of the U.S. Special Envoy to Sudan Scott Gration (http://www.africom.mil/getArticle.asp?art=3797&lang=0) to Khartoum and Juba, the increasing US interest in the Horn of Africa, and the anticipated US ? EU use of the political trickery “Islamic Extremism” in the years ahead, China should greatly reassess and adequately readjust its approach to Africa before Beijing finds itself confronted with the US tactics of faits accomplis.

Beijing must come to terms with the African realities and with the fact that never Chinese influence and penetration will be permanent in a country that has been a colonial fabrication. Meles Zenawi’s willingness to offer his capital city as the location of the AFRICOM headquarters is in this case indicative; for a moment he flirted with China, but then the racist Amhara – Tigray establishment of Abyssinia (fallaciously re-baptized ‘Ethiopia’) turned to Washington again.

It is urgent therefore for China to turn to the real forces of Africa, the tyrannized African nations who struggle for national independence, political freedom and cultural integrity, and not Africa’s colonially enslaved elites. Supporting liberation fronts and helping various African peoples shape independent countries is the only way for Beijing to outmaneuver the catastrophic work carried out by the colonial powers on African soil.

Ogaden

Ogaden is a first example. A sizeable territory (280000 km2) where 6 millions of Somalis have been engulfed, imprisoned and persecuted in all possible manners because of the ominous English colonialism that ended up in ulcerous anti-Somali racism and vicious political practices. In fact, the entire territory of Ogaden became a gift offered to the bloodthirsty and barbaric Amhara Abyssinian despot, Haile Selassie, because of his siding with England in the East Africa colonial game.

With rich soil, great natural resources, and a well educated Ogadeni Diaspora, an independent Ogaden Republic will be China’s key economic and political partner, and more importantly, it will be a partner deprived of tergiversations and hesitations. The brave people of Ogaden, the active Ogadeni Diaspora, and the Ogaden National Liberation Front (ONLF) are the key for China’s need for peace and national unity in Somalia.

China’s accurate understanding of the Asiatic landmass geopolitical games of England and America must help in shaping China’s new African policy. Afghanistan is a matter of concern for China’s national security. The US-led foreign armies in Afghanistan created a havoc after eight (8) years of inexplicably unending and truly speaking fake war against phantasms of extremism. What brought these armies there? This is known: September 11th. An event that more and more people allover the world refuse to take at face value and consider merely as a scheme of the US militaristic establishment.

Another September 11th may happen at any time. Those who expect it grow more numerous day by day. It can be possibly attributed to the Shabaab of Somalia who control the southern parts of Somalia, having got great help in terms of logistics from the US and their puppet, the tyrannical Kikuyu regime of Nairobi.

Another September 11th would be an excellent pretext for the US forces to occupy on permanent basis part of the geo-strategically very important territory of Somalia. Such a development would not only herald the beginning of the end of China’s penetration in Africa. It would also herald doubts about the possibility of China to effectively defend its national territory from nuclear attacks.

I will expand on this subject in several forthcoming articles but here I merely add two reports on recent demonstrations organized by the Ogadeni Diaspora in Copenhagen.

Members of the Danish Ogaden Community Demonstrate Outside the UN Climate Change Conference

Copenhagen, Denmark ? December 17. Protestors from Denmark’s Ogaden Community demonstrate outside the UN climate change conference on December 17, 2009 in Copenhagen, Denmark. The group were demonstrating against Ethiopian Prime Minister Meles Zenawi participating in the COP15 United Nations Climate Change Conference, claiming that he has one of the worst environmental records in the history of Ethiopia and that he has no respect for fundamental human rights.

Members of the European Ogaden Community Demonstrate Against Meles Zenawi

Dozens of Ogaden and Oromo communities in Europe demonstrated outside the UN climate change conference on December 17-18, 2009 in Copenhagen, Denmark. The group were demonstrating against Ethiopian Prime Minister Meles Zenawi participating in the COP15 United Nations Climate Change Conference. Meles Zenawi is one of the worst environmental records in the history of Ethiopia and that he has no respect for fundamental human rights.

Waving the Ogaden National flag, the protestors chanted Meles belongs at the Hague for trial at the International Criminal Court (ICC) instead of being honored as a spokesman for all African nations at the global conference this week. Members of the Ogaden community accused Meles Zenawi of committing genocide in the Ogaden.

Many African countries seek financial compensation for the continent in order to combat climate change. Recently, some African groups opposed a deal between Meles and European leaders.

The Ogaden people are fighting for self-determination. Extra-judicial killings, rape, disappearances, destruction of livelihood and the displacement of thousands of Ogaden people are the daily norm in Ogaden.

There is constant fighting between Ethiopian troops and ONLF forces in the Ogaden region. Human rights organizations accuse the Ethiopian soldiers of violating the human rights by harassing the people in the Ogaden region.

Note 1
Picture: Demonstrations of the Ogaden Diaspora
From: http://www.ogaden.com

Note 2
An audiovisual version of this article can be found here: http://www.youtube.com/watch?v=e5vDkuZIvBs

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What, no rainmakers in Copenhagen?

   [ By: Charles Onyango-Obbo ]
It has been heartening to see a once-demoralised Africa becoming increasingly assertive in international affairs in recent years.

A few weeks before the ongoing UN Climate Change Conference in Copenhagen, Africa threatened to walk out of the meeting if its demand for $300 billion eco-compensation was rejected by the industrialised world.

Africa is demanding compensation because, though it is the world’s smallest polluter, it suffers the greatest damage from climate change.

Africa may have gone to Copenhagen as the conference’s most self-righteous bloc, but it also has the world’s most contradictory practices where nature is concerned, and complicates campaigns to protect the environment in strange ways.

Generally, we seem to believe that environmental and climate problems can be fixed quickly.

If the rains stay away for a long time, you gather half a dozen white chickens and take them to the local rainmaker.

He will get a powder into which a tiger tooth and lion claws have allegedly been ground, climb to the top of a high hill, blow the powder in the air, flash his miracle-filled backside at the heavens, and frighten the sky into opening up.

If some mysterious insects eat all the village’s crops just before the harvest, the resident diviner shall be asked to investigate.

She will identify a family of “wizards” in the area whose dark arts have brought the pestilence.

In the night, the men will gather with clubs and machetes, attack the “wizards,” kill everyone and burn the house down.

And if a family wakes up one morning to find that all the cows in its kraal have died (after drinking from a poisoned well), in no time an elder will proclaim that it is the avenging ghost of an uncle who died with bitterness in his heart, which needs to be appeased to protect future herds.

This tendency to attribute environmental misfortunes to witchcraft and ghosts, and the existence of easily available superstitious solutions to deal with environmental calamities makes protection of the environment difficult, and good policy nearly impossible.

Thus many of the forests that are still fairly intact in several parts of Africa are safe probably not because our blood is green.

Rather it is because people believe that a dangerous serpent or angry ancestral spirits live in the forest, and if you cut down a tree your children will go mad.

Mau Forest

The effect of all this is that science is not a powerful argument where the environment is concerned.

Thus in Kenya, where the debate over the eviction of settlers from the environmentally critical Mau Forest has turned nasty, highly educated personages from the Rift Valley have stood up and argued that rain comes from the sky, and forests have absolutely nothing to do with it!

Second, long-term policy that seeks, for example, to restore water levels to a water mass like Lake Victoria, sound laughable in places where people believe a rainmaker can end a drought overnight.

There are exceptions like Rwanda, which has had remarkable success fixing environmental damage and with reforestation.

Perhaps it is because in the 1994 genocide in which nearly one million people were slaughtered, many a Rwandese learnt that there are no gods in the forests, or rivers that will fight your wars for you.

That ultimately, man is both his worst enemy — and only saviour.

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In America Dick FAT Morris Blogs: ” ….Dictators from Beijing to Africa are united in their demand for more “democracy” at the conference and are all deeply disturbed that Copenhagen may not turn out to be payday for which they had all hoped.” “Like anti-poverty storefronts in Harlem that change to drug rehab projects and then morph into stimulus programs, the less developed nations are now hanging out the climate change sign in the hopes of getting aid,” adds Dick Morris.

This is the same hypocrite and political prostitute who has traversed the world from east to west strategizing for “dictators.” For example Dick Morris helped out Raila Odinga of Kenya in his 2008 campaign against the dictatorship of Mwai Kibaki (see video below). An election which exploded into deadly violence.

Although I do not classify Odinga as a dictator, for he has never been president and has a sterling record fighting Kenyan dictatorships, I note here that Republicans have vilified and smeared Odinga and Obama as socialists and communists, and that Odinga plans to introduce SHARIA law in Kenya. Utter rubbish!

Therefore it is hypocritical for Dick Morris to call anyone a dictator; dictators who he has helped enable?

Morris is a twisted LIAR with Zero credibility, therefore his word cannot be trusted. He is always looking to score with lies, inflated figures and innuendo at NewsMax and with his racist goon-friends at Fox News — Sean Hannity and Bill O’Reilly of the O’GARBAGE FACTOR

From a Kenyan TV Station: November 13, 2007 – ODM Presidential candidate Raila Odinga has recruited “world renowned” political strategist Dick Morris to help shape his campaign. Mr Morris was former US president Bill Clinton’s election “campaign architect.”

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   Dr. Wolassa Kumo
1.Introduction

Rapid technological advances and globalisation coupled with the widespread use of the information and communication technology have extended the global reach of economic agents and countries. To fully benefit from these irreversible global mega trends, poorer countries such as those in Africa need to rapidly adjust their economies. Economic cooperation and integration are major instruments of adjustment.

Africa has been pursuing integration programmes for a very long time. From the 1960s to the present, many integration groupings have emerged and faded away. Examples of earlier groupings are the African Common Market comprising Algeria, Egypt, Ghana, Guinea, Mali and Morocco in 1962; the Equatorial Customs Union composed of Cameroon, Central African Republic, Chad, Congo and Gabon in 1962, which eventually led to the present Central African Economic and Monetary Community; and the former East African Community (EAC) comprising Kenya, Tanzania and Uganda in 1967, which until its demise, was the most developed of all the integration experiences in Africa. New groupings have since emerged, reflecting the continued belief by African countries in the virtue and importance of economic cooperation and integration [1].

The African Economic Community (AEC) was founded on June 3, 1991 through the Abuja Treaty which came into effect in May 1994 when it was ratified by a number of countries. Building on the existing Regional Economic Communities (RECs) and with commitment to establish new ones, where they do not exist, the AEC was envisioned to be created in six stages [1]:

a)   Creation of regional blocks in regions where such do not exist (to be completed in 1999)

b)   Strengthening of intra-REC integration and inter-REC harmonization (to be completed in 2007)

c)   Establishing of a free trade area and customs union in each regional bloc (to be completed in 2017)

d)   Establishing of a continent-wide customs union and thus also a free trade area (to be completed in 2019)

e)   Establishing of a continent-wide African Common Market or ACM (to be completed in 2023)

f)   Establishing of a continent-wide economic and monetary union (and thus also a currency union) and pan-African Parliament (to be completed in 2028)

The Treaty envisages further that all transition periods will end by 2034 at the latest with full fledged African economic and monetary union, and pan- African Parliament paving a way for the creation of the United States of Africa. Are the AEC goals achievable? African countries have set a number of grand goals including the Millennium Development Goals (MDGs) to halve poverty in the continent by 2015, which most of the countries are unlikely to achieve. Only 18 years are left to realize the goal of continent-wide economic and monetary union and 13 years to create the African Common Market (ACM). These are yet another set of ambitious and challenging goals for the continent. The remaining sections of this brief article assess the prospects, progress and challenges of the AEC endeavour.

2. Prospects

The justification for the creation of the AEC was the existence of a number of RECs. These include, the South African Development Community (SADC), Common Market for Eastern and Southern Africa (COMESA), Economic Community of Central African States (ECCAS), East African Community (EAC), Economic Community of West African States (ECOWAS), and the Arab Maghreb Union (AMU). These RECs are envisaged to form the foundation of the AEC. Two more RECs, the Community of Sahel-Saharan States (CEN-SAD) and Intergovernmental Authority on Development (IGAD) were formed in 1998 and 1996 by Sahel- Sahara States and North East African Countries respectively.

The Abuja Treaty also recommended the creation of an African Union (AU) and a Pan-African Parliament with the primary goal of facilitating the creation of the African Economic Community. The African Union was established on July 9, 2002 following further endorsement of the Abuja Treaty proposals on 9 September 1999 in Sirte, Libya, when the member states decided to form the African Union and Pan-African Parliament. On May 29, 2000 a detailed document on the creation of the African Union and the plan-African parliament was adopted in Libya[2].

The Pan-African Parliament was established in March 2004, by Article 17 of The Constitutive Act of the African Union, as one of the nine Organs provided for in the Treaty Establishing the African Economic Community signed in Abuja. The ultimate aim of the Pan-African Parliament is to evolve into an institution with full legislative powers, whose members are elected by universal adult suffrage which is envisaged to happen in 2034.

The creation of the AU and the pan African Parliament indicates the increased awareness by many African countries about the importance of economic cooperation and integration in the continent. These intuitions, if effective are indispensable for the realisation of the grand objective, the establishment of the African Common market and economic and monetary union.

While the progress in political commitment is encouraging, the actual economic cooperation and integration has been very slow. The following section highlights key progresses made and the challenges the continent faces in this regard.

3. Progress and challenges

Some progress has been made by RECs towards regional economic integration in the continent. The RECs have been observed to be most active in areas of trade and market integration. In all RECs, market and trade integration is being advanced through a series of
measures such as[1]:

a)   Removal of tariff barriers to intra-REC trade

b)   Removal of non-tariff barriers

c)   Development and enactment of common trade policies.

The effective implementation of these and other measures will lead in the long run to the achievement of zero tariffs for intra-REC trade and, conditional on convergence of RECs, a common external tariff for the continent.

The Constitutive Act of the African Union makes it clear that the primary goal of the Union is to establish an African Economic Community and assigns to RECs the primary responsibility for making that happen. An intermediate step in this effort is the transition of RECs into customs unions. Significant progress has been made on this issue. The East African Community (EAC) became a customs union on January 1, 2005 with the introduction of the EAC Customs Union Protocol. SADC hopes to establish a customs union by 2010. This will be a significant achievement for SADC, whose success will depend greatly on the compatibility of the planned customs union with the already existing Southern African Customs Union (SACU)[1].

COMESA planned to become a customs union in 2008 but failed to meet the target. ECOWAS is working to resolve a possible conflict with the already existing customs union in West Africa – the West African Economic and Monetary Union (WAEMU/UEMOA) – by adopting that Union’s tariff bands so that a customs union could be in place by 2008 which was not met [1].

According to [1] in addition to the existing tariff barriers, non-tariff barriers (NTBs) are a growing concern in Africa. Customs officials, police roadblocks and constant harassment by immigration officials hamper free trade. But these are not simply cases of extortion; they also reflect the slow implementation of regional integration agreements to remove tariff and non-tariff barriers to trade. If left unattended, these will negatively affect the benefits of greater market openness. NTBs have an extensive scope as they impede intraregional trade and serve the cause of protectionism.

Despite persistent efforts of trade liberalization by RECs, Africa’s trade within itself has been constantly poor compared with the internal trade of other regions such as Europe and Asia. According to WTO 2006 international trade statistics, intra-African trade as a percentage of total exports was only 9.8 per cent and 8.9 per cent in 2000 and 2005 respectively, compared with 72.7 per cent in 2001 and 73.2 percent in 2005 for Europe’s export trade, and 66.8 per cent and 66.7 per cent respectively,among the 25 countries of the European Union[1].

The main causes of the low Intra-African trade are a narrow production and manufacturing base and infrastructure inadequacies. Most African countries continue to trade in a narrow band of natural resource-based products. In some cases, one commodity accounts for over a third or even half of a country’s total merchandise exports. The corollary is a continued heavy dependence on imports from outside the continent, particularly in manufactured goods, to satisfy consumer demands in the subregional/regional markets[1].

Progress in the area of free movement of people remains modest, largely because unemployment remains very high in Africa and there are fears that such liberalization ill bring about asymmetric benefits.

Apart from these, physical integration remains poor in the continent. Enhanced physical integration is critical for economic integration. Trade infrastructure in much of Africa is in a very poor state and needs to be rehabilitated and upgraded, in order to improve trade on a cost-effective platform and maximize regional competitiveness. Three areas are critical: transport; information and telecommunications technology; energy and water are critical areas for integration[1].

Another challenge to RECs is an overlapping membership which has threatened to derail efforts at deeper economic integration. Membership overlaps exist among many RECs but more pronounced in SADC, COMESA and EAC. For instance, 8 of SADC members are also COMESA members while Angola is a SADC as well as ECCAS member and Tanzania is SADC and EAC member. An overlapping membership poses serious technical problems to these three RECs that plan to create customs unions, as a country cannot belong to more than one customs union [3].

A discussion was held between the three RECs in 2008 in Uganda to address some of these challenges and possibly agree on a framework that would allow for the creation of a grand FTA and customs union from Cape to Cairo which if successful, would merge as many as 26 African countries into a single trading zone, opening borders for literally half of the continent spanning the entire southern and eastern regions of Africa from South Africa to Egypt with a combined Gross Domestic Product (GDP) of US$625 billion and population of 527 million[3].

The AU also planned to create continent-wide financial institutions to promote continental economic integration. These included the proposal to establish:

a)   African Central Bank – Abuja, Nigeria

b)   African Investment Bank – Tripoli, Libya, and

c)   African Monetary Fund – Yaounde, Cameroon.

None of these institutions have been established yet except the recent finalization of the constitution of the Steering Committees working on their founding. These institutions were envisaged to serve as the foundation of the planned single African currency, the Afro.

4. Rhetoric vs. reality

There is no doubt that to fully participate in the global economics during this era of rapid technological change and globalization, African countries must urgently adjust their economies. The establishment of the AU and the pan African Parliament following the Abuja Treaty and the Sirte agreements are moves in the right direction.

However, the continent is unlikely to realise the primarily goals of economic integration with in the planned time frame, i.e. with in the coming 13 years. The performances of the existing RECs on which the success of AEC crucially depends are mediocre at best. Except the AEC, no REC has yet created a viable customs union to ensure greater trade integration. The overall intra-REC trade remains to be dismally low by any regional standard globally.

On top of these, non tariff barriers pose serious challenges for trade in Africa. The movement of people with the REC regions are seriously constrained by immigration bureaucracies worsened by rampant domestic unemployment and lack of common and accepted regional travel protocols.

Physical integration is very much limited. The development of transport infrastructure: road, railways, waterways are underdeveloped and non-integrated. To make matters worse, more than 15 African States are land locked and depend on their neighbours to export and import commodities.

The promised financial institutions crucial for the viability of the economic integration have not yet been established in the continent. The introduction of the envisioned common currency, Afro, depends of the existence of strong African central bank which has not yet been established.

In general, the continent is a long way to go to create the macroeconomic convergence crucially required for successful economic and monetary union.

Apart from these, the continent is still home for half of the world’s kelptocracies that are inimical to economic growth and development. Although the AU is a step in a right direction, it is a toothless tiger to enforce democratisation and ensure conflict resolution in the continent.

Given such facts on the ground, the current debate on the “United States of Africa” is rhetoric, far removed from reality.

References

[1] UNECA, 2008. Assessing Regional Integration in Africa 2008 — Towards Monetary and Financial Integration in Africa, ARIA III, Addis Ababa, Ethiopia.

[2] Manelisi, genge; Francis Kornegay and Stephen, Rule. 2000. Formation of the African Union, African Economic Community and Pan-African Parliament. African Union and Pan-African Parliament: Working Papers, October 2000.

[3] Munetsi Madakufamba. 2008. Africa: Economic Community Target Gets Fresh Impetus As RECs Convene Joint Summit. AllAfrica.com, 16 October 2008.

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   By: Dr. Wolassa Kumo
Introduction

Africa is the second largest continent in the World. Africa’s massive land mass of 30.3 million km2 makes it larger than the combination of China (9,6 million km²), the US (9,4 million km²), Western Europe (4,9 million km²), India (3,2 million km²), Argentina (2,8 million km²), and a number of other smaller countries. The continent consists of 54 countries with the population of over 900 million people.

However, sadly, Africa’s share in global wealth is insignificant. The combined GDP of the continent in 2007 was US$1.15 trillion (US $2.57 trillion based on Purchasing Power Parity (PPP)). This compares with the combined World GDP of US$65.6 trillion (PPP) and that of China US$6.99 trillion (PPP) in 2007. Africa’s share in world trade is also minimal. This has declined further since recently following the global economic down turn. Africa’s share in World trade fell to 3% in 2008.

Africa’s share in global wealth (GDP) is less than 4% while its share in global population is nearly 16%. Africa’s dismal economic performance has puzzled many analysts. Some emphasize historical factors such as slave trade, colonialism and its legacies, and geographical features as the root causes of Africa’s development disaster.

Others go beyond historical legacies and analyze the combination of geographic and demographic factors, technology, the role of state and the current challenges of globalization. There is no single root cause that fully explains the dismal economic performance of the continent particularly to the South of the Sahara with notable exception of South Africa.

This brief article is organized as follows: the next section presents an overview of some root causes of underdevelopment in Africa while the last section highlights opportunities for revival.

Root causes of African Underdevelopment

Different researches on the causes of African underdevelopment emphasis varieties of factors as the root causes of African underdevelopment. Among these the most important ones can be grouped into the following categories: (a) hostile natural environment, (b) archaic production technology, (c) demographic factors, (d) slave trade, (e) colonialism and its extractive institutions, and (f) political instability and predatory states.

a)   Hostile Natural Environment

Most of the African landmass lies within the tropical climate with no access to either the Atlantic or the Indian ocean. This made the vast areas of the interior continent home to malaria and tsetse fly which afflict humans and animals respectively. This made some researchers on the causes of African underdevelopment to test the hypothesis of malaria as the dominant cause of the underdevelopment in the continent.

In particular, Bhattacharya (2009) argues that malaria and other tropical diseases have fatal as well as debilitating effects on human population in Africa. It negatively affects productivity, savings, and investments in physical and human capital and directly affects economic performance of the continent.

Using statistical method Bhattacharyya (2009) emphasizes the relative importance of malaria in Africa’s underdevelopment. He finds statistically significant relationship between low economic development and prevalence of malaria in the continent. According to this author, malaria impacts African development by increasing both mortality and morbidity. Increased mortality induces households to increase current consumption and save less for the future. Increased morbidity on the other hand adversely affects productivity reducing household income and savings. This slows down capital accumulation and economic growth shedding some light on why malaria is so persistent in Africa.

He argues further that the high incidence of malaria in sub-Saharan Africa reduces the annual growth rate of the continent by 1.3 percentage points a year and eradication of malaria in the 1950s would have resulted into a doubling of per capita income (Bhattacharyya, 2009).

Although others doubt the link between malaria and economic development, a significant number of recent studies tend to support the malaria view both at the macro as well as micro level. It is an established fact that low mortality as a result of better health contributes to economic growth.

In addition to malaria the animal disease carrying tsetse fly, which is found all over the continent and can incapacitate draught animals, may itself explain the traditional low use of ploughs and other animal-drawn implements and hence the lower productivity of the agricultural sector.

b)   Archaic Production Technology

For centuries the African continent depended on archaic methods of agricultural production. Even the use of ploughs and other animal drawn implements were limited. The agricultural revolution and the use of iron tools came to sub-Saharan Africa later than to other parts of the world; indeed some have talked of a “1000-year lag” (Simensen, 2009). It is a fact that many African small holder farmers relied on wooden implements until as recently as the second half of the 20th century.

An important reason for the continent’s technological underdevelopment is the geographical obstacles to communication both internally and with the rest of the world. The Sahara has been a barrier in the north, and the Atlantic coast had no contact with the rest of the world until the first Europeans arrived around 1500. Influence from the Arab world and India came mainly via the Nile Valley and the East African coast, and had little spillover effect further inland. With the exception of the Niger and the Nile, the continent’s rivers with their large waterfalls have not provided a navigable route to the interior, in contrast to the rivers of Europe and Asia. The problems of today’s land-locked states illustrate the great importance of communication for economic and cultural development (Simensen , 2009).

c)   Demographic Factors

Africa’s demographic history has been characterized by low density of population and continuous migration and settlement of new areas. The continent with a massive land mass of over 30 million km2 has inhabitants less than that of India at present. Migration has continued right up to the present day, and there is still more migration on this continent — including migration between urban and rural areas — than anywhere else in the world (Simensen 2009). This continued migration may be due to a hostile geographical environment that debilitates the livelihoods of the population.

Except the early Kushitic and Egyptian, Niger River based and Aksumite civilizations, Africa lacked stable settlements with established social structures that could form the basis for enduring states and empires of the kind that have fostered advanced civilizations in other parts of the world.

However, at present the demographic picture of the continent is totally different. Rapidly growing population with limited demographic windows of opportunity has caused further strain on the development efforts and environmental sustainability in the continent. Rapid deforestation following population explosion has further aggravated the environmental problems. The rapid deforestation is fueling desertification with its negative impacts on agricultural production in many parts of sub Saharan Africa. Consequently, Africa is more food insecure today than the era of wooden agricultural implements.

d)   The Slave Trade

The slave trade theory is one of the dominant views on the historic root causes of the African underdevelopment. According to this view, Africa’s engagement in slave trade caused massive depopulation of the continent over two centuries. Inikori (1992) (in Bhattacharyya 2009) and Nunn (2008) are some of the key proponents of this view.

According to Inikori (1992), the result of engagement in slave trade was a significant slowdown in division of labour, demographic transition, human capital accumulation and long-run economic growth.

Depopulation also resulted into an implosion of the continent’s production possibility Frontier and an unambiguous reduction in welfare . The secular decline in welfare continued over more than two centuries plunging the continent into economic backwardness.

Furthermore, a Harvard economist, Nathan Nunn argues that the African countries with the biggest slave exports are by and large the countries with the lowest incomes now (based on per capita gross domestic product in 2000). That relationship, he contends, is no coincidence. One actually helped to cause the other.

Nunn (2008) reports a negative causal relationship between slave trade and current economic performance in Africa. He shows that slave trade prevented state development, encouraged ethnic fractionalisation and weakened legal institutions and through these channels it affected economic development.

Furthermore, Simensen (2009) argues that Africa’s integration into the world market following 1500 — during what he terms the “protoglobalisation era” — took on a perverted form when slaves became the dominant merchandise from around 1650. He further states that the cruelties of this trade have left deep scars in both the African and the European psyche. “The export of an estimated 12 million people across the Atlantic, and possibly a similar number to the Arab world in the course of a full millennium may have been a factor in Africa’s lower population growth compared with that of other continents. In economic terms, the slave trade tended to overshadow trade in other goods, and although it enabled certain strong kingdoms to increase their power, it was devastating for the groups affected by the kidnappings and conflicts that the trade entailed. In political terms, the rulers who controlled the trade on the African side were caught up in a particular form of dependence that had profound effects on African political culture” (Simensen 2009).

e)   The Colonial Extraction System

Colonialism in Africa took different form compared to Asia. Unlike in Asia, hostile tropical environment prevented colonizers from settling in Africa as a result of which they erected extractive institutions in these colonies. These colonial institutions have persisted over time and they continue to influence the economic performance of the colonies even long after independence.

Nunn (2007), using a stylised model for Africa, shows that colonial extraction when severe enough can cause a society to move from a high to low production level equilibrium. Due to the stability of low level equilibrium, a society can remain trapped in this equilibrium even after the period of colonial extraction is over.

However, many African as well nonAfrican scholars do not agree on the link between colonial extraction and the current underdevelopment in Africa. Ethiopia was never colonized but it is one of the least development countries in the continent while many Asian countries which have achieved development miracle since 1960s have been former European colonies.

However, there is one crucial link between colonialism and underdevelopment in Africa. This is the creation of a political map that is economically irrational and dysfunctional. According to Simensen (2009) Basil Davidson sums up this state of affairs in the title of one of his books: The Black Man’s Burden: Africa and the Curse of the Nation State.

Colonialism created artificial and non viable nation states that lacked legitimacy. This is the root cause of continued ethnic conflicts and civil wars that ravage the continent since the day of decolonization. Thus unless Africa does away with the current artificial colonial boundaries either through realignment of the current state boundaries wherever there are contestations or through more regional integration similar to the European model but not through hasty “United States of Africa” rhetoric, the continent will never achieve sustainable development.

f)   Political Instability and Predatory States

The post colonial Africa has been characterized by lack of political stability. This has deep historic roots. Africa’s participation in slave trade promoted strife and broke down political and social cohesion in the continent. There has been historic resentment by Africans whose tribes were victims of slave raids by stronger tribes during the centuries of slave trade. The ethnic diversity of the continent is extraordinary; linguists have identified around 900 separate language groups while today there are about 2000 known ethnic groups in the continent.

Colonial political boundaries lumped many of these ethnic and linguistic groups into few pseudo nation states. When these “nations” became independent nation-building proved practically difficult. National endeavours have been hampered by internal conflicts and civil wars, and at worst a form of anarchy, as seen in Democratic Republic of Congo. The forces behind these conflicts are often complex. But once the parties have resorted to violence, we see in Africa, just as in the Balkans and the Caucasus, that ethnicity overrides all other forms of loyalty with a ferocity that defies belief, but is easier to understand if we bear in mind the role that nationalism has played in European history (Simensen, 2009).

Not every ethnic tension in Africa is the making of colonial conspiracy, however. Post independence African politics was dominated by authoritarian regimes and kleptocracies. These rent seeking dictators often intentionally sow seeds of ethnic conflicts by deliberate political exclusion and marginalization of various ethnic groups that reside within the country.

Even after two decades of democratic reforms in the continent, today about 50% of authoritarian states in the world are found in Africa. About 24 out of 54 states in Africa are authoritarian regimes. Only Mauritius qualifies as a full democracy in the continent out of about 30 full democracies in the world while 6 more countries in the continent are flawed democracies.

Opportunities for Africa’s Revival

The wave of democratic reforms since the 1990s and the commodity price boom since 2001 lead many to believe that Africa could claim the 21st century. In fact, following the commodity boom African economy grew by over 5% on average for more than 6 years which was unprecedented in the history of the continent. Many argued that Africa needed about 7% annual average growth rate to achieve the Millennium Development Goals; but 5% was just as good.

However, this hope was dashed when the global economic downturn abruptly ended the commodity price boom in mid 2008. As a result, African economic growth plummeted to less than 3% in 2009. The recent revival in oil and other commodity prices and signs of global economic resilience are causes for optimism. However, reduced capital inflows coupled with widening budget deficits in many African countries are sure to delay any hope for faster recovery. Apart from this, the current revival in commodity prices may be short lived. Commodity prices may settle at much lower equilibrium levels even after the global economic recovery dashing further any hope for faster economic growth recovery in Africa.

In face of such reality, the only hope for Africa is to radically adjust its businesses in three key areas. First, Africa needs to institute transparent and accountable governance faster than ever. The prevalence of authoritarian regimes in the continent is seriously harming its image. This will scare the flow of FDI crucially needed to spur growth and development. The 24 authoritarian regimes in the continent should transform as a matter of urgency or perish.

Second, rapid investment in infrastructure. FDI will not come if there is no adequate road network, electricity or efficient telecommunication systems even if a country is near perfect democracy. One might ask where will the money come under current economic difficulties? That is a crucial question. However, there is no alternative. There must be adequate infrastructure if the continent is to revive from the current economic quagmire.

Finally, pursue export led growth strategy. Enough is enough with continued dependency on export of primary commodities. The current commodity price doom has proved to Africa that no matter how much wealth of natural resources the continent is endowed with, it will not be able to rely on export of primary commodity to achieve sustained economic revival. Manufactured export led growth strategy is the only way out of the current low level poverty trap in the continent.

References

•   Bhattacharyya, S. 2009. Root Causes of African Underdevelopment, Journal of African Economies.

•   Simensen J. Africa: the causes of under-development and the challenges of globalization. http://www.regjeringen.no/. Retrieved on August 9, 2009.

•   Nunn, N. (2007). Historical Legacies: A Model Linking Africa’s Past to its Current Underdevelopment, Journal of Development Economics, 83(1), 157-175.

•   Nunn, N. (2008). The Long-Term Effects of Africa’s Slave Trades, Quarterly Journal of Economics, 123(1), 139-176.

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Introduction

Developing countries faced catastrophic debt crisis in the 1980s following heavy borrowing after decolonization. Banks in the west freely lent money to newly independent developing countries often based on geopolitical concerns of the Cold War than financial prudence of the borrowers. The Cheap money that flooded financial markets in the 1970s was lent on to poor countries without regard for what it was spent on and whether it could be repaid. The ensuing global economic problems in the late 1970s with rising interest rates, deflation and falling commodity prices caught developing countries in a spiraling debt trap (UNIRIN, June 2009).

The Jubilee Debt Campaign also known as Jubilee 2000, a UK based charity concerned about unsustainable debt burden of poor counties in the world, is warning the global community that due to the current global credit crunch and economic down turn, poor developing counties are likely to face the second round of debt crisis reminiscent of the 1980s situation. The Jubilee Debt Campaign is calling for an immediate US$400 billion debt cancellation for developing counties to avoid a return to a 1980s-style crisis (UNIRIN, June 2009)

The Jubilee director, Nick Dearden, argues that debt cancellation would enable the World’s 100 poorest countries to fight poverty and relieve some of the devastating effects of the global recession on their economies. He states further that the US government’s bail-out of one insurance company, American International Group (AIG), could have wiped out the entire debt of all sub-Saharan Africa countries.

The 2009 Jubilee report warned that even before the effects of the global slowdown began to be felt, the World Bank had calculated that 38 of 43 indebted countries “required substantial debt cancellation” to meet the needs of their people (UNIRIN, June 2009).

The Jubilee 2000 campaign for a one-off cancellation of the unpayable debts of the poorest countries, under a fair and transparent process, began in 1996 and led to a commitment by developed countries to write off $100 billion of poor country debt. Although developed countries indicated their willingness to fully cancel such debts of poor countries in 2005 that never happened until today.

The Impact of Debt on Economic Growth and Development

There is ample evidence in economic literature regarding the negative impact of debt on growth and development of poor countries. Elbadawi et al. (1996) showed a debt overhang effect on economic growth using cross section regression for 99 developing counties spanning SSA, Latin America, Asia and Middle East. They identified three direct channels in which indebtedness in SSA works against growth: current debt inflows as a ratio of GDP (expected to stimulate growth), past debt accumulation (capturing debt overhang) and debt service ratio. They also discussed the fourth and an indirect channel that works through the impact of the above channels on public sector expenditures.

They found that debt accumulation deters growth while debt stocks spurs growth. Other similar studies found that there exists a debt overhang and crowding out effects on private and public investment respectively. In general, a number of economic studies confirmed the negative impact of debt on economic growth in developing countries.

The Developing Country Debt Trap

Estimates indicate that, today developing countries’ debt stocks stand at a staggering US$2.9 trillion, and every day the poorest countries pay the rich world almost US$100 million in debt repayments (UNIRIN, June 2009).

In Africa, by 2005, Nigeria, Africa’s largest oil exporter, had a US$30 billion debt from loans totaling only US$8 billion borrowed by the military regime in the 1970s. The Paris Club of a group of rich credit countries cancelled about US$18 billion of Nigeria’s debt leaving the balance of US$12 billion to be repaid by the democratic government. However, reports indicate that Nigeria had already paid over US$20 billion to Paris and London Club of creditors for the $8 billion loan it received in the 1970s with no further borrowing after 1992. Analysts describe this as the largest ever wealth transfer from poor to rich countries.

The Jubilee Charity criticized the British government, the largest creditor to Nigeria, for receiving debt payments from Nigeria in 2005 amounting Pound Sterling 1.7 billion. The entire repayment of over US$12 billion agreed among the Paris and London Club and the Nigerian government was to be received by the group of 7 industrialized countries (the G7).

The Charity stated that the payments meant that the G7 would receive more in six months from Nigeria than the 2005 Gleneagles G8 deal would provide to poor countries in a decade. Trisha Rogers, the then Jubilee’s director, said: “It is obscene for G7 countries to take billions of dollars from one of the poorest countries on earth. In particular this means the UK will take from Nigeria almost exactly twice as much as it is giving in aid to the whole of Africa in 2005.” She urged Britain, which chaired the G7, to take the lead in refusing to accept the payments (The Guardian, December 2005).

But the Jubilee Debt Campaign argued further that Nigeria is one of the world’s poorest countries – one in five children does not live to the age of five – and has already paid off $17bn of debt. The rest – consisting of penalties and interest – was run up by previous dictators. Regarding the use of the funds saved by debt relief, Jubilee stated that all proceeds from debt relief have been earmarked for poverty reduction and will be tracked through the World Bank-supported Virtual Poverty Fund (The Guardian, December 2005).

The key measure of the degree of debt trap is debt sustainability. The World Bank uses the ratio of a country’s export earnings to debt as an indicator of its debt sustainability. The threshold considered as sustainable by the Bank is a debt-to-export ratio of 150 percent. Most poor countries’ debt-export ratios are much higher than the threshold. For instance, in 2009 Zambia’s debt-export ratio is over 300 percent, double of the threshold indicating the severity of the country’s debt trap.

Debt Relief Under the HIPC Initiative

The Heavily Indebted Poor Countries (HIPC) Initiative is the first international response to provide comprehensive debt relief to the world’s poorest, most heavily indebted countries. The HIPC Initiative was launched by the World Bank and the IMF in 1996, and was further expanded in late 1998 (Enhanced HIPC Initiative)(www.Worldbank.org).

The HIPC Initiative is a comprehensive approach to debt reduction for heavily indebted poor countries pursuing IMF- and World Bank supported adjustment and reform programmes. According tom IMF, to date debt reduction packages have been approved for 35 countries, 29 of them in Africa, providing US$ 51 billion (in end 2007 net present value terms) in debt service relief over time (www.imf.org)

The HIPC Initiative was first launched in 1996 by the IMF and World Bank, with the aim of ensuring that no poor country faces a debt burden it cannot manage. The Initiative entails coordinated action by the international financial community, including multilateral organizations and governments, to reduce to sustainable levels the external debt burdens of the most heavily indebted poor countries. Following a comprehensive review in 1999, a number of modifications were approved to provide faster, deeper and broader debt relief and to strengthen the links between debt relief, poverty reduction, and social policies. In 2005, to help accelerate progress toward the United Nations Millennium Development Goals (MDGs), the HIPC Initiative was supplemented by the Multilateral Debt Relief Initiative (MDRI). The MDRI allows for 100 percent relief on eligible debts by three multilateral institutions?the IMF, the International Development Association (IDA) of the World Bank, and the African Development Fund (AfDF?for countries completing the HIPC Initiative process. In 2007, the Inter-American Development Bank (IaDB) also decided to provide additional (“beyond HIPC”) debt relief to the five HIPCs in the Western Hemisphere (www.imf.org)

To be considered for HIPC Initiative assistance, a country must: (1) be IDA-only and PRGF-eligible; (2) face an unsustainable debt burden, beyond traditionally available debt-relief mechanisms; (3) establish a track record of reform and sound policies through IMF- and IDA-supported programs; and (4) have developed a Poverty Reduction Strategy Paper (PRSP) through a broad-based participatory process (www.imf.org)

The IMF argues that for the 35 countries for which packages have already been approved, debt service paid, on average, has declined by about 2½ percent of GDP between 1999 and 2007. Their debt burden is expected to be reduced by about 90 percent after the full delivery of debt relief (including under the MDRI). Yet for debt reduction to have a tangible impact on poverty, the additional resources need to be targeted at the poor (www.imf.org).

Jubilee Warns HIPC is Woefully Inadequate

According to Jubilee Charity, although HIPC was reformed in 1999, after G8 countries came under pressure from campaigners, it is still failing the world’s poor. It is time to abandon HIPC, and ensure that there is 100% cancellation of all unjust and unpayable debts, without harmful conditions.

Jubilee argues further that HIPC is monitored and implemented by the World Bank and IMF. Although most other creditors – rich countries, regional development banks and some private creditors – are encouraged to take part not all do. Commercial creditors in particular often fail to deliver their share of debt cancellation under HIPC.

Another concern raised by Jubilee is the fact that HIPC is not open to poor countries (generally, those with annual income per head of $935 or less), that have debts that are more than one and a half times their annual export earnings (or, if they have lots of exports, more than two and a half times their government revenue), and that have a World Bank and IMF programme. In order to embark on the HIPC scheme, they have to have a “track record” with the IMF: that is, have done what the IMF says for at least three years! Then they have to comply with a large number of conditions in order to complete HIPC and get debts cancelled (www.jubileedebtcampaign.org.uk)

HIPC was heralded by rich governments as offering “an exit from unsustainable debt”. What this meant was a reduction in debt to a level deemed ’sustainable’ by the World Bank and IMF. That level – regardless of a country’s circumstances – was set as debt of one and a half times the value of export earnings. On entering HIPC, countries get some relief on debt payments, and on completing HIPC (which can take many years), they get cancellation of debt to this ’sustainable’ level. In 2005, thanks to an unprecedented level of campaigning on debt, this was extended. Under the MDRI, countries that complete HIPC now get cancellation of most debts to the IMF, African Development Fund and the World Bank. This is good news – but does not address the problems of HIPC conditions and structure, or the countries – and debts – left out (www.jubileedebtcampaign.org.uk).

Jubilee argues further that the conditions set out in ‘Decision Point document’ for completion of HIPC is self contradictory. While these conditions stipulate measures to target poverty, the compliance requirements to all kinds of economic policy conditions can undermine poverty reductions efforts. The latter requires countries to cut public spending, privatize basic services such as water and electricity, and liberalize trade.

These typical neoliberal policy prescriptions have not even benefited the rich countries themselves let alone poor countries struggling with lack of access to basic social and economic services and with limited access to the global commodity markets. The neoliberal policies (the Washington Consensus) is now believed to be the origin of the current global financial meltdown and the consequent global severe economic down turn commonly accepted today as Great Recession the world has ever seen. Surely, the use of the neoliberal policy prescriptions to cancel the debts of HIPC countries is unjust and hypocritical. At present, the neoliberal policies are dead. To resurrect the HIPC initiative the World Bank and IMF must devise new policies for debt cancellation. In line with the ideals of the Great Charity, Jubilee, the only option the World Bank and IMF have is to fully cancel the US$400 billion of debt owed by 100 poor countries worldwide all at once!

Apart from the neoliberal policy prescriptions the HIPC initiative is ineffective in many other respects. According to Jubilee 2000 HIPC takes too long: more than 10 years for 24 countries or so to benefit; HIPC offers far too little, what is needed is total cancellation of unplayable and unjust debt; HIPC is too limited, many more countries need and deserve debt cancellation, HIPC does not include all debts: debts are only partially cancelled and some countries, banks and companies refuse or fail to take part in the HIPC process at all, HIPC is entirely controlled by the creditors: they do not accept responsibility for their part in creating and maintaining the debt crisis or hear the voice of then poor countries.

Concluding Remarks

The current global financial crisis and economic downturn has severely curtailed the ability of poor developing countries to finance their debts. In most cases, these debts were amazed by the previous dictators whose primary objectives were not to spur growth and development but to misuse them. Likewise, the lenders, the rich nations in the west, showered these dictators with such loans not to ensure growth but primarily to secure their geopolitical influence over these countries during the Cold War. Today, the victims of such irresponsible borrowing and lending are hundreds of millions of poor citizens in over 100 poor developing countries who live on less than a dollar a day and have no access, in many cases, to a single meal a day. In particular, most of the 43 heavily indebted poor countries are currently unable to meet the basic needs of their peoples if their debts are not fully cancelled.

The HIPC initiative of the World Bank and IMF is a right policy measure but is utterly inadequate. Apart from being too slow, limited in scope and fully donor controlled, the strings attached to it, the neoliberal policy conditionalites, are more damaging to the poor countries than the promised debt cancellation.

The poor developing countries, in particular, the heavily indebted poor countries need an urgent debt-bailout, i.e. and immediate once off and full cancellation of unjust and unpayable debt. If industrialized countries in the west are willing and able to bail-out private corporations that have lost their assets primarily due to excessive greed and speculative activities, why can they not cancel the unjust and unpayable debts of the poorest countries in the world whose citizens are dying of hunger and malnutrition every single day? And what these countries need is not even a trillion dollar bail-out! The fund used to bail out a single US insurance giant, AIG, can wipe out the entire debt of sub Saharan Africa, where 80% of the heavily indebted poor countries reside!

References

•   UNIRIN, 1 June 2009. Africa: Jubilee Warns of Another 1980s Debt Crisis
http://allafrica.com/stories/200906010798.html

•   Elbadawi, et al. 1996. Debt Overhang and Economic Growth in Sub-Saharan Africa.

•   The Guardian, Monday 5 December 2005
http://www.guardian.co.uk/business/2005/dec/05

•   IMF, Debt Relief Under the Heavily Indebted Poor Countries (HIPC) Initiative
http://www.imf.org/external/np/exr/facts/hipc.htm

•   Jubilee debt campaign http://www.jubileedebtcampaign.org.uk/

•   World Bank, www.Worldbank.org

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