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Africa
at the G8 meeting
By
Jonathan
Power
TFF Associate
since 1991
Comments to JonatPower@aol.com
See
also Jonathan Power's "No need to denigrate Bob
Geldof"
July 7, 2005
LONDON - Prime Minister Tony Blair
is going to give the G8 summit the same kind of energy he
famously gave to the launching of the misconceived war
against Iraq. The question is will he be any more able to
hit the target accurately than he was in that case?
He has certainly prepared himself
better. Instead of relying on fast-written, poorly
researched, intelligence reports, he has spent over a
year studying Africa as the chairman of his Commission
for Africa. Along with mainly African commissioners he
presided over a first rate team of economists who came up
with well-informed drafts that not only were the most
perceptive observations of all the many reports on Africa
over the last two decades, but were well written to boot.
However, that is not enough. I still don't think Blair
gets it quite right.
Africa is not a basket case, as the
subtext of the report keeps suggesting. After a
disastrous period during the 1970s and 1980s a lot of
African countries are now doing reasonably well -
Senegal, Mali and Ghana have had steady 5% growth rates
for some years now. Mozambique, in the wake of a
murderous civil war, has not just secured its peace but
has regularly attained growth rates of between 7 and 9%.
Nigeria is also around 6%. Botswana with its growth rates
of near 10% - the world's fastest growing economy during
the 1990s - has shown what can be done by a country
over-dependent on one much desired export, in this case
diamonds.
Whilst the other oil and diamond
economies - Nigeria, Angola, Sierra Leone and the Congo -
ripped themselves apart in resource wars, Botswana has
ploughed ahead, using its revenues to diversify its
economy and to develop an impressive welfare and health
system. And then there is Tanzania and Madagascar turning
in a regular 6% annual growth each year.
All of these countries are not only
democracies, they have presidents committed to not
serving more than two terms in office. This, to me, seems
the litmus of success. Uganda may have done
extraordinarily well the last 19 years under Yoweri
Museveni but now that he has made it clear he wants a
third term, although it means re-writing the
constitution, the on-going political stability of the
country seems in doubt.
So what does Africa need to
continue to go forward? Blair says debt relief, a
doubling of aid and a better trade deal. The battle for
debt relief for the poorest countries has already been
won. Gordon Brown, the British Chancellor of the
Exchequer twisted the arms of the G7 finance ministers in
June to write off multilateral debt for the 18 of the
poorest countries. But maybe he has ruined their
commercial credit worthiness in the process.
As for aid, why the need to double
it? Is it meant for those who are not doing so well? That
would be self-defeating. If they can't match their
fast-growing peers it is because they are not on top of
their problems - they have spent too much energy and
sweat on wars. Or they have not got on top of their macro
economic priorities - reducing inflation, privatizating
money-losing state enterprises, raising the tax take,
limiting corruption and giving priority to
education.
And for those doing well? As I saw
recently in rapidly developing Tanzania and Uganda there
is only so much aid a country can usefully absorb.
Tanzania is receiving $1bn a year in aid and using most
of it rather well. Some more would be helpful in the
building up of infrastructure, such as new ports, roads
and airports but too much, too fast would lead to
bottlenecks, inflation and corruption. Tanzania doesn't
have the skilled manpower to support a growth rate of
more than 7% a year. What Tanzania needs, like all of
Africa, is more surety of aid - to make sure that
projects started are completed and then sustained, and
more private investment.
As for trade, the G8 are all over
the place, with Blair pushing a number of highly complex
initiatives. If Africa continues to depend on waiting for
the Doha round to bear fruit it will wait a long time, as
it bargains to limit Western crop subsidies in return for
lowering its own trade barriers. These negotiations are
labyrinthine, and will always be weighted, whatever the
outcome, in favor of the rich.
A better idea would be for Africa
to call the bluff of the West and demand an absolutely
level playing field in which both sides dismantle all
subsidies and tariffs, and quickly too. In Tanzania I saw
with my own eyes how African peasants, a growing number
armed with their cell phones, respond to the free market.
It is a challenge they can meet and prosper
with.
Copyright © 2005 By
JONATHAN POWER
See
also Jonathan Power's "No need to denigrate Bob
Geldof"
I can be reached by
phone +44 7785 351172 and e-mail: JonatPower@aol.com
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