Bush objects to UK Dept plan for africa

shotamoose

Quantum wrote:

SK didn't have billions poured into it and neither did the major economies...

I would like to write a nice long post pointing out why I think you're wrong in nearly every respect, but that will have to wait till tomorrow because it's half past midnight right now and I've got work in the morning. So for now, I'll just point out that on this score you are completely wrong. South Korea received vast amounts of aid during the 1950s and 1960s. Page 4 here says they got around $100 per person per year between 1955 and 1972. By comparison the figure for Sub-Saharan Africa today is about $30 per person per year.

So if you're going to use South Korea in an argument about aid, you have to use it as an example of how aid can be a roaring success. Not quite what you had in mind, was it?

Quantum

shotamoose wrote:

I would like to write a nice long post pointing out why I think you're wrong in nearly every respect, but that will have to wait till tomorrow because it's half past midnight right now and I've got work in the morning. So for now, I'll just point out that on this score you are completely wrong. South Korea received vast amounts of aid during the 1950s and 1960s. Page 4 here says they got around $100 per person per year between 1955 and 1972. By comparison the figure for Sub-Saharan Africa today is about $30 per person per year.

So if you're going to use South Korea in an argument about aid, you have to use it as an example of how aid can be a roaring success. Not quite what you had in mind, was it?

Interesting. I stand corrected if this is so. Tell us more ..?

bonkey

Quantum wrote:

On the subject of evidence I stated what I think of it above

Yes, I know you've stated that position before - the one that says "evidence can be produced to suit both sides, so its not really definitive". I've absolutely no problem with that. What I have an issue with is you taking that stance coupled with the frequent dismissal/refutation of points on the grounds that their proponents have produced no evidence.



Evidence either is, or is not, relevant. You can't have it both ways - denigrating the arguments of others because they're not producing evidence, and then dismissing it when it is produced, not with coutner-evidence, but just with the insistence that such counter-evidence surely exists.

The issue of Africa is not one that can be sorted in a school yard competition of how many you can line up against how many I can line up, and implying that it can is disingenuous.

I'm not suggesting that it can at all. I'm suggesting that posters should hold themselves to no lower a standard than what they demand from others. You keep dismissing points on a lack of evidence, but steadfastly refuse to produce any of your own on the gruonds that evidence doesn't really prove anything.

I have seen the policies that have been tried for decades

You still haven't explained how aid took the form of loans. How did these countries dig themselves into massive debt from us giving them money? The only way its possible is if there were no predonditions laid on the aid, and the lending institutions were happy to give the money - both issues which have been dealt with in the proposed new approach.

and they have singularly NOT worked. I don't need an economist to demostrate that fact.

No, you don't. Nor does one need an economist to see that the IMF's policies haven't worked either, but you seem to put faith in them on the grounds that "well, of course its not perfect", whereas the proposed aid - which is structurally a completely different beast to what has been tried over the last few decades - gets dismissed on the grounds of "it hasn't worked, so it can't work".

I don't believe those conditions can work. They cannot be enforced. These regimes will be able to refinance one way or another and the end result will be a huge delivery of cash aid to these corrupt countries with no change resulting.

Can you explain how investment is any different? It too is dependant on the same type of conditions which are designed to limit (and ultimately remove) the threat from corruption. If the conditions are unworkable, then the solution is irrelevant, as corruption will remain inevitable.

I don't care what the conditions are. I believe that they cannot be enforced, they cannot be implemented

Didn't you mean to add "except as precursors to an investment-based solution" to that sentence?

No, and now you're just being silly. I never said that.

...

I said I don't believe that Africa 'needs' 100% access to the EU and US markets in order to succeed.

You didn't say "Economic freedom and trade freedom should be demanded." ?

I wasn't aware that trade freedom meant "protectionist as wanted". Its especially difficult to understand that you meant "protectionist as wanted" when you even earlier had stated that "Their markets were never opened up. The IMF wasn't heeded properly or they wouldn't be in the mess they are in".

Now, given the standard IMF policies were to open their markets to everyone, especially to US and EU investment, I'm at a loss as to how it was clear that you didn't think we should open our markets to them.

If you don't agree with me fine - but please try to be fair to what it is I actually say ?

Quantum, I'm not choosing the bits of your argument which are self-consistent because they're not the bits I have the biggest issue with.

At least it beats the proven failure of pumping billions more into corrupt dictatorial regimes over a period of many decades that has left Africa in the hell hole that it occupied. Some 'scheme' that is.

Indeed.

Thankfully, no-ones suggesting it as the solution to the problem, no matter how many times you choose to describe the proposed plans as "more of the same".



How was it you put it...If you don't agree with me fine - but please try to be fair to what it is I actually say ?

.



Yes, that was it.



jc

DadaKopf

dermo88 wrote:

Europeans know how the place can be run, we developed it over 100 years.

You mean like the Belgians, who deliberately (under)developed the Congo only to a point necessary to exploit its mineral wealth, murdering 15,000,000 Congolese in the first 30 years of occupation. When they left, the country and the people were broken. But Belgium didn't really leave - Belgian businesses made sure to dominate the Congolese economy in co-operation with America. Then the CIA murdered their outspoken president, Patrice Lumumba, and the West installed the murderous Mobutu Sese Seko.

That's just one grim example of a pattern that repeated itself throughout Africa.

Quantum wrote:

SK didn't have billions poured into it and neither did the major economies...

To back up Shotamoose's point:

A 1996 United Nations Conference on Trade and Development (UNCTAD) report described South Korea as "the outstanding example of an ‘emerging donor’ with the potential for making a significant contribution to official development assistance." The report went on to note that since independence in 1945 South Korea had received aid grants totalling $4.8 billion and that "(It) is a country that has successfully broken out of aid dependence."

Little more than a year later, South Korea is in virtual receivership, having agreed to a $57 billion rescue package assembled by the IMF – an amount more than ten times the total official development assistance given to South Korea in the previous forty years. Ironically, membership of the OECD forced financial and other deregulation which were contributing factors to the financial meltdown, by increasing inflows of foreign finance and putting pressure on locally produced goods from less expensive and better quality imports. (Source)

To put all this another way: Marshall plan aid to Europe between 1948-1952 amounted to around $85 billion in today's money. So it amounted to $75 per capita between those years, whereas, as shotamoose says, per capita aid to Africa comes to around $26 per capita.

Europe benefited from Marshall aid because Europe required rebuilding, not building from scratch - despite the destruction, Europe still possessed the human capital and institutions necessary to drive growth. In addition to this, and driving this point, by the time Europe received Marshall aid, its economy was already recovering, with investor confidence restored.

Africa, on the other hand, is stuck with a low savings-low investment-low productivity gap. Since private investors are unlikely to inject money into the continent - because of financial instability, transaction costs, AIDS, malaria and other diseases (including lack of safe drinking water), conflict - the money is going to have to come from somewhere. In the past, aid was considered a form of investment gap filling, and after 20 years of failed neoliberal policies, this view is coming back.

Ultimately, what this chronic underinvestment means is African governments are unable to provide education, health care and capital overhead and the creation of human capital necessary for development, which Europe and South Korea had the funds to create in abundance. Looking back to the causes of South Korean and Taiwanese growth, it was massive amounts of aid to fill investment gaps, state provision of capital overhead, selective protectionism, ignoring IMF and World Bank strictures, investment in education, state-led championing of key industries, and the role of Japan who protected the region from the IMF and US Treasury bearing down on them which contributed to their economic success. Overall, this was the result of a model of development based on "a close working relationship between the private sector and the state, with the latter in a commanding role" (from link above). Going on this evidence, if you look at the role of education and health in development in Africa, you'll find that the IMF and World Bank are insisting on the privatisation and liberalisation of health and education - the Bank calls this "empowerment through cost recovery" and forms part of the good governance agenda. Maybe this is OK for a developed country, but for people who can't even afford fertiliser or even cheaper nitrogen-fixing shrubs to increase their crop yields (the bottom line of savings and investment), how are they to pay for education and health?

Not surprisingly, Ireland's 'partnership model is informed by the success of the Asian Tigers - though it's not remotely as deep - and, whoa, we've ignored IMF recommendations, too. But we could save enough to invest in education and health.

It's chronic lack of funds for development which actually fuels corruption as a way of life across much of Africa - in addition to foreign companies which feed it - and there's a two-way relationship between corruption and poverty. The role of foreign business in the perpetuation of corruption cannot be ignored; how can states fight corruption, as Tanzania is through it's National Anti-Corruption Strategy, if it hasn't the funds to fight it?

Quantum

bonkey wrote:

I'm not suggesting that it can at all. I'm suggesting that posters should hold themselves to no lower a standard than what they demand from others. You keep dismissing points on a lack of evidence, but steadfastly refuse to produce any of your own on the gruonds that evidence doesn't really prove anything.

Ok ok ok ok ok....point take... :rolleyes:

You still haven't explained how aid took the form of loans. How did these countries dig themselves into massive debt from us giving them money? The only way its possible is if there were no predonditions laid on the aid, and the lending institutions were happy to give the money - both issues which have been dealt with in the proposed new approach.

To my knowledge billions were lent to different dictators and one party nations at different times to fund military equipment and infrastructure over the decades and were linked to reform and market reform. But these were ignored and obfuscated repeatedly. When further funding became an issue the outcry against stopping further funding was such that the whole cycle was repeated as a vicious circle because of the whole Aid mentality.

No, you don't. Nor does one need an economist to see that the IMF's policies haven't worked either,

Lebelling the IMF as a failure can only be done in the light of what it's aims and objectives were - which were purely financial. It was never relaly intended to reform nations, only economies. I don't buy into theblame the IMF principle when the blame lay on the countries that got into the hole and refused to refom to get out of it. However I am not an expert on the IMF and cannot tackle specific issues as an expert. These are my opinions based on my memory of the cases as they arose over the years.

Can you explain how investment is any different?

Because investment comes AFTER reform. After corruption is dealt with and a democratic and legal structure is introduced.

Didn't you mean to add "except as precursors to an investment-based solution" to that sentence?

No. Investment comes after.

I wasn't aware that trade freedom meant "protectionist as wanted". Its especially difficult to understand that you meant "protectionist as wanted" when you even earlier had stated that "Their markets were never opened up. The IMF wasn't heeded properly or they wouldn't be in the mess they are in".

To my knowledge the rules of the IMF were always negotiable and there was always opportunities for special cases for special sectors just as the US and EU have their own special sectors, regrettably. The problem was that in most cases they never approached a serious level of openness and reform would be abandoned before success had a chance.

Now, given the standard IMF policies were to open their markets to everyone, especially to US and EU investment, I'm at a loss as to how it was clear that you didn't think we should open our markets to them.

I have repeatedly said I support opening our markets more. What I said was that I don't perosnally think that a 100% opening up is an absolute condition for them to succeed in rescuing their economies.

Thankfully, no-ones suggesting it as the solution to the problem, no matter how many times you choose to describe the proposed plans as "more of the same".

It may not 'look' the same - but I am of the opinion that the effect will be the same. That is the core principle of my opinion.
Both of us - ALL of us want Africa to succeed. It's about how it is going to be achieved.

shotamoose

bonkey wrote:

The article reads a bit funny. They talk about debt cancellation, and increased aid, and that the the debt plans should be financed in part by selling gold reserves held by the International Monetary Fund.

I'm at a loss as to why you'd need to sell a lot of gold to cancel debt.

If I've got this right, it's not debt cancellation but debt relief that's being proposed. In effect, paying the costs for "Highly Indebted Poor Countries" of servicing their debts to the IMF, World Bank, and the African Development Bank, until 2015. So it's not all or even most poor countries, it's not all debts, and it's not debt cancellation (Again, I might be wrong, but this is what I think is being proposed). But it would still be a step forward.

Also, they're not his mountains of gold, no matter how much he might like them to be. They're the IMFs, and I would assume provide it with the fiscal surity it needs to do its job, independant of the ever-changing fiscal surity of the nations who originally set it up and contributed.

The argument seems to be that the IMF can easily afford to sell or revalue some of its gold reserves, and that it wouldn't have a significant effect on its financial operations or on international gold markets. In a report written for the Irish Debt and Development Coalition, Sony Kapoor said

The IMF holds the largest official reserves of gold in the world after the United States and Germany. These are held at a significant discount to the market price and have a latent additional value of about $34 billion at current price levels. The IMF has no real use for this gold and it is not used in the general day to day operations of the Fund. Moreover gold constitutes only about 2% of the IMF’s total available resources.

There is also a significant opportunity cost to holding gold in its present form. Our calculations show that by holding gold the IMF has lost about $30 billion in potential revenue since 1979-80 when fund staff first suggested that the gold be sold.

By combining the uncommitted principal from gold revaluations carried out in 1999-2000 with the revenues from gold sales, the Fund could generate up to $37 billion of additional resources.

Full report is available here if you like that kind of thing.

Catsmokinpot

lads i have to admit i have a limited economic and political knowledge but, the way i see it...... we have raped and pillaged an under developed and defenceless world. we took it all over, took all their resources and split, we gave them debts that just keep on growing. we let these dictators like mugabe get in to power. we let countries like Burma, sudan, south africa eritrea congo go down the toilet

and then we worry about "freeing" the iraqi people by bombing the **** out of them, occupying their land, they weren't starving, weren't half as bad off as the saudis or the burmese or the africans and they didn't have any weapons of mass destruction which america and england kept insisting on.

now bonkey i understand what you meant. but upon further inspection i see that the american plan seems to be to lend them more money which i totally don't understand, the imf gold surplus seems the better option and cancelling third world debt would be an even better one

so far the american government has been wrong about most everything they've said iraq didn't have any WMD the war with iraq isn't over, the region is now more unstable than ever because of american influence in the area. he can hardly look after his own people. and now we're to trust bush's opposition to cancelling third world debt so he can lend them more money??

you know what that idea is like... its like a daytime tele advert for ocean finance they'll give you money even though they know you might have trouble paying it back, and if you fall behind we got ur house!! and if their already behind whats the point in keeping them there

when we do have a chance to make a real difference we object because it means things might not be so perfect for the rest of us we might have to suffer just a little

then some of us have the neck to talk about democracy being the saviour???? what about burma whos democratically elected leader of their country is kept under house arrest by a dictatorship who continues to drive the country and its people in to the ground, and america who says that democracy is the best thing since sliced bread doesn't give a monkeys

why don't we attack the saudis? they have their hands in our pockets and most of them were in those 911 planes

why don't we free the burmese? cause they don't have anything we cant get somewhere else

and why don't we help the africans? cause were making too much money off the interest

i know nothing is ever that simple and you cant change the world with the click of ur fingers but what you can do is get up off ur arse and focus on the real problems and take responsibility for what we have helped create and we did help create this problem

how will cancelling third world debt doom the third world to another century of poverty?????? it doesn't make sense if someone owes less money how are they worse off, these dictatorships would still exist without the crippling debts this im sure is true but, im sure the debt doesn't make it any better for these people. democratic nations seem to find it upon themselves to "help" these countries out by ripping out one dictator, sending in another, give them aid when it all goes wrong, oh by the way you have to pay us back! even though before these dictators came in we enslaved u, ruined your country and divided ur people.....

democracy is when the people rise up themselves and take charge of their own lives its not to be handed to them most of these people aren't ready for democracy if they were they

shotamoose

Quantum wrote:

Debt cancellation is a nonsensical and doomed suggestion for Africa and will condemn the people of Africa to another century of poverty and hunger.

That's quite a claim, considering Africa has already endured several centuries of poverty and hunger without any help from debt cancellation.

There is no point pouring this kind of money into African States that are thoroughly corrupt and in which the money will only end up in the bloated coffers of their rulers.

Debt cancellation is not "pouring money into" Africa. Rather it is stopping (or lessening, really) the flood of money out of Africa. Opponents of aid like to quote Peter Bauer's remark that aid is just "taking money from poor people in rich countries and giving it to rich people in poor countries". Funny how they don't have a problem with debt repayments basically taking money from poor people in poor countries (through taxes) and giving it to rich people in rich countries.

And the hoops poor countries have to jump through to get their debts cancelled include setting out detailed plans for how they'll spend the saved money on nice things like health and education. And this is exactly what has happened - countries which used to spend more on repaying old debts than they did on education now spend twice as much on eduacation as on debt, for example. There's more examples of how countries who have had debt relief have spent it on badly needed health, education and transport infrastructure on page five here

There is no point in cancelling debts when all they will do is borrow more money and spend it on the elite dictatorships and on more and more arms.

Agreed, but that's not what has happened with the debt so far so there's no reason to believe it will happen if we cancel more.

There is no point in cancellation of debts when what Africa needs is trade, more trade and yet more trade.

It's not an either/or choice. African countries actually have (limited) preferential access to EU markets, but can't take advantage of these trade opportunities because their people are dying of hunger and preventable diseases, are uneducated because their school systems are totally inadequate, because the 'Green Revolution' that transformed Asian agriculture bypassed Africa as it wasn't profitable to research there, and - very importantly - because the transport links with ports and through those ports to the rest of the world are terrible. All of these can be addressed with money from aid and debt relief. If you want Africa to profit through trade, you should support the provision of all the human capital, services and infrastructure that we take for granted but which underpins our competitiveness.

Of course, in other ways our (the rich countries) trade policies hurt Africa - through dumping huge quantities of subsidised cotton onto the market for example, and by putting up high tariffs against some of their goods. That should change, but this doesn't mean that debt relief isn't also a good idea.

Mycroft has already pointed out the sheer insanity of condeming corrupt dictators and then demanding that the countries who have managed to get rid of them should have to pay back their debts, so I wasn't going to go into that until I saw this:

That's the way it goes. Same in the West. You borrow money - you pay it back.

The point is that they didn't borrow it, their old oppressors borrowed it. States are not people. It would be like, oh I don't know, demanding that the new Iraqi government pay of the tens of billions in debt racked up by Saddam Hussein. Now, the US thought that would be totally unacceptable, but see no problem in blocking similar debt relief for countries who in all honesty need it a hell of a lot more.

dermo88 wrote:

Africa is a bottomless pit economically as long as it has the current bunch of undisciplined sociopaths in charge. Name a well run African country. I doubt it exists.

You think today's rich countries were all well run when they were developing? Hardly. Since good government is expensive and poverty breeds corruption, poor countries will always tend to be relatively badly run. That said, for poor countries Ghana, Senegal and Mali are relatively well governed - and certainly have much less corruption than Asian countries that are growing much faster, such as Bangladesh and Indonesia. So corruption, while it is a problem, is not the only one, or even, I would say, the main one.

Even South Africa under apartheid was well run. Its the wealthiest country in Africa. Why, you may ask.

A temperate climate, good sea links with the rest of the world and vast gold and diamond reserves certainly didn't hurt.

Quantum wrote:

The world trade organisation creates a flat playing field, the US and EU don't dump goods to any significant extent and Africa is as free as the US and EU to establish the same protections.

None of this is true.

The WTO does not create a flat playing field, since the sanctions poor or small countries can impose if they are wronged are insignificant to rich countries, but the sanctions rich countries can impose can devastate a poor country. Political power in the WTO depends on economic power.

The US and EU do dump goods to a significant extent, as is common knowledge. I've already given the example of cotton. There's also sugar, dairy products and more.

Wrong when he blames the west for Africa's problems instead of demanding that Africa get their own house in order.

Geldof has repeatedly, strenuously demanded that Africa get its own house in order. He has also demanded that we do more to help Africa, especially those countries that have got their house in order. The two are not mutually exclusive. Africa's problems are not simple, and neither are the solutions.

just because one or two countries in Africa are making progress doesn't mean we should continue to pour billions in aid to them.

So we should cut off aid and debt relief just as some countries are starting to get on their feet? Do you realise what that would mean? Hospitals shut down, children sent home from school for good, roads and rails crumbling, mass unemployment. Is that what you want? I hope you don't think this would be the signal for the private sector to jump in and start spreading capitalist plenty everywhere - because when the IMF imposed structural adjustment programmes in the 1980s that slashed public spending in all the above areas, there was no private sector renaissance. Things just got worse. We in the rich world are slowly starting to learn the lesson of that period now.

Unfortunately if they had heeded the IMF earlier they would have made progress earlier.

You're just talking bollocks now. No reasonably-sized country which has followed the kind of policies the IMF imposed on Africa in the 1980s and 1990s has succesfully developed (you could argue Hong Kong and Singapore, but they're not really countries as such). South Korea is probably the greatest developmental miracle in history, and you're saying they would have done it faster if they'd implemented the policies which Africa dutifully adopted only to experience no benefits whatsoever? Pull the other one.

Wrong. Their markets were never opened up.

No, you're wrong. There was deep and wide trade liberalisation in Africa in the 1980s and 1990s as a result of IMF programmes.

Aid destroys investment.

No it doesn't. This paper from World Bank researchers finds "solid evidence for a positive average contribution of aid to investment for the typical developing country".

Africa on the whole has almost no economy. Productivity is irrelevant at their stage of development.

That just doesn't make any sense. Please, if you're going to make such grand sweeping statements about something, at least try and ensure that they're potentially true. You're the one who wants them to trade more - if they're totally unproductive, how exactly is that meant to work? Why would anybody invest in a country where the workers are unproductive because they're too uneducated, too disconnected from the rest of the world, too lacking in communications or power equipment or too dead?

I notice you're not actually putting forward any evidence to support any of this. Well, please start.

Quantum

It's hard to reply to your post as you mix my quotes with others without attributing who posted what....

shotamoose wrote:

That's quite a claim, considering Africa has already endured several centuries of poverty and hunger without any help from debt cancellation.

Yes it is. But as I opined, I believe that debt cancellation will effectively be the same as pouring in more money, and the end result will be the same.

Debt cancellation is not "pouring money into" Africa. Rather it is stopping (or lessening, really) the flood of money out of Africa.

Sorry - but I believe that is will be EXACTLY the same, in effect. Their indebtedness will be wiped and they will be free to borrow more from countries and institutions that don't take part in the debt cancellation process and normal international institutions.

There's more examples of how countries who have had debt relief have spent it on badly needed health, education and transport infrastructure on page five here

Not very impressive examples in my view. Benin is hardly typical of most African countries and the key element in it's success has been the rigorous tackling of corruption and strengthening of democratic structures. However corruption is still rife according to the UN and though some improvements in education and health issues have been achieved there is little evidence that the country has made any progress toward losing it's dependence on Aid. Your referenced document provides no evidence whatsoever that such a program has moved any of the countries toward such independence. So the cycle goes on.

Agreed, but that's not what has happened with the debt so far so there's no reason to believe it will happen if we cancel more.

I don't agree for the reasons I stated above.

It's not an either/or choice. African countries actually have (limited) preferential access to EU markets, but can't take advantage of these trade opportunities because their people are dying of hunger and preventable diseases, are uneducated because their school systems are totally inadequate, because the 'Green Revolution' that transformed Asian agriculture bypassed Africa as it wasn't profitable to research there, and - very importantly - because the transport links with ports and through those ports to the rest of the world are terrible.

Although these problems are contributory they are not the major reasons imho. I suggest to you that the major reasons are that the billions in aid that has been poured into these countries for decades has been stolen by corrupt regomes and pocketed. There is no way to force these countries not to do the same again. There is no mechanism to force them and I believe the same will happen again.
As I have said previously I personally believe that what Africa has to do is to wipe out corruption, establish democratic structures and a pan African economic zone. That mixed with improved access to World markets as part of the WTO is the only way to end the cycle of Aid dependency, poverty and death.

All of these can be addressed with money from aid and debt relief. If you want Africa to profit through trade, you should support the provision of all the human capital, services and infrastructure that we take for granted but which underpins our competitiveness.

I do - but this Debt cancellation will not achieve it in my opinion. It looks wonderful on paper and in theory. But it is unenforcable and will only result in the same thing continuing for another century in my opinion.

The point is that they didn't borrow it, their old oppressors borrowed it. States are not people. It would be like, oh I don't know, demanding that the new Iraqi government pay of the tens of billions in debt racked up by Saddam Hussein.

They do and should. Your suggestion is unacceptable imho. We cannot have Russia and all of Eastern Europe defaulting on their debt because of a change in regime. I don't believe in that kind of system.

Since good government is expensive and poverty breeds corruption, poor countries will always tend to be relatively badly run.

I don't accept this. Good government is enormously cheaper than corrupt government which siphons off the wealth of countries in billions.

The WTO does not create a flat playing field, since the sanctions poor or small countries can impose if they are wronged are insignificant to rich countries, but the sanctions rich countries can impose can devastate a poor country. Political power in the WTO depends on economic power.

I don't agree. Firstly a flat playing field is not the same as equal capability. Also a pan African economic zone would create a significant zone of power, economically. Also the only reason rich countries sanctions damage these African countries is because they are not even trading with their fellow African countries ! This is the reason why an African economic zone and accelerated trade within that zone as well as improved access to the EU and US is the ay to go.

The US and EU do dump goods to a significant extent, as is common knowledge.

Yes they subsidise these products and I don't agree with it, but they don't dump the product directly into the poor countries - they just lower the selling price across the board. This is a different, if equally damaging, thing. It should end - but it is not the big issue that it is made out to be. Afric is free to block or add tarrifs to these products and would have the strength to do so in a trade accelerated situation.

Geldof has repeatedly, strenuously demanded that Africa get its own house in order. He has also demanded that we do more to help Africa, especially those countries that have got their house in order. The two are not mutually exclusive. Africa's problems are not simple, and neither are the solutions.

Yes but there is NO INCENTIVE for Africa to do this ! this is the point ! These crazy corrupt countries know that the Aid will continue, the money will continue and the next round of aid, disguised as debt cancellation, is on it's way. Hence no change.

So we should cut off aid and debt relief just as some countries are starting to get on their feet? Do you realise what that would mean? Hospitals shut down, children sent home from school for good, roads and rails crumbling, mass unemployment. Is that what you want?

No. Although I have used the words 'end' to aid I don't realy mean that I guess... I mean that we should cut back drastically on simple unconditional aid that cannot be proven to go straight to the people, and at the same time follow the trade strategy.

I hope you don't think this would be the signal for the private sector to jump in and start spreading capitalist plenty everywhere - because when the IMF imposed structural adjustment programmes in the 1980s that slashed public spending in all the above areas, there was no private sector renaissance. Things just got worse. We in the rich world are slowly starting to learn the lesson of that period now.

I am not interested in the IMF. I never suggested the IMF should get involved. Yes these countries need democracy and capitalism in the sense that we in Ireland and UK have capitalism. This is the only solution to their situation, not the repeatedly failed socialist model. They need competition, privatisation, investment locally and from abroad and trade within and without Africa.
No it doesn't. This paper from World Bank researchers finds "solid evidence for a positive average contribution of aid to investment for the typical developing country".[/QUOTE]I don't see it there. Firstly the aid has to be targeted and efficiently spent - something the majority of African countries are unwilling and incapable to doing due to their corrupt and dictatorial regimes and there is no way of enforcing it. Secondly aid aimed at providing produce, food, consumables destroys the market and hence the whole reason for investment.

That just doesn't make any sense. Please, if you're going to make such grand sweeping statements about something, at least try and ensure that they're potentially true. You're the one who wants them to trade more - if they're totally unproductive, how exactly is that meant to work? Why would anybody invest in a country where the workers are unproductive because they're too uneducated, too disconnected from the rest of the world, too lacking in communications or power equipment or too dead?

What I meant was that industry and economic activity is so low that dicussing productivity is irrelavant. However wages and costs are incredibly low and the potential for harnessing the people of Africa is enormous in my view. Education is the biggest stumbling block however and this is a situation that could be tackled through foreign involvement. The potential is there for Africa to become the new China in ten of fifteen years time in my view.

I notice you're not actually putting forward any evidence to support any of this. Well, please start.

Firstly the last fifty years of failure is the clearest evidence against the debt cancellation in my view. Secondly it is your proposal - it is your project of debt cancellation that needs to have supporting evidence that it will work, and there is no evidence that I can see. Not that I am asking for evidence ! (note to Bonkey ) because these are enormous issues that simply cannot be 'proven' or strengthened with statistics or 'evidence'. If it were, then previous attempts would have worked, and they haven't.

Quantum

I think this is a great thread but am disappointed that the same argument keeps going round and round at this stage.

I would like to have had discussions exploring the subject that there is no way of enforcing the debt cancellation, and the issues of doing away with corruption and non democratic regimes. This is an area of this whole project (the saving of Africa) that is being ignored in this debt cancellation, and I find this bizarre. It is proposed to spend tens, maybe hundreds of billions of what in the end will be tax payers money on countries with often despotic and corrupt regimes yet there is no interest in giving these people freedom from these regimes and freedom from the massive corruption.

bonkey

Quantum wrote:

I would like to have had discussions exploring the subject that there is no way of enforcing the debt cancellation, and the issues of doing away with corruption and non democratic regimes.

Whatever about the latter, I'm pretty certain you'll find that the preconditions attached to eligibility will automatically preclude nations who are not making a clear effort to redeem themselves (excepting regimes who the donor nations are friendly with, perhaps, but there's not much can be done there either way).

While I'm critical of many IMF implementations, it is noteable that they generally have a staggered implementation, with successive (or continuing) support being dependant on milestones being reached. What has failed has been the milestones chosen, which have led to problems of their own, rather than corruption being the overriding reason for failure.

I mention this, because given where the money is coming from, its almost inconceivable that this plan won't involve the nations signing up to an IMF recovery plan through which the funding is made available. Hopefully one where the lessons of the past have been learned, but there have been signs of change apparently.

Nations are typically required to develop a plan in conjunction with those doing the "rescue", and that plan is then monitored. The system is fundamentally sound, but thats unfortunately not enough. If - for example - a sell-off of assets is a required part, it should not be (but unfortunately often has been) carried out before the government is required to - and has - put the structures and institutions in place to ensure that it can be properly conducted and subsequently regulated.

The underlying concept is to free up cash in limited chunks, allowing the nation to follow a structured plan of expenditure. Evidence of significant corruption of the process should be (and I believe generally is, although I can't speak of the execution of it) sufficient grounds to call a halt to subsequent steps.

The biggest risk is, of course, that too much money is made available to individual nations in too short a time. Whether we like it or not, there is a finite speed with which progress can be in any way safely sponsored and its almost always frustratingly slow.

In this regard, I believe there may be additional scope for some of the funding to be managed by independant international bodies, but I'd have to think long and hard as to where that could be meaningfully accomplished without bringing unacceptable risks with it.

I'm no fan of the IMF to date, but ultimately, if they can learn from their lessons of the past, this plan has serious potential.

jc

DadaKopf

Quantum wrote:

I would like to have had discussions exploring the subject that there is no way of enforcing the debt cancellation

I'll be back in a jiffy! You've entered the wonderful world of conditionality. You can read this in the meantime.

bonkey wrote:

I'm no fan of the IMF to date, but ultimately, if they can learn from their lessons of the past, this plan has serious potential.

I think one of the problems is that the plan depends on the IMF - this has always been the way. The Bank and individual donor countries usually only disburse aid to developing countries after IMF approval. The link above shows how little the IMF and and Bank have learned about conditionality. They know old school, coercive conditions simply don't work (from their perspective, although S Korea and Taiwan developed because they didn't heed IMF advice, unlike Venezuela), but despite a change in language towards talk of 'Partnership' and 'selectivity', and changing from economic goals achieved towards developmental policies undertaken, their basic mechanisms of coercion have remained unchanged.

Evidently, the IMF hasn't learned anything.

Quantum

Yes Bonkey - I keep on hearing about conditions... and plans and monitoring... and it all sounds so fine... so logical ... so reasonable.

But when some of these despots start breaking the rules what will happen then ? When they start borrowing from Russia or Saudi or Singapore or the phillipines or China ? or other rogue banks and nations ? What then ?
What will happen when these countries start keeping two sets of books and inspections by the lenders turn out to be derisory and paltry ? and the money starts to leak away into swiss bankaccounts and tanks and F16s ?
Look at the millions donated to the tsunami effort ? where is it ? It's clearly not gone to the people who need it ... ! Where is it exactly ? does anyone know ?

And in the meantime what efforts are being made to push these countries toward democracy and freedom and wipe out corruption ? so that they can actually take advantage of this money ?

red-rover

Quantum wrote:

Yes Bonkey - I keep on hearing about conditions... and plans and monitoring... and it all sounds so fine... so logical ... so reasonable.


Look at the millions donated to the tsunami effort ? where is it ? It's clearly not gone to the people who need it ... ! Where is it exactly ? does anyone know ?

isnt that what the tentatively established IFF is for? at least in theory it should offer a more coherent distributor of resources and aid and be given more power and moral authority to extract the aid that had been promised. its almost like a "we couldnt do it for the Tsunami but will try to do it for africa" solution. however if this thing gets as wound up with the states and ideologes as the IMF and WTO and WB became then its all samey samey. however if it can maintain some independence and show that it can operate effectively then it might have a chance of working.

Quantum wrote:

But when some of these despots start breaking the rules what will happen then ?
And in the meantime what efforts are being made to push these countries toward democracy and freedom and wipe out corruption ? so that they can actually take advantage of this money ?

when they break the rules they get a seat on the UN High Council for Human Rights :rolleyes: .
operations to spread democracy and thus rationalise a haze of tribal territories and warlords empires will make it harder for western corporations to extract african mineral wealth at a fraction of the cost and a fraction of the transparency. Guardian report on Africa 2005
democracy will come as a result of mobilisation of public opinion here and there. it is not in the immediate interests of many governments to support pro-democracy movements in Africa especially considering its high proportion of Radical muslims in some areas.

---

Red Rover.....the blog

bonkey

Quantum wrote:

But when some of these despots start breaking the rules what will happen then ?

I've already argued that :

1) The despot-ruled nations will most probably be excluded from the outset
and
2) The purpose of "staggering" aid and monitoring against signs of corruption, and what to do when corruption raises its head

As a result, I'm unsure what you're asking. I'm certain that you're not asking me to repeat myself, but you're asking nothing more than what I've already answered from what I can see.

When they start borrowing from Russia or Saudi or Singapore or the phillipines or China ?

I wasn't aware that these nations had established international banking traditions with a habit of lending to nations with a proven inability to pay. In fact, its the first I've heard of that.

I guess that if they are in the business of loaning bankrupt nations money, then thats their perogative. I can imagine it would be somewhat counter-productive to the courtship of western economics that they're so tied into right now, but I'm sure you can explain to me why the Chinese (or whoever) would fall over themselves to loan monies to nations who have proven beynod a shadow of a doubt that they cannot repay a cent more than they already owe.

or other rogue banks and nations ?

Have I blundered into a Tom Clancy novel or something? What on earth is a rogue bank?

As for rogue nations...if you can point to any rogue nation which is in the business of international finance at all, I'd be well impressed, let alone showing that they - like the Chinese et al - are in the business of lending their own "hard-earned" cash to bankrupt nations ruled - as you arge yourself - by corrupt leaders.

What will happen when these countries start keeping two sets of books

Such a comment hints at a lack of understanding of the process thats already established, as well as the level of accessability that the IMF et al have to the financial affairs of signed-on nations.

and inspections by the lenders turn out to be derisory and paltry ?

If we are not going to monitor our investment/aid correctly, then that is our problem, not theirs.

and the money starts to leak away into swiss bankaccounts and tanks and F16s ?

Ah yes. I can see it now. "Hello Mr American Government. I represent that bankrupt nation that you're digging out of a hole, and we've, ummm, found a few million that weren't on the books you have access to, and we'd like to order some of your fighter planes".

Again - we have the ability to monitor this.

Look at the millions donated to the tsunami effort ? where is it ?

I'm not sure I recall ever suggesting that the tsunami monies were ever well-managed. If anything, I would have said that over the years, I've established that - as a general rule - I have a very low opinion of the knee-jerk, short-term reactions of the developed world to major events, and would propose a more careful, studied, structured approach.

Blair has done his homework. He's thought out his plan. He hasn't woken up one morning and said "Holy Crap....we need to save Africa. and it needs to be done by the end of the week, if not sooner, and there's nothing really in place to enable this. Quick...what can we do". That is basically what happened with the tsunami relief though.

And in the meantime what efforts are being made to push these countries toward democracy and freedom and wipe out corruption ?

Well, you know those IMF details that you've previously expressed such disinterest in? You know they partially answer this? And the link that Dada posted also contains information on this point as well.

I'll wait until you've offered a critique of what aspects of what they're currently doing (or is proposed in Dada's link) is wrong before I go into any further detail, if you don't mind.

I mean, if you just want to take the "blanket" approach (again) of classifying the entire thing as "we've been trying for decades, and its failed, so none of it works", then there's no point in me offering detail, is there. If, on the other hand, you'd care to discuss specifically what has and has not been tried, has and has not already been proposed and presented to you here, ....well, I'll wait until you head down that road before writing a more detailed answer to your question.

In the meantime...

The fundamental problem is the cost of good government. Sure, we can glibly say that the cost of corrupt government is higher, but those costs aren't comparable. A corrupt government can make money by starving its people to death, denying them education, healthcare, and other basic human rights. It can exploit its people and its resources to its own gain. A non-corrupt government does not have access to these revenue streams, but still must be funded somehow, or it will fail.

It costs money to put in place and maintain standards and structures to fight corruption, but where will this money come from? The nations themselves don't have it, and you're suggesting we don't help them get it until after they've found it, spent it, and used it to deal with their problems. But where will it come from????

The whole point of debt-relief is to enable these countries to free up money to finance good government, as well as the basic underpinnings of a functioning society - healthcare, education, etc. - which are necessary for development.

jc

Quantum

Where to begin... and I hope that none of my response comes across as the least bit patronising....;)

Are you telling me that African nations don't owe billions to Russia and maybe even North Korea and China and Iran who supplied arms to them over the last forty years ? I haven't any URL's but I recall many instances of them supplying arms. And you ask me about lending to countries with a proven record of not repaying.... yet this is exactly what has been done for decades !

It is disappointing that none of the solutions you refer to to tackle any countries that start reborrowing and/or stealing the money are very convicing. They seem to add up to basically being turfed out of the scheme. Which is basically no solution whatsoever. Why would any of these regimes care ? Do you honestly think that once they are turfed out of the scheme they won't continue to receive aid the same as they did before ? Because they will - none of the developed nations have ever shown any tendency to cut off aid to these countries when they are shown pictures of dying children on the TV.

You say 'we have the ability to monitor this" .... we do ? How ? How can we possibly monitor this when most of the countries are dictator or one party ruled and they have total control over what any 'inspector' sees ? And when we find that millions have been siphoned off what then ? there appears to be no sanction. Yet you then say " If we are not going to monitor our investment/aid correctly, then that is our problem, not theirs." Which is exactly MY point.

You also say that 'despot-ruled' nations won't be included. Great. But when you take those together with despotic one party states out of the equation, what exactly is left ? how many countries would quality ? it must be a less than a handful.
My use of the term roqgue bank was meant to refer to banks that don't want to toe the line set out by the international agreement on debt cancellation. I would have thought it obvious.

Then you mock my query about what happens when "money starts to leak away into swiss bankaccounts and tanks and F16s ?" Are you really serious ? Never mind a Tom Clancy novel.... what about Alice in Wonderland ... There is a long long line of African rulers who have salted away billions of their country's money in Swiss bank accounts over the last fifty years. Are you honestly saying this is not the case ?

Your argument appears to be completely wrapped in the minutae and the detail and ignores the big issues that are screaming out to be answered. You ask about discussing specifics yet have no practical effective answer to the central point that I have made throughout this thread about what sanctions there are against those who break the rules. I've read through dada's link and see nothing convicning on this point - if I have missed something I would be happy for anyone to bring it to my attention.

In the meantime I simply do not accept your assertion about the cost of good government. The cost of corrupt government is FAR in excess of good government and I believe that the cost of establishing good government is far less than the amounts of aid that are being poured in daily as things stand. The trouble with most states in Africa is that they are not interested in establishing good government. And they are not even close. No one is putting any pressure on them to do so - quite the opposite, the willingness to follow billions of aid with more aid and more cancellation of
debt just encourages them to stay as they are.

If there was a program to pressure these states into establishing democratic structures, establish good government and wipe out corruption in a pro active and hands on way - I would support that 100%. But there is no stomach among any of the countries in this debt cancellation scheme to get their hands dirty in a hands on way or in applying any kind of realistic pressure for fear of being accused of interfering with their precious sovereignty and having protestors marching on their streets objecting to it.

You also mention blair. Well I am what one would call a supporter of most things Blair does - but I wouldn't say that would apply to most people here. I believe they would ask about Blair's homework on Iraq, his homework on the Tsunami effort etc. Is this an indication of how much homework he has done on Africa ? I hope not.


Lastly you say "The whole point of debt-relief is to enable these countries to free up money to finance good government, as well as the basic underpinnings of a functioning society - healthcare, education, etc. - which are necessary for development."

And yet there are no enforcable requirements of these countries to establish good government and democracy in this scheme. If there were, it would be a lot more convincing.

DadaKopf

Quantum wrote:

In the meantime I simply do not accept your assertion about the cost of good government. The cost of corrupt government is FAR in excess of good government and I believe that the cost of establishing good government is far less than the amounts of aid that are being poured in daily as things stand. The trouble with most states in Africa is that they are not interested in establishing good government.

Have you any evidence to back this up? I'm not saying you're wrong, or right, just that I'd like to see your evidence.

Quantum wrote:

Your argument appears to be completely wrapped in the minutae and the detail and ignores the big issues that are screaming out to be answered.

Is this your crazy get out clause? First of all, detail matters. It really matters, and considering you're making some very wild generalisations about aid, debt and corruption, the owness is on you to back up your statements with detailed evidence. Detail is important because without it, aid money is wasted, badly applied and badly thought out aid makes things much worse.

Quantum wrote:

You ask about discussing specifics yet have no practical effective answer to the central point that I have made throughout this thread about what sanctions there are against those who break the rules.

Did you read the Christian Aid report I liked to above? I didn't think so. I know, there are a lot of words in it.

Quantum wrote:

I've read through dada's link and see nothing convicning on this point - if I have missed something I would be happy for anyone to bring it to my attention.

I don't know which link you're referring to. If it's the OECD link, I used it to show that, as you say, "corrupt to the core" African governments are actually piling money into achieving the Millennium Development Goals and some are doing very well. These successes are, in fact, examples of how constructive partnership-based relationships between donors and recipient governments overcome the problems associated with old school conditionalities.

Basically, (1) if countries can genuinely design and implement their own development priorities and strategies, (2) if donors make funds available to governments to implement good policies (while taking a broader view of what constitutes a good policy), (3) and if both recipient and donor work together to develop effective,democratic, co-operative monitoring frameworks in which both sides are scrutinised so both sides are happy, African governments can and have been extremely co-operative. (Before you jump the gun, this is now the World Bank's position, if only in writing and not in practise.)

One of the leadning examples of the benefits of such an approach is Tanzania. In the mid-1990s aid relations between the Tanzanian government and donors broke down because donors accused the Tanzanian government of failing to implement aid programmes or misusing funds (it turned out they weren't). An independent, international board was convened to come up with a solution and they suggested a system of continuous mutual monitoring to ensure that both donor and recipient activities were up to scratch. In 2002, the Tanzanian government rolled out the Tanzanian Assistance Strategy, a key aid framework in the country, and things got going again. Now Tanzania - in spite of corruption - has qualified for HIPC debt relief, which has provided the funds for free primary education (which they've achieved) and is on its way to achieving four of the MDGs. They could be doing better - they could do with free health care and access to the European market.

The key is for developing countries to have the freedom to develop their own development solutions - like I said, one size doesn't fit all. In fact, African development requires the possibility of institutional diversity in the global economy.

Are you saying that because the Tanzanian government is corrupt, but making progress, that we should cut funding to teach them a lesson? Even though this is completely counterproductive, as the Christian Aid document shows?

Just one last thing: this paper quantitatively examines the relationship between trade openness and corruption and its impact on economic growth. It basically finds that corruption has little effect on countries with closed economies (as was the case in early industrial Europe) but corruption can cause problems for countries with open economies where capital flight is a problem. I'm not arguing that African economies should have a lock in, but it shows that controls on capital flight and selective trade protection and the existence of corruption don't inhibit economic growth. As the article points out, corruption in Europe declined when governance structures reduced the advantages to be made through corruption because you were more likely to get caught. Achieving this in Africa requires massive investment in governance structures (I hate this word) in order for governments to increase their capacity to prevent corruption by increasing state revenues through business and trade.

Funny, you know, how US public funds - bonds etc. - are being used to prop up a war in Iraq which ultimately benefits a small coterie of oil men. Or the way Dick Cheney has decided America's energy security strategy (with ExxonMobil, Halliburton et al), which commits America to massive investment in oil-rich western African countries (which also involves support to corrupt regimes through military instruments like the African Contingency Operations Training and Assistance). In less obvious ways, British companies themselves corrupt aid processes, like Biwater's activities in Tanzania.

Be careful about double standards, Quantum.

dermo88

Several points to make.

1. I am no fan of the IMF either. Nationally formed solutions with popular support are one way, once you have an educated populated who know that they have to take bitter medicine for a few years.

That was Ireland in 1987, Poland in 1989, Argentina in 1991. We in Ireland avoided the IMF by the skin of our teeth.

I am firmly of a belief that the whole cornerstone is economic stability. A stable currency. The rule of law is paramount, with all men equal under it, be they the Prime Minister or Pauper, no bribes or nepotism.

Motivated, well renumerated public servants are generally honest when you have checks and balances in place.

Once you have that, all else follows.

Each economy has individual circumstances, be it in the tax system, excise system, subsidies, welfare.

These are the loopholes that have to be continually plugged, filled and monitored for weaknesses. It is these particular details that the IMF often overlook, and they can follow a 'standard' recipe. You know the usual crap, deregulate A, privatise B, tax C, etc.

Many of the options may be staring a government in the face, only to find that they are unpalatable.

The old third world trick of tying a local currency to the dollar does not work in my opinion. Its a recipe for utter pain and agony in the long term. The best option is to go for a currency board system, with the local currency pegged to a basket based on a nations terms of trade. The Singapore Dollar being the best example of such a currency, and its stable, with an honest government.

2. Creating a stable society

It has taken Europe 500 years, 2 world wars in the last century to get where we are now, and its not a bad society overall. Its egalitarian compared to the class snobbery that existed before. Europeans had African countries till the middle of the last century, and then as soon as we left, the Russians, with their bright ideas of an economic plan went in to twist their brains and deceive them that they did'nt have to be as productive, that they could have a collective farm. They could all be equals. Its taken 40 years to end that myth, and 30 years more for the people who were indoctrinated with that myth to die out. Sad to say, the most wonderful people I know are socialist, but its a dreamers vision, not a realists one.

And what happens then.

Ah....we'll take it easy.

Ah....we're all equal, relax, take it easy.

Ah....lets have a pint.

That was at the top. Meanwhile, the workers beneath struggled and worked harder for less. Told that this was to rebuild their nation after the white guys had raped and pillaged the land. What little comfort did a man who was working the Zambian mines at the end of the day have, when he was away from the wife and kids trying to make a crust.

3. The culture and transmission of STD's, AIDS/HIV and

The miner from Zambia. Up from a mile beneath the earth, digging copper.

"That was a good days work, and I'm horny as hell.....(grins and checks wallet for 50 Kwacha note)". Off to the local bar, and in the background, a bevvy of local beauties. Name your price, buy her a beer.

(Its hard from us from a semi Northern European catholic culture to imagine promiscuity and sex being so openly and obviously on offer)

Apparently its against African culture to use condoms. Because it does not feel 'natural' (I had the same conversation in my local gay bar once and almost clocked someone when they said that line!). Its also machismo, plus men there prefer it dry. A lethal recipe.

On Saturday night, he gets on the train, and goes back to his village to see his wife and kids. Its not that he does'nt love her any less doing what he did on payday (1st of the month), but she was'nt around, he had a few beers, and .......

This can happen anywhere, not just Africa.

4. Changing Africa.

The legacy of HIV/AIDS on Africa, is likely to have the same mental and socio-economic impact on Africa as the Great Famine had on Ireland, but on a much more massive scale. But this is the situation as I see it in 20+ years.

It will lead to the strengthening of religious values, since being promiscuous will be seen as the path to death. The Grannies putting the fear of God into the kids about sex, need only talk about Uncle Victor with the sores, hardly able to breath weighing 25 kg when he FINALLY died after 7 years. Africa has been much more open to evangelisation than Europe, because materially poorer people find much more solace in Christianity than many Westerners.

Marriage and sex will happen later. In fact, this was exactly what happened after the Great Famine in Ireland.

Families will be smaller, but with smaller families, better treatment of spouses and offspring. I reckon much less of the Machismo culture will prevail to the same extent as now.

Socio-economically, it will be a tragedy as 2/3 of the brains needed to run and regulate a society die out before achieving.

But this all assumes that the world does not churn out the maximum of 450 Billion triple combination treatment pills required every year to treat the people afflicted with this terrible disease.

Finally, what Rudyard Kipling once called the white mans burden has become the worlds burden. Ronnie Reagan, you poor man, you thought it was a small problem with a bunch of queens.

bonkey

Quantum wrote:

Are you telling me that African nations don't owe billions to Russia and maybe even North Korea and China and Iran who supplied arms to them over the last forty years ?

What I've said has been :

1) What is proposed is not what has gone before
and
2) What is proposed has the means to monitor and control these issues.

When you put those together, there is no suggestion that we have successfully done this continuously over the past few decades. It sugegsts that we have the ability to prevnet it reoccurring. If you're aware of what the changes are and why they won't work, then please...elaborate. If you're not aware of what those changes are, then I would suggest that you are not in a position to criticise them, especially when that criticism is rooted on the flaws from a timeperiod where they weren't in place.

It is disappointing that none of the solutions you refer to to tackle any countries that start reborrowing and/or stealing the money are very convicing. They seem to add up to basically being turfed out of the scheme. Which is basically no solution whatsoever.

Its disappointing? Compared to what? Your solution does nothing for them either, until they have the corruption (which would be the reason they disqualify themselves in my system) has been dealt with.

You say 'we have the ability to monitor this" .... we do ? How ?

Quantum, if you know what the plan is proposing, then I don't need to answer this question because you actually have that information. If you don't know what the plan is proposing, then I'd suggest you are in no position to be criticising it as unworkable.

In either case, there is absolutely no reason for me to answer this question other than to act as some sort of surrogate researcher for you, which I'm not willing to do. I've already provided information on this, but you've dismissed it because you're not interested in discussing the IMF - the organisation who'd fund this plan (in part), and who has played and will continue to play a central role in exactly this regard.

DadaKopf has already pointed to information concerning how the IMF's approach has both worked and failed, and subsequently been improved to the point where it is beginning to make a real beneficial difference. Is it perfect? No. Is it without risk of failure? No. Is it better than anything we've had to date? Absolutely, by a long shot. Is it better than standing back and saying "sort yourselves out lads, and when you've fixed the problems, we'll be along to help"? In my book - yes, any day of the week.

You read the report and found nothing "convincing" in this report. Fair enough.

My use of the term roqgue bank was meant to refer to banks that don't want to toe the line set out by the international agreement on debt cancellation. I would have thought it obvious.

If its that obvious, perhaps you could name one, because I believe they're a but like ROUS'es: frankly - I don't believe they exist. For a start, a "rogue" bank would sacrifice the right to any form of international support in persuing its claims for money, so it would be trivial to default on loans from one without reprecussion. Secondly, exactly who would these rogue banks do business with if they alienated themselves from the world of regulated international banking?

Then you mock my query about what happens when "money starts to leak away into swiss bankaccounts and tanks and F16s ?" Are you really serious ?

If you read what I wrote, you'll notice I mocked you about F16s. I still stand by that. The notion that the US - who is the only seller of such aircraft - would sell to these countries and not notice that it wasn't on their controlled budget is beyond farcical.

As to the Swiss bank accounts, I never denied their existence. I simply said that such things can be monitored. I didn't suggest that they have been monitored in the past, nor did I suggest that they don't exist. The logic you offer is nothing other than that "this problem existed in the past, ergo we cannot solve it in the present with new and better approaches". Personally, I don't believe thats in any way logical.

Your argument appears to be completely wrapped in the minutae and the detail and ignores the big issues that are screaming out to be answered.

Hang on a second. First you criticise me for not answering your "how will we stop this" questions with enough specificity, now you're giving out that I'm looking at the detail too much. Which is it? Do you want generalities to deride for not offering detail, or detail to dismiss for not being general enough?

You ask about discussing specifics yet have no practical effective answer to the central point that I have made throughout this thread about what sanctions there are against those who break the rules.

I've told you (repeatedly) - kick them out. No nation would be worse off than under your approach of "do nothing until they've got it sorted", so I'm at a loss to understand what your issue with part of my plan being "treat them like Quantum would" is. Can you explain it to me?

The overall aim is to end poverty in Africa, but you can't do it all at once. No-ones suggesting it can be done all at once.

Improve a couple of nations, though, and their neighbours will want in. Look at Turkey - practically falling over itself to join the EU. Its reforming its human rights (slowly, and maybe not enough), because it wants in to the economic benefits. Is it so hard to see that a few successes in Africa are not only a good thing in and of themselves, but are exactly what the other nations need to see to give them the impetus to get on board.

Your preferred investment plan is no different in this regard. How will you know that corruption has been dealt with for your plan to work? What will happen if you get your evaluation of who is worthy of investment wrong, and you invest in a nation who breaks the rules. What will you do? You believe that your solution is better, after all...so what will your system do when it gets ripped off?

In the meantime I simply do not accept your assertion about the cost of good government. The cost of corrupt government is FAR in excess of good government and I believe that the cost of establishing good government is far less than the amounts of aid that are being poured in daily as things stand.

You've read Dada's link, so you know what the figures of "per capita" aid are, both before and after administrative overheads are taken into account. Would you care to explain how this amount can fund good government ni a bit more detail than saying "I believe it can"?

Bear in mind that good government requires educated workers paid a sufficient salary. So, you've got running cost (to prvent systemic corruption) and education cost (to provide a capable workforce). And you can't really claim to be good government if you're letting your peopel starve and/or suffer and die from the most rudimentary, treatable medical consitions. So, you need food and healthcare too.

So can you explain how all of this, as well as the repayment schedules, can be funded on the paltry amounts of money available? Indeed, given taht you believe that tehre's "experts" to back up any position....can you provide a single reference to a single expert who has argued this stance, because I'm not aware that anyone credible has actually suggested that the highly-indebted African nations actually have enough money to run themselves properly.

The trouble with most states in Africa is that they are not interested in establishing good government.

Is this only in your opinion, or do you have any sort of evidence to back this up? The failure of poor policy in the past isn't evidence enough, unless you can explain why none of the blame for that failure should be attributed to the causes that have been found for its failure - again, a most of it is detailed in that link you found nothing convincing in.

No one is putting any pressure on them to do so

So the IMF tieing aid to reform is no pressure to reform, nor is the whole "entry qualifications before you get the benefits" (like the EU with Turkey) approach?

Exactly what then, in your book, would be pressure to reform then?

Also...can you provide anything to suggest that this is the case (that there is no pressure to reform) other than again making generalisations over an entire continent and nigh-on half-a-century, rather than limiting yourself to where and when the current techniques have been used, and looking at them in isolation.

Lumping the new proposals in with a load of different, older approaches that no-one will disagree were a failure in order to discredit the newer ones is not a convincing argument to me, but its all you seem to be offering.

jc

shotamoose

Quantum wrote:

The truth is we have had fifty years of your way and it has been a dismal failure.

How much African debt was cancelled in the 1980s and 1990s then?

Because if debts weren't cancelled en masse in the 1980s and 1990s - if, in fact, Africa's debt burden grew and grew - then how can you say that debt relief has been tried "for decades"? How can you say it would make things worse?

Africa was a basket case long before this, and look how pouring millions into corrupt dictators failed back then ! And you want to do it again ? How nutty is that ...

Nobody's denying that corrupt dictators got a lot of aid. They got a lot of loans too, and wasted those. Then when they were booted out, we demanded that the people who booted them out paid us the loans back. Do you think that's just?

The other interesting thing is that even though all that aid was wasted, the best evidence suggests that aid has still been good for growth in poor countries, and that's leaving aside all the non-growth benefits such as disease eradication. This suggests that since Africa has been getting less corrupt and more well governed, aid should be more effective than ever. Yet you want to cut it off. Doesn't really make any sense to me.

and look at the disaster that billions in Aid over fifty years has brought Africa.

What a minute. Are you seriously telling me that you think aid has made things in Africa worse? You think it's a bad thing that hospitals have been built, nurses employed, and diseases like smallpox wiped out with aid funding? Or are you just unaware that these things happened? Which are you - ignorant or sadistic?

It is the failure of the developed countries to abandon the cycle of destruction that Aid brought to Africa that caused countries to have to deal with the IMF in a vicious and destructive cycle.

Er, what? The debt crisis was caused by aid, was it? Jesus.

I have seen the policies that have been tried for decades and they have singularly NOT worked. I don't need an economist to demostrate that fact.

What policies were those? Were they the IMF-imposed policies under which Africa actually regressed in the 1980s and 1990s, or were they the pre-IMF policies in the 1950s and 1960s under which Africa had its highest ever growth?

Because from my point of view, the policies that worked are those that delivered highest growth, and they were not the policies of the IMF. But maybe I'm just allowing myself to be blinded by the facts - you just know, don't you? Tell me, why should I give any credence to your view, which is apparently unencumbered with anything so mundane as familiarity with the most basic history, when you treat the opinions of Stiglitz and any other expert who happens to disagree with you with such contempt?

The cancellation of debt simply won't work ...I don't care what the conditions are. I believe that they cannot be enforced, they cannot be implemented and they will inevitably lead to re indebtedness after a whole pile of money is pumped into these corrupt and undemocratic countries.

This is another fine example of how you simply don't know what you are talking about. We actually have something like a controlled experiment to test your view, in the shape of the limited but significant debt relief under the Highly Indebted Poor Countries initiative. Now, according to you, the results should be clear: none of the extra money will have been spent on, say, health and education services. Instead, these corrupt governments will have pocketed the cash or spent it on weapons, safe in the knowledge that the countries who cancelled the debt can do nothing about it.

What actually happened? The opposite. The proceeds of debt relief were spent on pro-poor, pro-development areas like health and education, and spending on arms did not go up. The conditions on debt relief were followed.

And that's it. You're simply wrong (again).

Labelling the IMF as a failure can only be done in the light of what it's aims and objectives were - which were purely financial. It was never relaly intended to reform nations, only economies.

You've inadvertently hit on something there. The aim of the IMF was not to help indebted countries develop. The aim of the IMF was to ensure they kept paying their debt service. So we shouldn't be surprised that their policies weren't good for growth and development. Yet you act all indignant when someone suggests the IMF might just carry some of the blame. A touch contradictory, I think.

It's hard to reply to your post as you mix my quotes with others without attributing who posted what....

No, I indicated quite clearly where the section with your quotes began and where the section with Dermo88's began, then where yours began again. I can only assume you either can't remember your own words or are running away from having to defend them.

I do - but this Debt cancellation will not achieve it in my opinion. It looks wonderful on paper and in theory. But it is unenforcable and will only result in the same thing continuing for another century in my opinion.

Your opinion is misguided. See my argument above for your belief about the unenforceability of conditions. Debt cancellation doesn't just look great in theory - it looks great in practice too, as the kids getting an education and the patients getting medicines as a result of it would be only too pleased to tell you.

a pan African economic zone would create a significant zone of power, economically. Also the only reason rich countries sanctions damage these African countries is because they are not even trading with their fellow African countries !

If the combined African economy was anything like as valuable as that of the EU or US, you might have a point. But it isn't, and you don't.

they don't dump the product directly into the poor countries - they just lower the selling price across the board.

They do both, actually. The report I linked to documented the dumping of EU-subsidised skimmed milk powder into Jamaica, devastating the local dairy industry. This is described on the very first page of the summary. Why the hell do you ask for evidence and then completely ignore it when it's spoon-fed to you? Why the hell should anyone give a damn what you think when you don't care enough to familiarise yourself with the basic facts?

Yes but there is NO INCENTIVE for Africa to do this ! this is the point ! These crazy corrupt countries know that the Aid will continue, the money will continue and the next round of aid, disguised as debt cancellation, is on it's way. Hence no change.

No, you're just wrong again. Crazy and corrupt countries don't get as much aid and debt relief. You think Zimbabwe is getting a lot of aid at the moment? Well, it isn't. That's a major incentive to improve.

I am not interested in the IMF. I never suggested the IMF should get involved.

But you defended the IMF when others suggested they might be partly to blame for Africa's plight. Now you're backing away from that position. Kindly have the decency to admit that those others might have been right.

I don't see it there.

It's there if you bloody look. Can you not do a simple text search? Okay, I'll help you - it's on page six. No doubt you'll still find a way to miss it - do I have to come over there and pin your eyes to the screen or something?

You know, having trawled through your comments I'm now not sure why I bothered. Bonkey's explained how debt conditionality works and you've just blankly responded that you don't believe him because of something about "rogue banks". Well, whatever. Basically you're searching for excuses, and if you can't find any in reality you'll happily take them from fantasy. There is no point whatsoever arguing with someone like that.

Quantum

To shotamoose:

I am disappointed in your reply whicih appears to rely mostly on abuse and rustration rather than any counter argument.

Debt cancellation, will, in my opinion lead to simply more billions being poured into Africa and as a reuslt it will produce the same affect as it has over the last 50 years - alnmost nil. In fact there is probably more poverty and disease and death in Africa now than fifty years ago. it seems to me.

Aid has consistently damaged agriculture and trade across the continent as it has distorted the local markets and the potential for exports. Because someone produces a 'report' that is hasn't done so doesn't make it so, as the MMR vaccine case proves. I believe it has. It is the appalling Aid- obsessed' mentality that has held Africa back over the last fifty years, while it pumped billions into corrupt regimes, enabled these regimes to milk their people and resources while the economies have been destroyed by corruption and the corrupting affect of the aid. The debt crisis was caused by the people who urged more and more loans, and more and more aid. The corrupt regimes were and are being strengthened by the aid, much of which goes to the regimes and their supporters and then these regimes borrow to build up militarty capability whcih they use against their people. The greatest part of the blame lies, I believe, on the deeply misguided intentions of people who's only answer to the plight of Afric has been to shovel money at them.

The IMF has been an excellent roganisation in my view, for the purposes for which it was intended, and unfortunately it has been ignored much of the time by it's clients, and of course has only been called in because of regimes that have been so totally irresponsible that they cannot pay back their debts. I have never supported their involvement in specific situations, but the blame lies on the regimes that create the debt. People like Stiglitz mischaracterise the situations and misdiagnose them. I believe their analsysis is wrong. You appear to believe that these people can do no wrong, cannot be wrong and their words are set in stone. You are entitled to that, but I do not share your confidence.
The Highly Indebted Poor Countries initiative has been widely criticised and is a completely different project in completely different situation, and centainly could never in any language I know be referred to as a controlled experiment. This project is also an IMF and World Bank project and is far too centred on economic reform without tackling the wider issue of trade and democracy and corruption acorss the African Continent.
The problems in Africa can only be dealt with in a wider global and systematic way based on trade across the continent as well as globally. It must be based on democratic reform, the iradication of corruption and internal as we as external trade.
Debt cancellation is unenforcable and naive, in my opinion, and doesn't tackle the issues that need to be tackled to make anything more than cosmetic improvments to the continent. A few new school, a few water schemes and some hospitals will ensue while the same old problems remain. Trade-based solutions are the only solutions that will lift Africa out of it's present situation.
Your referenced documents only support my views, showing that product dumping is a minor issue compared with the enormous distortion caused by Aid to the markets. When Aid is poured in, with free food, free cereals and free produce there is little incentive for local producers and they have no market for their goods. It goes to strengthen local regimes and their supporters and destroys any chances of the development of a healthy competitive and productive economy.
We need to end the indiscriminate aid as we know it and roll it into a broad, trade based, reform based project that does more than satisfy the emotional needs of those who have pushed Aid as a solution for fifty years.

Blind belief in the simplistic and fantasist solution of Debt cancelation is misguided and ignores fifty years of history. A complete lack of enforcement methods and the refusal to take a comprehensive approach to trade reformation within and without Africa together with a determined naivete about the corrupting affect of a lack of democracy and domocratic structures as well as the deep corruption across most regimes in Africa will ensure it's dismal failure and will sentence Africa to yet another generation of poverty, death and disease.

bonkey

There's only so many times one can point out that the last 50 years contain nothing like what is being proposed, (with the exception of the occasional small-scale trial liek that mentioned by shotamoose).

Quantum, if you're going to continue this charade of ignoring the points raised and pretending that no-one has even challenged your assertion that its just a proposal to do more of the same, then its clear that you have no interest whatsoever in discussing what is actually proposed, nor the challenges to your own line of reasoning, but simply want to knock the proposal and those favouring it with a dogmatic stance which seems both devoid of any verifiable factual content and full of verifiably incorrect and inaccurate claims.

Put more simply - I'm done. I've better things to waste my time on.

jc

Indeed this thread is circling the wagons

Dúnta.