Commentary

Aid to Africa - With Friends like Chretien and Bush, Africa Doesn't Need Enemies

The Liberal government of Jean Chretien announced in the December budget that it would be creating a special $500 million fund to oversee aid to the poorest nations in Africa. Alleviating the poverty of Africa, Chretien has said, will be a key theme of the upcoming G8 summit that Canada is hosting in Kananaskis.

U.S. President George W. Bush has made a similar commitment. The week before he went to participate in a summit on development in Monterey, Mexico, he announced that the U.S. would deliver $5 billion in aid to the world's poorest countries, making special reference to Africa and linking the aid to economic and democratic reform. Last week, his administration increased that amount to $10 billion, after many columnists compared the paltry sum of $5 billion in aid to the over $40 billion that has already been spent or approved to bomb Afghanistan as part of the war on terrorism.

Whatever the sums that are ultimately decided upon, the question that must be asked is how has Africa benefitted from all this aid? Chretien and Bush's announcements are just the latest in a series of aid projects that have been implemented over the past 30 years. Billions of dollars have been spent, allegedly to help Africa. Yet statistics show that the economic situation in Africa as a whole, particularly in sub-Saharan Africa where the poorest nations are, has deteriorated over the same period of time. Why?

There is an entire school of thought on this question, led mainly by American academics, who contend that what Africa really needs is free trade, not aid. Aid from the West, they argue, simply props up corrupt regimes that swindle and cheat their people, while unnecessarily shielding Africa from the inherent benefits of the free market. Their rhetoric has been adopted, to a certain extent, by the champions of globalization, who contend the further expansion of western markets and trade will be of most benefit to the poorest of the poor.

In contrast to this and other schools of thought, there is the empirical evidence. The same countries that pledge aid are the ones that have overseen a policy which has systematically indebted African nations, particularly in sub-Saharan Africa, to the point of economic collapse. The total debt burden of sub-Saharan Africa is $230 billion U.S. ($203 billion excluding South Africa), with 33 of the region's 44 countries designated by the World Bank as "heavily indebted poor countries". Creditors - mainly the International Monetary Fund (IMF) and the World Bank - have imposed harsh repayment conditions, insisting that debt servicing take precedence over social spending and local economic development. These policies have also undermined and destroyed democratic institutions in these countries, a problem that George Bush is demanding they overcome if they want more of the same enslaving aid.

According to figures provided by the World Bank, much of this accumulated debt was built up during the 1970s and early 1980s. Huge sums of money were lent specifically to allow nations to participate in joint infrastructure and resource extraction projects. These projects were financed partially through these loans and partly through different aid schemes and almost all of them were unmitigated failures. These and other aid projects also often compel the recipients of aid to buy resources, materials and manufactured goods from donor countries - colonialism at its most sophisticated. And all the time, the debt burden is growing.

In 1996, 43 of the nations in sub-Saharan Africa paid a total of $2.5 billion more on servicing their debt than they received in either new loans, loan credits, or aid. World Bank figures show that the external debt burden of sub-Saharan Africa has increased by nearly 400 percent since 1980. The IMF alone has taken over $3 billion out of Africa since the mid-1980s. As well, the structural adjustment programs it continues to impose to guarantee debt servicing charges are met have resulted in widespread social devastation. In a region of Africa ravaged by AIDS, for example, governments spend four times more on debt servicing charges than they do on health care, while deaths from malnutrition have increased by 40 per cent in 20 years.