OP/ED: Live8/G8 African Debt Relief: Making Poverty An Industry?

There can be little doubt that public support for African debt relief is extremely strong. There have been 11 Live8 concerts recently in 8 different countries with an estimated audience of over a billion people worldwide. Public sentiment and support is also boosted by the support given to their cause by the British PM and Chancellor of the Exchequer.

It truly warms your heart when the two most powerful men of British politics are championing the plight of the World's poorest countries. But what really is this debt relief? Is the roadmap for debt relief agreed upon by the G8 countries the same as what charities and civil societies are asking for? Has the plight of Africa's poor allowed us to inadvertently and publicly push for the modern enslavement of the African continent? This Op/Ed seeks to address, and temper, the euphoria being generated by the feel good event of the summer - African Debt Relief


Live8

The purpose of these concerts is not to raise money, but to raise awareness. Raising awareness of Africa's slow death. A slow death which is the result of un-repayable debt. A debt that the Western World allowed the African nation to get stuck in and now reaps the benefit of. The concerts are designed to be a show of solidarity, and indication of, public support for G8 countries to wipe out 100% of African debt.
Live8 Website

G8

The Group of 8 (G8) includes the World's 7 richest countries (UK, France, Germany, Italy, Japan, US, Canada) and Russia. The G8 will take part in a summit at Gleneagles, Scotland during 6 - 8th July 2005. At the top of the agenda is African debt relief, as set by the new G8 President - Tony Blair. A G8 consensus for African debt relief has already been achieved but the details of which will be determined at the Gleneagles summit.
G8 Website

But what are the conditions for the debt relief? To answer this question you have to understand how national debt has been used to further the individual financial interests of the few.

A very brief history of the use of national debt as a financial lever

I won’t attempt to explain all the complex and lengthy history of how national debt has been used by international bankers to further their aims here. I will outline a general overview of the subject matter and encourage you to read further material on the matter. (Research for yourself the origins of usury, Federal Reserve, Bank of England, money changers and the Rothschilds)

The destiny of all major western countries has been heavily influenced by a very small group of people for centuries. This group of people are called the international bankers. The histories of England, Europe and the United States are all heavily connected to international bankers. The American War of Independence, Civil War, Napoleonic Wars, Russian Revolution and both World Wars were all precipitated by international bankers. American presidents Lincoln and Garfield were both assassinated for their opposing views on private banks controlling monetary policy (central banks).

The fact that the central banks of England (Bank of England) and the United States (Federal Reserve), and many other nations, work outside the control of their respective governments is not widely known outside economic circles. Also the fact that these private banks have so much control that they can directly govern the amount of money in our economies, hence can cripple them at will, is also not widely known. The political power that stems from such financial clout is absolute. Money DOES make the World go round.

International bankers have long practiced the use of manipulation of national economies to get what they want. The Federal Reserve was created in 1913 after a major economic downturn instigated by international bankers. The Federal Reserve continues to exist outside the influence of the American government. The money borrowed by the United States government from the Federal Reserve is charged at interest. The interest from these loans is paid for by direct taxation of the American people.

When international bankers want to expand their economic stranglehold on a nation they use their economic influence to economically cripple the nation first. Then they find the government more receptive to the conditions they impose as they have no choice. The American government has declared bankruptcy twice and both times the international bankers have been there with their solutions.

The international bankers created and control the World Bank and the IMF. They are the international bankers foray into World government and the eventual enslavement of every country on the planet.

The fact that international bankers used their existing financial clout to financially cripple a nation then extend their economic control of it is well documented. To do the topic more justice please read the following article:
Shadow Government

Ulterior motives

Aside from the public relations boon surrounding the cancellation of African debt relief, the financial benefits to international bankers are amazing. How does cancelling debt make money for the lenders?

Bad loans

Not all the African countries who are indebted to the G8 nations can afford to repay their loans. African countries that default on their loans do not make money for their lenders.

The weak growth experienced by many low-income countries, particularly in Africa, meant that the series of increasingly concessional reschedulings – combined with borrowing on increasingly concessional terms – was too little, too late, and proved unable to deliver long-term debt sustainability.

Her Majesty's Treasury Official Website

The amount of unrecovered claims and interest on ECGD’s pre-1991 business stands at £9 billion (excluding the multi-billion pound payments to support exporters via ECGD’s Fixed Rate Export Finance product). Data is not readily available on other ECA losses but it seems unlikely that others avoided similarly heavy losses during the debt crisis.

Her Majesty's Treasury Official Website

What’s the point of running a country into the ground? If a country cannot develop its economy enough to even repay the interest on long-term debt, your opportunities to make money cease. If you allow a country to expand its economy enough to pay for the debt you ensure its ability of "long-term debt sustainability". Much like a parasite gains nothing from killing its host prematurely. The death of the host comes when the parasite has nothing to gain from its host: Africa still has much potential to create money for international bankers (more on that later).

UK's contingency plan

If an agreement on G8 African debt relief cannot be achieved at Gleneagles, the British taxpayer will start paying the debt owed to the World Bank by African nations. The debt will, for all intents and purposes, be transferred to the British public. The bankers get their money, the British government is seen to be altruistic and the British taxpayer foots the bill. The bankers do not lose out and African economic growth can increase.

In the absence of international agreement to provide 100% multilateral relief, the UK will pay our share of the debt service owed to the World Bank and African Development Bank’s concessional financing arms on behalf of eligible countries. On the basis of our contributions to the last replenishment round of the World Bank’s IDA, we estimate our share to be just over 10%. The relief will be offered to all post Completion Point HIPCs and all other IDA-only countries with suitably robust public expenditure management systems to ensure the savings are directed towards poverty reduction. We suggest a suitable proxy for the latter would be those that benefit from PRSCs from the Bank. We will guarantee this relief until 2015 except in the most extreme circumstances.

Her Majesty's Treasury Official Website

Make no mistake, the British contingency plan is to have African debt RELOCATED not removed. The British will end up paying more money to private international banks to make up for their bad debt choices and finance their economic expansion of the continent.

Strings Attached

The African debt relief plan that’s being pushed by Gordon Brown in the G8 summit at Gleneagles is not unconditional, it comes with lots of conditions. The details of which are obviously not agreed up yet and as such as not being made publicly available. But what has been floated by the Chancellor is that the African debt relief will be tied to economic, political and industrial changes. Economic changes involves trade liberalisation. Political changes involves combating corruption and deregulation. And industrial changes involve privatisation of national firms.

On the surface these conditions make sense and without further scrutiny many will accept them as being needed. But what will the effect of these conditions be on the future of Africa's development?

These conditions are nothing new. The same conditions have been placed on African nations in return for debt relief for years. They come in the form of the IMF and World Bank's Highly Indebted Poor Countries Initiative (HIPC). The HIPC initiative has been long criticized by charities and non-governmental organisations and has long been seen as a lever over African countries to further Western control of their economies.

As well as this failure to provide the resources for full debt cancellation, an equally serious problem with the HIPC initiative is that it is being used by the IMF and World Bank as yet another lever with which to press for
free market policy reform in the poorest countries.

WDM Website

That debt relief should be used as a carrot to entice desperate countries into furthering their economic enslavement to the rich nations should be abhorrent to us. But the debt relief that is receiving such public support today will only further the economic enslavement of these African countries.

For over twenty years, the IMF and the World Bank – acting on behalf of their political masters in the industrialised world – have been requiring poor countries to implement a wide range of economic and social policy reforms, such as trade liberalisation, investment deregulation and privatisation, in return for low interest rate loans. For example, according to the IMF, “Trade liberalization has been a key element of Fund supported programmes over the past twenty years.”

WDM Website

And with the advent of HIPC, the World Bank and IMF have yet another route through which to push structural adjustment. Not only are policies such as privatisation, investment deregulation and trade liberalisation being attached to the provision of new loans, their implementation has also now become a central feature of debt relief.

WDM Website

Are these conditions all that bad? After all, the removal of corruption is a precursor to democracy is it not? Can we expect debt relief from the G8 not to include such conditions? Don’t count on it.

“In theory, the fund [IMF] supports democratic institutions in the nations it assists. In practice, it undermines the democratic process by imposing policies.”
Joseph Stiglitz, Former World Bank Chief Economist14

So, while it is still important to press for complete cancellation of the unpayable debts of the poorest countries – which WDM continues to do – it is also critical to de-link debt relief or debt cancellation from the harsh and inappropriate economic policies being pushed by the IMF and World Bank.

WDM Website

Don’t be fooled. The conditions that will undoubtedly be attached to any G8 summit agreement on African debt relief will not be very different from those imposed by the World Bank/IMF through the HIPC initiative. Why should they? Gordon Brown is chair of the IMF in the first place, the source of HIPC. Also the HIPC initiatives conditions on debt relief are identical to their predecessor debt relief program, SAPS (Strucural Adjustment Programmes). Compromise on their goals now? I don’t think so.

Privatisation

To make more money from African nations, than debt repayments alone, these international bankers need to control their vast natural resources. One of the primary conditions on debt relief has been the privatisation of Africa's state firms including oil, diamond and uranium production.

Privatisation and debt relief in Zambia
Zambia has sold 257 out of 280 state firms in the past ten years. Now, in return for debt relief, Zambia is required to privatise its national commercial bank (ZNCB), electricity (ZESCO) and telecommunications (ZAMTEL) companies.

The JCTR (part of the Jubilee Zambia Campaign) has criticised such policies stating, “Any honest evaluation of the past ten years of privatisation will acknowledge that overall it has done great damage to the Zambian people’s livelihood: loss of jobs, closure of businesses, foreign dominance of assets, increase in poverty levels etc.”

Although the JCTR recognises that the three state run companies slated for privatisation are badly managed and need to change, it calls for a “Clear de-linking of this process from Zambia’s qualification for HIPC, so that the debt relief process is not held to ransom to foreign multinationals.”

According to BBC news, in February 2003, Zambia’s president Levy Mwanawasa seemed to agree with this argument, telling the IMF that he wanted to rethink the country’s privatisation programme because “there has been no significant benefit to the country” and “privatisation of crucial state enterprises had led to poverty, asset stripping and job losses.”

However, despite the concerns expressed by the public and the Government, the IMF representative in Zambia – Dr. Mark Ellyne – is reported to have threatened withdrawal of the promised $1 billion in debt relief under HIPC if the Government did not privatise Zambia’s national bank (ZNCB).55 The latest reports suggest that the Zambian Government is going to privatise ZNCB after all.

WDM Website

Privatise your largest firms or you will wallow in debt for eternity. I tried, and failed, to find evidence of just who is buying these state firms. But it would not be unfounded speculation to assume international bankers now control them.

Ghana's national oil production has been forced to be privatised as a condition of its HIPC debt relief.

[The Ghanaian] Parliament has passed into law the petroleum authority bill. The bill seeks to speed up the process of deregulation to allow for private sector participation in the provision of infrastructure and other services in the petroleum down stream sector.

All Africa News

Basically the international bankers want to own Africa's means of production and they intend to get it, not by wars, but by holding their economies hostage. Once international bankers own the African corporations who control their countries natural resources, the real money can be made. Money that is not based on publicly denounced debt interest payments but by the much touted "free trade" and trade liberalisation policies.

Tie their hands?

Not only will the financial sovereignty of African countries be sold in an attempt to get out of the artificially created debt black hole, but the relinquishing of African countries right to go to War will be a major condition added to debt relief.

Once debt relief is agreed, conditions under which it could be interrupted would then be limited to involvement in military conflict through the instigation of hostilities or significant violation of international obligations (e.g. on human rights or international peace and security), or strong evidence of misappropriation of funds.

Her Majesty's Treasury Official Website

Don’t like the fact that even though you are out of debt you are still not wealthy? What are you going to do about it? You start a war to get back what’s rightfully yours and the burden of debt is back on your shoulders. Not that you could stand up to a Western power any way.

Why would a country submit to such obviously oppressive conditions? Do they really have a choice?

"Good governance"

Another condition of African debt relief is the implementation of "good governance" by prospective governments. Also, on the face of it, it seems like common sense and a good idea. But has "good governance" really been pushed by the World Bank/IMF/G8 any further than "good governance" enabling the making of big money? Lets have a look at 3 indebted African nations. 2 have already been given debt relief through HIPC and one has not.

Ghana
Qualified for, and receives, debt relief through HIPC. Was granted HIPC assistance due to its efforts at privatization, including its national petroleum production.

Ghana holds vast natural resources including:

gold, timber, industrial diamonds, bauxite, manganese, fish, rubber, hydropower, petroleum, silver, salt, limestone

CIA World Fact Book

Ghana is held as a benchmark for "good governance". Its government is stable and has made efforts to reduce corruption. That is should qualify for debt relief is self evident.

Somalia
Does not qualify, has not received, HIPC debt relief.
Has $3 billion (2001 est.) worth of debt and receives $60 million/year (1999 est.) economic aid.

Little natural resources

Somalia's economic fortunes are driven by its deep political divisions. The northwestern area has declared its independence as the "Republic of Somaliland"; the northeastern region of Puntland is a semi-autonomous state; and the remaining southern portion is riddled with the struggles of rival factions. Economic life continues, in part because much activity is local and relatively easily protected. Agriculture is the most important sector, with livestock normally accounting for about 40% of GDP and about 65% of export earnings, but Saudi Arabia's recent ban on Somali livestock, because of Rift Valley Fever concerns, has severely hampered the sector. Nomads and semi-nomads, who are dependent upon livestock for their livelihood, make up a large portion of the population. Livestock, hides, fish, charcoal, and bananas are Somalia's principal exports, while sugar, sorghum, corn, qat, and machined goods are the principal imports.

CIA World Fact Book

Somalia would not qualify for G8 debt relief as its government is not conducive to the expansion of its economy. The superficial fact that its unstable and undemocratic is neither here nor there as shown in the next example.

Congo
Qualified for, and received, HIPC debt relief.

Enjoys vast natural resources.

cobalt, copper, niobium, tantalum, petroleum, industrial and gem diamonds, gold, silver, zinc, manganese, tin, uranium, coal, hydropower, timber

CIA World Fact Book

The government of the Congo is acknowledged as a 'Dictatorship' by the CIA World Fact book. The following excerpt further explains the political situation in Congo.

Since 1997, the Democratic Republic of the Congo (DROC; formerly called Zaire) has been rent by ethnic strife and civil war, touched off by a massive inflow in 1994 of refugees from the fighting in Rwanda and Burundi. The government of former president MOBUTU Sese Seko was toppled by a rebellion led by Laurent KABILA in May 1997; his regime was subsequently challenged by a Rwanda- and Uganda-backed rebellion in August 1998. Troops from Zimbabwe, Angola, Namibia, Chad, and Sudan intervened to support the Kinshasa regime. A cease-fire was signed on 10 July 1999 by the DROC, Zimbabwe, Angola, Uganda, Namibia, Rwanda, and Congolese armed rebel groups, but sporadic fighting continued. KABILA was assassinated on 16 January 2001 and his son Joseph KABILA was named head of state ten days later. In October 2002, the new president was successful in negotiating the withdrawal of occupying Rwandan forces from eastern Congo; two months later, the Pretoria Accord was signed by all remaining warring parties to end the fighting and set up a government of national unity. A transitional government was set up in July 2003; Joseph KABILA remains as president and is joined by four vice presidents from the former government, former rebel camps, and the political opposition.

CIA World Fact Book

If "good governance" pertains to democratic and anti-corruption measures by governments then why does the Congo qualify for such debt relief? If that is an example of "good governance" I want no part of it. Its governance that is probably advocated by our own political masters, and on its way.

Conclusion
The Debt relief advocated by Tony Blair and Gordon Brown is nothing but a tool for the further enslavement of the African people. The international bankers are not content to reap the interest payments that may, or may not, be forthcoming from indebted African nations. The international bankers also know that their previous economic plans for Africa are not sustainable in today’s Western societies. We know the suffering Africa is going through and we wont tolerate the debt payments they are forced to repay.

International bankers know that their debts are extremely unpopular and are not prepared to lose out on their piece of the pie. How do they plan on continuing to make money off Africans? More money than they currently do in fact? They intend to let African nations expand their economies. International bankers will make money out of setting up their economies (privatisation) and they will make money when they come online (central banks).

They intend to blackmail African nations into selling them the right to profit from their natural resources in exchange for debt relief. They also push for financial reform which includes setting up private central banks so as to lend African governments money. Money which will incur interest, but this time, the governments can actually tax their newly-better-off-citizens and pay for it.

Any one who believes that G8 African debt relief is purely altruistic in nature is deluding themselves. The conditions attached to debt relief are designed to permanently enslave the African continent and make more money for international bankers than they currently do through debt interest.

But do Africans really have a choice? Can they live with their current debt? No. But we can fight for these conditions to be dropped from debt relief. Raising awareness for debt relief alone whilst allowing ignorance of the conditions tied to debt relief is only helping international bankers enslave Africa - with our blessing!

Make the international bankers lose money for their bad investments, not us nor Africans.

[edit on 2/7/05 by subz]

[edit on 3-7-2005 by John bull 1]

Comments welcome, I wont bite...much

Does any one disagree with it?

I like it, I like it a lot mate.

Well constructed, well written piece.

Good job!

subz, I have to admit that you did a dang good job on this Op/Ed subject. Seem that you researched this one very well and I think it should be your specialty further on.

As soon as I learned about the plans to eliminate debt from Africa by the G8 last May, I knew it would mean in exchange for debt relief, certain African countries would have to give up their resources to the G8 and its backers, the international bankers.

Subz - I'm still in the process of reading your op/ed, but just wanted to let you know I think you've put together an excellent piece. I look forward to contributing when I've had a chance to go through it.

Thanks for the compliments guys

Im all for making money, even though I lean towards socialism in some areas. But I dont think making money from the exploitation of an already down-trodden continent is acceptable. Raising awareness about these conditions of debt relief is just as vital as what Live8 has sought to achieve

.
Your title is misleading.

If poverty is an industry then i would prefer it over War which is a Trillion Dollar industry,
War is an industry that commits violent mass murder of men, women and children and reaps huge profits for Haliburton, Bechtel and the manufacturers of war implements.

Yes the international banking system is run in a way that doesn't really help cure poverty.
You can't serve two masters at once.
Either you are about profit or you are about helping people and any claim to do both is pure BS.
.

[edit on 3-7-2005 by slank]

Very nice job with the article subz.

There is so much info to read on this. Glad someone took the time to put it all together. I was also wondering this myself. All of this activity leading to an industry.

Nice job, subz.
Excellent information and perspective.

I happened to run across this article and was hoping that some here would give a comment or two to what it asserts:

"Even if they cancel the debt, even if they give our governments aid money, ordinary Africans will not benefit," he said. "That money will only make the corrupt people richer and Africans international beggars for decades to come."

To ordinary Africans, G-8 seems out of touch

And this mention:

One issue, though, rarely has a hearing in this politically correct world: why doesn’t it work? Why is it that after an estimated trillion dollars of aid to Africa over the last four decades, average per capita income across most of the continent is, according to the World Bank, lower than at the end of the 1960s?

Some of that answer lies in the aid business itself. One report recently estimated that some 70 per cent of all money raised went on NGOs’ administration — cars, salaries, equipment, and the all-important workshops and seminars.

Lords of poverty wait to cash in on aid millions


Thoughts?





seekerof

[edit on 3-7-2005 by Seekerof]

Amazing post. Ive always wondered in what ways our Governments would want to benefit from Africa for cancelling the debt. Ive just not had the time to look into it recently and this has been more than a great starting block for me.

Again, thanks for the compliments guys. Raising the true issues surrounding Africa's problems is a reward in itself. If i've helped illustrate the true reasons for Africa's dire straights im glad

"Even if they cancel the debt, even if they give our governments aid money, ordinary Africans will not benefit," he said. "That money will only make the corrupt people richer and Africans international beggars for decades to come."

Its true. There is a case for reform in African countries, but not of the kind that is being pushed by the likes of the IMF/World Bank.

Privatisation of African national firms is the single biggest problem. If Africans dont have two pennies to rub together, how in the World will their citizens buy their own national firms? They cant, they will go to international corporations who have absolutely no obligation to pump their profits back into the local economy.

Coruption within African governments and their national firms has to be addressed. But instead of forcing them to sell them for bargain basement prices, we should be spending economic aid money on helping them root out corruption with swarms of our federal police and accountants.

We could certify national firms as being corruption free and do the same to their governments. Then, when that has been achieved, we can then give them debt relief to capitalize off their well run national firms. Money will flow into their economies at a staggering rate, their natural resources ensure it.

Throwing good money after bad, is not an option. There is a case for structural change preceeding debt relief but in the spirit of furthering their economic infrastructure for themselves, and themselves alone. This is something that we are incapable of doing, capitalism has no obligation to act morally.

One issue, though, rarely has a hearing in this politically correct world: why doesn’t it work? Why is it that after an estimated trillion dollars of aid to Africa over the last four decades, average per capita income across most of the continent is, according to the World Bank, lower than at the end of the 1960s?

Some of that answer lies in the aid business itself. One report recently estimated that some 70 per cent of all money raised went on NGOs’ administration — cars, salaries, equipment, and the all-important workshops and seminars.

Lets call a spade "a spade" here. African governments, by and large, are corrupt. The corruption comes from the economic nightmare our international bankers have imposed upon them.

Put yourself in their position, you have a choice. Get into political power and have a chance of saving your family from starving to death. Would you allow your family to starve to preserve your morals? Some might, I wouldnt.

I know that the greed and corruption goes further than ensuring their familes have food on the table. Palaces and ferraris atest to this, but when you cross the line of corruption to begin with, you are at its mercy. Your corruption to feed your family can then be turned against you by blackmailers (political and industrial) and if you want to keep your political position you have to go along with it - or starve.

NGO's and charities have the same potential for corruption as anything else. They are, by and large, though decent and legitimate in their aims of helping Africans.

Keep giving aid to Africans to survive but proper economic infrastructure change has to occur. Maybe headed by charities instead of 'conflict of interest' rife international banks.