Friday, June 03, 2005

Gordan Brown puts out the African Marshall Plan. I laugh.

Africa: Yet another idealistic pipe dream that works only in your mind, but will fail in reality.

"....Mr Brown said there was no justification for Africa to be weighed down by debts from 20 or 30 years ago and he proposed erasing all debts African countries owed to multilateral institutions such as the World Bank, the African Development Bank and the International Monetary Fund. Mr Brown also proposed boosting direct aid payments, selling bonds on the international market to fund immunisation programmes for malaria and HIV/Aids and eliminating trade subsidies in rich countries that make it difficult for African nations to compete in world markets. "These proposals represent a new deal between rich and poor countries," Mr Brown said. "We are determined the empowerment of the people of Africa ... can be made possible by decisions at Gleneagles. The scale of what we outline is very substantial indeed."

You erase all debts, you just give corrupt African leaders another lease on robbing its own people while happily taking aid money from rich countries. Regions with important farming industries are not going to drop their protection to save Africa. It didn't take long for the professional poor country groups to whine about the plan.

Romilly Greenhill, policy adviser for international development agency Action Aid, also welcomed Mr Brown's announcement, but said there was nothing new in the proposals. She said the key questions were how much extra money it would produce and what the UK was doing to persuade other G8 ministers to support the initiative. "Of course we welcome any movement, but we understand they are discussing compromises. Our figures show a £10bn annual debt reduction is needed for poor countries, but we fear they will end up with only a few hundred million." Mr Powell said the chancellor's proposal for 100% multilateral debt relief for poor countries until 2015 actually amounted to 30-40% relief. "Rather like a mortgage, loans to poor countries typically last for 30-40 years. The Treasury itself agrees that after the debt relief period ends in 2015, countries will still have to pay off 60-70% of their debt." Mr Powell said that while Mr Brown had indicated there would be a reassessment in 2015 of the need for continuing debt relief, it was unclear that governments would be as favourable then as they were today. The WDM was also concerned about the conditions attached to the proposal. "This debt relief will only be available to countries that sign up for packages of free-market economic conditions under the auspices of the IMF and World Bank," Mr Powell said. The WDM said the International Finance Facility (IFF) proposed by the chancellor did not involve any new money for poor countries, but instead relied on raising loans on the capital markets. "This means you get more money initially - it's called 'frontloading' - but in 2015 governments have to repay the international financiers for the money borrowed. Over the long term there is actually less money for poor countries," Mr Powell said. Action Aid said the IFF was an expensive way to raise money because of the interest paid on international bonds. "We therefore think the donors should put their hands in their pockets," Ms Greenhill told Guardian Unlimited. "The UK claims to be a leader on international aid, but to be a leader they should increase aid now."
Their view is no strings attached money directly from countries to Africa and you thought corruption was bad before? Try this dumb idea and see how fast that money disappears as Africa gets worse. President Bush doesn't care much for Brown's plan, but according to Mbeki he is willing to back a Marshall Plan for Africa. Mbeki of course likes the British plan.
"....The Africa summit has said it hopes to use the British plan to lobby the G8 group of industrialized states to give more aid to Africa at the G8 meeting in Gleneagles Scotland next month. Mbeki said Africa would place funding for peace and security on the Gleneagles agenda. Prime Minister Tony Blair has staked his reputation on helping the world's poorest continent during Britain's presidency of the G8 and the European Union this year, but his proposals have been dogged by discord among G8 nations on debt reduction and aid spending. Mbeki said a plan to impose an international tax on jet fuel - an idea floated by French President Jacques Chirac - was yet another example that the G8 was keen to help Africa. "Chirac is talking about taxes on jet fuel, the U.S. is talking of using its budget processes. I don't expect there will be conflict at Gleneagles over the need to help Africa," he said. Mbeki backed the British blueprint, saying it responded to pledges already made by the G8 to Africa's New Partnership For Africa's Development (NEPAD), a home-grown rescue-plan, in 2002.
The big complaint I have said over and over again is the problem about Africa is the corruption that is rampant over the continent, political and societial problems are the main reason why Africa is and will continue to be a cesspool. But they have a plan to make sure that aid money is not misused.
"He said NEPAD's peer review mechanism -- where evaluators assess a country's governance record in the hope that positive ratings could lure foreign lending and investment -- would help guarantee that aid money is not misused. The first reports under the voluntary scrutiny process, on Ghana and Rwanda, were expected to be ready this month, he said. Niall FitzGerald, chairman of Reuters and co-chair of the WEF summit, told reporters peer review was central to Africa's future and that countries that ignored the review did so at their own cost. "Those countries which have not yet signed up for that probably will be at the end of the line when it comes to getting the benefits of the projects to revitalise Africa," he said. "
Does anyone think that aid money will be delayed or cut off from countries if they don't meet some abstract review standard? There is no credible mechanism being put forth to hold African countries accountable. Until that happens all this talk is just talk.

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