An aura of sanctity is descending on the world’s most powerful men. Last weekend the finance ministers from seven of the G8 nations promised to cancel the debts the poorest countries owe to the World Bank and the International Monetary Fund (IMF). The hand that holds the sword has been stayed by angels: angels with guitars rather than harps.
Who could deny that debt relief is a good thing? Never mind that much of this debt should never have been pursued in the first place. Never mind that, in terms of looted resources and stolen labour, the rich owe the poor far more than the poor owe the rich. Some of the poorest countries have been paying more for debt than for health or education. Whatever the origins of the problem, that is obscene.
You are waiting for me to say ”but”, and I will not disappoint you. The but comes in paragraph two of the finance ministers’ statement. To qualify for debt relief, developing countries must ”tackle corruption, boost private-sector development” and eliminate ”impediments to private investment, both domestic and foreign”.
These are called conditionalities — the policies governments must follow before they receive aid, loans and debt relief. At first they look like a good idea. Corruption cripples poor nations. Money that could have given everyone a reasonable standard of living has instead made a handful unbelievably rich. The powerful nations are justified in seeking to discourage it.
That’s the theory. In truth, corruption has seldom been a barrier to foreign aid and loans. Robert Mugabe, the West’s demon king, has deservedly been frozen out by rich nations. But he has caused less suffering and is responsible for less corruption than Rwanda’s Paul Kagame or Uganda’s Yoweri Museveni, both of whom are cited by the G8 countries as practitioners of ”good governance”. Their armies are largely responsible for the meltdown in the eastern Democratic Republic of Congo (DRC), which has so far claimed four million lives, and have walked off with billions of dollars’ worth of natural resources.
Yet Britain remains their main bilateral funder. It has so far refused to make their withdrawal from the DRC a conditionality for foreign aid.
”Corrupt” is often used by the West to mean regimes that won’t do what they’re told. Genuine corruption, on the other hand, is tolerated and even encouraged. Twenty-five countries have so far ratified the United Nations convention against corruption, but none is a member of the G8. Why? Because corporations do very nicely out of it.
The idea, swallowed by most commentators, that the conditions rich governments impose help to prevent corruption is laughable. To qualify for World Bank funding, model client Uganda was forced to privatise most of its state-owned companies before it had any means of regulating their sale. A sell-off that should have raised $500-million for the Ugandan exchequer instead raised $2-million. The rest was nicked by government officials. Unchastened, the World Bank insisted that — to qualify for the debt-relief programme the G8 has now extended — the Ugandan government sell off its water supplies, agricultural services and commercial bank, again with minimal regulation.
And here we meet the real problem with the G8’s conditionalities. They do not stop at pretending to prevent corruption, but intrude into every aspect of sovereign government. When the finance ministers say ”good governance” and ”eliminating impediments to private investment”, what they mean is commercialisation, privatisation and the liberalisation of trade and capital flows. And all this means is new opportunities for Western money.
There is an obvious conflict of interest in this relationship. The G8 claim they want to help poor countries develop and compete successfully. But they have a commercial incentive to ensure they compete unsuccessfully, and that our companies can grab their public services and obtain their commodities at rock-bottom prices. The conditionalities imposed on the poor nations keep them on a short leash.
That’s not the only conflict. The G8 finance ministers’ statement insists the World Bank and IMF will monitor the indebted countries’ progress, and decide whether they are fit to be relieved of their burden. The World Bank and IMF, of course, are the agencies that have the most to lose from this redemption. They have a vested interest in ensuring debt relief takes place as slowly as possible.
Attaching conditions like these to aid is bad enough. It amounts to saying: ”We will give you a trickle of money if you give us the crown jewels.” Attaching them to debt relief is in a different moral league: ”We will stop punching you in the face if you give us the crown jewels.” The G8’s plan for saving Africa is little better than an extortion racket.
Do you still believe our newly sanctified leaders have earned their haloes? If so, you have swallowed a truckload of nonsense. Yes, they should cancel the debt. But they should cancel it unconditionally. — Â