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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Bill Murphy who wrote (6683)	7/1/1999 3:26:00 AM
From: Alex	Read Replies (1) \| Respond to of 81884

6/30/99 - ECONOMY-AFRICA: DEBT RELIEF OFFERS LITTLE RESPITE <Picture> HARARE, (Jun. 29) IPS - The debt relief measures pledged by the Group of Eight wealthy creditor nations (G-8) offers little respite for Africa, said Jubilee 2000. Jubilee 2000, an international coalition of civic groups that is demanding total debt forgiveness, said the gesture by the G-8 at the Jun. 18-20 summit in Cologne, Germany is too little, too late and will not be of much benefit to developing countries, especially Africa. In Africa, for example, trade liberalization, falling exchange rates and declining commodity prices have seen economies collapse, causing a perennial shortage of funds for poverty reduction, said Jubilee 2000. The agreement hammered out by the G-8 -- made up of Italy, Japan, Germany, Britain, Canada, the United States, France and Russia -- proposes a cut of some $70 billion in nominal terms off the $214 billion owed by the world"s 41 poorest countries. However, the offer only applies to countries that observe the principles of the welfare state and the rule of law and are carrying out reform programs in collaboration with the International Monetary Fund (IMF) and the World Bank. The proposal will only provide relief of an estimated $3 per person per year in the affected countries where each individual currently owes $573 annually, said Jubilee 2000. Out of the 41 countries eligible for the program, 32 are in Africa. But to take advantage of the initiative, governments must have a solid track record in financial management and are required to demonstrate at least five years of prudent fiscal policies. The Cologne package is a follow-up to the Highly Indebted Poor Countries initiative (HIPC) launched by the World Bank and IMF in 1996. Cologne targets the same countries and carries more or less similar conditions. Only four African countries -- Uganda, Burkina Faso, Cote d"Ivoire and Mozambique -- have qualified for debt relief under HIPC. Africa owes $260 billion, a figure which nearly equals its combined gross domestic product (GDP). Home to 10 percent of the world"s population, Africa provides half of the global market"s raw products. It has the second largest known deposits of cobalt and the largest deposits of gold, platinum, diamonds and chrome. About 75 percent of sub-Saharan Africa"s export revenues come from primary commodities. However, lowered prices have affected the entire range of commodities -- over the past two years rubber has fallen by 65 percent, and nickel, copper and other base metals are down by 50 percent. Oil prices reached a 12-year low in 1998 at $12 a barrel, down from about $22 the previous year. Gold is fetching its worst price in 20 years. The glut began in 1996 when the price began slipping from just over $400 an ounce to the current $258 an ounce. Debt relief strategies such as HIPC, rather than being used to leverage Africa into global competitiveness, have been likened to a whip by Ethiopian Prime Minister Meles Zenawi, "to enforce unquestioning acceptance of the economic orthodoxy, the so-called Washington consensus, that is being promoted by some international financial institutions." The short-term effect of globalization in African economies has been devastating. "We have seen more bad than good so far, in dumping of foreign goods, putting African farmers and manufacturers in jeopardy," said Beth Mugo of the Nairobi-based Council for Economic Empowerment of Women in Africa. A 1999 U.N. Economic Commission for Africa (ECA) report notes that despite recent economic growth and progress in reforms, most African countries lack the fundamentals for the sustained future growth at rates necessary to achieve globally-agreed poverty reduction targets. To reduce the crisis, Tayo Fakiyesi, a senior lecturer in economics at the University of Lagos, Nigeria, calls for "relieving current levels of debt...enabling semi-manufactured African products to have a place in the market of the developed world not because we can match them but to give our industries a chance to develop." Fakiyesi said any package for Africa should include some form of preferential access to world markets like that provided by the Lome Convention -- a preferential trade deal between the African, Caribbean and Pacific (ACP) countries and the European Union (EU) -- which is soon due for re-negotiation. Economic growth in Africa almost stagnated between 1980 ($293 billion) and 1995 ($297 billion), while Southeast and South Asia as well as Latin America and the Caribbean more than doubled their rates.