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Date: Thu, 15 Feb 2001 11:45:02 EST
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Subject: [wa-afr] [unioNews] Africans Are Creditors!
Thema: [unioNews] Africans Are Creditors!
Datum: 15.02.01 17:27:06 (MEZ) Mitteleuropäische Zeit
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Africans are creditors!
By J. Nii Amarh
“So severe has been the murderous burden of debt on the ordinary people in
the developing world that its destructive impact is comparable only to that
of war. The only difference being that it is children rather than soldiers
who are dying, and instead of millions wounded, there are millions of
unemployed. The war-like impact of debt is tearing down schools, hospitals
and rending the fabric of societies" — Prof. Adebayo Adedeji, former
Executive Secretary of the UN Economic Commission for Africa.
According to the World Bank, the total debt owed by "developing nations" to
the "developed world" exceeded US $2 trillion in 1998. The story began in
1973 when OPEC was formed to push up the price of oil. The amount that "3rd
World Nations" had to pay for that same quantity of oil quadrupled, creating
an initial debt of about $ 260 million. OPEC then found themselves with more
cash than they could spend. They deposited the excess profits with Western
banks that also had the problem of what to do with the money. Since banks
need to lend money in order to stay in business, they, for the first time,
turned to the "3rd World" which, of course, needed the money to pay for the
very expensive oil. Into the following decade, the banks continued to lend
lavishly at very low interest and with little concern for who was borrowing
or how the money was to be spent.
Little of the borrowed money was spent on productive investment that would
create the wealth needed to pay back the loans. Some was spent on the
expensive oil and some stolen or "disappeared". A lot more was spent on white
elephant projects, while about a fifth was spent on armaments, normally by
military dictators who used the easy credit to go on a shopping spree for
their "beloved toys" — WEAPONS!
The irresponsible lending, excessive borrowing and wasteful spending were not
the actual problems since low interest rates made repayment easier. However,
in the mid-70s, prices of "3rd World exports" fell sharply on the world
market and OPEC hiked up oil prices again in 1979. At the same time, "World
Interest Rate" shot to frightening heights whereby a single percentage
increase in interest rate pushed up the "3rd World Debt Repayment" by between
U.S$2 and $6 billion.
Analysts attribute the astronomical rise in interest rate to former US
president Reagan's excessive borrowing to finance the over a trillion-dollar
weaponry systems such as the "Star Wars Programme".
With falling incomes and rising payment, it took only a few years for "3rd
World Nations" to effectively go bankrupt. The debt crisis, therefore, began
in 1982 when Mexico announced her inability to afford repayment and other
nations followed suit. The banks then clubbed together and sought the help of
the IMF to negotiate "Debt Rescheduling" arrangements. This means that debts
are spread out and paid off more gradually than originally agreed; thereby
causing a lower annual payment but higher total repaid! Since 1987, arrears
on sub-Sahara African debts have quadrupled to £32 billion, while developing
nations' daily debt servicing amounts to U.S$ 717 million.
The I.M.F negotiated the rescheduling deals by offering more cheap loans to
cover debt interest on the banks, hence shifting the debts from private banks
to public institutions.
IMF loans come with S.A.P which "adjusts" the economy away from "public
welfare" to "debt repayment". Hence "debtor nations" are forced to build
their economic structures on "export of raw materials" to earn foreign
currency to service their "debt" and stock their armoury.
This provides the basic reason behind the perennial unrest in the Great Lakes
Region and other parts of Africa. The Mobutus, Kabillas, Sankohs, Savimbis
are all products of the same system which tends to forever marginalise Africa.
These draconian economic measures, known unofficially as "austerity
programmes" include the drastic cut in the "basic service" budget, such as
health and education, prioritising the export of goods such as food, timber
and minerals over providing for national population, abolishing public
subsidies, especially on agriculture and the utilities, and encouraging the
privatisation of public industries. These "inhuman policies" produce adverse
effects on our socio-economic and political environment.
• Wages have fallen in most African countries by 50 per cent since the early
80s whilst unemployment has risen drastically.
• Access to quality education and healthcare has been nothing but elusive —
one in 20 mothers in sub-Sahara Africa dies in childbirth, while the number
of children dying before their 5th birthday has increased tremendously.
Over the years, there have been many western-inspired plans to deal with the
"debt crisis" - The Baker Plan (1985), Trinidad Terms (1989), Brady Plan
(1989) and Naples Terms (1994). All these plans had the sole aim to make the
"3rd World" pay as much as possible, mainly by rescheduling the debt whilst
offering limited relief. Rescheduling has only shifted the problem into the
future — whereas "3rd World" total debt was about $1 trillion in 1989, it has
now doubled. This cunning system ensured that in 1997, for instance, the IMF
took U.S$ 600 million more out of Africa than it put in.
The latest official plan, called the Highly Indebted Poor Countries
Initiative (HIPC), was first proposed at the World Bank/IMF spring meeting in
1986. It is no different from the previous plans, since it offers no real
"debt relief" but "rescheduling" to make us perpetual debtors and beggars and
thereby entrench poverty, disease, crime and war in our motherland.
Politically, the "debt crisis" is convenient for the industrialised nations,
since it enables them to easily and constantly exploit our rich natural
resources for their benefit. So that until African leaders decide to muster
enough courage to break the myth surrounding the so-called debt, which has
been repaid over again through diverse means, the carnage continues unabated.
Hon. Leaders, it's fatal to continue with western solutions to Africa's
problems. They kill too many people and create many more armed robbers,
rapists, and sadists! It's simple — STOP DEBT SERVICING NOW AND REDIRECT
ECONOMIC FOCUS ON PUBLIC WELFARE!!
Daily Graphic * February 15, 2001 * Accra / GHANA
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QUOTATION:
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HREF="http://members.aol.com/GhanaUnion/afrohero.html">Dr J.E.K. Aggrey</A>
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