---------- Forwarded message ----------
Date: Thu, 5 Apr 2001 12:14:43 -0500
From: APIC <[log in to unmask]>
To: [log in to unmask]
Subject: Africa: World Bank and Africa Policy
Africa: World Bank and Africa Policy
Date distributed (ymd): 010405
Document reposted by APIC
Africa Policy Electronic Distribution List: an information
service provided by AFRICA ACTION (incorporating the Africa
Policy Information Center, The Africa Fund, and the American
Committee on Africa). Find more information for action for
Africa at http://www.africapolicy.org
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: Continent-wide
Issue Areas: +political/rights+ +economy/development+
SUMMARY CONTENTS:
This posting provides two brief notes on issues where World Bank
policy continues to clash with alternatives proposed by African
civil society organizations and governments. The first, from
Jubilee 2000-Zambia, concerns the use of loans rather than grants
to address the HIV/AIDS pandemic. The second is an update from Joe
Hanlon reporting that the IMF and World Bank are still resisting
Mozambican efforts to protect its cashew industry, despite apparent
concessions earlier this year (see
http://www.africapolicy.org/docs01/cash0101.htm for earlier
posting).
The posting begins with a brief cover note from Africa Action
executive director Salih Booker.
+++++++++++++++++end profile++++++++++++++++++++++++++++++
Who Pays for Damages?
The documents below are two examples among many of specific policy
areas exposing the 'democracy deficit' in the World Bank and other
multilateral institutions which in practice make many key decisions
for African countries. The balance of power in making decisions is
tipped decisively towards decision-makers in Washington, yet those
who pay for policy failures include patients seeking health care
from impoverished health systems and unemployed cashew workers.
An internal Operations Evaluation Department report of the World
Bank's health projects concluded that the Bank 'has performed
poorly in analyzing the factors that lead to ill-health among the
poor.' (Cited in John Gershman, The World Bank and Health -
http://www.bicusa.org/ptoc/htm/gershman_health.htm). Bank-imposed
user-fees (required in nearly 75% of the Bank's health projects in
sub-Saharan Africa) have driven the poor away from health care,
thereby fueling the HIV/AIDS pandemic. More than three years ago,
Mozambican and international critics identified the damages from Bank
policy to Mozambique's cashew industry and called for the Bank to pay
compensation (http://www.africapolicy.org/docs97/moz9711.htm)
Who owes whom? The precise figures may be hard to calculate, and
the international legal system does not yet provide for juries to
award damages as in domestic civil suits. But can there be any
doubt that those who imposed failed policies should be liable to
pay?
Salih Booker
P.S. In response to the most recent developments on the cashew
policy, Representative Cynthia McKinney has initiated a
congressional letter to U.S. Treasury Secretary Paul O'Neill on the
issue (http://www.africapolicy.org/adna/moz0103.htm). Along with
several other organizations in Washington, I am writing to
the Department of Treasury to request a meeting to ask that the
U.S. use its influence against this continuing pressure on
Mozambique.
###############################################################
Jubilee 2000 - Zambia
3 April 2001
PRESS RELEASE
NO! LOANS: NOT A SOLUTION TO THE AIDS PANDEMIC IN ZAMBIA
For more information:
Chrispin Mphuka
Coordinator, Jubilee 2000-Zambia Campaign
Jesuit Centre for Theological Reflection
P.O BOX 37774 Lusaka, Zambia.
Tel: 260-01-290410 Fax. 260-01-290759
E-mail: [log in to unmask] Web: http://www.jctr.org.zm
Loans will not solve the AIDS/HIV pandemic that Zambia is currently
facing. As Jubilee-Zambia, we are concerned with the World Bank's
insistence that Zambia should acquire loans to tackle the AIDS
problem. The World Bank should realise that Zambia is actually
losing more lives as a result of servicing debts for the loans that
we are being encouraged to borrow.
Responding to press article in which World Bank Country Director
for Zambia and Zimbabwe Yaw Ansu justified the need to borrow in
order to overcome the problem, Jubilee-Zambia Acting Co-ordinator
Charity Musamba explained that if indeed the World Bank is concerned
about AIDS in Zambia, then it should change its approach to this
crucial matter - HIV/AIDS.
Loans are not the main option especially if "thousands of people
are dying" as Mr Ansu noted. Instead, it would be important to
empower countries such as Zambia to tackle this problem in a more
sustainable way. The most critical question the World Bank must
respond to is "why are thousands of people dying of HIV/AIDS in
Zambia today?" Secondly, if the World Bank's concern is true, the
solution to this problem should be "people-centred" as opposed to
the current strict "monetary and commercial" approach the Bank is
promoting.
It is true that Zambia needs an urgent solution to the AIDS crisis
but the solution is not "more loans." We are all aware of how loans
affected our country today and one of the major results is that we
are now failing to deal with the crisis. More loans will only
continue to undermine the prosperity and opportunities of Zambia to
deal with the AIDS crises and the related challenges such as
poverty.
Zambia is poor and heavily indebted to effectively deal with the
problem at hand. Zambia needs grants and other non-exploitative
forms of external assistance. World Bank can play a key and
positive role by facilitating debt cancellation for poor nations so
that they are empowered to take charge of challenges such as
AIDS/HIV. Only when this is done will Zambia confidently acquire,
effectively utilise and repay loans.
As partners in development, let us show commitment to true human
development by encouraging sustainable approaches in dealing with
the crises that heavily indebted poor countries are facing.
Serious and real assistance to Zambia will aim at avoiding any
chances of worsening the country's debt problem. Let us fight AIDS
by avoiding debt traps!
Charity Musamba Acting Co-ordinator: Jubilee-Zambia
***************************************************************
MOZAMBIQUE FORCED TO REVERSE CASHEW EXPORT BAN WHILE WORLD BANK
DEFENDS ITS CASHEW POLICY
article and clippings by Joseph Hanlon [log in to unmask] 17.03.01
Mozambique has been forced to back down somewhat on its ban on
cashew export ban. In January we reported that "Mozambique has
banned the export of unprocessed cashew nuts, ending a five-year
battle with the World Bank and International Monetary Fund." But we
appear to have been over-optimistic.
According to Mozambican sources, the IMF was "furious" and demanded
that Mozambique deny the that a ban existed. In late February,
UTRA, the agency in the Ministry of Planning and Finance responsible
for customs, told the press that there really never had been a ban,
and that exports were permitted with restrictions.
The World Bank and IMF had forced Mozambique to allow the free
export of unprocessed nuts if India was prepared to pay a higher
price than local industry. As predicted, once the factories in
Mozambique closed, the Indian price plummeted to less than half the
earlier price. But UTRA concluded that there was under-invoicing,
and that traders were reporting export prices well below the real
price, and were putting the difference in foreign bank accounts
(and not paying local taxes on the difference). So UTRA agreed to
allow exports only if exporters, in effect, allowed an independent
adjudication of the export value.
Nearly all of the cashew factories are now closed, and 8500 of
10,000 cashew processing workers are unemployed. while peasants are
earning less than they were before. So, despite claims by the World
Bank that making 10,000 cashew workers unemployed would bring
higher earnings, both peasants and workers are now worse off.
Meanwhile, last year there were two articles in US newspapers. In
the New York Times economist Paul Krugman claimed that those of us
who oppose World Bank cashew policy say that "the World Bank is
evil, then, because it tried to end a policy that not only made
Mozambique as a whole poorer, but directly hurt millions of
impoverished small farmers."
The response came in an article in the Washington Post, by a
journalist who actually visited Mandlakaze in Mozambique, rather
than writing from a US university, and generally supported the
critics, calling the World Bank policy "a less than helpful hand".
The Statistical Assessment Service (STATS) then gave the Krugman
article one of its "Dubious Data 2000 Awards" for "The Top Ten
Silliest, Most Misleading Stories of the New Millennium". It wrote:
"Cashew, Cashew, We All Fall Down New York Times columnist Paul
Krugman found another way to criticize anti-globalization
protestors in his April 19 column, "A Real Nut Case." He claimed that
the World Bank's intervention in Mozambique's cashew industry
benefitted the country's poor farmers, who had suffered compared with
the nation's 10,000 nut processing workers. Unfortunately for Mr.
Krugman, and for Mozambique as well, investigations later in the year
by the Washington Post ("A Less Than Helpful Hand; World Bank, IMF
Blamed for Fall of Mozambican Cashew Industry," Oct. 18) and Knight
Ridder ("World Bank Policies Had Mixed Results in Mozambique," Sep.
17) found that the World Bank's policies had not only put over 7,500
factory workers out of a job in one of the world's poorest
countries, but that the farmers who were supposed to have
benefitted had lost out to nut speculators, many of them foreign."
But the World Bank jumped to defend its policies, issuing on 13
November 2000 a "Briefing Note on Cashew Policy in Mozambique"
which used Krugman's article to defend itself against the Washington
Post article. The briefing note contained a number of errors.
[The full text of the World Bank briefing note, with comments by
Joseph Hanlon, will be available in the web archive version of this
posting, at http://www.africapolicy.org/docs01/wb0104.htm]
=============================
The background to the cashew dispute is detailed in an article
"Power Without Responsibility: the World Bank and Mozambican Cashew
Nuts" published in the Review of African Political Economy 83 March
2000. The article is on the web at
http://www.jubilee2000uk.org/policy_papers/roape100400.html (Copies
of my 30.01.01 note - see
http://www.africapolicy.org/docs01/cash0101.htm - are available on
request from [log in to unmask])
==============================
EXPORTS OF RAW CASHEWS RESUME, UNDER CONDITIONS
Maputo, 23 Feb (AIM) - The Mozambican government has once again
authorised the export of raw cashew nuts, but the exporters, who
are suspected of evading the export surtax on the nuts, must pay a
deposit while customs investigates the real export price being
paid.
In late January, the independent newsheet "Metical" reported that
the government had slapped an embargo on the export of raw nuts
because it could not believe the low FOB prices that the exporters
were quoting.
Raw nuts pay an 18 per cent export surtax - a measure designed to
protect Mozambique's near moribund cashew processing industry.
There is therefore an incentive for exporters to lie about the prices
paid for their nuts (all of which are exported to India).
Exporters shipping unprocessed nuts out of the northern port of
Nacala were quoting FOB prices that varied between 335 and 440 US
dollars a tonne. But the current FOB price for raw cashews on the
world market should not be less than 650 dollars a tonne.
On Friday "Metical" reported that, after lengthy negotiations,
UTRA, the customs restructuring unit in the Finance Ministry, has
allowed the nuts to be exported - but only against a deposit, which
takes the form of a banker's guarantee that will not be cashed if
UTRA eventually concludes that the exporters are not trying to
defraud the state.
The traders will pay the 18 per cent surtax on the declared FOB
prices - but they must also provide a banker's letter of guarantee
pledging payment of surtax on the difference between the declared
price and 650 dollars a tonne.
The exporters claim they are paid low prices because the quality of
Mozambican nuts is "very poor". Customs clearly finds it hard to
believe that the nuts are so bad that the exporters can only pick
up between a half and two thirds of the normal market price for
them.
So studies to ascertain the real price are to be undertaken. If the
conclusion is that the nuts really are worth no more than the price
the exporters have declared, then the banker's guarantee will not
be claimed. If, however, customs concludes that the nuts have been
underinvoiced, then the money will be claimed.
A senior UTRA spokesman objected to "Metical"'s original use of the
term "embargo", which had doubtless annoyed the IMF and World Bank
ideologues who object to effective protection for the cashew
processing industry. (AIM)
************************************************************
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