[mgj-discuss] Spin, Lies and Corruption - on G8 debt relief

Mon Jun 27 16:27:27 GMT 2005

Great article on the recent debt cancellation agreement in the G-8.
M

>Spin, Lies and Corruption
>
>The G8's debt reduction plan is little better than an extortion racket
>
>
>By George Monbiot. Published in the Guardian 14th June 2005
>
>An aura of sanctity is descending upon the world's most powerful men.
>On Saturday the finance ministers from seven of the G8 nations (Russia
>was not invited) promised to cancel the debts the poorest countries
>owe to the World Bank and the International Monetary Fund. The hand
>that holds the sword has been stayed by angels: angels with guitars
>rather than harps.
>
>Who, apart from the leader writers of the Daily Telegraph,(1) could
>deny that debt relief is a good thing? Never mind that much of this
>debt - money lent by the World Bank and IMF to corrupt dictators -
>should never have been pursued in the first place. Never mind that, in
>terms of looted resources, stolen labour and now the damage caused by
>climate change, 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 2 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."(2)
>
>These are called conditionalities. Conditionalities are the policies
>governments must follow before they receive aid and loans and debt
>relief. At first sight they look like a good idea. Corruption cripples
>poor nations, especially in Africa. The money which 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: look at the money we have given, directly and
>through the World Bank and IMF, to Mobutu, Suharto, Marcos, Moi and
>every other premier-league crook. Robert Mugabe, the west's demon
>king, has deservedly been frozen out by the 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
>repeatedly cited by the G8 countries as practitioners of "good
>governance". Their armies, as the UN has documented, 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.(3)
>Yet the United Kingdom, which is hosting the G8 summit, remains their
>main bilateral funder. It has so far refused to make their withdrawal
>from the DRC a conditionality for foreign aid.
>
>The difference, of course, is that Mugabe has not confined his attacks
>to black people; he has also dispossessed white farmers and
>confiscated foreign assets. Kagame, on the other hand, has eagerly
>supplied us with the materials we need for our mobile phones and
>computers: materials which his troops have stolen from the DRC.
>"Corrupt" is often used by our governments and newspapers 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 UN
>Convention Against Corruption, but none of them are members of the
>G8.(4) Why? Because our own corporations do very nicely out of it. In
>the UK companies can legally bribe the governments of Africa if they
>operate through our (profoundly corrupt) tax haven of Jersey.(5) Lord
>Falconer, the minister responsible for sorting this out, refuses to
>act. When you see the list of the island's clients, many of which sit
>in the FTSE-100 index, you begin to understand.
>
>The idea swallowed by most commentators - that the conditions our
>governments impose help to prevent corruption - is laughable. To
>qualify for World Bank funding, our 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 which should have raised $500m
>for the Ugandan exchequer instead raised $2m.(6) 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.(7)
>
>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 what this means is new
>opportunities for western money.
>
>Let's stick for a moment with Uganda. In the late 1980s, the IMF and
>World Bank forced it to impose "user fees" for basic healthcare and
>primary eduction. The purpose appears to have been to create new
>markets for private capital. School attendance, especially for girls,
>collapsed. So did health services, particularly for the rural poor. To
>stave off a possible revolution, Museveni reinstated free primary
>education in 1997 and free basic healthcare in 2001. Enrolment in
>primary school leapt from 2.5 million to 6 million, and the number of
>outpatients almost doubled. The World Bank and the IMF - which the G8
>nations control - were furious. At the donors' meeting in April 2001,
>the head of the Bank's delegation made it clear that, as a result of
>the change in policy, he now saw the health ministry as a "bad
>investment".(8)
>
>There is an obvious conflict of interest in this relationship. The G8
>governments claim they want to help poor countries to develop and
>compete successfully. But they have a powerful commercial incentive to
>ensure that they compete unsuccessfully, and that our companies can
>grab their public services and obtain their commodities at rock bottom
>prices. The conditionalities we impose on the poor nations keep them
>on a short leash.
>
>That's not the only conflict. The G8 finance ministers' statement
>insists that the World Bank and IMF will monitor the indebted
>countries' progress, and decide whether or not they are fit to be
>relieved of their burden.(9) The World Bank and IMF, of course, are
>the agencies which have the most to lose from this redemption. They
>have a vested interest in ensuring that 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
>halos? If so, you have swallowed a truckload of nonsense. Yes, they
>should cancel the debt. But they should cancel it unconditionally.
>
>www.monbiot.com
>
>References:
>
>1. Leading article, 13th June 2005. That's enough debt relief.
>
>2. G8 Finance Ministers, 10-11 June 2005. Conclusions on Development.
>http://www.hm-treasury.gov.uk/otherhmtsites/g7/news/communique_110605.cfm
>
>3. United Nations Security Council, October 2002. Final report of the
>Panel of Experts on the Illegal Exploitation of Natural Resources and
>Other Forms of Wealth of the Democratic Republic of the Congo. UN, New
>York. See also: Amnesty International, 1st April 2003. Democratic
>Republic of the Congo: "Our brothers who help kill us" - economic
>exploitation and human rights abuses in the east.
>http://web.amnesty.org/library/Index/ENGAFR620102003; Human Rights
>Watch, 4th December 2004. Democratic Republic of Congo - Rwanda
>Conflict.
>http://www.hrw.org/english/docs/2004/12/04/congo9767.htm;
>International Rescue Committee, December 2004. Mortality in the
>Democratic Republic of Congo: Results from a Nationwide Survey,
>Conducted April - July 2004.
>http://www.theirc.org/pdf/DRC_MortalitySurvey2004_RB_8Dec04.pdf;
>Global Witness, June 2004. Same Old Story - Natural Resources in the
>Democratic Republic of Congo.
>www.globalwitness.org/reports/download.php/00141.pdf;
>The All Party Parliamentary Group on the Great Lakes Region and
>Genocide Prevention, November 2002. Cursed by Riches: Who Benefits
>from Resource Exploitation in the Democratic Republic of the Congo?
>http://www.appggreatlakes.org/content/pdf/riches.pdf; Bureau of
>Democracy, Human Rights, and Labor, US State Department. 31st March
>2003. Country Reports on Human Rights Practices, 2002. Rwanda.
>http://www.state.gov/g/drl/rls/hrrpt/2002/18221.htm
>4. http://www.unodc.org/unodc/en/crime_signatures_corruption.html
>5. David Leigh, 2nd June 2005. Jersey breaks promise to outlaw bribes.
>The Guardian.
>6. Warren Nyamugasira and Rick Rowden, April 2002. New Strageies; Old
>Loan Conditions. Uganda National NGO Forum, Kampala.
>http://www.internationalbudget.org/resources/library/UgandaPRSP.pdf
>
>7. ibid.
>
>8. Report of the meeting by a health ministry official, cited in
>Warren Nyamugasira and Rick Rowden, ibid.
>
>9. G8 Finance Ministers, 10-11 June 2005. G8 Proposals for HIPC debt
>acancellation.
>http://www.hm-treasury.gov.uk/otherhmtsites/g7/news/communique_110605.cfm
>
>

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