|Year 2003 No. 52, June 11, 2003||ARCHIVE||HOME||SEARCH||SUBSCRIBE|
Workers' Daily Internet Edition: Article Index :
Daily On Line Newspaper of the
Revolutionary Communist Party of Britain (Marxist-Leninist)
170, Wandsworth Road, London, SW8 2LA.
Phone: (Local Rate from outside London 0845 644 1979) 020 7627 0599
Web Site: http://www.rcpbml.org.uk
Subscription Rates (Cheques made payable to RCPB(ML)):
Workers' Weekly Printed Edition:
70p per issue, £2.70 for 4 issues, £17 for 26 issues, £32 for 52 issues (including postage)
Workers' Daily Internet Edition sent by e-mail daily (Text e-mail):
1 issue free, 6 months £5, Yearly £10
The 2003 summit of the G8 countries, the annual meeting of Britain, the US and the other wealthiest and most powerful countries, was widely promoted as an occasion when the problems of the African continent would feature high on the agenda. Much had been promised from the so-called G8 Action Plan for Africa, adopted at last years summit, and from the G8s support for the New Partnership for Africas Development (NEPAD). The French president, Jacques Chirac, even went as far as to state, "In Evian we are determined to prove that the agreement between the G8 and Africa within the context of NEPAD can provide new momentum and serve as the basis for concrete projects that will transform the continent."
But although several African leaders, including Thabo Mbeki of South Africa and Olesegun Obasanjo of Nigeria, were invited to address the summit, there was no evidence that anything would be done by the G8 countries to transform the African continent. Indeed commentators and NGOs in Africa and Europe have been very critical of the G8 summit and have condemned what has been termed lack of "political will" on the part of the most powerful countries to "meet their obligations to Africa". A Joint Statement from African NGOs and trade unions, for example, concluded that from an African perspective the Evian Summit "had been stunning in its failure to make progress on the debt, health, trade and agricultural issues". The Joint Statement, of the six largest NGOs and trade unions in Africa, stated that the summit was "ultimately a disaster for African farmers. It failed to adopt even limited proposals for a moratorium on reducing European and American tariff duties and subsidies for US and European agriculture." The Joint Statement added, "While millions of Africa farmers, most womens livelihoods, are ruined by these policies, European livestock are ensured major state subsidies." At the present time every head of cattle in the EU receives a subsidy of $2 a day, while over 300 million people in sub-Saharan Africa exist on less than $1 a day.
For their part, the British government has declared itself largely satisfied with the outcome of the summit, where most important decisions on tariffs and trade were postponed until the WTO meeting in Mexico in September. Speaking in parliament the Prime Minister, Tony Blair, announced further proposals to link so-called "aid" to Africa with "economic reforms and good governance". In this regard he pointed out, "Over the last year we have seen the largest ever US commitment to aid for Africa and many European Union countries, including our own, are increasing substantially our aid and development programmes."
Thus despite shedding crocodile tears about the plight of Africa and its peoples and continually speaking of the need for the reform of international trade agreements, Britain and the other big powers continue to keep Africa impoverished and in their grip. They continue to pour enslaving "aid" into Africa, at the same time as they demand total acceptance of neo-liberal globalisation and the increasing privatisation of all aspects of Africas economies to further facilitate the penetration of foreign capital.
The only conclusion that can be drawn is not that the G8 have failed Africa but that Britain and the other big powers remain the source of all the problems in the continent just as they were during the heyday of colonial rule.
Joint Statement from African NGOs and Trade Unions
Tuesday, 3rd June 2003
The outcome of the 2003 Summit of the G8 reveals that the political will of the eight most powerful nations to meet their obligations to Africa has simply dried up.
2001 saw the G8 summit heavy on rhetoric, 2002 saw the release of a G8 Africa Action Plan, but the outcome of the 2003 Summit has been stunning on its failure to make progress on the Debt, health, trade and agriculture issues.
Quite apart from the obligations of the G8 to Africa or the meeting of the Millennium Development Goals in Africa, the G8 has failed to match the progress reached by the African Union over the last year.
Aid, the Monterrey Commitments and Debt
1. We, representatives of six of the largest continental organisations and national networks headquartered in five Africa cities, bringing together women's organisations, labour, researchers, development and advocacy NGOs across Africa, recognise that there has been some progress on raising the US$6 billion promised by the G8 in 2002. However, the G8 is still a long way off meeting the US$25-35 billion required by the UN to halve poverty in Africa by 2015. Much of the new pledges announced recently including the well appreciated US$10 billion offered by the US for Global AIDS programmes or the money to fill the HIPC finance gap are not on the table yet. It should be noted that the G8 continues to spend less than 0.3% of their gross national product on aid. In all, the G8 Summit closes with offers of assistance in the range of less than 1% of what was spent on the war in Iraq.
Health and HIV/AIDS
2. In the light of the deadlock in the last Doha WTO Inter-ministerial, the G8 summit is a lost opportunity for progress on the right of African countries to import, produce and distribute cheap life-saving drugs such as anti-retroviral medicine for AIDS and other life threatening diseases.
3. This G8 has failed to indicate sufficient progress in raising the resources to eradicate polio, combat tuberculosis, malaria and HIV/AIDS. The amount allocated is still a far cry from the $10billion the UN fund needs, to treat and prevent these diseases.
4. We reaffirm that the right to clean, affordable and accessible water is critical both to African growth, fighting AIDS and arresting common pandemics such as cholera etc. We are concerned that the international policy discourse on water is dislocated from the experience in Africa of privatisation schemes that leave private suppliers unable to supply water at affordable rates for the poor and more importantly, poor people without water.
Trade and Agriculture
5. The 2003 G8 was ultimately a disaster for African farmers. It failed to adopt even limited proposals for a moratorium on reducing European and American tariff duties and subsidies for US and European agriculture. These policies are perverse. While millions of African farmers, most women's livelihoods, are ruined by these policies, European livestock are ensured major state subsidies.
6. We note the commitment of the G8 to refocus on support to African agriculture, but the G8 avoided translating this commitment into a tangible amount.
Lessons for Africa
7. One or two drops of aid out of Evian amounts to a small patch for the haemorrhaging economies of Africa. Without a change in world trade rules, the rhetoric of ensuring a fresh start for Africa will not translate into meaningful action or a new partnership for Africa. We strongly urge Africa leaders and citizens to take forward the initiative and the primary responsibility for resolving Africa's development crises. Key on our horizon is the need to prepare a common African position in the lead up to the WTO Inter-ministerial in Cancun, Mexico.
8. Despite the failure of Evian, the G8 continues to have outstanding obligations and commitments to Africa. For this reason, Africa must remain on the agenda of the G8 until these obligations are fulfilled. We shall continue to track, lobby and inform public opinion of these obligations.
Representatives of six of the largest continental organisations and national networks headquartered in five Africa cities, bringing together women's organisations, labour, researchers, development and advocacy NGOs across Africa, met and signed this statement.
According to a report by the World Bank of April 8, 2003, foreign direct investment (FDI) in Sub-Saharan Africa yielded the highest returns in the world in 2002.
"The rate of return on FDI was highest in Sub-Saharan Africa, compared with other regions in the world, perhaps because, given perceived higher risks in the region, investors chose only high-return projects," the World Bank said.
The Bank said the economy of Sub-Saharan Africa would grow at 3% this year, provided weather conditions are normal and commodity prices higher.
The World Economic Forums Africa Economic Summit is taking place in Durban, South Africa, from June 11-13. The World Economic Forum says of itself that "as the leading international foundation at the crossroads between business, government and civil society, it convenes leaders from the region and around the world to identify and debate the economic and social challenges of the day, proposes practical solutions and catalyses dynamic multi-stakeholder communities to impact on this agenda".
The stated aim of the Africa Economic Summit is to provide "a platform for effective dialogue and networking to marshal private sector inputs in implementing the New Partnership for Africa's Development (NEPAD)".
Business, is says, has a "crucial role to play in facilitating the NEPAD's success".
"The private sector task forces now developing the agenda," the official website says, "will focus the programme on tangible business and development outcomes."
African commodities and raw materials are processed in wealthy nations and then resold by companies and corporations in those nations at prices many times greater than what is paid to the producers, Ugandan President Yoweri Museveni said on Tuesday night at a reception after his meeting at the White House with US President George W Bush.
"The value of the coffee market is 70 billion dollars," he said. "We coffee producing countries get 5 billion. Who takes the remaining 65 billion? somebody else!" said Museveni, whose laughter accompanying the comment only partially hid the seriousness of his point, according to a report on the allAfrica.com website. "Africans are being donors but they do it in ignorance."
Trade, not aid is what's crucial for nations like Uganda, Museveni said. "I don't want aid; I want trade. Aid cannot transform society. If I get aid it must be aid that enables me to trade." He said the marketplace "and its discipline" can "set us free." But trade barriers stand in the way, he said, pointing in particular to agricultural subsidies in Europe and the United States, which he said undercut Africa's agricultural economy.
Museveni was speaking to a crowd gathered by the Whitaker Group to launch the Agoa III Action Committee, which will push for an extension of the African Growth and Opportunity Act past 2008. President Bush has scheduled a trip to Africa early next month, but administration officials declined to say whether he would visit Uganda.
In his brief public remarks at the White House, the Ugandan president emphasised the need to add value to African goods. "You hear so much of poverty in Africa, but, in fact, Africa is a very rich continent. The only problem is that we must simply move the value to the outside. We export only raw materials, we don't export value-added products."
A position paper by Ann-Louise Colgan, Research Associate,
The 48 countries of sub-Saharan Africa spend approximately $13.5 billion every year (1) repaying debts to rich foreign creditors for past loans of questionable legitimacy. These debt repayments divert money directly from basic human needs such as health care and education, and fundamentally undermine African governments' fight against the AIDS pandemic and their efforts to promote sustainable development. The All-Africa Conference of Churches has called Africa's massive foreign debt burden "a new form of slavery, as vicious as the slave trade".
Africa Action calls for the cancellation of Africa's foreign debt, which we consider in large part to be illegitimate, based on its origins and consequences. We consider the present and past attempts to deal with the debt crisis to be absolutely insufficient, and we oppose the existing debt relief framework, developed and controlled by creditors and designed to function only in their interests. Africa Action opposes conditionalities imposed by Northern creditors which perpetuate a global economic system where Africa remains economically controlled by the developed world. We believe that the costs of debt cancellation should be borne by the creditor nations and the International Financial Institutions, and moreover, we believe that the global North owes Africa an historical debt for centuries of exploiting the continent's human and natural resources. We therefore pose the question, "who really owes whom?".
1. Introduction to Africa's Debt Crisis
In the 1960s and 1970s, African countries became indebted to international lenders as they accepted loans for political and economic stabilization in the post-independence era. In the context of the Cold War, and with massive revenue surpluses of oil money in Western banks in the 1970s, loans were made with little thought to their purpose or to their recipients' capacity to repay the debt. Many were made to retain the loyalty of corrupt regimes, and much of the money went into the hands of unrepresentative and repressive governments. In the 1980s, when the shocks of the 1970s oil crisis, rising interest rates and falling global prices for primary commodities began to take a toll, the debt crisis in the developing world began to unfold.
Sub-Saharan Africa's debt crisis worsened during the 1980s, as the ratios of foreign debt to the continent's gross national product (GNP) rose from 51% in 1982 to 100% in 1992 (2), and its debt grew to four times its export income in the early 1990s (3). In 1998, sub-Saharan Africa's debt stock was estimated at $236 billion, and that of the whole continent was over $300 billion (4). Africa's debt burden is twice that of any other region in the world it carries 11% of the developing world's debt, with only 5% of its income (5). GNP in sub-Saharan Africa is $308 per capita, while external debt stands at $365 per capita.
Early attempts to address the debt crisis began in the 1980s, with debt swaps by creditors and with the IMF's Structural Adjustment Programmes, which were designed to stabilize and re-structure economies to ensure full payment of the debt stock. From 1989 on, a range of measures were enacted to reschedule and restructure debts through the Paris Club, an informal forum where creditor governments review and reschedule debt payment programmes for poor countries. In 1996, the Heavily Indebted Poor Countries (HIPC) Initiative was created as the first comprehensive debt relief framework encompassing private and government creditors as well as the World Bank and IMF, for the first time and this remains the dominant approach to resolving the debt crisis.
2. Africa's debt is 'illegitimate' debt
In light of the circumstances under which much of the debt of African countries was incurred, and in recognition of the mistakes of both borrowers and lenders, as well as of the harmful effects of Africa's debt on the continent's development, Africa Action considers much of Africa's debt to be illegitimate. The illegitimacy of the debt is based on the following principles:
* Debts contracted by dictatorships or repressive regimes, and used to strengthen the hold of these regimes, are illegitimate, for instance the apartheid-caused debt inherited by South Africa. This has also been termed "odious debt" (an established legal principle).
*Illegitimate apartheid-caused debt also includes the debt incurred by neighbouring countries who were destabilized and against whom war was waged by the apartheid regime in South Africa.
* Debt contracted by formally democratic but corrupt governments, which was stolen by leaders or senior officials, is illegitimate. This has also been referred to as "stolen wealth".
*Debts contracted and used for improperly designed projects and programmes are illegitimate. There is heavy responsibility on creditors here, particularly on the World Bank for its failed development projects.
* Debt that swelled because of high interest rates and other conditions imposed by creditor governments and banks is illegitimate. This perspective argues that the original debt (the principal) has already been repaid many times over, so the continued existence of a debt burden is illegitimate.
* Debts which cannot be serviced without impoverishing a country's people are illegitimate. This is more often termed "immoral debt". As Julius Nyerere said, "Must we starve our children to pay our debts?".
* All debt owed by the South to the North can be considered illegitimate. The argument here is 'who owes what to whom?". Africa Action and Jubilee South maintain that the countries of the South are in fact creditors of an historical, social and ecological debt which Northern countries refuse to recognize.
Understanding the illegitimacy of the debt reinforces the arguments for debt cancellation, and opens up some new options for accomplishing this.
The concept of odious debt exists as a doctrine in international law, and this legal precedent (dating back over 100 years to when the US captured Cuba from Spain) could allow for the cancellation of such debts by international agreement. The Doctrine of Odious Debt holds that debt incurred by dictatorships for their own benefit or for the purposes of enforcing the dictatorship is 'odious', and therefore not the responsibility of the population or of subsequent democratic governments. The Doctrine has two main aspects: the legitimacy of the borrower's purpose in seeking the loan and whether the lender was recklessly indifferent to the status of the contracting state. In the case of South Africa, for instance, all apartheid-caused debt should be considered "odious" because of the nature of the regime. More broadly, it may be argued that the debts of developing countries that have arisen as a result of bad lending policies and loan conditions should be declared odious and written off.
Debt repudiation is an option for countries that refuse to acknowledge the legitimacy of their debts. Repudiation involves the unilateral cessation of debt repayment. This is a dramatic move, and has several potential disadvantages, including the possibility of retaliation from commercial banks, creditor governments and multilateral lending institutions, and the possibility of jeopardizing relations with rich countries. One way to minimize this risk might be for a group of debtor nations to act in concert, joining in a "debtors cartel" that would not only be more difficult to "punish", but that would also command greater leverage in negotiations on future credit. The risk of limiting future access to financial flows would still be real, however. One past example of debt repudiation is that of Peru, where President Garcia declared that Peru was unilaterally limiting its debt payments to 10 percent of its export earnings - a de facto repudiation. This move proved detrimental to the Peruvian economy, leaving the country isolated from international financial markets, and eventually leading to a crushing $20 billion foreign debt. In Africa, there is a growing call from civil society for collective repudiation of external debts by African countries. The refusal to pay is increasingly seen as the moral and logical outcome of the illegitimate nature of these debts.
International Debtors' Court
Another possible approach for addressing the problem of illegitimate and unpayable debt is the notion of an international debtors' court, as a full insolvency procedure where debtor governments could present their case rather than leaving all control in the hands of creditors, as is currently the case. Jubilee 2000 and others have endorsed the idea of such an international, independent court, appointed to arbitrate between creditors and debtors. This would be a mechanism for drawing a line under the unpayable debts of a sovereign state, similar to bankruptcy laws for individuals. In this forum, creditors and debtors would argue their separate cases, with the final decision resting with independent arbitrators, who would only endorse an agreement that was fairly and openly reached.
Disclosure and Classification of Debts
In order to expose the illegitimate nature of much of Africa's debt, a process of disclosure and classification of all outstanding debts has been proposed by Jubilee South, to examine the circumstances under which the debts were incurred and to encourage future government accountability and transparency. An immediate and thorough information disclosure on existing debts would permit the investigation and classification of these debts in order to establish their legitimacy, and therefore would allow a fair determination on the appropriate policy on servicing these debts. Making public the purpose and use of loans and investigating their legitimacy should not only help determine which debts should cancelled as a matter of principle, but should also encourage greater transparency and responsibility on the part of both lenders and borrowers in future lending.
3. The Current Debt Relief Framework
The Heavily Indebted Poor Countries (HIPC) Initiative was launched by the Bretton Woods Institutions in 1996. It was a significant development in that it acknowledged that previous efforts at restructuring or rescheduling debt had been insufficient to resolve the debt crisis in the developing world. This was the first comprehensive international debt relief scheme, integrating all multilateral, bilateral and private creditors into one framework. The aim of the HIPC Initiative was to reduce to "sustainable levels" the debt burden of poor countries that demonstrated sound economic and social policy reforms, and thereby to provide a lasting solution to the debt crisis. Reducing the debt to "sustainable" levels was intended to remove the debt overhang, and make it such that the debt service owed was the same as the amount being paid, thus preventing countries from falling behind on their repayments.
In order for countries to be selected for HIPC status, they had to meet three main criteria:
* They had to be eligible only for concessional loans from the International Development Association (IDA) of the World Bank and the Enhanced Structural Adjustment Facility (ESAF) since re-named the Poverty Reduction and Growth Facility (PRGF) of the IMF.
* They had to have a debt burden that was considered "unsustainable". A "sustainable" level of debt was gauged to be a debt-to-export ratio of between 200 and 250%, and a debt-service to exports ratio of between 20 and 25%. This meant that "sustainable" debt should not exceed two and a half times the value of exports, and that debt service should not exceed one-quarter of the value of exports.
* They had to establish a track record of economic reforms under World Bank and IMF-sponsored programmes. In 1996, the World Bank and IMF selected 41 countries as potentially eligible for HIPC status. 33 of these were in sub-Saharan Africa. The total debt stock of these highly impoverished countries amounted to approximately $200 billion in 1997 (6). 85% of HIPC long-term debt is owed to public lenders (multilateral and bilateral creditors) rather than to the private sector, and about half of this is owed to governments, though only a small amount (3.7 %, at the end of 1997) is owed to the US (7).
The HIPC process was to be divided into two phases. First was a three-year period between the "entry point" and the "decision point", during which a country followed IFI adjustment programmes, and at the end of which a debt sustainability analysis was conducted to see whether and to what degree the country required debt relief. After a second three-year period, during which the country would consolidate its track record in following World Bank and IMF programmes, the "completion point" would be reached, and the country would then receive a reduction in its total debt stock.
Under the original HIPC Initiative, progress was very slow, and criticisms of the pace of the process and the stringency of the qualifying criteria led to a revision of the plan and the unveiling of the Enhanced HIPC Initiative at the G-7 summit in Cologne in 1999. Under the enhanced framework, debt relief was to be made "broader, faster and deeper", and it was to be linked more closely and transparently with the goal of poverty reduction. Debt relief was to be "broader" in the sense that the lowering of the debt sustainability ratio to 150% of exports would admit more countries to qualify for relief. It was to be "faster" in the sense that the timetable for offering relief was accelerated by 'interim' assistance being provided between the decision and completion points. In addition, the completion point was made 'floating', which meant that countries that performed exceptionally well would not be required to wait the full three years in the second phase of the Initiative, but could reach the completion point more quickly. Debt relief was to be "deeper" because expanded assistance was to be provided to qualifying countries.
The Enhanced HIPC Initiative also aimed to link debt relief more firmly with poverty reduction efforts, requiring that all HIPC governments produce a Poverty Reduction Strategy Paper (PRSP) as a condition to their being eligible for HIPC relief. PRSPs were to be developed transparently through a Government-led national process, in consultation with civil society, the private sector and external donors, and with the assistance of the World Bank and IMF. The aim of a PRSP is to ensure consistency between a country's macroeconomic, structural and social policies and the goals of poverty reduction and social development. A country is expected to have a viable and comprehensive poverty reduction strategy in place prior to its decision point, either in the form of a PRSP or an Interim PRSP. The Boards of the World Bank and IMF then consider this paper as they review the eligibility of a country for HIPC debt relief. The requirement of a PRSP is yet another conditionality that the World Bank and IMF have tied to the debt relief process.
At the G-7 Summit in Cologne when the Enhanced HIPC Initiative was announced, the leaders of the G-7 countries committed themselves to writing off an additional $100 billion of the HIPC countries' debt. The US share of this plan amounts to $920 million over 4 years. In FY2000, $110 million was appropriated by the US Congress for this global debt reduction plan. In FY2001, debt relief was approved in 2 parts:
* $435 million in appropriations, which was the Administration's request to fulfil the US commitment to Cologne. $225 million of this was for FY2001,
* $210 million was emergency supplemental funding for FY2000. Legislative language was passed which authorized the re-evaluation of the IMF's gold reserves to be used for the purpose of multilateral debt relief.
The remainder of the US' share of the Cologne Agreement is $375 million for FY2002 and FY2003.
The HIPC Initiative is financed jointly by creditors in a 'burden-sharing' practice. Bilateral debt relief is financed according to the budget process of each creditor country, while multilateral relief is funded through the IDA-managed HIPC Trust Fund, which receives money from the World Bank, IMF and bilateral donors. In order to finance IMF debt relief costs, the re-valuing of a portion of the IMF's gold reserves is an option, and this was endorsed by Congress in Fall 2000. The IMF holds 103 million ounces of gold in its reserves. It values this gold at $47 per ounce rather than the true market value of $262 per ounce, and therefore adjusting the value of this gold to reflect the market price would realize about $25 billion in capital gains (8). Re-valuing about 14 million ounces of gold would generate enough money to cover the IMF costs of HIPC debt relief (9).
The process by which the gold would be revalued works as follows: A country owing money to the IMF would use this money to buy a portion of the IMF gold at current market value (over $260/oz). After buying the gold, the country would make its loan repayment to the IMF using the gold that it had just purchased rather than hard currency. This transaction would adjust the value of the gold from the $47/oz at which it is valued at the IMF to the real market value. The IMF would invest the "profits" of this transaction in a security instrument where the interest earned would be used to pay the costs of cancelling HIPC debt. Harvard economist Jeffrey Sachs and others argue that the IMF therefore has more than sufficient resources on its own balance- sheets to absorb the cost of a more substantial write-down of the debt than is provided for through the HIPC process.
Under the Enhanced HIPC Initiative, 22 countries had reached their decision points by early 2001, including 18 in Africa - Tanzania, Mozambique, Cameroon, Uganda, Mauritania, Mali, Senegal, Burkina Faso, Benin, Zambia, Niger, Gambia, Guinea-Bissau, Malawi, Guinea, Madagascar, Rwanda, and Sao Tome & Principe. So far, only two African countries have finished the entire debt relief process and reached their completion points Uganda & Mozambique.
The IFIs consider the HIPC Initiative to be meeting its objective of relieving the debt burden of the world's most impoverished countries. They quote figures of "significant" debt reduction for HIPC recipients. The World Bank stated late last year that once 20 countries had passed their "decision points", debt relief worth $30 billion would have been committed. The US Treasury similarly stated that the HIPC process would reduce the debt level of qualifying countries to 30% of the debt they originally held. Both the US Treasury and the IFIs consider this to be major progress, and both expect significant growth to occur in developing economies as a result of the HIPC process.
Africa Action disagrees.
The IFIs' estimates of the savings countries will make under the debt relief plan are grossly unrealistic, as are the extremely optimistic growth projections they make for HIPC countries (8- 12% per annum). The fact is that many poor countries are simply not paying their debt service at present because they are unable to meet the cost, and therefore a reduction in the debt stock of these countries, or even a minor reduction in the debt service, will make no difference to their plight. At best, a minimal amount of resources may be released, with a negligible effect on the country's economy.
Analyses by Jubilee 2000/UK in 2000 assessed the progress of HIPC debt relief much more conservatively than the IFIs. They estimated that, for the 23 countries expected to qualify by 2001 (of which 22 have now qualified), approximately $1 billion dollars per annum would be released. Yet they also noted that all 23 countries would still be left spending more on debt repayments than on health care, that 6 of these countries would gain negligible levels of reduction, and that several countries, including Zambia and Niger, would actually be required to pay more in debt service after qualifying for HIPC assistance (10). An April 2001 report from Jubilee 2000/UK's successor Drop The Debt, found that the HIPC process has brought a mere 27% reduction in average annual debt payments to the 22 countries that have begun to receive debt relief, and that the total value of this is only $735 million per year (11). A GAO report, commissioned by Congress in 2000, concluded that the HIPC Initiative is unlikely to provide a country with a lasting exit from its debt crisis or sufficient resources to tackle poverty unless it achieves strong, sustained economic growth, and unless it continues to borrow at the same level and concessional terms as before (12). This can hardly be considered a successful outcome.
On a practical level, the length of time and the level of bureaucratic detail involved in qualifying for HIPC relief make the process complicated and slow, despite the "enhancements". Only half of the eligible countries have begun to receive debt relief at this point, and not all countries who are in need of debt relief are included in the HIPC plan (e.g. Nigeria). The requirement of economic and structural reforms both delays progress in the implementation of debt relief and gives the IFIs a degree of control over debtor countries that is detrimental and inappropriate. The role of the World Bank and IMF in designing the terms and process of debt relief, and in dictating the economic and social policy reforms that must occur, gives these institutions a powerful influence in developing countries.
The only significant outcome of the HIPC Initiative, therefore, is that it permits creditors to continue to squeeze the maximum in debt repayments from the poorest economies. The so- called beneficiaries, the debtors in the world's poorest countries, see no real benefits from the current framework. The United Nations Conference on Trade and Development (UNCTAD) recently predicted that if current growth trends continue, only 1 out of the 43 Least Developed Countries will have graduated out of that category by 2015, and only 8 will graduate in the next 50 years. It is clear that the massive debt burden of the world's poorest countries cannot be serviced, and that the continuing existence of this debt will only further impede their development.
4. Conditionality Tied to Debt Relief
The issue of conditionality is central to any discussion of debt relief or debt cancellation. The IFIs argue that conditions, such as economic reforms and supervision by the World Bank and IMF, are necessary to ensure that debt relief proceeds are used wisely, and to prevent 'reindebtedness' (a recurrence of the debt crisis) caused by economic mismanagement by irresponsible or unrepresentative governments. They use the "moral hazard" argument to reject calls for debt cancellation, maintaining that writing off outstanding debts would "reward" bad practices and would encourage, rather than discourage, future financial irresponsibility by debtors. Not only is this argument flawed in its failure to acknowledge the illegitimate nature of much of Africa's debt, it also fails to recognize the responsibility of creditors in the lending process, and the role of creditors in the origins of the debt crisis.
The latest form of conditionality imposed by the World Bank and IMF is the requirement for HIPC countries to develop a Poverty Reduction Strategy Paper (PRSP), as described above. This approach, devised by the World Bank and IMF, is portrayed as a means to link debt relief more firmly with the goal of poverty reduction. While the notion of a national plan for poverty reduction and social and economic development, designed through collaboration between governments and civil society, undoubtedly has some merit in the abstract, the PRSP process is highly problematic. The fact that this approach is dictated and supervised by external creditors and is a precondition for receipt of debt relief raises serious questions as to its legitimacy as a natural expression of democracy in a HIPC country. Rather, it is another means by which rich country creditors retain control of African economies, and it is an inappropriate intervention in the process by which these countries govern themselves. It is a matter for African governments to determine their own approaches to poverty reduction, not to have this prescribed to them by external powers. The requirement of a PRSP presupposes that, without Northern guidance, Africans would neither care enough nor know how to apply themselves to the business of poverty reduction, and as such this is just another example of the neo-colonial mentality of these creditors in their relations with Africa and the global South.
Beyond the philosophical problems with PRSPs, there are also practical problems with implementation. The development of PRSPs brings an added bureaucratic dimension to the HIPC process, rendering it even more cumbersome and complicated. Linking the receipt of debt relief with the creation of such a paper means an even slower progression through the HIPC programme and creates tension between the desire for speed in achieving debt relief and the complex requirement of producing a PRSP, which may lead to sacrifices in the quality of the paper drawn up. The PRSP requirement is a weak attempt to make the HIPC Initiative seem more concerned with the eradication of poverty. In reality, the current debt relief framework does not allow for sufficient savings for the roots of poverty to be tackled, and the PRSP is therefore just one more structural adjustment programme to which developing countries must conform.
A more immediate approach to linking debt relief with poverty reduction was developed in Uganda, where the Poverty Action Fund (PAF) is often held up by creditors and NGOs alike as a model to emulate in the management of debt relief resources. Early in the HIPC process, the Ugandan government created this Fund, which is transparently managed and audited, and which has been used to channel debt relief resources to funding human development goals (13). Uganda's PAF has allowed for increased expenditures in education, in clean water supply and in infrastructure. While this approach has proved successful to date, and might be one short-term way to deal with the proceeds of debt relief in a transparent and productive manner, this is not a substitute for a broader poverty reduction strategy, with a poverty focused macroeconomic framework. There is a need to strengthen the links between expenditures from the PAF and poverty/human development indicators to ensure that this approach is systematic and comprehensive in its objectives. It is also worth noting that even after debt relief, Uganda still pays out roughly 18% of its government revenues to cover its remaining debt.
While many NGOs consider debt cancellation tied to World Bank and IMF conditionalities to be fundamentally inappropriate, particularly in the case of illegitimate debts, it is important to acknowledge that the desire for conditionality in the debt relief process does not merely come from the creditors' side. There are groups in African civil society, as well as NGOs elsewhere, who consider some form of conditionality to be a useful safeguard against the misuse of freed up resources and the possibility of reindebtedness by an irresponsible and authoritarian government. In cases where there is no democratic government, the establishment of an international monitoring body to oversee the use of debt relief proceeds is one approach which has been suggested by the Eurodad Network. This would work through the creation and management by this independent body of a "poverty fund" into which debt service savings would be diverted, and to which civil society would apply directly to finance specific sustainable human development opportunities (14). Bypassing a country's government in this way seems difficult as well as inappropriate in encouraging citizens to move outside the framework of their own state to seek guidance and economic direction from an external body. It is also unlikely that a country's civil society would have sufficient capacity to function independently of an undemocratic government.
Some argue that a basic precondition for debt cancellation is the existence of a democratic government, that can be relied upon to practice transparency and to include civil society participation in determining how resources are spent to ensure that they are re-channelled into programmes that promote sustainable development. A democratic system should also allow for transparency and consultation on future loan transactions, and thus minimize the risk of reindebtedness. It is our view, however, that illegitimate debts should be written off regardless. It is new loans and grants that are most appropriately used as incentives to support civil society and other internal campaigns for democratic reform.
5. Principal Creditors and the Costs of Cancellation
As noted above, the US is a relatively minor creditor in relation to the HIPC countries. Only 3.7% of the long-term debt of HIPC countries is owed to the US. This small proportion is explained in part by the fact that the US independently cancelled about $3.58 billion in poor country debt in the late 1980s and early 1990s, and also by the fact that the US shifted from loan aid to grant aid in the early 1980s.
As of early 1999, African countries owed the United States approximately $6.8 billion. This is only a small share of sub-Saharan Africa's total $236 billion debt burden. The principal debtors to the US are: Democratic Republic of Congo ($2.1 billion), Sudan ($1.2 billion), Nigeria ($871 million), Somalia ($431 million), and Cote d'Ivoire ($378 million) (15).
The cost of cancelling these outstanding debts is actually far less than it might appear. While collective HIPC debt amounts to some $200 billion in nominal terms, the actual cost of writing off this debt is much lower. A Jubilee 2000 report finds that the real cost of cancelling the debts of all HIPC countries would be $24 billion (16). These figures are based on the market value of the debts determined by how much the debts are bought and sold for on the secondary market not the face value.
The US has already pledged to cancel the bilateral debt which it is owed, as have many of the other big bilateral creditors among the G-7 countries. The actual cost of bilateral debt cancellation by the US and other countries is likewise less than it might seem. For the $6 billion which the US is owed by the HIPC countries, this debt is carried on its books at a more realistic 10% of face value, in recognition of the fact that 90% of this money is simply not going to be repaid. The cost of writing this bilateral debt off the books is therefore only about $635 million (17). The Treasury Department has estimated that every $1 the US contributes toward debt cancellation will leverage an additional $27 from international creditors. The importance of US leadership is clear, while the cost of acting is truly minimal.
The Treasury Department admits that the cost to the US of bilateral debt cancellation is small, yet it emphasizes that the costs of multilateral debt relief are great, and that some of these will also fall on the US. A recent Drop The Debt report stated that after HIPC debt reduction, the 22 countries will owe more to the World Bank and IMF than to the next 17 largest creditors combined. Achieving cancellation of this huge multilateral debt is therefore crucial.
On the basis of recent studies and analyses, it has become clear that the wealth of resources that the major IFIs hold on their own balance sheets is sufficient for them to use internal funding to absorb the costs of multilateral debt cancellation. The IMF, by using accounts already in place for absorbing losses and by revaluing its gold, could come up with enough funding to absorb the $6.2 billion it is owed in effective HIPC debt. The $21.9 billion in effective debt owed to the World Bank by all HIPCs might similarly be absorbed from within its own reserves (18). A major new Report from Drop The Debt in April 2001 concluded, on the basis of an audit by two Independent Accounting Firms in the UK, that the World Bank and IMF could write off 100% of the debts of the world's poorest countries from their own resources and without negatively impacting their credit rating or ability to function (19). This Report seriously undermines the arguments of the World Bank and IMF and proves that debt cancellation is not a financial impossibility for these institutions. Adam Lerrick, a leading economist, argues that cancelling the debts makes economic sense, and that any temporary cash flow imbalances that might be triggered by an immediate write-off could easily be addressed by bridge financing by the US Treasury and the Treasuries of the other G-7 countries.
Any proposal for debt cancellation must also consider how development in future countries will be financed after the debts have been cancelled. The very idea of loans being more appropriate than grants has been seriously called into question by the current crisis. The Meltzer Commission's Report expressed scepticism about loans being the best means of financing development in the world's poorest countries, and instead endorsed a change from loans to project-centred and results-based grants. This notion of transforming the IFIs into grant-making institutions has also been expounded elsewhere. Jeffrey Sachs has proposed the creation of a World Development Agency to replace the World Bank in dealing with the world's poorest countries, which would provide grants to support programmes in health care, education, technological development and other areas (20).
What is certain is that the staggering cost of poverty eradication means that debt cancellation cannot be used as an alternative to development assistance. The need for "additionality", for substantial new grants and capital contributions by donor governments and multilateral institutions, over and above the cancellation of the debt burden, cannot be stressed enough. Development Assistance has been steadily decreasing over the past decade. Despite repeated promises from rich countries to provide 0.7 % of their gross national product for overall official development assistance for poorer countries, not one of the G-7 members (21) reaches even half that figure. The US ranks at the bottom with only 0.1 percent of GNP going to development assistance, and only 1/100th of 1% of the US budget is currently spent on aid to sub-Saharan Africa.
In light of the questionable legitimacy of much of Africa's outstanding debt, the enormous social and economic costs associated with servicing this debts, and the failure of debt relief efforts to date, Africa Action calls for the cancellation of Africa's massive foreign debt burden.
The HIPC Initiative, even in its "enhanced" form, is clearly inadequate and has certainly failed as an approach to Africa's debt crisis. Even in those rare countries, such as Uganda, where savings have actually permitted greater social expenditure, debt services still drain much-needed resources from social priorities and from efforts to address the devastating AIDS pandemic and other development challenges. In the majority of African countries that have received some HIPC debt relief, reductions in debt service have been minimal, and annual debt repayments still exceed expenditure on health care. Recent moves by the World Bank and IMF to attach additional debt relief conditionalities only render the debt relief process more complicated and accord these institutions an even more intrusive role in the economic and political processes of African countries.
It is time for a far more bold approach to Africa's debt crisis. The World Bank and IMF can and must do more, and the US, as global leader, must use its great power within these two institutions to push for real progress toward debt cancellation.
(1) Drop the Debt, "Reality Check. The Need for Deeper Debt Cancellation and the Fight Against HIV/AIDS", April 2001 ( http://www.dropthedebt.org).
(2) Alternative Information and Development Centre, Briefing for the Archbishop of Cape Town WHN Ndungane. (http://www.aidc.org.za)
(3) Sanford, Jonathan E., "Africa's Debt Burden: Proposals for Further Forgiveness", CSIS Africa Notes, October 1996 (in) "Promoting US Economic Relations with Africa", Task Force Report sponsored by the Council on Foreign Relations, 1998.
(4) Africa Policy Information Centre, "Africa's Debt", Background Paper, 1998
(5) Jubilee 2000 Afrika Campaign. Conference Report.
(6) The World Bank website ( http://www.worldbank.org)
(7) Congressional Research Service Report, "Debt Reduction: Initiatives for the Most Heavily Indebted Poor Countries", February 2000.
(8) Sachs, Jeffrey D., Testimony before the House Committee on Banking and Financial Services, Hearing on Debt Reduction, June 15, 1999.
(9) Congressional Research Service Report (see above).
(10) Jubilee 2000/UK Presentation, "The need for further enhancement of the HIPC Initiative", Bretton Woods Committee Roundtable, Washington, DC, November 2000.
(11) Drop the Debt, "Reality Check. The Need for Deeper Debt Cancellation and the Fight Against HIV/AIDS", April 2001.
(12) GAO Report, "Developing Countries: Debt Relief Initiative for Poor Countries Faces Challenges", June 2000.
(13) Oxfam International Briefing Paper, "Drop the Debt - Go Back to First Principles", July 2000.
(14) EURODAD, "Making Debt Relief Work. Mechanisms for Aligning Debt Relief with Human Development", 1999.
(15) Congressional Research Service Report (see above).
(16) Garrett, John & Travis, Angela, Jubilee 2000/UK, "Unfinished Business - The world's leaders and the millennium debt challenge", 1999.
(17) Sachs, Jeffrey D., Testimony before the House Committee on Banking and Financial Services (see above)
(18) Lerrick, Adam, "The Initiative is Lacking", EuroMoney Magazine, September 2000.
(19) Drop the Debt report 2001 (see above).
(20) Sachs, Jeffrey D., "The Charade of Debt Sustainability", The Financial Times, September 26, 2000.
(21) The members of the G-7 are Britain, Canada, France, Germany, Italy, Japan, and the US.
A position paper by Ann-Louise Colgan, Research Associate,
Health is a fundamental human right, recognized in the Universal Declaration of Human Rights (1948), and the Constitution of the World Health Organization (1946). Health is also an essential component of development, vital to a nation's growth and internal stability.
Over the past two decades, the World Bank and International Monetary Fund (IMF) have undermined Africa's health through the policies they have imposed. The dependence of poor and highly indebted African countries on World Bank and IMF loans has given these institutions leverage to control economic policy-making in these countries. The policies mandated by the World Bank and IMF have forced African governments to orient their economies towards greater integration in international markets at the expense of social services and long-term development priorities. They have reduced the role of the state and cut back government expenditure.
While many African countries succeeded in improving their health care systems in the first decades after independence, the intervention of the World Bank and IMF reversed this progress. Investments in health care by African governments in the 1970s achieved improvements in key health indicators. In Kenya, for example, child mortality was reduced by almost 50% in the first two decades after independence in 1963 (1) Across sub-Saharan Africa, the first decades after independence saw significant increases in life expectancy, from an average of 44 years to more than 50 years (2)
In the 1980s and 1990s, however, African governments had to cede control over their economic decision-making in order to qualify for World Bank and IMF loans. The conditions attached to these loans undid much of the progress achieved in public health. The policies dictated by the World Bank and IMF exacerbated poverty, providing fertile ground for the spread of HIV/AIDS and other infectious diseases. Cutbacks in health budgets and privatisation of health services eroded previous advances in health care and weakened the capacity of African governments to cope with the growing health crisis. Consequently, during the past two decades the life expectancy of Africans has dropped by 15 years (3)
Africa Action calls for an end to World Bank and IMF policies that undermine health. This requires cancelling the debts that prevent African governments from making their full contribution to addressing the health crisis. It also requires ending the imposition of harmful economic policies as conditions for future loans or grants.
This position paper provides a brief background overview of World Bank and IMF policies. It focuses particularly on their impact on health.
1. The World Bank and IMF in Africa
The World Bank and IMF were created at the Bretton Woods Conference in New Hampshire, U.S.A., in 1944. They were designed as pillars of the post-war global economic order. The World Bank's focus is the provision of long-term loans to support development projects and programmes. The IMF concentrates on providing loans to stabilize countries with short-term financial crises.
The World Bank and IMF became increasingly powerful in Africa with the economic crisis of the early 1980s. In the late 1970s, rising oil prices, rising interest rates, and falling prices for other primary commodities left many poor African countries unable to repay mounting foreign debts. In the early 1980s, Africa's debt crisis worsened. The ratio of its foreign debt to its export income grew to 500% (4) African countries needed increasing amounts of "hard currency" to repay their external debts (i.e. convertible foreign currencies such as dollars and deutschmarks). But their share of world trade was decreasing and their export earnings dropped as global prices for primary commodities fell. The reliance of many African countries on imports of manufactured goods, which they themselves did not produce, left them importing more while they exported less. Their balance of payments problems worsened and their foreign debt burdens became unsustainable.
African governments needed new loans to pay their outstanding debts and to meet critical domestic needs. The World Bank and IMF became key providers of loans to countries that were unable to borrow elsewhere. They took over from wealthy governments and private banks as the main source of loans for poor countries. These institutions provided "hard currency" loans to African countries to insure repayment of their external debts and to restore economic stability.
The World Bank and IMF were important instruments of Western powers during the Cold War in both economic and political terms. They performed a political function by subordinating development objectives to geo-strategic interests. They also promoted an economic agenda that sought to preserve Western dominance in the global economy.
Not surprisingly, the World Bank and IMF are directed by the governments of the world's richest countries. Combined, the "Group of 7" (US, Britain, Canada, France, Germany, Italy and Japan) hold more than 40% of the votes on the Boards of Directors of these institutions. The US alone accounts for almost 20% (5)
It was US policy during the Reagan Administration in the early 1980s, to expand the role of the World Bank and IMF in managing developing economies (6) The dependence of African countries on new loans gave the World Bank and IMF great leverage. The conditions attached to these loans required African countries to submit to economic changes that favoured "free markets."
This standard policy package imposed by the World Bank and IMF was termed "structural adjustment." This referred to the purpose of correcting trade imbalances and government deficits. It involved cutting back the role of the state and promoting the role of the private sector. The ideology behind these policies is often labelled "neo-liberalism," "free market fundamentalism," or the "Washington Consensus." From the 1970s on, this orientation became the dominant economic paradigm for rich country governments and for the international financial institutions.
The basic assumption behind structural adjustment was that an increased role for the market would bring benefits to both poor and rich. In the Darwinian world of international markets, the strongest would win out. This would encourage others to follow their example. The development of a market economy with a greater role for the private sector was therefore seen as the key to stimulating economic growth.
The crisis experienced by African countries in the early 1980s did expose the need for economic adjustments. With declining incomes and rising expenses, African economies were becoming badly distorted. Corrective reforms became increasingly necessary. The key issue with adjustments of this kind, however, is whether they build the capacity to recover and whether they promote long-term development. The adjustments dictated by the World Bank and IMF did neither.
African countries require essential investments in health, education and infrastructure before they can compete internationally. The World Bank and IMF instead required countries to reduce state support and protection for social and economic sectors. They insisted on pushing weak African economies into markets where they were unable to compete with the might of the international private sector. These policies further undermined the economic development of African countries.
2. What is Structural Adjustment?
Structural adjustment refers to a package of economic policy changes designed to fix imbalances in trade and government budgets. In trade, the objective is to improve a country's balance of payments, by increasing exports and reducing imports. For budgets, the objective is to increase government income and to reduce expenses. In theory, achieving these goals will enable a country to recover macroeconomic stability in the short-term. It will also set the stage for long-term growth and development.
The structural adjustment programmes of the early 1980s were meant to provide temporary financing to borrowing countries to stabilize their economies. These loans were intended to enable governments to repay their debts, reduce deficits in spending, and close the gap between imports and exports. Gradually, these loans evolved into a core set of economic policy changes required by the World Bank and IMF. They were designed to further integrate African countries into the global economy, to strengthen the role of the international private sector, and to encourage growth through trade.
Typical components of adjustment programmes included cutbacks in government spending, privatisation of government-held enterprises and services, and reduced protection for domestic industry. Other types of adjustment involved currency devaluation, increased interest rates, and the elimination of food subsidies. The underlying intention was to minimize the role of the state.
World Bank and IMF adjustment programmes differ according to the role of each institution. In general, IMF loan conditions focus on monetary and fiscal issues. They emphasize programmes to address inflation and balance of payments problems, often requiring specific levels of cutbacks in total government spending. The adjustment programmes of the World Bank are wider in scope, with a more long-term development focus. They highlight market liberalization and public sector reforms, seen as promoting growth through expanding exports, particularly of cash crops.
Despite these differences, World Bank and IMF adjustment programmes reinforce each other. One way is called "cross-conditionality." This means that a government generally must first be approved by the IMF, before qualifying for an adjustment loan from the World Bank. Their agendas also overlap in the financial sector in particular. Both work to impose fiscal austerity and to eliminate subsidies for workers, for example. The market-oriented perspective of both institutions makes their policy prescriptions complementary.
Adjustment lending constitutes 100% of IMF loans. In 2001, approximately 27% of World Bank lending to African countries was for "adjustment." In the World Bank's total loan portfolio, adjustment lending generally accounts for between one-third and one-half (7) The remainder of World Bank loans are disbursed for development projects and programmes. The project portfolio of the Bank covers such areas as infrastructure, agricultural and environmental development, and human resource development. In some cases, the projects supported by World Bank loans do make useful contributions to development. But these occasional successes must be weighed against the negative effects of increasing debt, imposed economic policies and their consequences.
The past two decades of World Bank and IMF structural adjustment in Africa have led to greater social and economic deprivation, and an increased dependence of African countries on external loans. The failure of structural adjustment has been so dramatic that some critics of the World Bank and IMF argue that the policies imposed on African countries were never intended to promote development. On the contrary, they claim that their intention was to keep these countries economically weak and dependent.
The most industrialized countries in the world have actually developed under conditions opposite to those imposed by the World Bank and IMF on African governments. The US and the countries of Western Europe accorded a central role to the state in economic activity, and practiced strong protectionism, with subsidies for domestic industries. Under World Bank and IMF programmes, African countries have been forced to cut back or abandon the very provisions which helped rich countries to grow and prosper in the past.
Even more significantly, the policies of the World Bank and IMF have impeded Africa's development by undermining Africa's health. Their free market perspective has failed to consider health an integral component of an economic growth and human development strategy. Instead, the policies of these institutions have caused a deterioration in health and in health care services across the African continent.
3. Poverty and Health Care Cuts
Health status is influenced by socio-economic factors as well as by the state of health care delivery systems. The policies prescribed by the World Bank and IMF have increased poverty in African countries and mandated cutbacks in the health sector. Combined, this has caused a massive deterioration in the continent's health status.
The health care systems inherited by most African states after the colonial era were unevenly weighted toward privileged elites and urban centres. In the 1960s and 1970s, substantial progress was made in improving the reach of health care services in many African countries. Most African governments increased spending on the health sector during this period. They endeavoured to extend primary health care and to emphasize the development of a public health system to redress the inequalities of the colonial era. The World Health Organization (WHO) emphasized the importance of primary healthcare at the historic Alma Ata Conference in 1978. The Declaration of Alma Ata focused on a community-based approach to health care and resolved that comprehensive health care was a basic right and a responsibility of government.
These efforts undertaken by African governments after independence were quite successful. There were increases in the numbers of health professionals employed in the public sector, and improvements in health care infrastructure in many countries. There was also some success in extending care to formerly unserved areas and populations. Across the continent, there were improvements in key health care indicators, such as infant mortality rates and life expectancy.
In Zambia, the post-independence government expanded public health care services throughout the country. The number of doctors and nurses was also significantly increased during this time. Infant mortality was reduced from 123 per 1,000 live births in 1965, to 85 in 1984 (8) In Tanzania, during the first two decades of independence, the government succeeded in expanding access to health care nationwide. By 1977, more than three-quarters of Tanzania's population lived within 5 km of a health care facility (9)
While the progress across the African continent was uneven, it was significant, not only because of its positive effects on the health of African populations. It also illustrated a commitment by African leaders to the principle of building and developing their health care systems.
With the economic crisis of the 1980s, much of Africa's economic and social progress over the previous two decades began to come undone. As African governments became clients of the World Bank and IMF, they forfeited control over their domestic spending priorities. The loan conditions of these institutions forced contraction in government spending on health and other social services.
Poverty and Health
The relationship between poverty and ill health is well established. The economic austerity policies attached to World Bank and IMF loans led to intensified poverty in many African countries in the 1980s and 1990s. This increased the vulnerability of African populations to the spread of diseases and to other health problems.
The public sector job losses and wage cuts associated with World Bank and IMF programmes increased hardship in many African countries. During the 1980s, when most African countries came under World Bank and IMF tutelage, per capita income declined by 25% in most of sub- Saharan Africa (10) The removal of food and agricultural subsidies caused prices to rise and created increased food insecurity. This led to a marked deterioration in nutritional status, especially among women and children. In Zambia, for instance, following the elimination of food subsidies, many poor families had to reduce the number of meals per day from two to one (11) Malnutrition resulted in low birth weights among infants and stunted growth among children in many countries. It is currently estimated that one in every three children in Africa is underweight (12) In general, between one-quarter and one-third of the population of sub-Saharan Africa is chronically malnourished.
The deepening poverty across the continent has created fertile ground for the spread of infectious diseases. Declining living conditions and reduced access to basic services have led to decreased health status. In Africa today, almost half of the population lacks access to safe water and adequate sanitation services (13) As immune systems have become weakened, the susceptibility of Africa's people to infectious diseases has greatly increased. A joint release issued by the WHO and the Joint UN Programme on HIV/AIDS (UNAIDS) in April 2001 reports that the number of cases of tuberculosis in Africa will reach 3.3 million per year by 2005 (14) The WHO reported in 2001 that almost 3,000 Africans die each day of malaria. Each year in Africa, the disease takes the lives of more than 500,000 children below the age of five (15)
Most devastating of all has been the impact of the HIV/AIDS pandemic. The spread of HIV/AIDS in Africa has been facilitated by worsening poverty and by the conditions of inequality intensified by World Bank and IMF policies. Economic insecurity has reinforced migrant labour patterns, which in turn have increased the risk of infection. Reduced access to health care services has increased the spread of sexually transmitted diseases and the vulnerability to HIV infection.
More than 17 million Africans have died of HIV/AIDS. It is currently estimated that more than 28 million of the 40 million people living with the disease worldwide are in sub-Saharan Africa (16) There are more than 12 million African orphans who have lost their mothers or both parents to AIDS (17) The social and economic effects of the AIDS crisis are reversing post-independence progress and exacerbating conditions of underdevelopment. The policies imposed by the World Bank and IMF have fuelled the spread of the disease and continue to hinder the response to this health emergency.
Declining Health Care Systems
As poverty has increased Africa's health problems, World Bank and IMF intervention has also led to a breakdown of health care delivery systems. The role of the state in the provision of health care services has been reduced substantially. Cutbacks in the health sector have severely undermined existing services. And Africa's debt repayment obligations to foreign creditors have diverted money directly from spending on health.
Cutbacks in government spending represent a major component of World Bank and IMF adjustment programmes. In the 1980s, real disbursements per person dropped in government expenditure in many African countries. In Madagascar, between 1977 and 1985, government expenditures declined by 24% (18) Cutbacks in government budgets led to major cuts in the health sector. In the 42 poorest countries in Africa, spending on health care fell by 50% during the 1980s (19) In Nigeria, per capita expenditure on health fell by 75% between 1980 and 1987 (20)
The dramatic drop in health expenditure in the 1980s and 1990s resulted in the closure of hundreds of clinics, hospitals and medical facilities across the continent. Those that remained open were generally left under-staffed and lacking in essential medical supplies. Many were unable to afford even basic vaccines. In 14 sub-Saharan African countries between 1990-1992, the level of polio vaccination dropped by more than 10% as a result of cutbacks in health care services (21)
Thousands of health care professionals throughout the continent lost their jobs as a result of public sector cuts. In Ghana, between 1982 and 1992, the number of doctors in the government health care system dropped from 1700 to 665. In Senegal, between 1980 and 1993, the number of people per nurse increased six-fold (22)
Even as government spending on health was cut back, the amounts being paid by African governments to foreign creditors continued to increase. By the 1990s, most African countries were spending more repaying foreign debts than on health or education for their people. Health care services in African countries disintegrated, while desperately needed resources were siphoned off by foreign creditors. It was estimated in 1997 that sub-Saharan African governments were transferring to Northern creditors four times what they were spending on the health of their people (23) In 1998, Senegal spent five times as much repaying foreign debts as on health (24) Across Africa, debt repayments compete directly with spending on Africa's health care services.
The erosion of Africa's health care infrastructure has left many countries unable to cope with the impact of HIV/AIDS and other diseases. Efforts to address the health crisis have been undermined by the lack of available resources and the breakdown in health care delivery systems. The privatisation of basic health care has further impeded the response to the health crisis.
4. Privatisation and User Fees
Privatisation forms a centrepiece of the World Bank and IMF agenda. Reducing the size and scope of government, and privatising state-owned enterprises and services, is a major element of World Bank and IMF programmes. Under World Bank and IMF direction, control of health care services has increasingly been transferred from African governments to the private sector. The rationale is that health care services are better financed and more efficiently delivered privately.
The World Bank has recommended several forms of privatisation in the health sector. These include: the introduction of "user fees" for health services previously provided free of charge; the promotion of health insurance schemes; increased investments in private care in order to attract patients to private facilities. Through these measures, private services are made the primary focus of health care.
Throughout Africa, the privatisation of health care has reduced access to necessary services. The introduction of market principles into health care delivery has transformed health care from a public service to a private commodity. The outcome has been the denial of access to the poor, who cannot afford to pay for private care.
For example, the introduction of user fees for health care services has been shown to sharply reduce access for those unable to pay. The World Bank and IMF have promoted "user fees" as a means of generating revenue for the health sector. They argue that these fees will tax the rich and that a system of exemptions will protect the poor from the costs. However, the evidence shows that user fees have actually succeeded in driving the poor away from health care services.
Ghana, Swaziland and the former Zaire were among the first African countries where user fees replaced free, or almost free, services. In each of these, studies showed that the introduction of fees led to reduced utilization of these services (25) Studies in Côte d'Ivoire have shown that those with income above the median make more use of medical services when a user fee is charged. But those with below median incomes reduce their use (26) Across Africa, reports indicate that attendance at hospitals and clinics drops significantly after the introduction of user fees.
Schemes intended to exempt the poor from user fees have been shown to be ineffective. A comprehensive UNICEF study discovered that such schemes are rare (27) The study claims that poor people are generally unaware of such exemptions, and that there are often complex administrative barriers involved. The report concludes that the implementation of exemption schemes is infrequent and is applied in ad hoc ways. It therefore does not appear that user fees have been managed so as to collect revenues only from the rich. Instead, they have had the effect of closing off access to those who cannot pay. As a recent paper concluded, user fees "increase the barriers disproportionately faced by the poor when seeking health care."(28)Their failure to generate revenue has also undermined their economic rationale, as propounded by the World Bank and IMF.
Another form of privatisation involves the promotion of insurance schemes as a means to defray the costs of private health care. This is inherently flawed in the African context. Less than 10% of Africa's labour force is employed in the formal job sector (29) Therefore, the vast majority of people are not eligible for insurance through their employer. Income levels in Africa are extremely low, and have been reduced further by wage cuts and lay- offs associated with World Bank and IMF austerity policies. Most Africans cannot afford the cost of private insurance. In view of such circumstances, insurance schemes cannot resolve the issue of access to private health care in African countries (30)
Beyond the issue of affordability, private health care is also inappropriate in responding to Africa's particular health needs. When infectious diseases constitute the greatest challenge to health in Africa, public health services are essential. Private health care cannot make the necessary interventions at the community level. Private care is less effective at prevention, and is less able to cope with epidemic situations. Successfully responding to the spread of HIV/AIDS and other diseases in Africa requires strong public health care services.
The privatisation of health care in Africa has created a two-tier system which reinforces economic and social inequalities. As health care has become an expensive privilege, the poor have been unable to pay for essential services. The result has been reduced access and increased rates of illness and mortality. Despite these devastating consequences, the World Bank and IMF have continued to push for the privatisation of public health services.
5. Recent Developments: Reform or Repackaging?
In recent years, there has been growing criticism of the impact of World Bank and IMF programmes in developing countries. As a result, these institutions have shifted their public stance in favour of "poverty reduction." They have attempted to re-package structural adjustment to include greater emphasis on social development programmes.
The "Poverty Reduction" Spin
Both the World Bank and IMF have proclaimed a greater commitment to "poverty reduction" in recent years. They have made it a requirement for countries to prepare Poverty Reduction Strategy Papers (PRSPs) as a condition for the receipt of new loans or debt relief. These papers are intended to be drawn up by national governments in consultation with civil society "stakeholders" and with World Bank and IMF guidance. They are to outline the priorities and strategies of African governments in their development efforts. In order to reflect their concern with social development, the World Bank and IMF have also renamed structural adjustment lending. The IMF now uses the term "Poverty Reduction and Growth Facility" (PRGF). The World Bank's new term is "Poverty Reduction and Support Credits"(PRSCs).
The World Bank has also increased its funding for health, and for HIV/AIDS programmes in particular. While the shift in focus towards prioritising social development and poverty eradication is welcome, fundamental problems remain. New lending for health and education can achieve little when the debt burden of most African countries is already unsustainable. Debt cancellation should be the first step in enabling African countries to tackle their social development challenges. Additional resources to support health and education programmes should be conceived as public investment, not new loans. The new spin on the World Bank and IMF priorities fails to change the basic agenda and operations of these institutions. Indeed, it appears to be largely an exercise in public relations. The conditions attached to World Bank and IMF loans still reflect the same orientation prescribed over the past two decades. The recent moves towards promoting poverty reduction have actually permitted these institutions to increase the scope of their loan conditions to include social sector reforms and governance aspects. This allows an even greater intrusion into the domestic policies of African countries. It is highly inappropriate that external creditors should have such control over the priorities of African governments. And it is disingenuous for such creditors to proclaim concern with poverty reduction when they continue to drain desperately needed resources from the poorest countries.
Equivocation on User Fees
In 1998, the Bank's Operations Evaluation Department reported that nearly 75% of projects in sub-Saharan Africa included the establishment or expansion of user fees (31) As the negative effects of user fees have begun receive more public attention, the Bank has sought to distance itself from the promotion of these fees.
In a policy statement at the end of 2000, the World Bank announced that it was stepping back from the promotion of user fees for basic social services in the developing world. It stated that it supports the provision of basic health care for free. However, it added that well-designed and well-implemented fees can be useful in mobilizing additional resources for these services in poor countries. It maintains that exemption schemes do work in some countries. Overall, it remains convinced that user fees can improve the quality of health care services being provided.
It is difficult to ascertain whether the World Bank is still pushing user fees in practice. Indeed, it is not easy to monitor the content of the Bank's adjustment programmes at all because of the lack of information disclosure on this form of lending. In the US, an important victory was achieved in 2000, when Congress passed language against user fees. This language requires the US representatives to the World Bank and IMF to oppose user fees. These representatives must inform Congress within 10 days if any loan requiring the imposition of user fees is approved by the International Financial Institutions.
Despite this victory, challenges remain. It has been documented in at least one case since then that user fees have been included in a loan package, despite this legislative language. This calls into question the commitment of the World Bank and, of its US Directors, to ending user fees as part of World Bank and IMF prescriptions. At the IMF, no move has been made to indicate a new policy on the imposition of user fees in borrower countries.
Water Privatisation, a threat to future health
The privatisation of public water systems is a strategy being promoted by the World Bank in an increasing number of African countries. This involves the reduction of public subsidies for clean water. It also involves, in some cases, the introduction of cost-recovery measures for access to water supplies.
This development represents a major cause for concern. Access to clean water is a vital public health necessity and a basic human right. The privatisation of water can only lead to reduced access to safe water for poor communities. In Ghana, the recent moves towards water privatisation are being opposed by civil society groups for this reason. Already, according to the Ghanaian Ministry of Health, half of all clinic visits in Ghana are due to water-borne illnesses. The groups opposing privatisation are concerned that this move will further reduce access to safe and affordable water in urban areas (32)
Over two million people in developing countries die each year because of diseases related to lack of clean water. Many of these are children. Increased privatisation of water in African countries can only increase the risk of ill health among the poor.
The free market fundamentalism of the World Bank and IMF has had a disastrous impact on Africa's health. The all-out pursuit of market-led growth has undermined health and health care in African countries. It has forced governments to sacrifice social needs to meet macroeconomic goals.
This approach to development is fundamentally flawed. The failure to prioritise public health denies its significance in promoting long-term economic growth. As the WHO Commission on Macroeconomics and Health recently concluded, health is more than an outcome of development, it is a crucial means to achieving development (33) Investments in Africa's health must therefore form a central part of any comprehensive development strategy.
Economic and social progress in Africa cannot succeed in the context of the current health crisis. In order to address this crisis, it is necessary to tackle the structural factors that fuel it. The World Bank and IMF must accept responsibility for the devastating impact that their policies have had on Africa's health. If the US is serious about responding to Africa's health crisis, it must use its power at the World Bank and IMF to end the harmful policies of these institutions.
(1) Paul Kieti Kimalu, Debt Relief and Health Care in Kenya (Nairobi: Kenya Institute for Public Policy Research and Analysis, July 2001). http://www.wider.unu.edu/conference/conference-2001-2/poster%20papers/kimalu.pdf
(2) The World Bank, World Development Indicators (Washington, 2001). See table 8 at: http://www.worldbank.org/poverty/data/trends/mort.htm
(3) Reported from the fourth general assembly of the African Population Commission, Addis Ababa, Ethiopia, February 2002. See http://www.globalpolicy.org/socecon/develop/aids/africa/LifeXpec0212.htm
(4) Kevin Watkins et al, The Oxfam Poverty Report (Oxford, 1995), p. 74.
(5) The US holds 16.45% of the votes at the World Bank, and over 17% of the votes at the International Monetary Fund.
(6) Rick Rowden, "Globalisation and Protest Against the Policies and Outcomes of a Corporate-Led Process", a paper presented at the "Poverty and Globalisation Conference," St. John's University, Jamaica, NY, April 2001. (Available upon request from the author at email@example.com)
(7) The World Bank, Annual Report 2001 (Washington, 2001), volume 1,
(8) Meredeth Turshen, Privatising Health Services in Africa (New Brunswick, NJ, Rutgers University Press, 1999), p. 38.
(9) John Yudkin, "Tanzania: still optimistic after all these years?", in The Lancet(1999; 353: 1519-21).
(10) UNICEF, "Balance sheet of human progress in Africa," posted beginning in September 2000 at http://www.unicef.org/miscellaneous/balance.htm
(11) Turshen, Privatising Health Services in Africa, p. 17.
(12) UNICEF, The State of the World's Children (New York, 1998), section on "The Silent Emergency". http://www.unicef.org/sowc98/silent.htm
(13) UNICEF, "Balance sheet of human progress in Africa."
(14) Joint UNAIDS/WHO Press Release, "HIV Causing Tuberculosis Cases to Double in Africa", April 23, 2001. See http://www.unaids.org/whatsnew/press/eng/pressarc01/TB_240401.html
(15) "Roll Back Malaria" a partnership of the World Health Organization (WHO), UNICEF, UNDP and the World Bank. See http://www.rbm.who.int
(16) UNAIDS/World Health Organization (WHO), "AIDS Epidemic Update", December 2001 See http://www.unaids.org/epidemic_update/report_dec01/index.html
(17) Salih Booker and William Minter, "AIDS in Africa: is the world concerned enough?", in Great Decisions, 2002 (New York, Foreign Policy Association, 2002). See http://www.africaaction.org/action/aids2002.htm
(18) Turshen, Privatising Health Services in Africa, p. 16.
(19) Inter-Church Coalition on Africa (ICCAF, Beyond Adjustment: Responding to the Health Crisis in Africa (Toronto, 1993), p. 17.
(20) ICCAF, Beyond Adjustment, p. 19.
(21) Kamkes, J., van der Meer, J., Mooren, H., and de Wildt, G., "Economic adjustment in poor countries is too painful for health care," Bulletin Medicus Mundi (No. 64, April 1997) (http://www.medicusmundi.ch/bulletin/bulletin641.htm
(22) B. G. Schoepf, C. Schoepf, and J. Millen, "Theoretical Therapies, Remote Remedies: SAPs and the Political Ecology of Poverty and Health in Africa," in J. Yong Kim, J. Millen, A. Irwin, A., and J. Gershman, J., eds., Dying for Growth. Global Inequality and the Health of the Poor (Monroe, ME: Common Courage Press, 2000), p. 112.
(23) United Nations Development Programme (UNDP), Human Development Report 1997 (New York: Oxford University Press, 1997).
(24) Jubilee 2000 Coalition, UK, Through the Eye of A Needle. The Africa Debt Report (London, 2000), p. 4. See http://www.jubilee2000uk.org/analysis/reports/needle.htm
(25) D. Arhin-Tenkorang, "Mobilizing Resources for Health: The Case for User Fees Revisited", WHO Commission on Macroeconomics and Health (CMH) Working Paper Series, Paper No. WG3:6., November 2000. Available through http://www.who.int/cmhreport
(26) WHO, "Financing Essential Drugs: Report of a WHO Workshop", document WHO/DAP/88.10, 13. Referenced in Turshen, Privatising Health Services in Africa, p. 48.
(27) S. Reddy and J. Vandemoortele, "User Financing of Basic Social Services. A review of theoretical arguments and empirical evidence," 1996. See http://www.unicef.org/reseval/pdfs/Userfees.pdf
(28) Arhin-Tenkorang, "Mobilizing Resources for Health."
(29) The World Bank, World Development Report 1995 (New York: Oxford University Press, 1995). Referenced in Turshen, Privatising Health Services in Africa, p. 61.
(30) Turshen, Privatising Health Services in Africa.
(31) John Gershman, "The World Bank and Health". See http://www.bicusa.org/ptoc/htm/gershman_health.htm
(32) For more information, see http://www.isodec.org.gh/isodec/campaigns.htm
(33) For the final report of the WHO Commission on Macroeconomics and Health, see the section on the WHO website at http://www.who.int/cmhreport
By Lord Anthony Gifford, British Queens Counsel and Jamaican Attorney-at-Law
A paper Presented to the First Pan-African Congress on Reparations, Abuja, Federal Republic of Nigeria, April 27-29, 1993
I am a lawyer who has striven for human rights and justice in many parts of the world. Much of my work has concerned the manifold injustices which are caused by the evil of racism. Especially, I have stood in solidarity with Black people in Britain in their bitter and continuing struggle for equal rights, and with the liberation movements of Mozambique, Angola, Guinea-Bissau, Zimbabwe, Namibia and South Africa, in the still unfinished cause of complete African liberation. I now live and practice law in Jamaica.
I believe that the cause of Reparations to Africa and Africans in the Diaspora is rooted in fundamental justice - a justice which over-arches every struggle and campaign which African people have waged to assert their human dignity. For the iniquities perpetrated against African people today - whether in South Africa by the apartheid regime, in Mozambique and Angola by terrorist forms of de stabilisation, in Britain and the USA by racist attacks and by systems of discrimination - are the continuing consequences, the damages as lawyers would say, flowing from the 400-years-long atrocity of the slave system.
For me as a lawyer it is essential to locate the claim for Reparations within a framework of law and justice. If this were merely an appeal to the conscience of the White world, it would be misconceived. For while there have been many committed individuals and movements of solidarity in the White world, its political an economic power centres have evidenced a ruthless lack of conscience when it comes to Black and African peoples.
But in my experience progress has been made when the powers that rule in the white world have been compelled to recognise that the rights of non-white peoples are founded in justice. It is then that forms of legal redress, which may not have existed before, have been devised.
For example, it used to be perfectly legal in Britain, only 25 years ago, for landlords or employers to put up notices which said "VACANCIES - NO COLOUREDS". Today any employer who discriminates on racial grounds can be required by a Tribunal to pay compensation.
At an intentional level, apartheid in South Africa used to be regarded as an internal affair, however regrettable. But over the years apartheid became recognised as a crime against humanity and a threat to peace, so that international sanctions could be imposed.
This is not to say that the achievement of legal sanctions brings automatic justice. This has not happened either in Britain or South Africa. But these examples show that the demand for justice and legality is an essential element in the struggle for a just cause.
So it is with the claim for Reparations. Indeed, once you accept, as I do, the truth of three propositions
Those who may say that that is all very true in theory, but that in practice there is no mechanism to enforce the claim, or no willingness of the white world to recognise it, I would answer with a Latin legal maxim: ubi jus, ibi remedium: where there is a right, there must be a remedy. An injustice without a remedy is abhorred by lawyers like a vacuum is abhorred by nature. Once the claim is well-founded in legal principle, and well-recognised by the international community, remedies and mechanisms will be fund.
Even so, given the unique, massive and multi-faceted nature of the claim, international jurists will be needed who can show corresponding creativity and imagination. International la- has never been static. New structures have often been devised to give effect to recognised principles. The Nuremberg War Crimes Tribunal is an example of new legal thinking which brought a measure justice following the atrocities f Nazism. The International Court of Justice, where states could settle disputes with each other by law rather than by war, was unknown at the start of this century.
This paper is an attempt to conceptualise a legal framework for the formulation and prosecution of the claim for Reparations.
It is argued by reference to seven fundamental propositions.
1. The enslavement of Africans was a crime against humanity
The Charter of the Nuremberg Tribunal defined crimes against humanity in these words:
"Murder, extermination, enslavement, deportation, and other inhumane acts committed against any civilian population.... whether or not in violation of the domestic law of the country here perpetrated"
The Charter also gave jurisdiction to the Tribunal to try cries against Peace ('planning, preparation, initiation or waging of a war of aggression...'), and War Crimes ('violation of the laws and customs of war... including murder, ill-treatment, or deportation to slave labour or for any other purpose of civilian population of or in occupied territory..')
It is considered by international lawyers that the Nuremberg Charter did not create new law, but declared and confirmed concepts of international criminality which had been accepted over centuries. As one writer puts it:
"The tribunal found that acts so reprehensible as to offend the
conscience of mankind, directed against civilian. populations, are crimes in
D.P.O'Connell, International Law for Students
In 1948 the United Nations promoted the Convention of the Prevention and Punishment of the Crime of Genocide. It has been ratified by most countries in the world. Again, the Convention was giving a new legal form to an old concept in international law. The preamble to the Convention recognised that "genocide is a crime against international law", and that "at all periods of history genocide has inflicted great losses on humanity. Genocide was defined:
"Genocide means any of the following acts committed with intent to destroy, in whole or in part, a national, ethnical, racial or religious group, as such:
Historians and their experts can show without difficulty how the invasion of African territories, the mass capture of Africans, the horrors of the middle passage, the chattelisation of Africans in the Americas, the extermination of the language and culture of the transported Africans, constituted violations of all these international laws.
The argument that such crimes were 'legal' under European law, an accepted as normal most Europeans, would be unavailing. Europeans did not, then or now, constitute all mankind, and the conscience of all decent mankind must always have been outraged by the atrocities which Europeans inflicted on Africans over 400 yeas.
Indeed it can be said that it was the ultimate crime against humanity, to deny human status to a vas section of humankind.
2. International law recognises that those who commit crimes against humanity must make reparation
The right to reparation is well recognised in international la. It has been defined by the Permanent Court of International Justice (the predecessor of the International Court of Justice) in these terms:
"The essential principle contained in the actual notion of an
illegal act - a principle which seems to be established by international
practice and in particular by the decisions of arbitral tribunals - is that
reparation must, as far as possible, wipe out all the consequences of the
illegal act and re-establish the situation which would, in all probability,
have existed if that act had not been committed. Restitution in kind or, if
this is not possible, payment of a sum corresponding to the value which a
restitution in kind would bear; the award, if need be, of damages for loss
sustained which would not be covered by restitution in kind or payment in place
of it - such are the principles which should serve to determine the amount of
compensation due for an act contrary to international law."
Chorzow Factory Case, Germany v Poland, 1928
The leading textbook on international law by Schwarzenberge described the recognition of the right to reparation as a process:
"International judicial institutions have slowly groped their way towards the articulate formulation of the rule that the commission of an international tort (wrong) entails the duty to make reparations."
Most of the case law on reparations concerns the compensation for specific losses such as the destruction of property, buildings, ships etc. But the principle is just as valid in the case of illegal actions on a larger scale which affect whole peoples. Indeed there are direct precedents for the payment of reparations in such cases:
A number of agreements have been made under the British Foreign Compensation Act of 1950; lump sum settlements were made by Bulgaria, Poland, Hungary, Egypt and Rumania, and a Tribunal was set up to make awards from the sums made available, so as to do justice as between many thousands of claimants whose property had been expropriated. A US-Iran Claims Tribunal was set up in 1981 for a similar purpose.
Japan has made reparation payments to South Korea for acts committed during the period of invasion and occupation of Korea by Japan
Most recently, the United Nations Security Council has passed a resolution, binding in international law, requiring Iraq to pay reparations for its invasion of Kuwait.
It is therefore clear that the concept of reparations is firmly established and actively pursued by states, on behalf of their injured nationals, against other wrongdoing states.
In addition, one can identify a second category of reparations which is of great relevance. This is where a state has accepted the responsibility to make restitution, not just to other states, to groups of people within its own borders whose rights had bee. violated.
In 1988 the United States Congress passed the Civil Liberties Act, which was designed to make restitution to Japanese Americans in respect of losses brought about by "any discriminatory act of the US Government...based upon the individual's Japanese ancestry during the wartime period when Japanese Americans were interned in great numbers. A Commission was set up to investigate' claims. A total of $1.2 billion, or about $20,000 for each claimant, was paid. The Act began by stating the basis for reparations in clear terms which could be applied with the greatest relevance to the claims of African peoples:
"The purposes of this Act are to :
(1) Acknowledge the fundamental injustice of the evacuation, relocation and internment of US citizens and permanent resident aliens of Japanese ancestry during World War II;
(2) Apologise on behalf of the people of the US
(4) Make restitution to those individuals of Japanese ancestry who were interned...
(7) Make more credible and sincere any declaration of concern by the US over violations of human rights committed by other nations."
Some steps have been taken to recognise the rights to restitution of indigenous peoples whose land was plundered and occupied, and whose people were decimated, especially in the United States, Canada, and Australia. Each of these countries
have made land rights settlements and/or financial payments to indigenous peoples. These are woefully inadequate gestures, given the atrocities committed in those countries against indigenous peoples. But they represent some recognition that the surviving generations of indigenous peoples have the right to a measure of reparation for the crimes committed against their ancestors.
3. There is no legal, barrier to prevent those who still suffer the consequences of crimes against humanity from claiming reparations, even though the crimes were committed against their ancestors
Whether the descendants of the immediate victims of a crime have a right to reparations, will depend on the nature of the claim being made. The US payments to Japanese Americans were aimed at making restitution for the suffering of those actually interned. The Austrian payment was to survivors of the concentration camps, again to make reparation for the physical and mental agony of the concentration camps. If a victim died before the claim were agreed, his claim died with him, since the pain and suffering were personal to him.
But there are many cases where the consequences of the crime committed are visited upon descendants. Where property has been expropriated, the loss is suffered not merely by the then owner, but also by his descendants who have lost an inheritance which would otherwise have been theirs. In such cases, international law gives a remedy, even if the claimant was not born at the time of the expropriation.
For example, the Order made under the British Foreign Compensation Act of 1950 provided that the Foreign Compensation Commission should treat as established any claim relating to certain property in Egypt which had been sequestrated by the Nasser government if the applicant was the owner "or is the successor in title of such owner", making it plain that the children and the grandchildren of the original dispossessed owners were entitled to claim.
More recently, since the unification of Germany, claims have been pressed successfully by the sons and daughters of property owners whose lands were seized after the German Democratic Republic was set up. No one doubts their right to claim, even though they may have been children, or even unborn, when their family's land were taken over.
Claims have been made not only by descendants, but by the nation state which has had to bear the burden of paying for the consequences of the crime. As noted above, Israel successfully claimed reparations from West Germany for the costs of resettling Jewish refugees - even though the state of Israel did not exist at the time when the Nazi regime committed its crimes against the Jews. It is also significant that West Germany, which felt obliged to meet the claim, was also a different state, territorially as well as politically, from the German Reich which was responsible for the atrocities.
In principle, therefore, the passage of time since slavery ended is no barrier to the claim of African peoples, provided that it can be pro-led that the consequences of the crime of slavery continue to manifest themselves to the prejudice of Africans now living in Africa and the Diaspora. On this point, the evidence of historical experts is clear and unequivocal.
On the African continent, flourishing civilisations were destroyed; ordered systems of government were mashed up; millions of citizens were forcibly removed and a pattern of poverty and underdevelopment directly resulted, which now affects nearly every resident of Black Africa. In the Americas, the slavery system gave rise to poverty, landlessness, underdevelopment, as well as to the crushing of culture and language, the loss of identity, the inculcation of inferiority among Black people, and the indoctrination of whites into a racist mindset - all of which continue to this day to affect he prospects and quality of Black People's lives in the Caribbean, USA, Canada and Europe.
While there is no limitation period in international law, unreasonable delay could be a reason for refusing a claim. A sate which had a just claim, but which failed to advance it over a long period, could be held to have acquiesced in the wrong or to have waived its right to claim reparations.
However, no objection along these lines could properly be made against the claim of Africa and Africans in the Diaspora. In the case of Africa and the Caribbean region, the period of slavery and the slave trade was followed by the period of colonialism. It can be argued that colonialism itself was a crime in international law, for it was a usurpation, imposed by force, of the rights of the colonised peoples to their sovereignty. It was at the very least a crime against peace, and in most if not all colonised territories, crimes against humanity were frequently committed. In the case of the United States, former slaves were subjected to a system of exclusion, separate development, racial persecution, civil rights denials and ghettoisation, which has only in part been overcome in the recent years following the civil rights movement.
The important point is that African peoples, until recently, had no independent voice, nor even any status in the world community. How could, the people of, say, Ghana or Jamaica make a claim for reparations when their country was considered to be an 'overseas possession of the very country whose people had kidnapped and enslaved their ancestors? Still less were African-Americans, as they struggled for the right to be recognised as citizens, in any position to make any claims - even if there was any international forum in which a claim could be brought, which there was not.
Even after the independence of African nations from colonialism, the shackles of neo-colonialism have fettered the power of African governments to speak with any real independence against their former conquerors. It is by no means unreasonable or surprising that it has taken some 30 years since formal independence for a claim for reparations to be voiced. Indeed I would argue that no, as never before, is the right time for this claim to be made, as African leaders are speaking with a new confidence and operating in new democratic structures.
4. The claim would be brought on behalf of all Africans, in Africa and in the Diaspora, who suffer the consequences of the crime, through the agency of an appropriate representative body
So far I have been dealing with the legal basis for the reparations claim. The last. four sections deal with questions which a legal analyst is bound to raise, however difficult it is to answer the:
Here we sail into uncharted waters, since no claim for reparations of this magnitude has ever been brought. Hundreds of millions of people, in different continents of the world, have an interest in this claim. Their losses may seem almost impossible to quantify. Some minds are so daunted by the practical problems involved that they conclude that the claim is unrealistic.
I do not hold any such defeatist view. Once the first three propositions are accepted as valid, and the right to reparations is seen to be soundly established in international law, then ways of doing justice can and will be found. Difficulties of scale or procedure should not be obstacles to justice. The unwillingness of the white world to consider the claim is not a reason for giving it up, but rather a spur to mobilising awareness and support around the issue.
However, in addressing these questions I seek to identify the principles involved, rather than to furnish precise answers, which can only be developed over time and experience, and after deep study.
Who are the claimants for reparations? The broad answer is that all Africans, on the continent Or Africa and in the Diaspora, who suffer the consequences of the crime of mass kidnap and enslavement, have an interest in this claim. I am opposed to any divisiveness in the formulation of the claim. If, for example, we plan for an Africans-on-the-Continent claim and a separate Africans-in-the-Diaspora claim, we will already have begun to splinter into fractions.
All Africans around the world] have been affected in some way by the crime of slavery. Even those who have succeeded in a business or a profession have had to face racial prejudice at the least. And while there may be some whose families enriched themselves by collaboration with the slavers, that should not be allowed to undermine the overall truth that the rape of Africa impoverished all Africans, both those who were taken and those who were left behind.
Who should process the claim on behalf of so any? This is a matter which transcends national governments - but governments are the chief implementers of social programmes, as well as being responsible for the repayment of their country's foreign debt. They should neither be excluded from, nor have sole control over, the prosecution of the claim. In any case, African-Americans, African British, French Africans, and others who are in a minority in the country where they have settled, have no government which could speak for them.
Some form of appropriate, representative and trustworthy body will be required; its size and composition, and the mechanisms for setting it up, will become clearer as the movement for reparations develops.
5. The claim would be brought against the governments of those counties which promoted and were enriched by the African slave trade and the institution of slavery
Who is responsible for paying reparations? Here it is more appropriate to concentrate on the Governments o the countries which. fostered and supported the slave trade, which legitimised the institution o slavery, and which have profited as a result.
It would be possible to identify individual companies which could be proved to have made vast profits from slavery. There are plantation owners in Jamaica, and titled families in England, whose living heirs owe their wealth to slaving. Should such companies and families be targeted as individual Defendants to a reparations claim?
In my view such an approach would create more problems than it solved. Enormous research would be needed to identify the companies and families, to determine how much money was made y their ancestors, and to calculate how much should be forfeited y the present shareholders or family members. The process would inevitably be somewhat arbitrary, and potentially oppressive, and it would be rejected both by the targets themselves and their governments
I would however make one exception, when it can be proved that a work of art or an artefact, now in a public or private collection, was originally obtained illegally in the course of an invasion or plundering exercise in Africa. In this one case, the international law concept of restitution in kind could be applied. The reparation process must include the restoration of identifiable treasures to the country which most closely represents the people from whom they were robbed.
In reality in these cases of restitution, the individual owner would lose the work of art, but would most probably receive compensation for its value from his own government. This is because the restitution would have been made with the co-operation of the relevant European or other government; and it is a normal principle that compensation must be paid when private property is taken away by act of a government.
The reasons why the 'Defendants' to the reparation claim should be governments, are in my view that it is governments which have some measure of control over their national wealth, through their reserves and their taxation powers; it is governments who must in the end be persuaded that reparations are to be paid as a matter of justice; it is governments who can determine whether Africa's debt burden should be unladen from its shoulders; and it is governments which are responsible for making international treaties and implementing them through the passage of laws.
Historians will advise as to which countries have profited most from slavery and the slave trade. The major European maritime trading nations and colonisers can be easily identified. So can the United States, as a country which grew rich on slave labour and the exploitation of African Americans. However, as the next section indicates, the assessment and evaluation of responsibility will be a vast undertaking.
6. The amount of the claim would be assessed by experts in each aspect of life and in each region, affected by the institution of slavery
The assessment of what should be claimed is perhaps the most pressing and onerous task to be faced by the reparations movement. Each affected country will have to be studied, and perhaps even each people with each country. Different considerations will apply to the peoples of the Africa continent; the peoples of the now independent countries where slavery flourished; and the people who are now minorities in Europe or North America.
The damage may be classified and researched under different headings. There is economic damage, cultural damage, social damage/ psychological damage. To put monetary figures on any of the elements of the claim raises questions to which I have no answers: how do you assess the value of the loss to an African people of a young person, kidnapped and transported over 200 years ago? What figure can be placed on the psychological damage inflicted by a system which is still deeply racist? Can it be proved that the slave system destroyed old and flourishing African civilisations, and if so, how is their value to be measured? What level of restitution is appropriate for the African peoples of the Diaspora?
Another approach, perhaps to be adopted in parallel, is to measure the amount by which various European nations were directly enriched by the institution of slavery. In the Report of the Inquiry into Racism in Liverpool, which I conducted in 1989, I quoted the historian Ramsay Muir, who wrote in 1907. He described the slave trade as '"The pride of Liverpool", for it flooded the town with wealth which invigorated every industry, provided the capital for docks, enriched and employed the mills of Lancashire, and afforded the means of opening out new and ever new lines of trade. beyond a doubt it was the slave trade which raised Liverpool from a struggling port to be one of the richest and most prosperous trading centres in the world."
Similar evidence could be uncovered about Bristol, London, Bordeaux, and many other ports. And naturally the wealth generate through the ports spread into the whole country. But here too, even if the general picture is clear, the detailed evaluation is not easy. Is it possible to work out the amount of profits which poured into the ports of Europe? If so, how should that amount be translated into present-day money? Is the process any easier in the case of North America and the Caribbean, in relation to the profits of the plantation-owners?
Fortunately there are many seekers after truth who are trying to find answers to all these questions through careful research. Any figures put on the various elements of the reparations claim will at best be estimates made from a basis of sound historical research. However the research process itself will have a value far beyond the calculation of figures. It will be an educative process through which the horrors of the past will be re-examined. The more the details of the slave system and its consequences are exposed, the more understanding there will be, among African people and white, of the justice of the reparations claim.
7. The claim, if not settled by agreement, would ultimately be determined by a special international tribunal recognised by all parties
There is at present no court which would be competent to hear a claim for Reparations for Africa and Africans in the Diaspora. The International Court of Justice is competent to hear claims by one state against another for breaches of international law. But this claim is on a much vaster scale than a claim between states. It would need a new mechanism, commensurate with the unique and massive issues of which I have spoken.
The absence of a court is no impediment to the Reparations claim. In the examples given earlier, the legitimacy of the claim was recognised and embodied in an agreement, without there having been any pre-existing tribunal to deal with the grievance. As part of the agreement a mechanism for dealing with individual claims has been established. The nature of the court which makes the binding decisions will depend on the issues at stake and the negotiations which have preceded the agreement.
For example, the agreement made between Iran and the United States for the payment of reparations set up a nine-member Commission, consisting of three American judges, three Iranian, and three from countries not involved in the dispute. It sat in three chambers of three judges, and made adjudication's on nearly four thousand claims.
At this stage, therefore, it is premature to consider the composition of any Commission or Tribunal which might ultimately; adjudicate upon the African Reparations Claim. The adjudicating body will only carry authority if it has been set up with the concurrence of all parties to the dispute. The international recognition of the justice of the claim is a condition precedent to the setting up of any judicial machinery.
This, then is the great task in which lawyers have a specific but significant contribution to make. They are only a small part of the panoply of forces which will be needed - historians, archaeologists, artists, writers, politicians, sociologists, psychologists, and beyond them all people of good will, of all races, which perceive that the crime of slavery was a monstrous evil, for which atonement and reparation is long overdue.
RCPB(ML) Home Page
Workers' Daily Internet Edition Index Page