Most readers would be aware that the G8 intends to cancel the debt owing by poor countries, and heard Bob Geldof declare “victory for millions of campaigners across the world”. Bob said:
Tomorrow 280 million Africans will wake up for the first time in their lives without owing you or me a penny from the burden of debt that has crippled them and their countries for so long.
Wrong, Bob, dead set wrong! But then he went on to say:
We must be clear that this is the beginning and the end will not be achieved until we have the complete package demanded by the Commission for Africa of debt cancellation, doubling of aid, and trade justice.
More like the end of the beginning, but possibly closer to the mark.
First up, while a preliminary decision has been made, it needs to be confirmed at the actual G8 meeting on 6-8 July and then presented to the governance structures of the World Bank, the IMF and the African Development Bank before it becomes policy. Furthermore donor countries beyond the G8 will need to agree to chip in. So the final decision might be different. Also the cynics would say if the rich countries kept their promises to the poor it would be the first time ever. To make sure the protesters will be there marching and at an Alternative Summit and other disruptive activities. Not that the masters of our universe are likely to notice, as there will be steel fence around the 850 acre Gleneagles resort.
Nevertheless, since the IMF and the World Bank pretty much dance to the US Treasury’s tune we can expect the decision to stay much as it is. The decision itself was announced in a press release. To gain perspective it may help to indicate the scope of the decision.
The decision doesn’t address the total third world debt, which is estimated to amount to US$2.4 trillion. It covers about $50 billion or roughly 2%.
The decision addresses the debt of only 18 countries: Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda, and Zambia. (Non sub-Saharan countries in bold.) These represent 5% of the population of the 165 third world countries. The scheme may extend to another 20 countries later, representing another 5%.
Only the debts to the World Bank, the IMF and the African Development Bank are covered. Ghana, for example, has debts with nine multilateral lenders. The Latin American countries owe considerable amounts to the Caribbean Development Bank and the Inter-American Development Bank which are not included. There may also be private loans to these countries. Zambia will have less than 20% of its debt cancelled.
As to how much debt should be cancelled, how long is a piece of string? African debt totals about $300 billion. Some commentators suggest that up to $1 trillion or $2 trillion should be forgiven. There is about $500 billion of ‘odious debt’ (mainly debt spirited away by corrupt dictators, but ironically now invested in the developed world.)
Unsurprisingly, the G8 decision closely follows the American model, the other main contender being the Canadian-UK-Netherlands model (not just Tony Blair’s idea as you might have gathered from the media.) The latter would only have partially wiped out the capital debt and would have involved selling the IMF’s gold reserves. This would have necessitated Bush asking Congress for permission, and it is thought he was reluctant to do that.
The leading feature of the American model is that the beneficiaries pay for some of the debt reduction themselves, but not directly. Being a non-economist I admit to still being confused, so if there is an economist in the house who can explain in clear language what is meant to be going on, I’d be grateful. Perhaps everything will be clearer after the G8 meeting. Meanwhile it is difficult to see how the target countries benefit much.
For the IDA (International Development Association) and the AfDF (African Development bank) 100% debt stock cancellation will be delivered, but target countries will be docked by “adjusting their gross assistance flows by the amount forgiven.”
The IDA is an organ of the World Bank that provides grants and interest-free loans to very poor countries. It has a flow of new money from 40 donor countries, who will be asked for additional donations to cover the debt relief, essentially, I think, by taking over the repayments. The US will do this by diverting existing aid funds of about $150 million each year.
In the case of the IMF the G8 statement says that “the costs of fully covering IMF debt stock relief, without undermining the Fund’s financing capacity, should be met by the use of existing IMF resources” with donors helping out where necessary. I understand they have some funds from a trust set up after previous gold sales.
In total taking over the debt repayments will cost the G8 all of $350-500 million in the first year and after that maybe $1.5 billion each year. Or the cost of a week or two of the war in Iraq.
It does appear that the Europeans are willing to stump up more aid and most are heading for the target of 0.7% of GDP. As the matter stands the Americans are not. Currently Official Development Assistance (ODA) stands at about $80 billion, compared to over $300 billion for internal rich country farm subsidies. US share of ODA is about 25%, but this amounts to about 0.18% of GDP. Jeffrey Sachs reckons that aid to Africa amounts to about $30 per head, of which only $12 gets to them. The US contribution of that he calculates at about 6 cents.
Ultimately the G8 initiative has to be seen against need. The G8 statement picks up on the UN Millenium Development Goals (MDGs), launched in 2000 with the aim of halving hard-core poverty by 2015. Since then the UN has had 250 experts working with Jeffrey Sachs on strategies for the MDG initiative. To his credit, he gets about and seems to learn as much from interacting directly with impoverished peasants and villagers. Earlier this year they issued a report, with a new website, heaps of documentation and ten nifty recommendations.
Short of reading Sachs’ book The End of Poverty (which is staring at me from the pile — looks good), you can get a good idea of what he’s on about from this Time Magazine article(pdf file), this New Yorker article and this Mother Jones interview.
Sachs is diplomatic about current World Bank and IMF programs, but I get the idea he would rather see bottom up identification of needs and planning from the community level. Until such planning has been done and aggregated need cannot be finally costed, but he thinks that annual aid of about $195 billion (against the current $80 billion) would do the trick. There does seem to be a move away from loans to direct aid.
Tony Blair and the Europeans generally have been giving some priority to Africa, with Blair establishing a Commission for Africa. The Commission report calls for immediate additional direct aid of $25 billion (Executive summary here – smallish pdf file). He went to see Bush about this and got big fat zero.
This particular debt relief initiative is merely the continuation of the HIPC (Heavily Indebted Poor Countries), a World Bank/IMF program initiated in 1996 which has already cancelled substantial amounts of debt in the countries within the program.
So the G8 gesture is starting to look like a cheap publicity stunt. I think there is sincerity behind it, but it is a small step, not a large one as trumpeted by Blair and Brown. The devil is partly in the detail, the famed “conditionalities” that the Bretton Woods pair always attach to their generosity. Everyone complains about the conditionalities.
The conditionalities involve the usual: tightening budgets already struggling to pay for necessities such as health and education, instigating user charges for same, opening public services and infrastructure to privatisation by multinationals, freeing up trade to allow tariff-free import of luxury goods as well as subsidised farm produce from rich countries.
George Monbiot, perhaps their unkindest critic, puts it like this :
Attaching conditions like these to aid is bad enough: it amounts to saying “we will give you a trickle of money if you give us the Crown Jewels.” Attaching them to debt relief is in a different moral league: “we will stop punching you in the face if you give us the Crown Jewels.” The G8′s plan for saving Africa is little better than an extortion racket.
The Monbiot quote is but one example indicating deep ideological fissures surrounding this issue, wherein Patrick Bond and associates accuse the NGOs of supplying a teflon coat to Blair and particularly to Gordon Brown who:
…repeatedly endorsed and fostered policies that destroyed hundreds of millions of lives across the world, and refused to countenance democratic reform of the Bretton Woods Institutions, whose important Monetary Policy Committee he chairs.
In the near future, time and strength permitting, I’d like to investigate these fissures further. Meanwhile we await a famous ‘victory over poverty’ announcement from Gleneagles.
Good article about the endemic difficulties of ensuring money gets past corrupt African governments in The Age ( The Australian?) last weekend. Confronting stuff – I’m going nuts here in the paper pile trying to find it, did anyone else read it? Please? As the technicalities of untying the liens that bind the Third World to the First are only part of the picture. I adore Bob G, but am frightened he has oversimplified the whole thing.
Nice post, Brian. It’s good to get the facts that are often hidden beneath the rhetoric.
People need not get hung up about what Geldof says or doesn’t say. He is not the issue. He’s raising the issue the only way he knows how. It’s up to everybody else to do same.
The Sachs articles are complusory reading – thanks Brian -and a great post.
First person who hops onto this thread and makes the deliberatley derailing and falsely dichotomous comment that it’s about trade not about aid, must be banned.
US share of ODA is about 25% … aid to Africa amounts to about $30 per head, of which only $12 gets to them. The US contribution of that he calculates at about 6 cents.
25% of $30.00 is $0.06?
Longest journey start with the smallest steps and all that…
Great post Brian. I have been trying to get my head around the machinations and I remain in two minds about it, but you have rightly pointed out that it is only a tiny tiny step, perhaps overstated.
I will give credit thought, to Blair et al. at least for raising Africa’s profile even though this measure is targetted at selected countries around the world..
My missus is going to want to watch the tennis tonight, and build a cupboard apparently. Also I posted the thing at Webdiary and there is a fair bit of detailed comment there, so I’m going to struggle to cope with it all.
Genevieve, I’d be very interested in that Age article. I didn’t see it. Sachs has a lot to say on the issue of corruption. In brief, he acknowledges the problem, but says it is over-rated as are a number of reasons people give for not doing anything.
He’s not just giving an opinion, but has done some economic analysis to base his views on. I’ll get back to you on this later with more detail.
Meanwhile the World Bank/IMF HIPC program does include what they call “scaling up” to cope with the funds, intalling transparency measures etc. That’s one reason why not all needy countries are included and only 18 have reached what they call “completion point.”
Kim, thanks. I started investigating the topic about 2 weeks ago from close to a standing start. It took a while to see some shape to the whole thing and I’m still feeling my way.
wbb, I agree about Geldof and Bono who Sachs uses a lot. The downside is twofold. Firstly it has tended to strengthen the charity paradigm, though I think Geldof is trying to go beyond that now.
Secondly, I think the first world approach needs a radical critique and the celebrities do lend strength to the standard first world approach. On balance it is no doubt better to have Geldof’s effort than not.
I agree with you about the ‘trade not aid’ mantra, which was starting to be put about a fair bit a few years ago.
Russell and saint, it’s certainly better than nothing. I’m not a Blair fan, but I think it links with his “draining the swamps of terrorism” call after 9/11. There is a fair bit of momentum behind the Millenium Development Goals which I understand the UN are going to look at again in September. I don’t think I mentioned the socalled Monterrey consensus, which was a UN initiative but with participation of the World Bank and the IMF, where everyone who matters confirmed 0.7% of GDP as the desirable standard for aid. The pdf copy of the report (101pp) is here. There is a shorter World Bank report on it here and a speech by the boss man of the IMF in the following year here. Towards the end he says:
PRSP stands for Poverty Reduction Strategy Papers which, since 1999, has been at the very centre of the HIPC program. It is where they put the target country through needs assessment, make sure they have the skills and capacity to do the work etc. Unfortunately this is where the loan “conditionalities” come in because being true neoliberals their agents really do believe there is no other way.
I think Sachs would dearly like to find agencies other than the IMF/World Bank duo to do the work. The UN itself, maybe, but the UN is not flavour of the month in all parts.
Other than the UN the G8 is no doubt the only real agenda-setting body. So we should be eternally grateful to Tony Blair for making it a central issue.
EP you’ve short-circuited somewhere, I think. I read the story on Africa in one of Sachs’ articles, but it is also in his book (p310). This is the whole story:
As I understand it the US’ ODA or Official Development Assistance is indeed about 25% of the world’s total. It seems clear that they spend most of it somewhere other than in Africa.
Certainly, in terms of debt relief, the $120 billion that the world forgave Iraq at the request of the US dwarfs anything proposed for Africa.
btw there were a couple of articles on the subject in the SMH today, by Mark Scott and Matte Wade.
Brian – you worry that Live 8 “has tended to strengthen the charity paradigm”?
If so, I’d be interested in what you see as the problem with charity. If you only mean, well, let’s teach them to fish, then OK, I understand.
Or is there a more fundamental objection to Charity per se.
Here’s some petrol on the fire.
Thanks for the petrol on the fire, Evil. It looks pretty dopey, and probably quite offensive, but I’ll have a closer look when I get time.
wbb, I’ve no objections against charity as such, providing we don’t automatically blame the victim and regard them as intrinsically inferior. (Sachs cites the reaction of the first Europeans to make contact with the Japanese, who were seen as hopelessly lazy and would never amount to anything.) And yes, we do need to ‘teach them to fish’ although I’m not sure ‘teach’ is the right word. Sachs cites the farmers in Kenya who now don’t use fertiliser, because they can’t now afford it, although they all once did.
My worry is that we may think that chucking some short-term money at the problem is all we have to do. It remains to be seen, for example, whether, the US, the EU and Japan will open their markets generally to farm produce from the third world.
The main gripe from Africa, and I heard it on a BBC program again last night, is that the bad news out of Africa swamps all the good news and adversely affects Africa as a tourist destination or as an investment destination.
When I get a moment, I’ll put up Sachs’s five-point strategy, plus what I heard an African leader say needs to be done.
Combining the gripe about the negative image and the niggle about charity, are you saying that there is no place for popular political action against rich government inaction, Brian?
Brian, I had another hunt for the article but no luck so far – I may have actually ditched the paper, and RMIT is subscribed to Factiva, but The Age does not provide full text coverage to us studes which is pretty crappy.
There was a term in it used to describe African politicians as “Looters” (or a derivation of said term) which was pretty damning, however. And the point was made that this is more of a problem in Africa than anywhere else in the developing world. I guess it stuck in my mind as I have been listening to a lot of Radio Australia lately whilst cataloguing at the ABC.
wbb, I’ve been working today for my sins. I think I said that Geldof and Liveaid were on balance positive. I think the main benefit is in attitude change and constituency building, but I’m no expert on social change.
I think there is an interesting issue around critical mass in exercises like Liveaid. If the audiences had flopped and no-one turned up it would have been very negative for the cause. The protests against the Iraq war on 15 Feb 2003 are often cited as a successful exercise of this kind. I thought at the time that the turnout (15 million?) was a bit light on. Had we had 30 million in the US alone it might just have impressed the only guy who really counted in the end – GWB.
Last year on 15 Feb they had another go to mark the anniversary and it turned out as one they really should have cancelled, because not enough turned up.
The bit of TV coverage I saw on the news tonight looked pretty impressive and South Africa having Nelson Mandela on board helped. I guess it’s the TV that counts. The turnout for the march in Gleneagles yesterday was also pretty impressive at about 200,000 plus, but got crowded out by Liveaid in the coverage. They seem to select sights for these events to make them seem to be more accessible than they really are. The WTO after Seattle went to Doha, which was impossible for protesters to reach. Cancun in 2003 was an isthmus. I’m not sure of the layout of the next one this November in Hong Kong, but I’d be surprised if it was easily accessible.
genevieve, Sachs says it is worse in Africa, but the very strong point he makes is that corruption is always worse in poorer countries and that when compared with countries at a similar level of development it is no worse there than anywhere else.
In this recent interview (small pdf file) he gives the example of Malawi who put together a truly excellent plan to provide 300,000 people affected with AIDS with the necessary anti-viral drugs. We, the rich countries, eventually gave them enough to save 25,000 people, no doubt with appropriate self congratulations, leaving the other 275,000 to die. On the CIA factbook data base Malawi (population 12.9 million) is the second poorest country in the world, ahead of East Timor, and has a life expectancy of 36.97 years.
Sachs says according to the studies they?Äôve done the chances of good government grow as development proceeds. There will always be exceptions, of course.
Btw, I recently heard Tim Costello after a returning from Aceh, where great pains have been taken to minimise corruption. He said that when workers on the ground were asked about corruption they just smiled.
You might be interested in a comment from the discussion at Webdiary. Commenter Bill Bradbury said:
Finally, the George Monbiot article that initially got me going on this topic gives the rich countries a huge serve for their hypocrisy. Among other things he says:
Sigh!
Correction!
I said Malawi in the above comment when I should have said Mali.
I’ve got them thorougly muddled.
Mali is on the south side of the Sahara Desert (think Timbuctu) has a population of 12.29 million, 140,000 with AIDS (2003) and a life expectancy of 45.09 years. Its GDP is $900 and is 214th in rank order.
Malawi is east of Zambia and Mozambique, has a population of 12.16 million, 900,000 with AIDS (2003) and a life expectancy of 36.59 years. Its GDP is $600 and is 231st in rank order.
btw Dateline on SBS on Wednesday is going to be about Malawi and the G8 decision. Malawi is also said to have good government.
Corruption in Africa is cited all the time by rich people who either simply do not want to contribute to a solution or else want to placate their conscience by believing that the poor bring it upon themselves by putting up with bad government.
Corruption occurs everywhere to greater and lesser extent. In circumstances of extreme poverty it is futile to expect to find good governance. People are too busy feeding their children to worry about the niceties of bureaucratic protocol. How the hell a country is supposed to afford a well-paid and motivated civic service when it can’t afford to feed it’s school children is beyond me. So of course corruption, as we term it, will accompany dire poverty. It is a mistake to assume causation however.
The causes of miserable poverty are many. Corruption is only one of them. People are not starving in many corrupt countries. The more fundamental problems that can be addressed by donation of resources, debt cancellation and trade have to do with water, sanitation, soil fertility, primary health care etc.
Those who prefer to argue the toss over whether or not a particular country deserves to be helped while people die are irrelevant to the movement expressed by such things as Live 8, the Millenium Project, etc.
It is the same failure to see the woods for the trees that sees people today concentrating on the fact that the Philadelphia perfomers were given extravagant gifts in return for their time.
Nothing involving humans is pristine. But those who throw their hands up in the air at the first blemish will always bleat when it isn’t. It’s their way to escape responsibility.
Charity is a problem, I agree with Brian. If it becomes the prism thru which the rich see all of Africa’s problems. The reality is that we rip them off and exclude them using unfair trade practices. So we need charity at an emergency immediate level and we need fairness which is no more than their due, for long-term resolution of the grave imbalances between the rich and porr countries over trade.
I think Live 8′s focus on trade is ignored by the knockers who try to paint the movement as possessed of a childlike grasp of the issues. Live 8 is only the front of stage for people like Sachs who do indeed know what the real issues are.
I found this op/ed in the Guardian very interesting on the charity question.
Live 8 reflection – Pink Floyd are showing their age!
And here are the British pollies harnessing things to their trade agenda, and pouring oil on the waters generally.
And I found this screaming I completely missed the point article in the Guardian too.
It is so easy to nit-pick like this. If it wasn’t a serious problem that some people are actively trying their level best to address, then it might make for interesting academic type discussion. But as it is, it’s wilfully disengaged from the real issue.
The clear image I have of the writer is a white person: mean, cynical, pleased with themselves, showing off. Oh, and feeding of positive action, as ever.
Agree with most of what you have posted on the faces of corruption, Brian, of course development and improved governance push and pull each other along in most cases and the point on Asian development may well be highly contestable.
I was merely reporting the main thrust of that lost article in the hope that someone, somewhere has seen it too. Also in my listening to Radio Australia I came across many stories about development projects including a couple on the meeting of an African Asian forum set up to encourage developing countries to support each other, here:
http://www.abc.net.au/ra/asiapac/programs/s1351936.htm
and here
http://www.abc.net.au/ra/asiapac/programs/s1349920.htm
Also I guess what I have heard of the role Australia has played in attempting to support Papua New Guinea and the Solomon Islands in terms of governance initiatives does put an interesting spin on the problems in parts of Africa.
That’s from the article you linked to, thanks, Kim. This is very topical, because Australia has just won a case against the EU in the WTO, objecting to the subsidies they pay their sugar beet farmers. The irony is that such action puts the entire sugar crop in Fiji in jeopardy. Other unnamed former colonial sugar producers are similarly affected.
This illustrates the interlocking nature of trade arrangements and the need for a more comprehensive rational approach to the whole issue, probably on a commodity by commodity basis. The WTO should be doing this, but is captive to ideology-ridden and self-interested game-playing, including by Australia.
Britain opposes the continental agricultural subsidies, which is a central issue to the argument they are currently having over the EU budget.
While Oxfam has long pointed out that opening agricultural markets to third world producers (which incidentally would devastate many millions of farmers in the US, the EU and Japan) would yield about $100 billion to the poor countries. It really is an impossible dilemma. Mandelson is wrong to say that trade was “the only way to convert humanitarian assistance into economic sustainability in Africa.” Trade is important, but substantial aid in the short to medium term will also be required.
wbb, that is a fine statement, IMO, you express yourself very well and make a lot of sense. Sachs gives the example of a country with say $1000 per capita GDP and government revenues of perhaps $100. Not a lot to pay for health, education, roads, power supply, water, law and order, and an army. And, yes, I forgot, half of it goes on paying interest on debts run up by a dictator 30 years ago. Along comes the IMF and tells you that you have to sell your infrastructure to private enterprise, eliminate food subsidies, tighten your belt to run a budget surplus, open your markets to subsidised rich country food, privatise your bank etc and you have no choice.
Sachs emphasises two things that are different about Africa. More of their countries are land-locked, and the weather seems less reliable than in most parts of the world. Secondly they started with very low levels of infrastructure back in the 60s and 70s when most gained independence.
Add to this opportunistic loans of petro-dollars etc at high interest rates on projects that did not produce extra exports in the short term. Then came higher oil prices, lower commodity prices and closed markets. On top of that you can add corruption, failed states, war-lordism and all sorts of mayhem. Plus assistance by the IMF and the World Bank that made things worse while we were happy to make any deal that worked to gain and maintain access to mineral resources.
Furthermore total (human) fertility seems to increase automatically in conditions of increased poverty and consequent increases in infant mortality. Sachs shows that with the exception of a few places in the Middle East, across a sample of 148 countries, both infant mortality and total fertility decrease as economic growth proceeds.
There seems little chance that a virtuous cycle of growth and well-being can be achieved anywhere without external assistance except a few places where the profits of large mineral wealth may be captured locally.
A case of the latter may be Nigeria where a special deal has just been done on debt relief. But the joint has 130 million people and GDP per capita of $1000. This puts their total economy just ahead of Singapore and just behind Ireland and Israel. If they crack 6% growth it will take 24 years to reach per capita GDP of $4000, which I think is the threshold for becoming a ‘transition economy’ which gives them real options to marshal internal resources to produce growth.
The poor buggars are going to need a lot of help. But we can afford it. I understand the trade for the entire continent is less than Belgium’s.
TYhanks for that genevieve.
Yes, and we should think about our responsibilities to East Timor, which on the CIA factbook rankings comes stone cold, motherless last in the wealth stakes, and by a fair marjin.
Must fly now.
And here is the mother of all “Live 8 is detrimental” articles.
Simon Jenkins
And while we are here : P Adams interviews David Rieff tonight on Radio National. Rieff is the guy who everybody quotes when they want to show that aid is harmful. He will lambast Live 8 – so should be fun!
wbb, I think there was a Times editorial up front that repudiated the idea of debt relief when the idea was first announced, but I didn?Äôt follow it up. Simon Jenkins is wrong about at least one thing. He says:
Given the G8?Äôs influence on the IMF, the World Bank, the WTO, and indeed the UN, not to mention many other multilateral finance institutions, to call it a talk-shop is just silly.
Meanwhile Bush was on the news saying that if the EU reduced agricultural subsidies, the US would follow suit. The Americans have been saying this for some time in the WTO. Maybe they are just grabbing the high moral ground, knowing that the EU won?Äôt budge. Maybe they think that if all the barriers are down the Europeans will be less competitive and be wiped out.
Malcolm Fraser was on the 7.30 report. He welcomes Live 8 and on trade, he says, Don?Äôt forget the Japanese.
Well said, Malcolm because their subsidies are way higher than those of the US or the EU.
The BBC asked eight commentators, including some Africans. Not much unanimity there.
Saturday week ago I heard this program on the ABC. I think it was Demba Dembele who said the following should be done:
1. Cancel all debts
2. Eliminate all “conditionalities”
3. Return the money from the Swiss bank accounts etc.
4. Open rich countries markets to African exports
5. Establish a new body with 50% African finance ministers and 50% donor country representatives to disburse aid.
It?Äôs not the silliest proposal I?Äôve heard.
I saw a glimpse of Fraser, before my viewing companion said that man is bald like John Howard and we went off to deconstruct JM Barrie.
Apparently Simon Jenkins is famed for his Little England views.
The African Union has just released a communique, trying to leverage off the European zeitgeist, which calls for cancellation of debt. This would be such a no-brainer – and has been for years – that it has required something like Live 8 to so get up the noses of those with exquisitely delicate morals, to spark any opposition to it.
Sounds like the man knows how to play an audience. Going nicely.
Paul McCartney, Bob Geldoff, U2, Mariah Carey?!?!?
Bunch of has been musicians out to get their face back on tv. What have they done in the past 10 years?
If these crusty billionaires wanted to help, they would share their fortunes.
Failed Irony?
(I should know as I own the genre, but I’m not sure.)
Why can’t we make poverty history in Australia too
While I’m mentioning Live 8, there’s a good piece on the topic at William Burroughs’ Baboon – “Whether from left or right, check your politics in at the door when you enter the house of Desperate Deprivation.” This…
Andrew, I understand there are about 40 million people in the mighty US of A who are “food insecure”. That is they may eat tomorrow, OTOH they may not.
Chris Sheil says that growth has been slowing in the last three decades of the 20th century. If you look at Figure 1 in this article you might wonder where progress is being made. Certainly the rich in the US have been doing OK, but I understand the lower strata of the workforce have fared about as well as Latin America/Caribbean and the Arab states.
Why do we aspire to be like the US? Why do the “new” Europeans similarly so aspire? And why do we heap so much shite on the old Europeans who have looked after their lower strata better than most?
http://www.theaustralian.news.com.au/common/story_page/0,5744,15822151%255E7583,00.html
Call me an economoc rationalist, but this still says it all.
Tony, it’s all wishful thinking IMHO. Bush is only repeating what the Americans have been saying for a few years. But Bush knows that Congress wouldn’t put up with it when he can’t get his Central American Free Trade Agreement (CAFTA) through.
He should also know the Europeans have locked in their CAP until 2013 and it can?Äôt be changed unless every country agrees. Pascal Lamy, the former EU trade negotiator, said he needed to secure the future of Europe?Äôs 7 million farmers in his dealings with the WTO. Lamy is now Director General of the WTO.
And don?Äôt forget the Japanese. They?Äôd have to agree too and I don?Äôt think they want to feed up big on Chinese rice and vegies.
Personally I think food is different from other tradeable goods. We need to trust our food, and I think any country is entitled to grow its own food, even if this involves higher prices and/or subsidies. If a country wants to do this it is better to use quotas. But the exporting of subsidised produce to wipe out other countries’ food production capacity should be totally verboten.
Cotton is different and is just a commodity. In the future I’m told we will be growing plastics and other materials as plants.
The editorial says:
The writer doesn’t seem to know what’s going on. There were special arrangements governing TCF exports which ended in the beginning of this year. The effect was that the Chinese began to wipe just about everyone out. There were flourishing textile industries in Kenya and some other African countries. This year they have been devastated by Chinese competition. Here again I don’t welcome a world where all clothing is made in one country but what you would do to reasonably avoid it I’m not sure. The US and the EU have just whacked quotas on again and sent the Chinese into a rage. I’m not sure about Europe, but the conditions applying in the American textile industry are – well, third world.
It’s never going to be rational world, I think.
“It?Äôs never going to be rational world, I think.”
Brian nails the absolute bottom line nub of it.
Where the market arm-throwers get it all wrong is that they cannot contemplate one order of greater complexity than their mythical level playing field.
The real players who actually write the rules under which the world lives and dies know that every single deal must be hammered out on its own merits. With whatever degree of market sophistry required.
And most often the rich win because they negotiate from power. In much the same way Safeway will always destroy the corner shop. The world needs an ACCC on steroids. And that’s what all the Live 8, Millenium Project, Make Poverty History people are on about. Including George Monbiot when he’s not hyper-ventilating. Not that I blame him, but he does get steamed up and ejects the baby sometimes. Although it was a pleasure to watch him call Alan Oxley every name under the sun tonite on Dateline.
Preventing dire life-threatening poverty in Africa is not a question that can be left to market theorists.
Trade with Africa must be tailored on a case by case basis to allow those countries to get to a point where they can feed their children, and can then educate their children and also treat their basic medical conditions.
At that point let them be thrown to the mercy of real politik and market forces if you like. But for crissakes, let them get to the starting line. Then see how they go on the elysian fields of market.
wbb, nation states tend to act in their own self-interetest, but their primary constituency in matters of trade and commerce is not the people, or some notion of the broader public good, rather it is their corporations and their own broader geopolitical strategies.
The logical answer to all this is a democratically-elected world government, plus a ‘fair trade’ organisation to rein in corporations. This, plus the Keynesian idea of an International Clearinghouse Union to replace the IMF, is what Monbiot advocates in his book “The Age of Consent”. To his credit also, he doesn’t just outline these proposals conceptually but addresses the strategies required to introduce them starting from where we are now.
I think the critical first step, missed by Monbiot, is to defang corporations within the core powers, especially the USA.
Last year, a href=”http://backpagesblog.com/weblog/archives/000285.html”>at Back Pages), I said, drawing from the writer Paul Kingsnorth (misspelling his name):
Kingsnorth’s book One no, many yeses has a chapter on activists in the US who would like to make the notion of corporations being regarded as persons, and hence rhe entitlement to fund politicians under free speech provisions, as unacceptable as pissing in the street.
Their campaigns are on a local level, but targeting states which have citizens referenda provisions. The battle has to be won in the first instance at an attitudianl level. Perhaps they should sign up Bob Geldof.
I’d like to revisit this one some time, but am too busy right now.
I’ll try again on the Back Pages link.
The age article on the duplicity of these bureaucrats implementing debt in the good weekend i have a copy of. Yes its not on the school archive and yes i dont know how to get it to you do-gooders