CONTENTS | ANB-BIA HOMEPAGE | WEEKLY NEWS
by Edw. Hobbs Gama, Malawi, January 1999
THEME = DEBT
Developing countries, especially those in Africa's sub-Saharan
Africa region,
are still feeling the weight of the debt they owe towards foreign countries
- a debt they have no hope of repaying as they strive to provide
for the social, health and education needs of their own countries.
Any income they can generate is taken up by the heavy foreign debt
they are doing their best to service
On 15 December 1998, in his address for the 1 January 1999 World Day of Peace, Pope John Paul II raised the cry for debt relief for impoverished nations. The elderly pontiff pleaded with creditor nations to see the approach to the year 2000 as an ideal opportunity to help developing countries extricate themselves from heavy international debt. He urged them to consider the effects of economic globalisation, free market economy and financial fluctuations which are hurting most of the developing economies.
In his speech, the Pope obviously had in mind the new millennium. He urged those countries looking for debt repayments not to ignore the effects of fluctuations in the financial markets and the effects of globalisation. He said: «We urgently need a new vision of global progress in solidarity, which will include an overall and sustainable development, so as to enable all people realise their potential.»
The Pope's appeal underlines the worldwide effort now being made to free poor countries from the chains of foreign debt. It is recognised that the so-called «aid» given to poor nations under the guise of «Structural Adjustment Programmes» and similar schemes, have done more harm than good as they plunge developing countries ever-deeper into debt.
Following many years of failed attempts to adequately address the problem of foreign debts in poor countries, the International Monetary Fund and the World Bank, developed a new initiative under the sobriquet of «Highly Indebted Poor Countries» (HIPC) to deal with the debt problem «once and for all». However, the experience of those countries which have gone through the HIPC, proves that debt relief has been minimal - indeed, for many countries, there is little prospect of debt relief for several years.
«Jubilee 2000» is a common effort by a number of Churches and aid agencies throughout the world to urge wealthy industrialised rich nations, to cancel the «unrepayable» debt. Resources thus saved can be used to eradicate or at the very least, reduce the effects of poverty.
In many African countries, the situation paints a grim picture, with poor nations failing to strengthen their economies due to mounting debt, and basic social services continuing to deteriorate. Such countries include Tanzania, Zambia, Ethiopia, Niger.
Let's take closer look at some of these countries.
Tanzania is one of the world's poorest countries. Half of Tanzania's population live below poverty line. One in six children die before the age of five, and almost one third of the population will not live until the age of forty. And in the present financial year, over one third of the budgetary expenditure will be allocated to foreign debt servicing!
In Ethiopia, where over thousands of children die annually from easily preventable diseases, debt repayments are four times more than government expenditure on health care. In Zambia, infant mortality rates are on the increase while provision for general health care is on the verge of collapse. In Niger, debt servicing needs are more than the combined budgets for health and education. The country ranks 173 out the 175 on the UNDP Human Development Index. The average life expectancy is 47 years and only 14% of the population is literate.
Many African countries are paying out more and more in an attempt to service their debts. This is doing nothing to help their development and economic growth, especially in areas such as health and education that need adequate funding.
In his April 1998 report to the Security Council, entitled: «The causes of conflict and the promotion of durable peace and sustainable development in Africa», the UN Secretary-General, Kofi Annan, summed up the situation as follows: «Many states in Africa lack the financial capital needed to address basic expectations and fundamental needs. This is one of the central crises of Africa today, and one that is due in large measure to the problem of African public sector debt.»
According to a report released by the International Monetary Fund towards the end of 1997, the total external debt of developing countries amounted to about US $2,066 billion. In the same year, developing countries paid back to creditor countries and financial institutions of the developed world, US $272 billion.
Sub-Saharan Africa's total debt is US $330 billion. Every day, sub- Saharan Africa pays out about US $33 million in debt servicing. 28 out of the 45 sub-Saharan African countries fall in the group of Heavily Indebted Countries. These include Angola, Burundi, Cameroon, Central African Republic, Congo RDC, Congo-Brazzaville, Côte d'Ivoire, Ghana, Guinea, Guinea-Bissau, Equatorial Guinea, Kenya, Liberia, Madagascar, Mali, Mauritania, Mozambique, Niger, Nigeria, Rwanda, Sao Tome e Principe, Sierra Leone, Somalia, Sudan, Tanzania, Uganda and Zambia.
A great deal of understanding is needed, so that the world's richer nations can be persuaded into doing something about alleviating the debt situation of poorer nations. If this at least could be achieved at the very least, what an encouragement it would be for the developing world to tackle their own problems!
END
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