In Africa, a tale of two bailouts

Issue 

It was a powerful symbol. At the New York summit meeting at the UN General Assembly on September 22, the first point on the agenda was forgotten amid the financial crisis.

The Paulson Plan, named after US President George Bush's Treasury Secretary and which consists of injecting US$700 billion to save the US banks that the speculative bubble is driving bankrupt, occupied the front pages the newspapers.

The cruel irony is that the UN General Assembly was then considering the mid-stage results of the Millenium Development Goal commitments, and in particular the most dramatic case: Africa.

In 2000, 190 governments had made a commitment to eliminate extreme poverty and hunger, to provide a primary education to all children, to work towards equality between the sexes, to reduce infant mortality, to improve maternal health care, to fight against AIDS and malaria, to make progress in sustaining the environment and to set up a world partnership for development.

The report by UN general secretary Ban Ki-moon underlined the delays and the unkept promises by the world's richest countries. In 2005, a G8 summit agreed to double aid for African development by 2010.

The following year, that aid was increased by 8%, but since then the providers of funds have fallen behind, the general secretary noted.

Africa has a long way to go to realise the development objectives that have been set. Africa is regressing compared to the rest of the world.

Two-thirds of its population is stricken by the greatest poverty. Sub-Saharan Africa, already hard hit by famine, is further threatened by a food crisis, global warming and skyrocketing energy prices.

Malaria and many other diseases, which could be contained and treated for just a fraction of what is being spent to save the banks, continue to kill millions.

These are just a few of the conclusions contained in the report presented to the world's heads of state and government, amid almost total media indifference.

Despite promises to ease African governments' debt burden, it still stood at $144.5 billion in 2007, and the debt contracted by private business hit $110.2 billion. Meanwhile, Africa is falling further behind in terms of infrastructure, health
facilities, access to medicines and water.

And at the very same time, the money that the richest countries cannot find for development of the South spouts in a geyser of hundreds of billions of dollars to save a financial system weakened by speculation.

Whereas the UN puts the amount of aid that the world should devote to deliver Africa from the slow death of underdevelopment at $72 billion a year, the US government vouchsafes $700 billion to the bankers, with the US taxpayer footing the bill.

The UN estimates of the money needed by the African continent are, in comparison with the colossal sums being spent to save finance capitalism, shamefully modest. Fifty-two billion dollars over the next two years to close the infrastructure gap, $20 billion over the same period to close the energy gap, $5.7 billion to provide clean water, $11 billion for transport, $8 billion for agricultural development.

Compare that with the Paulson Plan's $700 billion, which comes hard on the heels of the $200 billion freed up to take over Fanny Mae and Freddy Mac, the 250 billion pounds announced by the British government, Spain's 30 billion euros, the Netherlands' 8 billion euros and the 50 billion euros paid out by Germany to save the Hypo Real Estate bank from going belly up.

As Aminata Traore, former minister of culture of Mali and a great militant for the African cause, explained in the October 11 l'Humanite, there is a great danger of seeing the Great Powers, which dominate the world, striving to make up part of the bill by reducing aid to the countries of the South — countries that have been seriously weakened by the structural adjustment programs imposed by the International Monetary Fund and World Bank.

This fear was further corroborated by the worrying words pronounced by IMF director Dominique Strauss-Kahn, who announced on October 9 that the countries of the Third World were going to suffer the fallout from the crisis that is shaking the share markets.

The South is the eternal loser: $700 billion as against $72 billion!

And yet, the extravagance of the great capitalist powers, ready to pay out thousands of billions of dollars and euros to defend the capitalist system, is enough to show that humanity, once it has been freed of the domination of the markets, has more than enough means to guarantee a decent life to every human being.

[Originally published in l'Humanite on October 11, the full article canb e found at http://www.links.org.au.]

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