STWR - Share The World's Resources

Mary Riddell

Journalist, The Observer Newspaper

Towards a moral universe

Soon it will be over. No more cod theology, no more recycled orphans' faces on front pages and no more of the media's perishable brand of pity. What happens next, in the countries devastated by the tsunami, and in Africa, will depend on whether the mood of the past fortnight really is a conduit to a better world.

Gordon Brown thinks so. His three-part prescription of debt relief, increased aid and better trade terms for poor countries is, at first sight, nothing new. He rehearsed his action plan, complete with an international financial facility (IFF) for front-loading funding, several months ago in an essay for New Economy .

Two factors made last week's programme different. The first is the Asian earthquake and the second the supposed feud with the Prime Minister, who rolled out his own salvation package simultaneously. Mr Brown is, apparently, playing Prometheus to Mr Blair's Zeus. In the legend, the underling filched the leader's fire to bestow on struggling mortals. In the modern variant, the Chancellor has merely stolen the PM's thunder.

Mr Blair wants to be a saviour, too, but he has been upstaged by Mr Brown's talk of 'the extraordinary power of human compassion to build anew'. The two men's wishes may be similar, but Blair's lack the transformation element. Only Brown believes that the events of the past fortnight can turn people into better human beings who will now refocus their newfound altruism on Africa.

Governments are not usually very optimistic about the goodness of their citizens and Blair's is no exception. Any legislative or social programme suggests that the human condition is to hang around the chip shop in a hoodie, plan ning antisocial acts or to binge fecklessly on alcohol and carbs.

The perfectibility of mankind is a frequently recycled hope, despite its dubious record. Communists held it as a primary goal. Thomas Malthus thought it might work, if only there were fewer people to perfect. Enlightenment dogooders were always trying to civilise wild children, as proof of the triumph of rationalism and reason, and then growing bored with them once the novelty had faded.

Mr Brown tacitly admits he has some way to go. The statistics quoted in his speech do not bear witness to the kindness of the affluent: 110 million children denied a school place and 60,000 others who suffer or die each day as the rich world falls 150 years behind in its millennial pledge to eliminate avoidable infant deaths.

Then there are the bits he did not mention, such as the competitive giving in which nations vie to outdo one another, while corporations get denounced as tightwads. In all this who-gave-whattery, only the generosity of citizens offers some hope that they can become the army of salvation that Mr Brown's vision requires.

Can people really change so fundamentally and do they need to? On two of his proposals - writing off debt to developing countries and doubling aid - the Chancellor is asking nothing radical. As Professor Rodney Barker of the London School of Economics says, Athenian regimes of the 4th century regularly cancelled debt in the hope of building a fairer society. Helping the poor has always been the duty and the luxury of the wealthy.

Fairer trade policy, the third plank of Mr Brown's plan, will be the test of whether the earthquake has unleashed the will for a better world. Some months before the tsunami struck, Oxfam interviewed a woman called Nong, who was stitching underwear for Victoria's Secret in Thailand. She explained she was afraid of having children because she feared she could not feed them. 'We have to do overtime until midnight to earn a decent income,' she said.

Thailand, the Maldives and Sri Lanka are full of women like Nong. Their poverty has been compounded not only by the tsunami but also by a change in international regulations, which puts China in direct competition with other textile producers. Meanwhile, the West continues to rake in its cut with one hand while dispensing beneficence with the other.

On Oxfam's figures, the US duty levied on Sri Lanka for exports of clothing and textiles alone was $244 million in 2003. The EU charged $77m in the same year. In Indonesia, the corresponding charges were $426m and $180m. Tariffs are so harsh that the charity estimates the overall income lost to the developing world at $40 billion. Western generosity is woefully selective.

From Margate to Malibu, people know little about such clawbacks, mainly because their politicians do not discuss uncomfortable truths. Few things are simpler to grasp than starving to death and few are made more unnecessarily complex than the remedies. Global financial institutions do not deign to speak the language of ordinary voters, which is useful for governments with a vested interest in ensuring that the poor stay poor.

The idea that a fairer world is virtually impossible to achieve has corroded public generosity, or skewed it. Before the tsunami, the average British adult donated his £12.32 a month (or £13.55 for women) to causes led in popularity by medical research (24 per cent), children (21 per cent) and animals (11 per cent). Overseas projects trailed at 8.5 per cent and disaster relief was the priority of only 2.4 per cent. In other words, donkey sanctuaries touched more hearts than Darfur.

Professor David Held of the LSE has done some other sums. In a recent essay for openDemocracy, he argued that developed countries had ample means to change the world. EU citizens spend $11bn a year on ice-cream alone, while the joint pet-food bill for the EU and the US is £17bn, against the UN budget of $1.25bn, excluding peacekeeping. Held's question was whether we have the will for global social justice.

Gordon Brown thinks so. He has annexed citizens' goodwill, not in fiscal speak but in a prophet's rhetoric, or even a poet's. With the tsunami over and Africa ahead, Mr Brown is ushering voters into TS Eliot country, to choose 'between the profit and the loss in this brief transit where the dreams cross'.

Will we go with him? Not if the only lure is the fading faces of the drowned or even the knowledge of what a scandalous profit retailers are making from Sri Lankan knickers. But perhaps citizens will follow and drive their politicians, if they can be shown that there is a mutual benefit at stake.

There would be short-term sacrifices for fair trade, such as job losses that Britain should be able to absorb. In the longer run, the 'one moral universe' Mr Brown envisages will benefit a world in which global warming, natural disaster and terrorism have already instilled some equality of catastrophe.

Easier options exist. We could help reconstruct pre-earthquake poverty and give Aceh back its one, flyblown hospital to treat a region's sick. We could stall on debt relief and trade while virtuously bewailing, over a cup of fair-trade tea, the lack of decent governance south of the Sahara. Or we could accept what events, self-interest and humanity decree: that Asia and Africa are the key to all our futures.

This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

First Published: Sunday January 9, 2005 The Observer Newspaper.

Christopher Brauchli

In faith and hope the world will disagree, but all mankind's concerns is charity
Alexander Pope, An essay on Man

He sure knew what he was talking about. He should. He is president of the World Bank.

In an April interview with the New York Times, James Wolfensohn suggested that in addition to blowing up people and things: "I would argue that there is also a need for a parallel and equally urgent attention to the question of development as a way to prevent terror, and to prevent conflict. . . ." In the interview he observed that the military receive $900 billion each year from world governments and wealthy farmers receive $300 billion. By contrast those same governments spend only $56 billion on development assistance for the poor. Subsequent reports made the point even more forcefully.

On December 9, UNICEF released a report entitled "Childhood Under Threat." It said that over one-half of all the children in the world or more than one billion children suffer extreme deprivation because of war, HIV. and AIDS. It observed that each year the equivalent of the entire population of children under five living in France, Germany, Greece and Italy died from deaths that could have been prevented. Each day 29,158 children under the age of five die. Three thousand nine hundred of those children die because they lack access to safe drinking water and adequate sanitation.

The report also observed that child poverty had worsened in many developed countries, including Finland, Sweden, Belgium, Germany, Luxembourg, the Netherlands, Austria and Italy. That was offset by the good news that the child poverty rate in the United States had declined from 24.3 percent to 21.9 percent which, however, was accompanied by the bad news that that rate was higher than the poverty rate in any of the countries named.

A report issued two days earlier by the U.N. food and agriculture agency disclosed that 852 million people (or almost three times the number of people living in the United States) suffered chronic malnutrition and five million children a year die because of malnutrition. (The remaining 5 million that Unicef described presumably died from other causes.) Commenting on the report, Florence Chenoweth, the food and agriculture agency representative pointed out that "hunger kills one child every five seconds." If you add the 5 million children from the Unicef report to the equation every 2 ½ seconds a child dies from mostly preventable causes. In the time it takes to read this column anywhere from sixty to more than one hundred children will have died. Most of them never learned to read.

Joining the gloomy statistics reported by the various agencies was one from Oxfam International. It said that the aid budgets of rich nations had dropped by 50 percent since 1960. The report says 45 million children will die by 2015 because the wealthy are not living up to the promises of support they made many years ago. The United States spent 0.14 percent of national income on foreign aid in 2003. That is one-tenth of what it spent on Iraq. Jeremy Hobbs, Oxfam’s Executive Director said: "The world has never been wealthier, yet rich nations are giving less and less. . . . The scandal must end. . . . . Unless world leaders act now to deliver a historic breakthrough on poverty, next year will end in shameful failure."

I’ve bad news for Mr. Hobbs. Shameful failure looms. On December 23 it was reported that as a result of budget deficits and the need to cut back on spending the Bush administration is cutting back on support for global food aid programs. Cutting back on food aid is a good way of reducing spending without impacting the wealthy whose pleas for help are heard and heeded. The cries of the poor are barely audible and cannot be heard in Washington. That’s why George Bush could let it be known, two days before Christmas, that contributions to global food aid programs will be cut. Some charities estimate the cuts will be in the neighborhood of $100 million. On New Year’s day Mr. Bush will use his Saturday radio address to wish everyone a happy new year. It will be happier for the well fed than for the hungry.

(After this was written the Tsunami tragedy struck Asia. As of this writing more than 70,000 have been killed. Mr. Bush has not yet commented. The U.S. initially pledged $15 million to help victims, one half the amount pledged by Japan. In response to criticism the amount pledged was raised to $35 million. That is almost as much as will be spent on the inaugural festivities celebrating the Second Coming of George W. Bush. The inaugural festivities will be more fun than rebuilding the lives of those affected by the tsunami).

This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Ida Urso, Ph.D.

Ida Urso, Ph.D., is Founder/President of the Aquarian Age Community, a non-profit accredited nongovernmental organization (NGO) in association with the UN Department of Public Information. This article is an extract from a more extensive report, which may be found at: http://www.aquaac.org. For information, about the meditation initiative, “The Spiritual Work of the United Nations and the Liberation of Humanity,” write to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .

The 57th Annual DPI/NGO Conference
“Millennium Development Goals: Civil Society Takes Action”
8 to 10 September 2004; United Nations Headquarters—New York City

The image on the agenda booklet of the 57th UN/NGO Conference is a most telling and symbolic statement about this year's NGO conference. It depicts a chain of people efforting to raise the globe of earth up a set of stairs; concerned humanity—cooperatively striving to uplift Earth up the stairs of consciousness, thus lessening and eliminating suffering, darkness and despair.

One newspaper publication of the Millennium Campaign (http://www.millenniumcampaign.org) made available at the Conference put it this way, "In September 2000, 189 nations came together and agreed on 8 goals to make the world a better place for everyone." Then each page of the newspaper is dedicated in large, bold type to one of the following possibilities:

• What if governments lived up to their promise?
• What if everyone could eat when they were hungry?
• What if everyone were guaranteed a basic education?
• What if everyone were equal regardless of gender, ethnicity or religion?
• What if A.I.D.S. disappeared?
• What if more mothers and children survived the miracle of childbirth?
• What if environmental resources were here for generations to come?
• What if everyone were to work together as a global community?
• What if you could make it happen?

The newspaper concludes, "Meeting the 8 Millennium Development Goals by 2015 will require all of us to hold our governments to their promise. Lend your voice [this author would add, ‘your heart and your mind’] for this unique opportunity." (Please visit the following website which enumerates the 8 goals: http://www.un-ngls.org/mdg.htm)

Making their way through an unusual downpour of rain and putting up with the long lines created as every single person went through strict security procedures, 2700 plus representatives from over 700 Non Governmental Organizations (NGOs) from 90 countries came to participate in an extraordinary conference.

In this my 14th year of participation, I was struck by what seemed to me to be a yearly climaxing depth of commitment, focus and a positive, cooperative and collaborative "can do" attitude that refuses to entertain the word, "can't." Civil society, government, faith based and media representatives, UN diplomats and staff, youth and more were all applying heart and mind energies to the question of how can we best achieve the 8 potentially world transforming goals, now agreed upon by all 191 member States of the United Nations.

These 8 goals—the Millennium Development Goals, the “MDGs”, referred to by Shashi Tharoor, the UN Under-Secretary-General for Communications and Public Information, as an acronym for “Making A Difference for Good,” are, according to UN Secretary-General Kofi Annan, “a test for all of us.” Further quoting Mr. Annan, he stated, “We have an historic opportunity to end extreme poverty and to set the world on a safer, more just and humane path, but there is no time to lose. Every day we don’t act, people suffer. And if the goals are not met, we will all be poorer and less secure.”

Eveline Herfkens, Executive Coordinator of the UN Millennium Development Goals Campaign, enthusiastically underscored the importance of civil society in both articulating the goals and in ensuring their realization. She also addressed two criticisms of the goals: one, that they are not ambitious enough. For those who thus complain, she encouraged: “Please, raise the bar!” The second criticism is that these goals cannot be achieved. To this she responded, “I want you to join me by simply not accepting that these goals are not going to be achieved!! The world has the resources. We’ve never been richer. We know what to do; we know what the solutions are and please don’t get disheartened by so many reports, including from the UN system that so many countries are off track of so many of the goals, accentuating the negative, the glass is half empty….Please reject this undue pessimism because these goals are doable.”

Joining every speaker at the conference in her affirmation of the need for unprecedented cooperation and collaboration, Ms. Herfkens encouraged the creation of “grand alliances” and the need to “act locally while thinking globally.” She quoted Secretary-General Kofi Annan who often underscores the necessity for local/national/UN cooperation: “Political will shifts only if there is national and local mobilization by the public and only when national leaders are held accountable.” The UN, as Mr. Annan often reminds us, “is only as strong as its members allow it to be.”

Necessary to the realization of these goals is a recognition of “the division of labour” required between the developing and the developed countries of the world: “We have all agreed that it is the responsibility of the developing countries to achieve the first seven goals, but [we also] acknowledge that rich countries must support poor countries in order for them to do so…The MDGs are a global compact built around mutual commitments and they demand mutual accountability by all countries.” The enumerated responsibilities of the “rich countries” are to “increase aid, increase aid effectiveness, provide more debt relief and more trade opportunities and put an end to agricultural subsidies that destroy the markets of poor farmers.”

Encouraging and inspiring all, she reported on the large global North-South coalition coming together under the banner, “Make Poverty History.” This global mobilization effort demonstrates that citizens do care and want to put an end to poverty. We have in front of us a unique window of opportunity. The suffering of children in developing countries necessitates immediate action and the children of rich countries can no longer afford to ignore how their counterparts in the South live. The children in rich countries cannot continue to be “illiterate on how their own societies share responsibility” for current world conditions.

Pointing to the dilemma caused by the clash of the competing demands of nation states at the UN, Shashi Tharoor referred to the results of the “prestigious Pew Report” of last summer that found the UN standing had come down in all countries. Those who supported the Iraq war were criticizing the UN for not supporting the war and those who did not support the war were castigating the UN for not being able to prevent it. As a result, a “High Level Panel on Threats, Challenges and Change” has been appointed to examine the major threats and challenges to international peace and security, including those threats arising from economic and social issues. Mr. Tharoor reported that the challenge before this panel, “is nothing less than reviewing the entire architecture of the whole system that we have built up in the last 59 years and next year on the 60th anniversary of this organization, in December, the report of this panel will be fully discussed.”

As he indicated, the need for greater planet-wide peace and security cannot be overly estimated: “It is axiomatic that the MDGs will NOT be met in a world marred by instability and conflict. [The MDGs] are inextricably linked to the need to build international peace and security!”

Quoting from the Millennium Declaration, (http://www.un.org/millennium/summit.htm), Joan Kirby, Chair of the NGO Conference emphasized that in signing the Declaration, the countries of the world recognized that in addition to their responsibility to their individual societies, they also agreed that they have “a collective responsibility to uphold the principles of human dignity, equality and equity at the global level.” They solemnly affirmed that the United Nations is the COMMON HOUSE of the entire human family and they pledged unstinting support for their common, universal aspiration for peace, cooperation and development and their determination to achieve them.

Sister Kirby, a Religious of the Sacred Heart and the NGO Representative to the UN of the Temple of Understanding, ended her remarks by citing a prayer: “For as long as space endures and for as long as living beings remain, may we too abide to relieve the misery of the world.”

Putting in perspective the goal of the United Nations and the present reality, Jacques Attali, President of “PlaNet France” and featured keynote speaker sharply contrasted today’s UN, which functions mainly “as a multilateral organization where nations are competing to get the best for their own interest” and the UN needed to solve today’s global problems. As he emphasized, there is a need to shift from “national priorities to mankind priorities.” He lamented the fact that the world today is sadly lacking in statesmanship and in “worldmanship.” He referred to the national defense budgets as “budgets for the protection of national interest.” He stressed the need for world consciousness and speaking on the last afternoon of the conference, he asserted what had been evident throughout the three-day proceedings: “It is only in a room like this one where we see people interested by issues without borders, without any national, selfish interest; and this makes a dramatic difference in terms of ethics and dreams.”

Mr. Attali called for the creation of a Dow Jones-like index that would daily measure and publicize “a survival index to see if humanity is progressing along the path to its own survival.” And he called for the need to hold people accountable if the MDGs are not being met.

Responding to a question posed by Zin Verjee, Anchor of CNN International, Mark Malloch Brown, Administrator of the United Nations Development Programme (UNDP) referred to the fact that the 9/11 tragedy caused a change in political consciousness. “We have learned,” he said, “that not only can the rich hurt the poor, but that the poor can hurt the rich,” and a strong national defense cannot make life safe for its citizens. In fact, he stated, “the stronger your defense, the richer your citizens, the more powerful you are, in some ways, the more vulnerable you are and I think these ideas are penetrating into our world, which means with the help of civil society, we will within a short generation understand a genuine sense of global responsibility and [the need for] global action.” He acknowledged, “we are at a moment of moving signposts in the global conversation,” and in a few years, we will talk in different terms about security and development and eventually, we will recognize the need for pro-active development strategy as just something you expect from your tax-payer dollar wherever you live.

This theme of important changes wrought in consciousness by the 9/11 tragedy was further addressed by Kavita Ramdas, President of the Global Fund for Women who referred to the “gift of 9/11”: “We are all in this world together vulnerable. We all suffer terror of all different kinds. The privilege of living in a wealthy country does not necessarily protect you from being exposed.” She referred to the terror experienced by those who watch their child die of starvation; the terror of not being able to make ends meet even though you work so hard from sunrise to sunset; the terror of watching both of your parents die, leaving you with only a legacy of being HIV positive. She declared that the citizens of the world are only secure when for example, “the children of Fallujah are fed and secure and not fearful that cluster bombs can, at any time, fall on their heads.”

Increasingly the concepts of universal ethics and spirituality are embraced and openly articulated at these gatherings. For example, this year, two of the midday workshops referred to the role of spirituality in addressing global problems. One workshop whose theme was, “The Role of Spirituality in Peacemaking and Conflict Resolution” called for the creation of a global day of reconciliation. The presenters of this workshop recognized that violence is a response to a deep wound and the world community must seek alternative ways of addressing wounds, based on forgiveness and love rather than on punishment and violence.

We exist at a pivotal point in the history of humanity and the planet. As many of the NGO conference participants repeated, the problems on our planet are huge, yet so is the opportunity! May we therefore each play our part with stern resolve and with earnest aspiration to promote social progress and better standards of life in larger freedom!

A transcript of the available speeches and the web cast of the conference can be found at: http://www.un.org/dpi/ngosection/57conf.htm

Debt Relief for Poverty Reduction

Report from The Department for International Development

It is internationally recognised that the debt burden of the world’s poorest, most indebted countries has to be tackled if they are to set themselves on a path of sustainable growth, development and poverty reduction. Since 1999, the enhanced Heavily Indebted Poor Countries’ (HIPC) Initiative has been providing faster, broader and deeper debt relief to poor countries committed to eradicating poverty. The objective is to provide a permanent exit from unsustainable debt burdens. In total, this debt relief package is worth US$100 billion.

To date, 27 HIPC countries have qualified for this exceptional debt relief. Relief totalling more than US$70 billion is being provided to these countries, reducing their debts by around two-thirds on average.

The international community has stated strongly that the rationale for debt relief is to allow countries to tackle poverty more effectively. HIPC debt relief releases resources for this purpose, and helps to re-establish a country’s economic position. To this end, every HIPC country develops a national poverty reduction strategy, setting out how they will tackle poverty and specifying how the debt relief savings, and other development resources, will be used. Civil society is involved in the development of these strategies, so that they command broad-based support.

The Context

All countries have debt, it is a consequence of normal economic activity. When countries put the money borrowed to productive use, they benefit from faster economic growth and increased spending on social services.

But some countries, through adverse economic factors, misfortune, bad spending decisions, corruption or unwise lending or borrowing, acquired a level of debt that was too high for them to repay. The consequences of such high levels of indebtedness on the lives of the poor has aroused deep concern across the world, as shown by the huge popular response to the Jubilee 2000 campaign, and subsequent Jubilee Debt Campaign.

Debt relief is not new. Since the early 1960s, measures have been taken by government creditors (known as the ‘Paris Club’) to delay repayments, and more recently, to write off up to two-thirds of the face value of the debt. Commercial banks provide relief on comparable terms to the Paris Club, but most of the poorest countries have little commercial debt. Some donors, such as DFID, have written off old aid loans. However, it was found that these measures were not sufficient to deal with the very high levels of indebtedness of some of the poorest countries.

The original HIPC Initiative, launched by the International Monetary Fund (IMF) and World Bank in 1996, recognised that exceptional relief was required to bring about a once and for all reduction in the debts of some of the poorest countries. For the first time, this included debt relief from multilateral institutions, such as the IMF, the World Bank, and the Regional Development Banks. The 1999 revision to the HIPC Initiative was a consequence of a review led by the UK Government, which believed improvements were necessary following the experiences of some of the first countries to qualify for HIPC debt relief.

Under the revised HIPC framework, each qualifying country receives more debt relief, with the amount provided being determined by the debt sustainability ratios. A country’s debt is compared with (a) its export earnings and (b) government revenue, and relief is provided to bring the ratios down to the levels indicated above. Reducing the debt sustainability ratios has meant that more countries benefit from HIPC relief under the enhanced Initiative.

Countries deemed eligible on account of the level of their debt sustainability ratios qualify for debt relief in two stages. They reach the first stage, known as Decision Point, when they have demonstrated their commitment to poverty reduction by pursuing sound policies and undertaking reforms agreed with the IMF. At this stage, they receive interim relief on the ‘flow’ of payments. When HIPC governments have demonstrated progress in tackling poverty, they reach the second stage, known as Completion Point. At this stage, they receive an irrevocable reduction in their ‘stock’ of debt. Under the original framework, Completion Point was reached after three years of implementing reforms but, as part of the HIPC revision, it was agreed that Completion Point would be ‘floating’. Rather than coming after a fixed length of time, it would be dependent on HIPC governments demonstrating progress in tackling poverty by meeting the Completion Point conditions or
‘triggers’, which are linked to the national poverty reduction strategy. In the interim period between Decision and Completion Points, countries are not required to service their debt and cease to make payments. In this way, the enhanced HIPC Initiative delivers faster debt relief, and the savings feed directly into increased social expenditure from Decision Point.

Financing the HIPC Initiative

Governments provide relief to qualifying HIPC countries on debts they hold on a proportional basis. However, around half of this debt relief needs to be provided by multilateral institutions. Not all Multilateral Development Banks are able to cover the costs of providing their share of debt relief from their own resources, and therefore require additional funds. The HIPC Trust Fund was established to receive and manage contributions from governments.

The UK is the second largest bilateral contributor to the HIPC Trust Fund. In September 2002, we pledged a further US$95 million plus our share of European Commission money (US$30 million). This was additional to the US$309 million, including our share of EC/European Development Fund money (US$88 million) already committed. The UK has also contributed US$43 million to assist the IMF with its costs of delivering HIPC debt relief. The European Commission has now committed US$918 million to the Trust Fund bringing total pledges to almost US$3.4 billion.

The table to the below shows the pledges made to the HIPC Trust Fund by November 2003.

Making HIPC More Effective

The UK is supporting a range of measures to ensure that the HIPC Initiative is as effective as possible. These measures include a capacity-building programme to improve countries’ debt management, a donor funded technical assistance facility to provide legal advice to countries facing litigation from non-participating creditors and additional relief for countries that risk exiting the process with debts above the HIPC thresholds.

At the Annual Meetings of the IMF and the World Bank held in Dubai in September 2003, the international community reviewed the status of the HIPC Initiative and reconfirmed their commitment to its objectives, full financing and implementation. They confirmed that additional relief can be provided at Completion Point (so-called ‘topping-up’), on a case-by-case basis, for those countries which risk exiting the Initiative with debts above the HIPC threshold due to external shocks. The IMF and the World Bank were encouraged to do further work on ways to help reduce the vulnerability of these countries to exogenous shocks, including commodity market and weather-related shocks.

Debt Relief and Poverty Reduction

The central focus of the UK Government’s international development policy is a commitment to the Millennium Development Goals, which include halving the proportion of people living in extreme poverty by 2015, and targets on universal access to
primary education and basic health care provision.

Debt relief is a key element in meeting these targets. However, the link with pro-poor policies is crucial. Only in this way will the poor benefit from debt relief measures. If debt relief were unconditional, the consequence could be increased military or prestige spending leading to more debt.

In developing national poverty reduction strategies, HIPC governments involve their Parliaments, civil society and international donors in their discussions. The strategies analyse the causes of poverty, and set out how poverty will be tackled, specifying how resources, including savings from debt relief, are spent. It is important that the development of these strategies is transparent and participative, so that they are well grounded in a good understanding of poverty, and command broad based support. These strategies are now the basis on which the World Bank and the IMF provide assistance to HIPC and other poor countries. Some governments, including the UK, have also committed to focusing their international development programmes on supporting these strategies. A DFID Background Briefing on Poverty Reduction Strategies is available.

Progress to Date

To date (February 2004), 27 countries have qualified for debt relief under the enhanced HIPC Initiative. Of these, 17 countries have reached Decision Point and are receiving interim relief, and 10 have reached Completion Point and received a reduction in their debt stock. The table below provides details of the countries that have qualified and the debt relief agreed.

This relief will reduce the debts of these 27 countries by around two-thirds, on average. The impact on debt servicing shows that payment falls by about a third; this is less marked than the reduction in debt stock, as substantial portions of debt were not being serviced. For example, Mozambique’s debt payments in the years 2000 – 2002 were around US$50 million a year – less than half what they paid in 1998 (US$104 million); without debt relief, Mozambique would have owed more than US$450 million in each of the years 2000 – 2002.

HIPC governments have already begun to indicate how they plan to use the resources freed from debt relief. Increases in education and health spending are expected to absorb about two-thirds of the total relief, with around 40 per cent directed towards education and 25 per cent to health care. Other priority sectors include HIV/AIDS, where almost every HIPC country is creating or strengthening education and treatment programmes, rural development and water supply, governance and institution building, and road construction.

The social expenditure of countries that have qualified for debt relief under the HIPC Initiative has already begun to rise – from US$6,067 million in 1999 to US$9,997 million in 2003; this is expected to increase further over the coming years. Poverty reducing expenditure is projected to be around five times more than spending on debt servicing in the years 2004 and 2005.

In 2000, Uganda became the first country to reach its Completion Point; this was followed by Bolivia, Mozambique and Tanzania in 2001, Burkina Faso and Mauritania in 2002, Benin, Mali and Guyana in 2003, and Nicaragua in early 2004. We hope that Nigeria and Ethiopia will reach their Completion Points shortly.

There are 10 HIPC countries with an unsustainable debt burden that have yet to qualify for debt relief under the enhanced HIPC Initiative. Seven of these are affected by conflict: Burundi, Republic of Congo, Cote D’lvoire, Liberia, Myanmar, Somalia and Sudan. In the remainder, there are concerns about governance. The UK Government has announced that it will hold in trust any debt service payments received from these countries; this money will be returned for spending on poverty reduction once these countries reach Decision Point.

The panel below shows the position of these remaining heavily indebted poor countries.

UK Assistance on Debt

The UK has provided considerable assistance on debt, in addition to the contributions to the HIPC Trust Fund outlined. The Government has already cancelled the aid debts for all the poorest countries, not just HIPC countries, worth some £1.2 billion. The remaining debts owed by HIPC countries are to the Export Credits Guarantee Department (ECGD) and Commonwealth Development Corporation (CDC). The UK provides full debt relief on all these remaining debts for qualifying HIPC countries to free up more resources for investment in poverty reduction programmes – that is.

100 per cent relief for these countries. A number of other governments, including Canada, France, Germany, Italy, Japan
and the US, are also providing relief on their bilateral debts, on top of that delivered under the HIPC framework.

It is important that countries do not re-acquire very high levels of debts after they have received their debt relief. There are several factors which determine a country’s ability to maintain sustainable levels of debt. One area is improving their debt management and developing a policy on future borrowing. DFID is co-funding the HIPC Capacity Building Programme,
which provides technical assistance to build the capacity of HIPC countries to analyse and manage their debt position, and to negotiate debt relief with creditors and the International Financial Institutions. Another issue is more responsible lending. ECGD has committed itself to ensuring that the guarantees it provides for poor countries are not used for unproductive purposes, and the UK is pressing for international agreements on this issue. ECGD makes clear that it will ensure debt sustainability will be a prime determinant of the provision of its support for exports and investments to developing countries. In order to ensure that HIPCs (and other IDA-only countries) do not develop new unsustainable debt burdens, ECGD will only provide support for exports or investments to these markets that meet Productive Expenditure Criteria.

Finally, external ‘shocks’, such as natural disasters or a marked decline in terms of trade, can pose a threat to a country’s debt position. The UK Government remains ready to provide additional debt relief where necessary – so called ‘topping-up’ – to countries that have suffered a fundamental change in their economic circumstances due to external shocks.

Where governments are committed to eradicating poverty, debt relief can free up resources for investment in key programmes, and play an important part in our efforts to meet the Millennium Development Goals. But debt relief is only one of a range of measures through which poverty reduction can be achieved. Development assistance in other forms will continue to be essential. For some years, all UK bilateral aid to the poorest countries has been on grant terms, so as not to add to their debt burdens.

The UK Government announced in July 2002 that the UK level of official development assistance (oda) will increase by £1.5 billion to reach 0.4 per cent of gross national income (GNI) by 2005-06 – the biggest ever rise in UK aid. This is proof of the Government’s continued commitment to make progress towards meeting the UN target of an oda/GNI ratio of 0.7 per cent and means that the UK’s aid ratio will be more than double the current G7 oda/GNI average. The UK Government has pressed others to follow our example and is pleased that in support of the Monterrey Consensus, the European Union made a commitment to reach an oda/GNI ratio of 0.39 per cent by 2006.

*** This article is reproduced with the kind permission of DFID.

For the last two decades the indebted, developing nations of Sub-Saharan Africa (and many other parts of the world) have been compelled by their Western creditors to undergo "structural reforms" and "modernization programs" in order to meet their debt service obligations and maintain their good standing in the club of well-behaved world traders. This implies that such nations, having squandered the billions they borrowed in the name of development, can only be saved by "tough love" -- compelled learn good old-fashioned fiscal discipline. Government budgets must be scrutinized; with GDPs growing slower than populations, they cannot afford the luxuries of public education, health or infrastructure. They wanted to dance, we are told, and dance they did, buying airports, monuments, gigantic dams, lots and lots of weapons -- now the Western piper has got to be paid. And the piper can only be paid in Western currency, so all resources must immediately be channeled into production of export goods.

It is suggested that those folks should follow the Bankers' advice for their own good, and learn to love exports. Ah, exports! Isn't that, after all, what production is all about -- savoring the subtle joys of shipping our stuff away? Production for our own consumption, why, that's downright passé. Let's de-emphasize that; let's send it all off, and get nothing in return! Now that's market reform! Under the tutelage of the Bretton Woods Institutions, the Heavily Indebted Poor Countries (HIPCs) have become hyper-disciplined -- they have developed economic bulemia.

Seeing this, compassionate folks around the world have begun to ask searching questions about just how good "the free market" and "international trade" could be, if they lead to such calamities. Many are led to conclude that it would be best if we stay home, chop our own firewood, grow our own chickens and prepare our own poultices as best we can, for trading is dangerous -- just look what it's done to poor Africa.

What such folks seem to have missed, however -- but the World Bank and the Ghanian peasants know only too well -- is that "exporting" is not the same thing as "trading". Trade is something that two parties do voluntarily, for their mutual benefit. Each trader ends up with something she values more that the thing given up. This is nothing like what has happened when Sub-Saharan Africa has engaged in "international trade". In return for their oil, their eight-hundred-year-old trees, their wildlife, their gold and gems, their crops, the African workers who produced such wealth have gotten nothing, nothing at all. That's not trading: that's giving.

But, of course, somebody does get something in return for those exports: those who own the resources, or the lands on which the exports crops are produced. They are a very, very small part of the population in each nation, but they weild influence in bureaucracies, write fancy reports detailing structural adjustment plans, and manage to achieve a tolerable degree of "modernization" in their personal lifestyles. The only problem is that they are so very few. The rest of the people are, alas, left pretty much to fend for themselves.

Under "structural reforms", the informal economy -- the peasants, peddlers, unregistered craftspeople and service-providers, the masses of people scraping together a living however they can -- was supposed to have been subsumed into the overall national economy, in a Western-type model. There was no way this could ever have happened, however, because of the demand for debt service, and the consequent pathological over-emphasis of export industries. National production in any realistic sense was simply not a priority for the people making economic decisions -- and in fact, their policies created dis-incentives to produce goods for domestic consumption.

Meanwhile: there are no jobs, but many people who need to make a living. There are lots of underutilized natural resources, but the regulatory environment is lax, erratic, corrupt, overextended, nonexistent, etc. People need to eat; they need to live somewhere. They will either produce these things for themselves, or die -- and overall populations have been increasing, so nothing else but the informal economy could have delivered the goods and services that enabled such widespread survival. That's not to say that those goods were delivered in a ways that were healthy, sustainable or just -- just that they were delivered somehow.

However, it ought to be pointed out that the distinction between the formal and the informal economy is political, not economic. There are risks and costs associated with any manner of producing things. When a lot of people, rationally assessing their options, decide that informal production costs less and rewards them better, then that is the situation; the masses haven't made a mistake. In economic terms there is nothing illegitimate or unreal about the informal economy; it is simply part of the range of options that present themselves to people trying to make a living. This fact has been shown repeatedly in various places with respect to monetary systems: if a crisis of confidence in a nation's currency develops, people will stop using it, substituting some other currency (or commodity). In such a situation, the "formal" money is legal, but it isn't legitimate.

I suspect that part of the reason that we refer to "the informal economy" with such a sterile and undescriptive term is that such survival-oriented activities are not useful to international financiers or to the third-world elites who are in bed with them. They would prefer that such people quietly die off -- or, better, not be born at all: hence the continual outcry over population growth, in nations whose people consume a pathetically small per-capita share of resources, and cause a tiny fraction of the per-capita pollution dumped out by the ZPG'ers of the West.

But: once we understand two vital facts, we can easily see that the "informal economy" is indeed the key to development and prosperity. These facts are:

1. The foreign debt burden of HIPCs is unjust, undemocratic, cannot be repaid, and should be eliminated categorically. The fact that this is politically hard to swallow doesn't make it any less true. The people being compelled to pay off these loans had no say in contracting them and received no benefit from them. And as to the "rights" of the Western lending institutions, they must recognize that in market economies, people take risks. If governments want to subsidize their bankers' incompetent lending decisions, that is their affair, but it is not Africa's job.
2. Prosperity does not trickle down. It never has, and it never will. Economies prosper and grow upward from the lowest sector of the labor market. When all workers, regardless of their level of skill, have an opportunity to make a living for themselves, then employers must pay them decent wages, and must invest in their productivity. In the HIPCs, of course, the great masses of workers have no viable employment opportunities at all -- we can see this by the prevalence of the underground economy. Development simply cannot occur under such conditions.

HIPCs do not continue to honor their foreign debts out of an overdeveloped sense of politeness or honor. They do so because that is the only way they can continue to sell their exports. They are locked in a vicious cycle that benefits only two players: the Western banks who do not have to write off their (nevertheless) bad loans, and the African elites who profit from exports while impoverishing their people, and raping their natural habitats.

None of these things are difficult to see if one looks soberly at the facts. Yet they are hard to recognize in another sense, for their clear implication is unthinkable. But let's think of it, anyway. To achieve just, sustainable development, an HIPC must:

1. Refuse to pay its foreign debt
2. Collect the rent of land and natural resources for public revenue, and abolish taxes on production and commerce.

It is always a mistake for land to be held in absolute private ownership -- for reasons of both justice and efficiency. It is egregiously wrong for great part of a nation's resources to be held by foreign corporations, or by a ridiculously small elite. These injustices can be redressed, and these inefficiencies eliminated, but the public collection of land rent. This point is well-known, at least, among advocates of this reform. But what is not widely understood is that these two steps in a nation's path to liberation are interdependent. It is only by unleashing this engine of equitable, sustainable economic growth that an HIPC can hope to survive its weaning from foreign capital.

How would that happen? What would happen to a nation that did these unthinkable things? Well, to begin with, it would immediately lose its export markets. Tariffs would be slapped; ships full of timber and cocoa would lie in port.

Conventional wisdom would, of course, call that a disaster. But for whom? Would it be a disaster for people in the informal economy, who do not produce export goods and get no benefit from a nation's exports? (In fact they are most often hurt by those exports, for when a nation devalues its currency, making exports more attractive and debts easier, it simultaneously makes imports -- including medicines and other needed items -- more costly!)

The fact is that in a very poor nation such as any number in Sub-Saharan Africa, production is so low, and the economy is so dysfunctional, that tremendous improvements in living standards could be made before such processes even showed up on the radar screens of those equipped to monitor the "formal" economy.

Refusing to pay the debt would be a disaster for the landowners whose lands are used to produce exports. But no matter: our hypothetical, enlightened state, affirming fundamental principles of human rights, would have appropriated the rent of land for public revenue. Those plantationeers would be slapped with a large holding cost for land, the produce of which is longer in demand! Will they not abandon those lands? (They will, if the government that took this step has any chance of longterm survival.)

Suddenly there would be a drastic increase in the amount of good land available -- even to those small, "informal" producers. Furthermore, with the disastrous tariff on imports removed, the incentive to acquire improved tools and equipment for small-scale production will have been greatly enhanced. You can do the math: the lives of the millions engaged in "informal production", whether rural or urban, will be improved -- and the government, now provided with a stable, non-inflationary, growing public revenue fund, will be in a position to contribute to growth by supplying long-needed infrastructure improvements. Slowly, "informal" will become "formal" because entrepreneurs will perceive a benefit in doing so -- just (as Hernando deSoto points out in The Mystery of Capital) as has happened in developed economies.

Of course, such a program would be very, very risky. It would be truly revolutionary -- a revolution with a realistic chance of actually delivering on its promises. As such it would be very threatening to the status quo, and would be strongly repressed. If it succeeded in one nation, there would certainly be a "domino effect"!

However, by identifying, so clearly, the root causes of suffering and deprivation in HIPCs, this reform could defend itself on unassailable grounds of justice and human rights. And by presenting a clear path to a workable remedy, it can, when courageously (and incessantly) presented, gain popular support.

Reprinted by kind permission of The Henry George Institute.

Copyright Henry George Institute 2002.

Statistics

Resources

• 20% of the world’s population are currently using 85% of the world’s resources.
• The U.S. has 5% of the world’s population and uses 40% of the world’s resources.
• The richest countries - Europe, the U.S. Canada, Australia, and Japan - use 65% of the world's electricity.
• $40 billion annually would provide social services to all people in developing countries.
• Comparatively, the worldwide budget for military spending is $780 billion. (As estimated by the U.N. Development Program in 1998).

Poverty

• 2.8 billion people—more than half the people in developing countries—live on less than $700 a year. Of these, 1.2 billion earn less than $1 a day. 2.8 billion on less than $2 a day

More information on poverty

Mortality

• 33,000 children die every day in developing countries
• Each minute more than one woman dies during childbirth
• In many developing countries, life expectancy has declined, for example, in Botswana the average person now lives 10 years less than in 1990.

More information on mortality

Health

• Malaria, affects an estimated 300 million people and kills at least one million people each year, three-quarters of them children under five.
• UNAIDS has estimated that in 2000 there were 3 million deaths due to AIDS, the highest global total since the beginning of the epidemic, and 5.3 million newly infected individuals.
• In all, 36.1 million individuals are estimated to be living with HIV or AIDS.
• In 1998, there were 163 million underweight children under age five
• 11 million children under five dying annually from preventable causes (1998)
• 8 million undernourished people (1996-98)

More information on Aids

More information on Malaria and Aids

 

Education

• 325 million children out of school in 2000, at the primary and secondary levels, 183 million of them girls
• It is estimated that 100 million school-age children will not be in school by 2015.
• In 2000, 854 million adults in developing countries were illiterate, Of these 64 percent (543 million) were women (2000)
• In South Asia only 40 percent of women are literate compared to 65 percent of men. In Nepal and Afghanistan only about 20 percent of women are literate; in Pakistan 30 percent.
• The incidence of adult illiteracy in developing countries has fallen from 47 percent in 1970 to 26 percent in 1998
• In India and Pakistan, as well as in Benin and Mali (among other West African countries), the median grade completed among 15 to 19 years olds from the bottom 40 percent of households is zero.

More information on education

Water and sanitation

• Contaminated drinking water and an inadequate supply of water cause diseases that account for 10 percent of the total burden of disease in developing countries.
• In 1997, approximately 1.5 billion people in low and middle-income economies lacked access to safe water supplies. And in Sub-Saharan Africa fewer than half the population has access.
• In 1998, approximately 2.4 billion people were without access to basic sanitation
• At the present rate of progress, one-third of all low-income people—over 900 million—will still lack adequate sanitation in the year 2015.

More information on Water and sanitation

Other useful sources of information.

All sources of statistical information on this website are from the World Bank and International Monetary Fund, various United Nations divisions and OECD surveys.

Our Common Interest - Report Of The Commission For Africa

Executive Summary

African poverty and stagnation is the greatest tragedy of our time. Poverty on such a scale demands a forceful response. And Africa – at country, regional, and continental levels – is creating much stronger foundations for tackling its problems. Recent years have seen improvements in economic growth and in governance. But Africa needs more of both if it is to make serious inroads into poverty. To do that requires a partnership between Africa and the developed world which takes full account of Africa ’s diversity and particular circumstances.

For its part, Africa must accelerate reform. And the developed world must increase and improve its aid, and stop doing those things which hinder Africa’s progress. The developed world has a moral duty – as well as a powerful motive of self-interest – to assist Africa. We believe that now is the time when greater external support can have a major impact and this is a vital moment for the world to get behind Africa’s efforts.

The actions proposed by the Commission constitute a coherent package for Africa. The problems they address are interlocking. They are vicious circles which reinforce one another. They must be tackled together. To do that Africa requires a comprehensive ‘big push ’on many fronts at once. Partners must work together to implement this package with commitment, perseverance and speed, each focusing on how they can make the most effective contribution.

Getting Systems Right: Governance and Capacity-Building

Africa’s history over the last fifty years has been blighted by two areas of weakness. These have been capacity – the ability to design and deliver policies; and accountability – how well a state answers to its people. Improvements in both are first and foremost the responsibility of African countries and people. But action by rich nations is essential too.

Building capacity takes time and commitment. Weak capacity is a matter of poor systems and incentives, poor information, technical inability, untrained staff and lack of money. We recommend that donors make a major investment to improve Africa’s capacity, starting with its system of higher education, particularly in science and technology. They must help to build systems and staff in national and local governments, but also in pan-African and regional organisations, particularly the African Union and its NEPAD programme. Donors must change their behaviour and support the national priorities of African governments rather than allowing their own procedures and special enthusiasms to undermine the building of a country ’s own capacity.

Improving accountability is the job of African leaders. They can do that by broadening the participation of ordinary people in government processes, in part by strengthening institutions like parliaments, local authorities, trades unions, the justice system and the media. Donors can help with this. They can also help build accountable budgetary processes so that the people of Africa can see how money is raised and where it is going. That kind of transparency can help combat corruption, which African governments must root out. Developed nations can help in this too. Money and state assets stolen from the people of Africa by corrupt leaders must be repatriated. Foreign banks must be obliged by law to inform on suspicious accounts. Those who give bribes should be dealt with too; and foreign companies involved in oil, minerals and other extractive industries must make their payments much more open to public scrutiny. Firms who bribe should be refused export credits.

Without progress in governance,all other reforms will have limited impact.

The Need for Peace and Security

The most extreme breakdown of governance is war. Africa has experienced more violent conflict than any other continent in the last four decades. In recent years things have improved in many ountries,but in other places violent conflict is still the biggest single obstacle to development. Investing in development is investing in peace.

The most effective way to tackle conflict – to save both lives and money – is to build the capacity of African states and societies to prevent and manage conflict. That means using aid better to tackle the causes of onflict. It means improving the management of government incomes from natural resources and international agreements on how to control the ‘conflict resources’ which fuel or fund hostilities. It means controlling the trade in small arms.

African regional organisations and the UN can help prevent and resolve conflict when tensions cannot be managed at the national level, through, for example, effective early warning, mediation and peacekeeping. Donors can support this by providing flexible funding to the African Union and the continent’s regional organisations; and supporting the creation of a UN Peacebuilding Commission. The co-ordination and financing of post-conflict peacebuilding and development must be improved to prevent states emerging from violent conflict from sliding back into it.

Leaving No-One Out:Investing in People

Poverty is more than just a lack of material things. Poor people are excluded from decision-making and from the basic services the state ought to provide. Schools and clinics must be available to the poorest people in Africa. This is an urgent matter of basic human rights and social justice. But it is also sound economics: a healthy and skilled workforce is a more productive one, fulfilling their potential with dignity. Investing for economic growth means rebuilding African health and education systems,many of which are now on the point of collapse. This requires major funding, but it is not only a question of resources. It is also about delivery and results. These are powerfully strengthened when local ommunities are involved in decisions that affect them.

Properly funding the international community’s commitment to Education for All will provide all girls and boys in sub-Saharan Africa with access to basic education to equip them with skills for contemporary Africa.Secondary, higher and vocational education, adult learning, and teacher training should also be supported within a balanced overall education system. Donors need to pay what is needed to deliver their promises – including the cost of removing primary school fees.

The elimination of preventable diseases in Africa depends above all on rebuilding systems to deliver public health services in order to tackle diseases such as TB and malaria effectively. This will involve major investment in staff, training, the development of new medicines, better sexual and reproductive health services and the removal of fees paid by patients, until countries can afford it. Funding for water supply and sanitation should be immediately increased, reversing years of decline.

Top priority must be given to scaling up the services needed to deal with the catastrophe of HIV and AIDS which is killing more people in Africa than anywhere else in the world. But this must be done through existing systems, rather than parallel new ones. Governments should also be supported to protect orphans and vulnerable children and other groups who would otherwise be left out of the growth story. Almost half of the extra aid we are recommending should be spent on health, education and HIV and AIDS.

Going for Growth and Poverty Reduction

Africa is poor, ultimately, because its economy has not grown. The public and private sectors need to work together to create a climate which unleashes the entrepreneurship of the peoples of Africa, generates employment and encourages individuals and firms, domestic and foreign, to invest. Changes in governance are needed to make the investment climate stronger. The developed world must support the African Union’s NEPAD programme to build public/private partnerships in order to create a stronger climate for growth, investment and jobs.

Growth will also require a massive investment in infrastructure to break down the internal barriers that hold Africa back. Donors should fund a doubling of spending on infrastructure – from rural roads and small-scale irrigation to regional highways, railways, larger power projects and Information & Communications Technology (ICT). That investment must include both rural development and slum upgrading without which the poor people in Africa will not be able to participate in growth. And policies for growth must actively include – and take care not to exclude – the poorest groups. There should be particular emphasis on agriculture and on helping small enterprises, with a particular focus on women and young people. For growth to be sustainable, safeguarding the environment and addressing the risks of climate change should be integral to donor and government programmes. This programme for growth takes over a third of the total additional resources we propose.

More Trade and Fairer Trade

Africa faces two major constraints on trade. It does not produce enough goods, of the right quality or price, to enable it to break into world markets. And it faces indefensible trade barriers which, directly or indirectly, tax its goods as they enter the markets of developed countries.

To improve its capacity to trade Africa needs to make changes internally. It must improve its transport infrastructure to make goods cheaper to move. It must reduce and simplify the tariff systems between one African country and another. It must reform excessive bureaucracy, cumbersome customs procedures, and corruption by public servants, wherever these exist. It must make it easier to set up businesses. It must improve economic integration within the continent’s regional economic communities. Donors can help fund these changes.

But the rich nations must also dismantle the barriers they have erected against African goods, particularly in agriculture. These barriers hurt citizens in both rich and poor countries. They must abolish trade-distorting subsidies to their agriculture and agribusiness which give them an unfair advantage over poor African farmers. They must lower tariffs and other non-tariff barriers to African products, including stopping the bureaucratic application of rules of origin which excludes African goods from preferences to which they are entitled. And they must show this ambition by completing the current Doha Round of world trade talks in a way which does not demand reciprocal oncessions from poor African nations. Careful attention must be given to ensure that the poorest people are helped to take advantage of the new opportunities and to cope with the impacts of a more open system of world trade. Africa must be provided with the funds that can help it adjust to the new opportunities of a changed world trading regime.

Where Will the Money Come From: Resources

To support the changes that have begun in Africa, we all for an additional US$25 billion per year in aid, to be implemented by 2010. Donor ountries should commit immediately to provide their fair share of this. Subject to a review of progress then, there would be a second stage, with a further US$25 billion a year to be implemented by 2015. Ensuring the money is well-spent will depend on two factors. First, good governance in Africa must continue to advance. But,second, donors must significantly improve the quality of aid and how it is delivered: that means more grants, more predictable and untied aid, and donor processes that are less burdensome on the already stretched administrations of African countries. It must also be better harmonised with the aid of other donors and better in line with the priorities, procedures and systems of African governments. Above all, it must be given in ways that make governments answerable primarily to their own people.

These changes are needed not just from individual donor nations but also from multilateral institutions – both African and global. The African Development Bank needs to be strengthened and the role of the Economic Commission for Africa enhanced. The IMF and World Bank need to give higher priority to Africa’s development. They also need to become more accountable both to their shareholders and to their clients, and to give Africa a stronger voice in their decision-making.

Rich nations should commit to a timetable for giving 0.7 per ent of their annual income in aid. To provide the critical mass of aid which is needed now, the aid should be front-loaded through the immediate implementation of the International Finance Facility. Practical proposals should be developed for innovative financing methods such as international levies on aviation, which can help secure funding for the medium and longer term.

For poor countries in sub-Saharan Africa which need it, the objective must be 100 per cent debt cancellation as soon as possible. This must be part of a financing package for these countries – including those excluded from current debt schemes – to achieve the MDGs, as promised in Monterrey and Kananaskis.

Conclusion

Bold comprehensive action on a scale needed to meet the challenges can only be done through a new kind of partnership. In the past contractual and conditional approaches were tried, and failed. What we are suggesting is a new kind of development, based on mutual respect and solidarity, and rooted in a sound analysis of what actually works. This can speed up progress, building on recent positive developments in Africa, towards a just world of which Africa is an integral part.

Click Here To Read The Full Report (PDF)