[stop-imf] To forgive dying man's debt isn't enough (fwd)

[Robert Weissman]

Dear friends and colleagues,

Attached is an article reporting on a rousing presentation
by the President of Algeria (who is also currently President
of the Organisation of Africa Unity) at the last session
of UNCTAD X.

Also attached is an IPS article on the last day of UNCTAD X.

These articles were published in the SUNS of 23 Feb.

With best wishes

Martin Khor
Third World Network




SUNS  #4612   Wednesday   23  February   2000

south-north development monitor    SUNS [Email Edition]

twentieth year 4612   wednesday    23   february   2000

contents 

Development: Forgiving a dying man's debt isn't enough, says OAU
President
(Martin Khor, Bangkok)

Development: All eyes on how UNCTAD drives vehicle for new order
(IPS, Bangkok)

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DEVELOPMENT: FORGIVING A DYING MAN'S DEBT ISN'T ENOUGH, SAYS OAU
PRESIDENT

Bangkok, 21 Feb (Martin Khor) -- A comprehensive analysis of the plight
of Africa and a devastating critique of the response to it by Western
governments was presented by the President of Algeria and current
Chairman of the Organization of African Unity OAU), Abdelaziz
Bouteflika, on the final day of UNCTAD X.

Bouteflika's speech and answers to questions, which came at a panel
made up of world leaders (including the Prime Ministers of Thailand,
Mozambique and Morocco and the President of the Dominican Republic)
were a major highlight not only of the final day but of the Conference.

The Algerian President's views and comments were greeted with loud and
long applause.

The OAU President's main message was that writing off the debt of 33
poorest African countries which could not pay the debt anyway was only
a gesture -- a "macabre scene" where a creditor visits a dying man to
forgive his debts.

Much more needed to be done by the international community, if
Africans, who are a disappearing people threatened with extinction, are
to survive.

Whilst the very first speech of UNCTAD X, that by Malaysian Prime
Minister Mahathir Muhammad, set a high note for the critique of
globalization at the start of UNCTAD X, Bouteflika's presentations at
the very end of the Conference served as a stark reminder of how the
poorest continent had been subjected not only to exploitation but to
hypocrisy from rich nations that purported to help the poor countries.

The OAU President's remarks had all the more impact as the Committee of
the Whole of UNCTAD-10 had concluded the previous night a Plan of
Action, which in terms of governmental commitments provided no new
breakthrough in terms of duty-free and quota-free access for least
developed countries, or of debt relief for developing countries,
despite well-publicized wrangling for several days on these two key
issues.

This had left officials from developing countries feeling that the
Northern countries as a whole were not willing to extend concessions or
goodwill despite the failure of the WTO's Seattle Conference, and had
also caused the NGOs inside and outside the Conference to criticize
UNCTAD X for only being a discussion forum and lacking substantial
results.

In his introductory remarks, the OAU leader said the major problem
facing Africa was indebtedness. Whilst current debt relief measures
were welcome symbols, they only applied to bankrupt states that could
not repay the debts anyway. For debt alleviation to go beyond the
symbolic, it must be provided for middle-income African countries, as
it had been to Russia.

Amplifying on this theme in response to questions from the moderator,
Bouteflika, speaking without notes and in a passionate tone, said that
"Africa is completely being marginalised." This was made clear at the
WTO conference in Seattle, where the dialogue was between the US and
EU. The Africans were the forgotten ones in Seattle, and they held
their tongues and their dignity.

He said Africa had been split away from the flows and processes of
development of the rest of the world. "Globalization can only benefit
those countries with the material basis and technological foundation to
operate," he added. "Only they can benefit from globalization."

The Algerian President said that the international community had not
taken measures to help Africa, which was lagging behind. "Its
backwardness in trade is such that it will be utterly left out of the
process."

Asking how such a situation came about, Bouteflika said it was
necessary to look at history and the background.

"Africa is a continent that suffered from slavery and the trading in
blacks. Africa was used to develop other continents that are now more
advanced. I am not blaming anyone, but just looking at the past to
understand the present. Colonialism divided Africa, introduced regional
imbalances, social inequality and inter-ethnic conflict that have used
up our energies."

He added that the colonizing countries were interested in exploiting
Africa's natural resources, to the detriment of schools, education and
social development, whilst also causing cultural divisions. "This
jeopardized our subsequent development."

The OAU president said "Once we attained independence, African
countries, sad to say, chose the wrong development model. Those that
chose socialism or the free market failed equally. There was a lack of
executive personnel, services, infrastructure. It was disastrous. There
was a general imbalance at every level.

"The international economic order kept the African countries as
suppliers of raw materials and as markets for manufactured products. By
deregulating trade and bringing in competition when the forces in the
North and South are so disproportionate, it is obvious that Africa is
absolutely out of the race.

"What can we do? How can we combat marginalisation? What are the
palliatives, since there are no remedies? African countries must take
responsibility to combat their marginalisation, but without shame we
must also say the world cannot set aside such an enormous swathe of
humanity and live with a clear conscience.

"We can't live with a conscience side by side with this large part of
humanity, which faces drought, disease, AIDS affecting up to 40% of the
population. Africans are a disappearing people, going extinct.
Developed countries now have third-generation AIDS drugs, but not a
single African country has benefitted yet from the first generation of
such drugs. Everything is happening as if we are trying to regulate the
world's population through Malthusian logic, to let the weakest die so
we can have a world of the rich and let the poor go to the wall.."

Bouteflika said it was too easy for others to say that Africa must
settle its disputes. He agreed that this was a major problem, with 13
conflicts at present between states. Besides, there were also internal
social disputes that strike African countries, including Algeria.

"Of course, we can recommend countries to take on their own social
responsibility. But we have lost all our rights except the right to
dream."

Touching on the need for solidarity and partnership among African
countries, Bouteflika said solidarity of the poor is a fantasy more
than a dream. "Our people are big-hearted. But the big problem is that
of African debt."

He welcomed the Group of 7 decision in Cologne on debt relief as a
first step to a solution. He also welcomed the decision of UK Premier
Tony Blair and President Chirac of France to extend debt write-off for
eligible countries from 90 to 100%. He also welcomed the outgoing IMF
managing director's statement that 33 African countries would benefit
from debt write-off.

"But what are the 33 countries that have benefitted? We have written
off the debts of the countries that are bankrupt and that cannot pay.
Their debts could not have been paid anyway. We are looking at a
macabre scene of someone visiting a dying man and telling him 'you can
die without debts, you can die happy because you do not have debts to
pay.'

"The debt problem will not be solved this way. We knew the 33 countries
could not squeeze anything out anymore, anyway. Writing off their debts
is a welcome gesture. But we need to bring these countries up, to bring
their dignity back, and charity is not enough."

The Algerian President said other measures are needed to resolve the
debt problem. The debt of middle-income countries needs to be solved.
He noted that the Western nations had written off Russia's debt, and
urged that similar measures be applied to middle income African
countries. If these countries were free of debt, they too would have a
chance to develop, and to contribute to resolving world problems.
He added that whilst everyone wanted to be part of globalization, and
to go against it would be running against history, yet "globalization
is something that must not leave out the rich or the poor, and the rich
who have must truly share with the poorest among us."

In response to another question, the Algerian president said he was
struck by Mr Camdessus' idea to expand the Group of 7 to 30. The idea
to bring together creditor and debtor countries for discussions was
good but after speaking to his African colleagues he felt that UNCTAD
could become the facilitator between creditors and debtors so that
African debt can be discussed in the appropriate forum. This he said
was a crucial issue for Africa.

In the same session, Thai premier Chuan Leekpai said the Thai crisis
was initially due to a fall in foreign reserves as they had been used
to fight an attack on the Thai currency. The sharp currency decline led
to the disappearance of investor confidence and major capital outflows
or "the bleeding of the country." He added that the agreement with the
IMF was strict and limited fiscal spending. "But the situation did not
improve, so we arranged to adjust the agreement from one requiring a
fiscal surplus to one allowing a fiscal deficit. Clearly, the IMF's
initial assessment of the situation was wrong."

Chuan said Thailand used the crisis to undertake measures to prevent a
recurrence such as revising the legal and regulatory framework and
improving governance.

Mozambique premier Pascoal Manuel Mocumbi said the first challenge
facing Africa was: "How can we be part of the global picture when we
have high poverty and weak institutions? How can we move people earning
less than 50 cents a day up from that bracket and then go on to
produce?"

The second challenge was the debt crisis that impeded growth. "All that
we have is used to pay off this debt." He was happy that "today there
is agreement on the need for broader and deeper consideration of the
issue."

In the interactive part of the session, South African deputy president
Jacob Zuma said the format and processes of the WTO did not allow for
a good exchange of views as discussions in the WTO were in a
negotiating mode. At UNCTAD X there was a freer atmosphere for
discussions.

He added that at the UNCTAD IX in Midrand, some had predicted the
demise of UNCTAD. "We have succeeded in turning UNCTAD around at UNCTAD
X. Many stakeholders have made their voices heard here. This forum can
bring all stakeholders of the world together so we can discuss our
problems."

The Moroccan premier Abderrahman El-Youssoufi said UNCTAD should now
endeavour to play its role in full. "After the failure of the WTO at
Seattle, UNCTAD now enjoys more legitimacy and weight, and we have the
opportunity to rethink the principles and guidelines of the
multilateral trading system. Our institution should be a democratic
forum where everyone can defend their views. It should be the
appropriate framework for consensus to emerge. This is the optimistic
impression from UNCTAD X."




DEVELOPMENT: ALL EYES ON HOW UNCTAD DRIVES VEHICLE FOR NEW ORDER

Bangkok, Feb 21 (IPS/Kalinga Seneviratne) -- At the just-finished tenth
session of the United Nations Conference on Trade and Development
(UNCTAD) here, the often sidelined UN agency offered itself as the
vehicle to kickstart a "new order" of trade negotiations where
developing countries have a louder voice.

This stands in contrast to how its clout appeared to wane in past
years.

In 1995, the Western powers, particularly the United States, wanted
UNCTAD closed down after the World Trade Organisation (WTO) was
established in 1995.

Ironically, following the debacle of the WTO talks in Seattle last
year, the Geneva-based UNCTAD seems to have got a new lease of life.

At the Bangkok meeting of UNCTAD, even the developed countries urged it
to play a more active role in bridging the gap between the North and
South, which came into open conflict in Seattle.

"Four years ago (when UNCTAD IX was held in South Africa) UNCTAD was
completely isolated in relation to trade and technical cooperation, now
virtually everyone is talking about it," observed UNCTAD's
secretary-general Rubens Ricupero at a press conference at the end of
the Bangkok meeting.

"We rejoice at UNCTAD ideas becoming the mainstream," he added, but
warning that there is lot more to be done to make it possible to
implement many of the recommendations in the Plan of Action adopted
here.

The symbolism of UNCTAD acquiring a stronger voice in the global debate
on economic governance and trade, with that of the South being heard
clearer, cannot have come at a better time.

A few months ago, the United States tried its best to block the
appointment of Thailand's Deputy Prime Minister Supachai Panitchpakdi
as director-general of the WTO, fearing that it may give the developing
countries, as well as Japan, a greater say in world trade body's
deliberations.

Today, Supachai, despite doubts by activists that he can alter the
balance of power that gives industrialised countries more clout in
world trade talks, is seen at being at the forefront of moves to bring
the North and the South together at the WTO.

It is also a plus for his leadership of the UNCTAD conference -- he was
conference president -- that the prime minister of Japan, Keizo Obuchi,
was the only industrial country leader who bothered to turn up at
Bangkok.

As UNCTAD X president, Supachai had been given the task of spearheading
the campaign to help implement the main theme of the Bangkok
declaration -- to make the right to development a major component of
the next round of trade talks at the WTO.

When he takes over the reins of WTO in September 2002, he will still be
holding the presidency of UNCTAD on behalf of Thailand.

In his post-conference press conference, Supachai said cooperation
between developed and developing countries must be institutionalised to
tackle any future global financial crisis like that which struck Asia
in the last two years.

"If we run into another crisis, then we need to have cooperation
between G7 and the developing countries, so that the deepening of the
crisis could be prevented," he said.

"So the combination of G-7 and the participating developing countries,
if that could be institutionalised, would really be putting global
policy coherence into practice."

UNCTAD X's plan of action adopted here by consensus is designed to make
globalisation an effective instrument for development.

In his closing address to the conference, Ricupero said that the
economic discourse of the past decade has been dominated by the
'Washington Consensus' with 12 rules of economic policy to which "all
sensible people were supposed to agree".

He noted that the assumption contained in those principles such as by
liberalising, deregulating, privatising and getting prices right,
private markets would allocate resources efficiently for growth, has
been shown to be faulty.

"This has proven inadequate for the insecurities and challenges of
globalisation. We need to find a new 2000 paradigm," argued Ricupero.
"The new consensus cannot be a Washington consensus, but as we have
recognised in the poverty reduction strategies, countries must claim
ownership and make it part of their national consensus."

He said that he is tempted to offer a new set of 12 principles which he
would call the 'Bangkok Consensus', but he would not do so as consensus
could sometimes become self-destructive.

Ricupero noted that during the last decade informed public opinion has
converged toward liberal views of desired economic policies such as
freer trade, promotion of the private sector and the imperative of
macroeconomic stability. At the same time however, there is a strong
sense that such standards should not be set exclusively by the
developed countries.

"A more inclusive and participatory decision-making process is needed
at international level," he said. "This is one of the clearest appeals
made at this conference by heads of state and government who have
spoken."

The elements of the 'new international order' that countries at the
UNCTAD X conference said they wanted, Ricupero said, are the
dismantling of the trade barriers in developed countries for
agricultural, textile and clothing, recognition for efforts by
developing countries in promoting regional economic solidarity; and
making international economic institutions more pluralistic and
participatory.

But some delegates said the despite all of loud voices by the
developing countries at the UNCTAD conference about reforming the
international economic and financial system, the fact remained that no
leader of the North, except Obuchi, turned up at Bangkok.

When this was raised by the Algerian moderator of the heads of state
forum Saturday, Thai Prime Minister Chuan Leekpai said most leaders he
invited replied back by saying that this was meant to be only a
ministerial conference.

However, ministers from the North who attended the meeting, at least in
public, seem to support UNCTAD's call for a North-South dialogue.

"UNCTAD X offers us, industrialised and developing countries alike, the
opportunity to make up for what we lost in Seattle. The chance to
ensure that the ownership of WTO will be universal," said Netherlands
Trade Minister Gerrit Ybema.

At the same though, the same trade interests dictated positions during
negotiations on the conference's documents. For instance, the least
developed countries (LDCs) wanted duty and quota free access for their
products, but the European Union wanted access only for "essentially
all" items.

Martin Khor, director of the Malaysia-based Third World Network, said:
"With the failure of Seattle the rich countries are now more willing to
find out what's really have gone wrong," noted Khor. "At UNCTAD X
developing countries were getting their act together to make use of
this opportunity."

Khor argues that developing country criticism of the existing world
order must be transformed into proposals for changes that can be backed
up politically in the international fora. "I think there's a long way
to go," he added.

"UNCTAD is helping to build a culture of democracy which the World Bank
would be well advised to follow suit," argues Prapansak Kamolpetch,
chairman of the People's Assembly, the largest network of Thai NGOs.

He noted that UNCTAD X provided ample opportunity for NGO
representatives to "speak directly" to delegates. If the World Bank and
WTO learn to take the same participatory and analytical approach, then
"we will have a new era for trade and development", Prapansak argued.