[stop-imf] Sign-on re: Treasury Secretary's trip to Africa

[Robert Weissman]

Forwarded from Ann-Louise Colgan, Africa Action <alcolgan@africaaction.org>

Dear Colleagues,

Please consider signing on to the following letter to Paul O’Neill,
Secretary of the U.S. Treasury, in advance of his upcoming trip to
Africa.  He leaves next Monday, May 20, for an 11-day trip that
includes stops in Ghana, South Africa, Uganda and Ethiopia.

This letter, initiated by Africa Action and TransAfrica Forum, urges
a new U.S. policy approach to Africa’s development challenges,
based on the cancellation of Africa’s illegitimate external debt and
increased U.S. public investment in social development, particularly
in responding to Africa’s health crisis.  It is very important that these
critical issues be raised by as many groups as possible as the
Secretary travels to Africa for the first time.

The letter will be sent to the U.S. Treasury on Friday, May 17, and
will be released to the press on Monday, May 20, as the Secretary
leaves for Ghana on the first leg of his trip.

To sign on, please send your name, title and organization to
alcolgan@africaaction.org by 5pm on Thursday, May 16.  Please
send organizational signatures only.   Signatories already include
ActionAid USA and Fifty Years is Enough.

Please circulate this letter widely for maximum sign-ons.
Many thanks.

Ann-Louise Colgan
Africa Action
*****************

Mr. Paul O’Neill
Secretary of the U.S. Treasury
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220


Dear Secretary O’Neill,

As you prepare to travel to Africa for the first time at the end of this
month, we write to urge a new U.S. policy approach to Africa’s
development challenges.  We believe that U.S. efforts to support
Africa’s development should focus on the priority concerns of
African countries.  The Bush Administration should begin by
removing the most obvious impediment to reducing poverty in Africa:
the burden of illegitimate foreign debt.  The U.S. should also support
African initiatives with increased public investment in social
development.

The Millennium Challenge Account, proposed by President Bush as
a new vehicle for delivering U.S. bilateral aid to poor countries, is
inappropriately designed for promoting development in Africa.  An
over-emphasis on the exaggerated benefits of free trade and the
private sector as the engine of economic growth is flawed.  A
successful development agenda should be based on human
development.  Greater investment in people through health and
education is proven to reduce poverty and promote economic
growth.  What is required is a significant commitment of resources
from donors and creditors alike, and a new approach to partnership
between rich and poor countries.  A true partnership would not
attempt to place the burden for sustaining health and education
services on the shoulders of the poor through cost recovery
measures such as user fees and the privatization of public utilities.

While we agree that both rich and poor countries should be held
accountable, we strongly oppose the principle of tying aid to
specific criteria, including economic policies and governance
conditions, defined by Washington.  It is correct to demand that
resources be used effectively to achieve their intended purposes,
but the monitoring mechanisms should be independent rather than
unilaterally imposed by donors.  The performance of both recipient
countries and donor agencies should be evaluated in open and
transparent processes, including participation by independent
experts and representatives of civil society.  For development to be
successful, it will require a paradigm shift away from dictating policy
to poor countries, toward supporting the poverty reduction initiatives
defined by these countries.

We certainly welcome moves towards more realistic levels of
development assistance, but the increase proposed by President
Bush is still too little, too late.  These sums are considerably less
than what the U.S. – in terms of its wealth and its share of the world
economy – should provide.  Unless the world’s single richest country
increases its investment in poverty reduction, meeting the Millennium
Development Goals will be impossible.  Moreover, the two year delay
in instituting the proposed increase in aid is unacceptable when the
need for greater resources is immediate. Most crucially of all, the
Millennium Challenge Initiative fails to address Africa’s debt crisis.
Unconditional debt cancellation must be central to any effort to
promote Africa’s development.  So long as African countries are
forced to spend almost $15 billion per year repaying debts to rich
foreign creditors, their efforts to address urgent domestic needs will
be undermined.  Increased development assistance from foreign
donors will achieve little when this trickle of additional resources is
more than offset by the unconscionable outward flow of debt
repayments.  Africa’s debt is not only unsustainable, it is
fundamentally illegitimate.  As you well know, most loans were given
for strategic purposes, to prop up repressive and corrupt regimes in
the context of the Cold War.  Now, Africa’s people are repaying
huge debts which were mainly incurred before their time and which
did not benefit them.

The current international debt relief framework, the Heavily Indebted
Poor Countries (HIPC) Initiative, has failed to provide a solution to
Africa’s debt crisis.  Even by the World Bank’s own criteria, this
initiative is not even reducing debt to “sustainable levels”.  Most
African countries still spend many times more on debt repayments
than on health care for their own people.  The hemorrhaging of
resources from African countries to repay foreign debts is the single
largest impediment to the continent’s development and economic
independence.  Debt cancellation should be the very first priority of
any U.S. initiative that seeks to promote Africa’s growth.  The U.S.
should use its powerful position at the World Bank and International
Monetary Fund (IMF) to move these institutions in this direction.

African efforts to respond to the continent’s devastating health crisis
and related economic and social challenges are crucial to the
continent’s future.  U.S. assistance in support of these efforts is an
appropriate form of public investment.  This is not charity, but rather
an obligation and a responsibility of all rich countries.  Moreover,
increased investment in addressing the spread and impact of the
HIV/AIDS crisis in Africa will prove highly effective in promoting
sustainable growth.  The pandemic has already cost millions of
African lives, and the social and economic effects of the health
crisis are undermining development across the continent.  African
governments do not command sufficient resources to tackle this
global challenge alone.  The U.S., as the richest country in human
history, must provide far greater leadership and resources in
combating the worst plague ever faced by humankind.

Mr. Secretary, your trip to Ghana, South Africa, Uganda and
Ethiopia will afford you the opportunity to experience conditions in
these countries first-hand.  You must meet with African civil society
groups in these countries, as well as with government agencies, to
truly gain an understanding of the concerns they share and the
challenges they face. You will, no doubt, learn about the official
African initiative called the New Partnership for African Development
(NEPAD).  It is the most ambitious self-driven African development
plan for a generation.  But it is still an emerging initiative that is not
yet fully informed by the participation of African civil society.  It
cannot become the basis for a partnership between African
governments and rich country governments until it has first become
a partnership between African governments and their own people, in
which there is shared ownership reflected through the active
engagement of African trade unions and civil society organizations.
NEPAD will be at the top of the agenda of the G8 Summit in Canada
next month. We will share our concerns with all of the Finance
Ministers of the G8 countries in advance of that meeting.

In the meantime, we urge you to use your influence within the U.S.
government and the World Bank and IMF to call for a new approach
to the development challenges of Africa, based on the priorities
outlined in this letter.


Sincerely,

Salih Booker, Executive Director, Africa Action

Bill Fletcher, President, TransAfrica Forum