[stop-imf] Consumer groups: IMF hurts consumers

[Robert Weissman]

  WTO Joins Battle Against African Consumers!

  If structural adjustment policies implemented through World Bank and
IMF
  conditionalities led to unbridled economic and trade liberalization of
  Africa=92s economies and hence the loss of consumer rights by Africans,
WTO
  agreements, seem tailor-measured to serve as the nail in the coffin.

  By Nessie Golokai
  Third World Network Features


  Up to the late 1970=92s and early 1980=92s, African governments were
actively
  involved in provision of services such as healthcare and public
utilities
  for their peoples.

  But following drastic falls in commodity prices and increase in oil
prices
  in the late 1970=92s, African governments turned to the World Bank and
IMF
  for concessionary loans to provide short-term and long-term relief to
their
  economies.

  These loans however came with strings attached in the form of
  conditionalities and thus began the period of economic
  structural  adjustment  programme  in  many African states. The main
  features of this period were economic and trade liberalisation and
  deregulation. The introduction of the World Trade Organisation, WTO,
in
  1995, many of these features are being made legally binding on member sta=
tes.

  One effect of this course is the commercialisation and privatisation
of
  enterprises responsible for the provisions of basic and essential service=
s.

  This has implications in terms of access and affordability for many.
The
  recently released UNCTAD Report on Sub-Saharan Africa entitled =93
Economic
  Development in Africa:  Performance,  Prospects and Policy Issues=94
reports
  that per capita income in Africa had gone down by 10 percent since
1980.
  This figure is vindicated by the increase in the number of least
developed
  countries from 38 to 41 in the same time period.

  The impact on African consumers can best be analysed within the
context of
  the eight consumer rights;

  Right to basic needs=97Liberalisation and globalisation should not take
away
  people=92s rights to enjoy access to basic goods and services. However
this
  has not been the case. For example in Senegal, with the privatisation
of
  the water utility, public taps in disadvantaged suburbs were
privatised. A
  survey conducted by the Association for the Defence of Users of Water,
  Electricity, Telecommunications and Services (ADEETelS) in Senegal
  discovered that a family without running taps would pay approximately
US $
  35 every two months for water bought at the privatised taps. However,
a
  family connected to the taps would pay US $ 16 in the same time span
for a
  minimum of 30 cubic meters required by the World Health Organization
to
  satisfy a person=92s basic needs. Clearly, the touted benefits to all in
a
  globalized world do not include the poor and vulnerable.

  Right to safety=97Trade liberalisation and de-restriction of trade
should not
  reduce the standards of goods and services sold on the market. There
are
  confirmed cases of banned CFC producing refrigerators being  sold in
  African markets. In Mozambique, food aid from the US was said to
contain
  genetically modified grain; raising concern about the safety of these
  products for consumers.

  Right to choice=97Liberalisation heralded a wide range of products from
  abroad onto the shelves of African shops. But at the same time there
has
  been a fall in the production and sale of local products due to
foreign
  competition. The case of textile industry in Nigeria, where cheaper
imports
  and second-hand clothing from abroad have displaced local textiles
readily
  comes to mind. Whereas, consumers welcome increased variety, this
should
  not be at the expense of local variety.

   From another perspective the right to choice of many consumers is
  constrain by poverty. The choice of products on the market is
illusionary,
  as the vast majority cannot afford to buy these products and services.
In
  Kenya, for example 50 per cent of households are described as food
  insecure. Though there is more variety of foodstuffs available on the
  market this has served no purpose to these households.

  Right to redress=97Cross-border trade facilitates the movement of goods
and
  services without the actual movement of people. However, when a
consumer
  purchases a product on the market, which is faulty or hazardous to
health,
  the consumer has no avenue to obtain redress if the product is not
locally
  produced or the manufacturer has no physical presence locally.

  Right to information=97Consumers have the right to know the contents of
what
  they are buying in order to make informed and rational choices. There
has
  been a push by the US against the labelling of genetically modified
  products. But as consumers, we have the right to know the content of
their
  food purchases in order to make a choice as to whether we want to buy
that
  specific product or not.

  Right to consumer education=97Consumer and civic organisations need
enhanced
  capacity to understand the effects of multilateral trade agreements on
  their constituency as well as to be informed of national and global
events
  that affect them. The link between trade and consumer welfare is a
very
  strong one. There is trade because there are people to consume the
products
  produced.

  Right to representation=97In order for laws to be sustainable they must
  involve all stakeholders. Consumers demand the right to be heard and
have
  their concerns considered at international and national trade fora.

  Right to a healthy environment=97Consumers need to be assured that
traded
  goods do not have the potential to impact negatively on their
environment.
  GMO crops could reduce the fertility of the soil especially for local
food
  varieties and create transgenic crops. There may be other long-term
  environmental effects of such crops and therefore governments=92 right
to
  control GMO production and sale should not be compromised by WTO rules.

  The relevance of liberalization for consumers is not simply in terms
of
  range, quality and prices of consumer goods. The relationship between
  income and prices, which determine the purchasing power of consumers,
are
  affected by liberalization. For example, the small-scale farmer who
sells
  his produce and then buys his household goods has his purchasing power
  influenced by  the price of agricultural inputs.These affect the price
he
  obtains for his produce on the market and the prices of goods on the
  market. Therefore if African economies are negatively affected by
  globalization, consumers suffer as well. When industries close down
due to
  competition from abroad or when farmers lose their markets to the
dumped
  agricultural produce, it means unemployment, loss of income and hence
  poverty.

  Another example of the impact of WTO Agreements on consumption is the
  issues of TRIPS and access to essential medicines. A coalition of
forty-two
  local and international pharmaceutical manufacturers launched a court
  action against the South African government over plans by the
government to
  implement the Medicines and Related Substances Control Amendment Act,
No 90
  of 1997 which sought to enable South Africa procure cheaper-priced
generic
  AIDS drugs. This was to be done through the parallel importation of
drugs
  as well as the introduction of a Pricing Committee to advise the
Minister
  of Health on the price of medicines. South Africa=92s decision was due
to the
  fact that 4.2 million people, about 10% of the population, are HIV
positive
  and cannot access the drugs because it would cost between US$ 10 000
to 15
  000 a year for an individual to take a full course of an anti-AIDS
drug.
  This makes the drug too prohibitive for most South Africans. The court
case
  was eventually dropped after public outcry and intense international
lobby.
  But it clearly illustrates how TRIPS could be used to curtail consumer
  access to essential needs due to its skewed bias in favor of
commercial
  interests to the detriment of the wider public interest.

  At the same time loss of government revenue means that the production
of
  needed public goods such as roads will be greatly reduced. According
to the
  UNDP=92s Human Development Report 1998, Sub-Saharan Africa is set to
lose US$
  1.2 billion a year under this new global trading system. There is
therefore
  an urgent need to ensure that the rights of consumers are not
compromised
  within the international trading system.=97Third World Network Features.

                                                 -ends-

  This article first appeared in African Agenda Vol.5 No.1

  About the author: Nessie Golokai, based in Harare, Zimbabwe, is the
Trade
  Officer, Consumers  International, Regional Office for Africa.

  When reproducing this feature, please credit Third World Network
Features
  and (if applicable) the cooperating magazine or agency involved in the
  article, and give the byline. Please send us cuttings.
  *****