One of the favorite mantras of the neo-cons around the world is "Trade not aid for Africa". They want Africans themselves to trade their way out of poverty, instead of relying on Western aid. How can a continent whose share of the world trade fell from 6% in 1980 to around 2% by 2002 realistically trade itself out of poverty?
Even though Africa has 12% of the world’s population it has been the only continent to have increased levels of poverty than 30 years ago. More than 300 million people live in Sub-Saharan Africa today, though nearly half live on less than $1 a day. This number is expected to rise to 400 million by 2015. Even though Africa is the home to five of the world’s fastest growing economies it is also the home of 34 of the world’s 49 poorest countries.
In the year 2000, the nations of the world agreed to a set of "Millennium Development Goals" with regards to reducing poverty, increasing literacy and the provision of clean water. Africa is falling way behind in its achievement of these goals. More than 300 million people in Africa do not have access to clean water and more than 44 million primary school aged children are out of school in Africa. So how can this continent trade itself out of poverty?
Every year Sub-Saharan Africa spends $30 billion dollars repaying debts to the world’s rich countries and International Financial Institutions (IFIs). Often they spend so much on debt payments that they have very little left over for health and education.
23 African countries are getting debt relief through the Highly Indebted Poor Countries(HIPC) programme. So far, this means they have an extra billion dollars a year to spend on health care and education. But more needs to be done.
HIPC will cut only two thirds of these countries’ debt over the long term, though efforts are underway to get donors to agree to cancelling 100% of the debts owed which would make a huge difference for these countries.
Every day in Africa, 6,300 people die and another 8,500 contract the HIV virus — 1,400 of whom are newborn babies infected during childbirth or by their mother’s milk. Africa is home to 25 million people with HIV — 64% of global infections. More than 12 million children in Africa have lost at least one parent to HIV/AIDS; this total will reach 18 million by 2010.
Women account for 57% of all adults in Sub-Saharan Africa infected with HIV or AIDS. AIDS, though not completely curable, is preventable and treatable.
We know what works against AIDS.
Uganda, for example, got communities across the country involved in preventing AIDS and reduced its rate of infection from 15% to 5%. 6 million AIDS patients around the world are in immediate need of anti-retroviral drugs (ARVs) but despite progress only 700,000 receive them and just 310,000 of these people are in Africa, the region hardest hit by AIDS. These drugs have a "Lazarus effect" and can have patients out of bed, back at work and caring for their families within months. Most of the ARVs available in Africa go towards treating the elites in those countries.
In 1970 wealthy nations agreed to a goal of spending 0.7% of GNP on development assistance. In 2003, these countries spent on average just 0.25%.
The U.S gives the smallest percentage of its wealth, 0.15% to poor countries. In 2003, the rich countries of the world gave $24 billion in aid to Africa. This money has helped tremendously but to achieve the Millennium Goals and reduce poverty in half, Africa will need an additional $25 billion by 2010.
At the recent G8 summit it was agreed to cancel debts of 8 Heavily Indebted countries. But the fine print says only the multilateral debt was cancelled. Two thirds of these country’s debts are bilateral debts. However the US got the bilateral debts of Iraq which has the second largest oil reserves of the world cancelled.
So you must be wondering why after listing a long list of Africa woes I still claim Africa cannot trade its way out of poverty.
It is simple. The global trading regime is heavily weighted against poor countries in general and Africa in particular. Right now, trade rules are so skewed that cows in Europe receive more every day in subsidies than half the population of Africa has to live on, which is $2 a day.
Every day the farmers in rich countries receive subsidies worth billions of dollars for the production of meat, milk, sugar, tomatoes, and wheat. Now these are the very same primary products exported in large amounts by poor African countries. In the case of rice these subsidies account for 80% at the market place. For wheat it is 36% and for milk and sugar it is 45%. This guarantees the farmers in the rich countries a return on their investment. This in turn permits them to dump these on the world market at a price below their cost.
Farmers in rich countries also get generous support for research in the latest techniques in production and the enforcement of a strict intellectual property regime prevents African farmers from having access to the latest production techniques. At the same time even if the World Trade Organization rules that these subsidies are illegal — as it did recently in the cases of subsidies for cotton and sugar — the strong farm lobby in the developed countries makes sure that these subsidies are re-introduced in other ways such as export insurance credits and so on.
While all this subsidizing of farmers and exporters in rich countries go on the International Monetary Fund and the World Trade Organization are putting enormous pressure on poor African countries to cut the already meager subsidies they provide to their farmers and other exporters. These so called ‘subsidies’ are so small they do not have any distortive effect on African exports to the rest of the world, but the subsidies of the rich countries to their agricultural sector alone has touched $400 billion and growing.
Another trick used by these developed countries is to set certain high ‘health’ and ‘safety’ standards for exports in to their countries. These are non-trade barriers meant to keep out African exports. They also use "labour” standards, set by themselves to keep African products off their supermarket shelves.
The present world regime is stacked against African countries. It is impossible for continent which has only 2% of world trade and which is facing ever increasing trade and non-trade barriers to trade it self out of poverty.
Bryant Commentary — Send me your comments. Let me know what you think!