Billions Into A Bottomless Pit?

When they occupied large territories of Asia and Africa, the colonial powers used the native labor to extract mineral resources and grow agricultural crops, such as cocoa, coffee, tea, sugar, cotton, and rubber. Much to the natives’ chagrin, the products of their labor were exported while the occupiers took most of the profits.

When the colonized countries gained their independence after the Second World War, the new native overlords kept the land and the markets under state control and raised all kinds of taxes to finance their pet projects and increase their own wellbeing and wealth. Even today, most sub-Saharan governments, except for South Africa, fail to allow private producers access to free markets but make them sell their crops to government-controlled marketing agencies.

Africa’s ruling elites have also failed to develop sufficient technically and managerially skilled manpower for industries that can compete with the rest of the world. The income from the state-controlled exports all too often went into private bank accounts of the rulers even while they clamored for more development aid from the “rich” industrialized countries.

In most African countries predatory economic practices kept the masses poor and powerless. Yet, most former colonies in Asia gradually developed substantial market reforms. A World Bank comparison of the development of South Korea and Ghana--two countries at a similar stage of development in 1965--found that “between 1965 and 1995, Korea’s exports increased by 400 times in current dollars. Meanwhile Ghana’s increased only four times, and real earnings per capita fell to a fraction of their earlier value.”

An investigation by the present civilian government of Nigeria showed that between 1960 and 1999 the country’s military rulers embezzled or misappropriated ₤220 billion. That is roughly as much as the foreign aid given to all of Africa in forty years. Although Nigeria owns more natural resources than any other African country, among them 35 billion barrels of proven oil reserves. two thirds of its 130 million people live in squalid poverty, a third is illiterate, and 40 percent have no safe supply of water, according to the Britain’s Telegraph.

Now British Prime Minister Tony Blair tries to improve his reputation--damaged due to his lies about Iraq’s weapons of mass destruction--by asking Africa’s largest creditors at the G8 summit to forgive the continent’s debtor governments the billions of dollars they owe. Blair’s treasury secretary Gordon Brown wants a “Marshall Plan for Africa” but fails to remember that Nigeria’s corrupt rulers alone have already stolen the “equivalent of six Marshall Plans.” Even before Blair’s grandstanding, the G8 had written off the debts of fourteen African countries but refused to cancel $20 billion in loans to Nigeria.

The forgiving of loans will do little for countries where government mismanagement and corruption continue to undermine progress. Many African leaders have yet to learn how to operate government democratically and efficiently. That includes the privatization of the means of production--land, labor, and capital--as well as the freeing of the markets from stifling bureaucratic controls.

Foreign aid to politically, economically, and socially inept governments is likely to be wasted again unless the aid comes in expert assistance rather than money. To qualify for grants and loans from creditor governments, the African leadership elites need to show much more active determination to stop the continent’s devastating conflicts, mostly over ethnic and political dominance, as in Rwanda, Sudan, Congo, Sierra Leone, Guinea, Liberia, Ivory Coast, Central African Republic, Ethiopia, and Eritrea.

Why should non-Africans assume the costly burdens of intervening in Africa’s internecine quarrels? Even the U.S. support for food deliveries to the starving people in Somalia turned into a sorry waste of American personnel and property.

Before Mr. Blair and the other G8 leaders commit themselves to more financial support for chronically disease-ridden and impoverished Africa, they need to stipulate strict conditions for political, economic, and social reform. The U.S. with its budget-busting war expenditures in the Middle East and countries with more than 10 per cent unemployment, such as France and Germany, can hardly be expected to give sub-Saharan governments more billions of dollars unless they demonstrate that they can use them productively.

Wolf D. Fuhrig	Home	07-10-05
Billions Into A Bottomless Pit?
When they occupied large territories of Asia and Africa, the colonial powers used the native labor to extract mineral resources and grow agricultural crops, such as cocoa, coffee, tea, sugar, cotton, and rubber. Much to the natives’ chagrin, the products of their labor were exported while the occupiers took most of the profits. When the colonized countries gained their independence after the Second World War, the new native overlords kept the land and the markets under state control and raised all kinds of taxes to finance their pet projects and increase their own wellbeing and wealth. Even today, most sub-Saharan governments, except for South Africa, fail to allow private producers access to free markets but make them sell their crops to government-controlled marketing agencies. Africa’s ruling elites have also failed to develop sufficient technically and managerially skilled manpower for industries that can compete with the rest of the world. The income from the state-controlled exports all too often went into private bank accounts of the rulers even while they clamored for more development aid from the “rich” industrialized countries. In most African countries predatory economic practices kept the masses poor and powerless. Yet, most former colonies in Asia gradually developed substantial market reforms. A World Bank comparison of the development of South Korea and Ghana--two countries at a similar stage of development in 1965--found that “between 1965 and 1995, Korea’s exports increased by 400 times in current dollars. Meanwhile Ghana’s increased only four times, and real earnings per capita fell to a fraction of their earlier value.” An investigation by the present civilian government of Nigeria showed that between 1960 and 1999 the country’s military rulers embezzled or misappropriated ₤220 billion. That is roughly as much as the foreign aid given to all of Africa in forty years. Although Nigeria owns more natural resources than any other African country, among them 35 billion barrels of proven oil reserves. two thirds of its 130 million people live in squalid poverty, a third is illiterate, and 40 percent have no safe supply of water, according to the Britain’s Telegraph. Now British Prime Minister Tony Blair tries to improve his reputation--damaged due to his lies about Iraq’s weapons of mass destruction--by asking Africa’s largest creditors at the G8 summit to forgive the continent’s debtor governments the billions of dollars they owe. Blair’s treasury secretary Gordon Brown wants a “Marshall Plan for Africa” but fails to remember that Nigeria’s corrupt rulers alone have already stolen the “equivalent of six Marshall Plans.” Even before Blair’s grandstanding, the G8 had written off the debts of fourteen African countries but refused to cancel $20 billion in loans to Nigeria. The forgiving of loans will do little for countries where government mismanagement and corruption continue to undermine progress. Many African leaders have yet to learn how to operate government democratically and efficiently. That includes the privatization of the means of production--land, labor, and capital--as well as the freeing of the markets from stifling bureaucratic controls. Foreign aid to politically, economically, and socially inept governments is likely to be wasted again unless the aid comes in expert assistance rather than money. To qualify for grants and loans from creditor governments, the African leadership elites need to show much more active determination to stop the continent’s devastating conflicts, mostly over ethnic and political dominance, as in Rwanda, Sudan, Congo, Sierra Leone, Guinea, Liberia, Ivory Coast, Central African Republic, Ethiopia, and Eritrea. Why should non-Africans assume the costly burdens of intervening in Africa’s internecine quarrels? Even the U.S. support for food deliveries to the starving people in Somalia turned into a sorry waste of American personnel and property. Before Mr. Blair and the other G8 leaders commit themselves to more financial support for chronically disease-ridden and impoverished Africa, they need to stipulate strict conditions for political, economic, and social reform. The U.S. with its budget-busting war expenditures in the Middle East and countries with more than 10 per cent unemployment, such as France and Germany, can hardly be expected to give sub-Saharan governments more billions of dollars unless they demonstrate that they can use them productively.

Wolf D. Fuhrig

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07-10-05

Billions Into A Bottomless Pit?