2005-10-28,+G8+Package+for+Africa+-+poison,+Masuku,+Shopsteward

= G8 Package for Africa: The container looks attractive - but beware, the contents are highly poisonous =

Shopsteward, COSATU, October 2005

By Bongani Masuku

Introduction

In his article to the Third World Quarterly journal (2004), entitled, “The Second age of the third world: From primitive accumulation to global public goods”, David Moore had this to say on how the global economy functions,

//“……..capitalism in the world’s core was dependant on wealth taken from other modes of production in other parts of the world-and still is. It relies on the destruction of the third world, not its development, on monopoly rather than competition, on dictators not democrats, on war instead of peace. All the west’s developmental co-operation shibboleths are empty excuses for the continuing subjection of the third world’s people to classes who only want the extraction of their natural resources and their forms of labour that have not advanced far beyond slavery”//

Millions of poor and suffering people all over the world, particularly in Africa had their hope of making poverty history, itself turned into history. A gathering of the G8 re-affirmed, once again, the hallmark of power and mission of the rich and powerful of the world; Poverty is the future – deepen it now, and diminished all hopes for any real solution than resolute struggles of the poor.

The beautiful Pertshire golfing estate resort of Gleneagles in Scotland played host to a very interesting bunch of fellows from the 6th to the 8th July, 2005. The British taxpayer had to foot a bill of about $400m to entertain 1 500 delegates and cater for all the expenses of the event. These fellows constitute the G8 or the richest countries in the world led by the imperial might of the US.

In April 1973, worried by the state of the world economy and the prospect of losing control over it, finance ministers of the US, West Germany, France and the UK met for crisis talks in the White house. By 1976, this had evolved into the G7 summit with the inclusion of Japan, Italy and Canada. With the fall of the Soviet Union, the G7 began to court Russia in order to integrate former Soviet countries into the global capitalist orbit, which arrangement was formalized as the G8 in 1998. But Russia is excluded from their most important meetings between finance ministers and central bank governors, because they say Russia is not a major economic power and leading creditor.

At the heart of all these complex developments lies the struggle to complete the process of reconfiguring the global economy into full compliance with capitalist dictates, in other words, to put the global accumulation process on a sustainable path to maximum profitability. The recent outcomes of the G8 summit in the UK regarding the economic crisis in poor countries are nothing short of the continuation of the chains of bondage and domination for the people of the countries in question. Debt continues to be the primary instrument of domination and control and trade the guarantee for its continuation, thus entrenching the perpetuation of the unequal power relations in world affairs.

The solution offered to the debt crisis, for instance, only represents one eighth of what Africa needs in terms of debt cancellation, as this means canceling only US $40 billion out of Africa’s burgeoning debt stock of over US $330 billion and stills spends US $15 billion every year in debt service to rich countries and the international financial institutions. This is in the context of the fact that low-income countries together still owe a total of US $523 billion to all creditors.

Although the highly indebted poor countries (HIPC) initiative has delivered more than $48 billion in debt cancellation, none of the participating countries has achieved debt sustainability. As with the 1996 HIPC initiative and its enhanced version of 1999, people’s hopes are being raised unnecessarily in this regard. The 18 countries that graduated by reaching the HIPC completion point (14 of which are in Africa) are in no better situation than they were before the much proclaimed “deal”, if not worse. Between 1999 and 2003, the external public debt of the 18 countries that had completed the terms of the HIPC initiative, rose from 68 to 73 billion dollars, so this is what debt relief in action means!

The fundamental question at the heart of the whole problem is a global economic architecture that is rooted in the structural crisis of capitalism. Conditionalities remain a serious deterrent to the meaningful emancipation of the poor. This is not a question of charity, but of global justice and the need to comprehensively respond to the worsening poverty crisis and global power imbalances, instead of reforming the bases of global economic inequality.

Not all that glitters is gold, hence behind the much proclaimed “victory for the poor”, lies the painful and harsh reality of the practical implications of the conditionalities attached. Economic governance and market reforms are consistently the banner behind which the rich countries seek to entrench global economic inequalities and the structural underdevelopment of the poor countries.

These rules are a continuation of the disastrous policies enforced by the IMF structural adjustment facility, under the pretext of kick starting economic growth in these countries. They are the same sweet song on the lips of the musician, but harshly painful in the ears of the audience, because with them comes the heavy rains of massive poverty caused primarily by, amongst other things; privatization of basic goods and necessities, cuts in social expenditure and fiscal austerity, increase in military expenditure, of course in anticipation of the uprisings associated with the rising poverty levels and exacerbated social crisis.

A 2004 report by UNCTAD on Africa states clearly that, “the continent received some $540 billion in loans and paid back $550 billion in principal and interest between 1970 and 2002. Yet Africa remained with a debt stock of $295 billion”. The report concluded that the continuation of exploitative interest payments constituted a “reverse transfer of resources” from poor to wealthy countries.

Interestingly, a u-turn in US policy came in the aftermath of the US invasion of Iraq, when the US appealed to creditor nations to forgive Iraq’s estimated $120 billion debt. George Bush sent former Secretary of State James Baker on a special mission to lobby allies to cancel Iraq’s debt, by arguing that the debt endangered the country’s “long-term prospects for political health and economic prosperity” and that the world must not allow the financial obligations to “unjustly burden a struggling nation at its moment of hope and promise”.

The G8 proposals cover only a limited number of countries, home to just 5% of the world’s poor. The 18 countries referred to are only a small fraction of the 165 developing countries needing urgent redress. This is supposed to be a small compensation for the neo-liberal straightjacket that they have been forced into for many years, because they are under creditor control: the noose of debt – the tool of their enslavement, so it must therefore be loosened slightly. But it must never be totally removed, because the rich will lose control over the poor masses.

But the annual amounts to be released are ridiculous compared with the actual scale of needs. Initial projections indicate that the 18 countries will save almost around 1 billion dollars per annum, which could be deducted from the aid they will receive if they fail to meet the docility criteria imposed by the rich countries involved.

In essence, the G8 decision represents a continuation of the HIPC initiative, which means the imposition of heavily neo-liberal policies: privatization of natural resources and strategic economic sectors to the benefit of transnational corporations; higher cost of health care and education; a rise in VAT; free flow of capital, lower tariff protection, which leads to the destruction of small local enterprise initiatives, because they cannot compete with these transnational vultures and corporate giants.

The G8 club failed to acknowledge and recognize their responsibility for the crisis, including the lack of democracy, peace and development in many of the countries, due to the work of the CIA, MI6 and their whole web of dirty networks responsible for the sale of arms, creation and expansion of new arms markets, sponsoring of military dictators and corrupt political elites to loot and plunder the wealth of the people by creating juicy conditions for the super-exploitation of the poor in return for a life of luxury for these elites.

In 2003 alone, G8 countries exported major conventional weapons worth in excess of US $24 billion. Whilst some of these exports were to other G8 countries or developed countries, the majority were to the developing world. Its obvious that all the money spent on missile launchers, for instance, means the poor are denied of; health, education and poverty eradication opportunities. In 2001, the British government approved the sale of a military air traffic control system manufactured by BAE systems to Tanzania. The system cost $40 million, yet half the population of Tanzania lacks access to clean water.

Britain’s defence export services organization (DESO) maintains offices around the world to help sell arms to countries that can ill afford them, and most of who have poor human rights record. But its principal duty, anyway, is to ensure a sustained and constantly expanding market for the arms industry of Britain and how else can this be generated than through creating an environment conducive to these sales, such as generating tensions between states, the example of India and Pakistan is one immediate example.

In the US, the arms industry enjoys tax breaks, low-cost loans, export credit guarantees, research and development costs paid for by the taxpayer and military aid to developing countries to buy US weapons. The Italian state actually owns a 32% share in Italy’s largest arms company, Finmeccanica, whilst the French state also has shares in Thales. Most Russian arms exports are made through Rosoboronexport, the Russian state arms exporter. Early this year, around February 2005, Chancellor Schroder of Germany took a six day trip to the Middle east with arms company executives, specifically to sell German defence products. This is normal behaviour for G8 leaders.

Finally, the G8 package was nothing historic for the following reasons;

· The multilateral debt cancellation being advanced is still tied to compliance with conditionalities which exacerbate poverty, open poor countries for further exploitation and plunder, and perpetuate the economic stranglehold of the north over the south

· Even if there were no conditionalities, the proposal falls far short in terms of scope and amounts to demonstrate a bold step towards justice by any standard

· It does not express any acknowledgement or responsibility for the historical and structural causes of the poverty crisis and their own culpability. Without this recognition, G8 leaders cannot make poverty history. Instead, the G8 statement is a re-affirmation of their commitment to push poverty-inducing and debt-creating policies in the south.

· The $50 billion package is nothing fundamentally new, except an additional few billions to already made commitments, in many other international and bilateral platforms.

· G8 countries and donor have a poor record in delivering, even on their small commitments and targets. Concrete actions towards the fulfillment of the 0.7% ODA as agreed in Monterrey and other platforms are yet to come, yet we see more public relations games than firm delivery.

Therefore, the debt and development aid questions in Africa should however not be seen in isolation from the broader objective of putting the continent on the path to sustainable growth and development through the creation of a fair global trade system, based on a just power equation. The failure to link Africa’s sustainable crisis to the impact of the predominantly hostile global trading system under which it operates has resulted in piecemeal measures that end up dealing with the symptoms of the problems and not the causes.

But even more fundamental is the need for a clear understanding of these problems as inevitable in the very functionings of a capitalist system, a system which by its very being requires the consistent exploitation of resources and people for the maximization of profit for a few. It is a necessity in order for the system to survive that legalized plunder takes place to subsidise the greedy interests of those who wield all power globally. Aside the public relations exercise of the G8, the issues are serious and require radical ideas backed by solid action.

On another note, as the G8 resumed its work, a heavy explosion rocked London. It was a painful reminder of the terrible experiences the people of Iraq are being daily exposed to by the US and British invaders. The bombs were planted in Iraq, but they exploded right in London, what a coincidence!

The unfortunate thing about them is that it killed and hurt innocent people, some of who, I am sure, were part of the huge marches and the general resistance movement against the invasion. It is not those rich and irresponsible decision-makers, who want the resources of the Iraq people, who suffer the consequences of such greedy decisions, but ordinary people.

A one day explosion sent the whole world in shock, because it exploded in London, but a daily occurrence in Iraq is not enough to cause alarm. This says volumes about the unequal value attached to different lives, depending on where you come from.

The Swazi case as an example of Africa’s corrupt elitism

A cousin company to Britain’s defence export services organisation (DESO) is BESO, which is the British Executive Services Overseas, which specializes in cushioning the economic and other interests of the corrupt political elites of certain countries all over the world in line with the fundamental interests of British capitalism, through these puppet elites.

This is the same company that has over the years run the strategic and commercial interests of king Mswati. All the Swazi money he acquires through robbing the Swazi people and invest it in Crown Agents in England, is a classical example of how the systematic looting of Africa’s wealth and its transfer to Europe is being perpetuated.

Certainly the rich and powerful are benefiting from this official looting and historic plunder, hence its interest in maintaining not only undemocratic systems, but also the very corrupt elites, aside their public relations stunts about their much proclaimed commitment to democracy and human rights in Africa, a very convenient political posture indeed.

There is no doubt that a further illustration of this classical example would also indicate that, the primary reason why Swaziland survived for so long as an undemocratic country was due to the fact that the British military intelligence (M16) and its whole security establishment, took full responsibility for protecting the political and economic interests of the Swazi monarchy, since the days of king Sobhuza 11 and worked actively to frustrate all efforts towards a genuine democratic dispensation by the forces of progress in the country.

Maintaining in power the puppet royal regime of Swaziland is in the interests of British imperialism. The role of Tibiyo and Tisuka are to oil the wheels of imperialist accumulation to ensure the effective participation of the royal aristocracy in the process of global capital accumulation and exploitation of the world’s poor majority.

This is what explains the double standards applied by Britain, particularly in dealing with Swaziland as opposed to how they are dealing with Zimbabwe.

Britain has been the most vocal opponent of smart sanctions being applied against Mswati’s regime in the European Union, yet the foremost proponent of the same for Zimbabwe, purportedly for the reason of human rights and democracy, what a shame on a neo-colonial bully!