>From the stop-imf newslist <stop-imf at essential.org>
>IMF blames African nations for improper use of loans
>
>The Nation (Nairobi) August 31, 1999 By Samuel Nduati
>The director for the African department in Washington, Mr. G.E Gondwe, said
>debt relief was not a panacea to Africa's problems, adding
>that on its own, it was unlikely to have the desired results. He said
>although most African countries had received debt relief of some kind on a
>regular basis over the past 15 years, the relief had not yielded ..
>positive effects..
>"The resources freed up by the debt relief were often not channelled to
>priority areas but to unproductive spending including the military," Mr.
>Gondwe said.
>The fundamental objective of debt relief of any kind, he said, should be to
>enable each country, with proper policies to achieve and maintain the high
>growth rate necessary for sustained development and poverty reduction.
>debt relief should be designed as part of an overall strategy for achieving
>faster growth through the efficient use of essential resources and
>enhancing the ability of governments to deliver essential services that
>their populations need by concentrating spending on priority areas.
>The IMF official said although the external debts problem could be a
>balance of payment problem in that a country lacks adequate foreign
>exchange to make payments, or a budgetary problem in that the government is
>unable to raise enough money to make payments, in Africa it was a mixture
>of both.
>Mr. Gondwe suggested that since African countries will continue to need
>substantial resources from abroad, it was imperative that they gradually
>shift from dependence on official development assistance to private capital
>flows particularly direct foreign investments.
>However, he said, this would require the right policy environment to
>encourage private sector development.
>He opposed direct cancellation of loans and suggested that poor countries
>negotiate for grants, pursue rescheduling and use money raised from
>privatisations to retire part of the debt.
COMMENT by CB
So this is evidence of a substantial transfer of funds from the west to Africa over the last 15 years (even though it no way makes up for the transfer of funds from Africa to the West)
If no one does anything about it, the intention is to cut even this amount, on the assumption that if the countries cannot get foreign direct investment by offering a high enough rate of exploitation it is their fault.
The article interestingly uses "productive" in the marxist sense - productive of surplus value. Non-priority areas would presumably include getting infant nutrition out to poor rural areas where it is expensive to distribute. Cheaper if the population migrates to urban slums.
Whereas spending money in a country like Kenya to grow flowers with its limited water supply to fly them to Europe, is "productive" - of surplus value, because the cycle M-C-M can be completed with the help of the purchasing power of the masses of the metropolitan countries while the population of Kenya is relatively and progressively impoverished.
All the more reason to address the question of the *existing* regular compensatory transfer of money back to Africa on a systematic and not a patronisingly charitable basis.
If no-one speaks up it is clear the neo-liberals will not also magnamimously leave the terrain of battle.
Chris Burford
London