UNDP says debt shows 'international selfishness'

 

Debt “not only reflects the glaring inequality in access to development, but is a dangerous illustration of the selfishness in international relations,” said Zephirin Diabre, Associate Administrator of the United Nations Development Programme (UNDP), in a survey of sub-Saharan Africa published on 22 April.

“The economies of sub-Saharan Africa are paralysed by debt,” the survey warns. “Unless the debt burden is relieved, Africa's financial problems will continue and the most vulnerable groups will be further marginalised. Poverty alleviation in Africa will have no effect unless a better solution to the debt problem than the one currently proposed is found. Debt is no longer about money, but about worsening poverty.”

The World Bank/IMF Heavily Indebted Poor Countries (HIPC) Initiative is criticised because “it only comes into effect after six years and, even after the reduction, debt levels will remain dangerously high for these economies. Debt reduction must be more substantial and the process considerably accelerated.”

The survey is also highly critical of the economic development and structural adjustment policies prescribed by the World Bank and IMF for Africa. “Adjustment policies to the 1980s based on economic growth have proved flawed and have not achieved a reduction in poverty. ... Rather than economic growth, countries need pro-poor growth. ... While GDP growth is the pride and joy of economic analysts, African people want nothing more than a concrete, visible, tangible improvement in everyday living conditions.”

And distribution of resources cannot be left to the market. “Any government wishing to reduce rural poverty will need to launch a concerted campaign to concentrate resources on the countryside, in particular the farm sector,” the survey says.

Finally, the survey warns against dependence on foreign investment. “High flows [of foreign direct investment] to Africa would not necessarily be desirable, since foreign investors demand a higher rate of return than elsewhere, because of the risks associated with the region. This rate was 24%-30% per year in 1990-94 for sub-Saharan Africa, compared to 16-18% for developing countries as a whole.”