| There
was a time, some decades ago, when analysts could write
of "aid as imperialism". Today, when official
aid is all but defunct, it is more correct to describe
the current tendency of debt-forgiveness as imperialism.
There is much that is appalling about imperialism today
the dastardly occupation of Iraq which has brutalised
the entire society, is but one particularly telling
example. But the militaristic and resource-grabbing
aspects of imperialism may be distracting from other
deep and continuing features which are also doing great
damage to countries across the world.
What
is even more obscene is when imperialism is not naked
in its violence, but disguised as charity and empathy
for the oppressed, and when the rest of the world is
made to applaud the benevolent concern expressed by
the great powers. This is what has been happening around
the recent G-8 Summit meeting, which made it a point
to continue despite the London bombings, in order to
push through what it claimed was a "historic"
and "unprecedented" debt relief package for
some of the poorest countries of the world.
This was accompanied by a concert extravaganza of the
trendiest "feel-good" pop stars around, such
as Bob Geldof and Bono, to provide entertainment to
accompany the good deed, as well as a media blitz supported
by almost the entire world's press and television. So
much so that even otherwise well-informed and progressive
people in the developing world were fooled into thinking
that, for a change, the leaders of the core capitalist
countries were actually thinking about doing some good
for people desperately in need of it.
Unfortunately, a more cynical perspective is actually
the correct one. The G-8 debt relief deal is actually
a paltry and niggardly reduction of a small part of
a debt that has grown to gigantic proportions more because
of adding on unpaid interest than because of any recent
flows of fresh resources. And this pathetic amount is
being traded for yet more major concession made by the
debtor countries, in terms of sweeping and extensive
privatisation of public services and utilities, which
is about all that is left for governments to sell in
these countries, as well as large increases in indirect
taxes which fall disproportionately on the poor.
Consider the main elements of this "generous"
deal. To begin with, only 18 countries are to "benefit"
from the G8's so-called generosity. They are all countries
that have been through this before most recently through
the highly publicised HIPC initiative (for heavily indebted
poor countries) launched in 1996. The HIPC initiative,
which was greeted with similar if less musical fanfare,
has since failed utterly, either in relieving the burden
of debt or improving conditions in the countries concerned.
Estimates by UNCTAD suggest that the 27 HIPC beneficiary
countries, for example, will be making bigger debt repayments
in 2005 than in 2003.
Even for these 18 countries, the debt relief is very
partial and is nowhere near complete cancellation. It
mainly concerns only some bilateral debt and the debt
held by the World Bank and the African Development Bank,
which amounts to a very small proportion of the total
debt of the concerned countries. The British proposal
only intended to take over repayments between now and
2015.
The total financial burden on the G-8 of the entire
operation would amount to some $2 billion a year, which
should be compared to the estimated $350 billion annually
devoted by the G8 to farming subsidies or the $700 billion
spent by the G-8 on military expenditure. The annual
amount spent by all these G-8 countries put together
for the announced cancellation is less than half of
the amount the US government spends every month on its
continued illegal occupation of Iraq. Even this trivial
amount for the US would be financed through the US development
aid budget, reducing aid provided elsewhere and not
involving any additional resources.
It is true that the current deal is an improvement on
the HIPC initiative in that what has been agreed upon
is a real cancellation that would bear on the principal
of the debt, rather than simply a financial contribution
towards the debt service paid to multilateral institutions.
But even so, the announced cancellations would not even
amount to a complete cancellation of debt for these
18 countries, who would still have to deal with a large
amount of multilateral debt.
What do the recipient countries have to provide in return
for this munificence which will not even be noticed
in the budgets of the governments of rich countries?
The answer is that they will have to further sell their
natural resources, their public assets, and deprive
their people of the basic conditions of a decent life,
in order to advance the profiteering by large corporations
from the G-8 countries and elsewhere.
The G8 decision represents a continuation of the HIPC
initiative, which insisted upon the imposition and intensification
of heavily neoliberal policies that have already ravaged
poor debtor countries. Consuder some of the main elements
of the conditionalities:
privatisation of natural resources and of strategic
economic sectors to the benefit of large multinational
corporations;
higher cost of health care and education, directly
affecting the access of the poor to these basic socio-economic
rights;
increases in VAT, a regressive tax, which means increased
costs and lower real incomes of ordinary people;
free flow of capital, which leads to great volatility
of exchange rates and capital flight by the elite;
lower tariff protection, which leads to thousands
of small and middle producers losing their livelihoods
because they cannot compete with imported goods.
It is not hard to see that this is a deal designed to
further the economic interests of imperialism, which
has once again been sold across the world as a huge
concession made to the world's poor. In the words of
the poet, "After such knowledge, what forgiveness?"
|
