AFRICANEWS

Tanzania/Africa

Fighting for peace means fighting against poverty

Economics

At a recent World Council of Churches meeting in Moshi, Tanzania, delegates pointed out that there can be no peace unless the issue of dire poverty present in at least 40 countries including Tanzania is resolved. This poverty is caused and perpetuated by unfavourable lending and aid conditionalities to poor nations, discriminative terms of trade for commodities, and trade imbalances between rich and poor countries, among other factors.

"The answer to terrorism must be found in redressing these wrongs that breed violence between and within nations." These are the words of Tanzanian president Benjamin Mkapa when opening an international ecumenical meeting of the World Council of Churches held in the northern town of Moshi recently.

On October 7, some 600 delegates from civil society organizations in Africa, Europe, and the United States gathered to identify social, political, and economic wrongs that have condemned more than 40 countries including Tanzania into dire poverty.

The discussions revolved around issues such as the unfair distribution of global wealth, the increasing rich-poor gap, unfavourable lending and aid conditionalities to poor nations, discriminative terms of trade for commodities, and trade imbalances between rich and poor countries.

Mkapa's proposal for a solution to terrorism could be justified, but would the North be willing to listen and take action in that direction? Giles Merritt, director of Forum Europe, wrote in the October 3 edition of the International Herald Tribune: "How ready are the United States and its European allies to parallel the war on terrorism with peace and prosperity strategy capable of defusing the clash of civilizations that we all fear?" And his own answer to the question was: "Not at all."

And that is exactly what the international conference in Dar es Salaam - dubbed "The 2001 Gender Festival" to debate social injustices and propose transformative approaches to challenge poverty - realised.

Delegates from civil society and community-based organizations became aware that aid donors and international financial institutions were not all that keen to see the poor defeat poverty. For instance, the process for - and end result of - Tanzania receiving international assistance after the country was to be eligible for debt relief under the Highly Indebted Poor Countries initiative in September 1999 was flawed, said Rebecca Muna, director of the Tanzania Coalition on Debt and Development.

The Tanzanian government was supposed to prepare a Debt Sustainability Analysis (DSA) report and submit it to World Bank and International Monetary Fund (IMF) directors by January 2000. The government was also supposed to prepare an interim Poverty Reduction Strategy Paper (PRSP) that would show its commitment to using debt relief to reduce poverty, and sign a new Enhanced Structural Adjustment Facility with the IMF. Tanzania reached decision point - the stage at which a country can be considered for debt relief - in early April 2000 on the strength of the DSA and interim PRSP.

However, said Muna, the time to prepare the interim PRSP was extremely short and did not provide any time or space for civil society organisations' participation. As a result, "the final document did not contain anything new," said Muna. "It drew its contents from existing documents such as Vision 2025, National Poverty Eradication Strategy, Tanzania Assistance Strategy, Medium-term Expenditure Framework, Poverty Reduction Growth Framework, Local Government Reforms Programme etc.… which were never participatory."

Moreover, she said the expected HIPC debt relief would not make much difference other than eventually burdening Tanzanians even more. For instance, assuming Tanzania reaches completion point - the stage in which a country qualifies for debt relief after meeting all the necessary conditions - by December this year, the debt service payments to the IMF and World Bank are projected to decline to US$35 million in 2002-03 from US$61 million this fiscal year. However, from 2003-04 onwards, debt service obligations even after full HIPC relief are projected to rise again to exceed the actual payments this year.

Muna said that throughout the PRSP processes, civil society organizations were involved only in a superficial manner and half-heartedly. "The consultation done was all in a rushed manner, not allowing for true dialogue, discussion, and debate," she said. "Is the PRSP really country-owned?"

The argument now is that the PRSP process undermines the very goal it seeks to advance: never before have the IMF and World Bank possessed the power to endorse a borrower's entire national plan such as the PRSP. "Ironically, the institutions have seized these powers in the name of enhancing country ownership of the development process," Muna charged.

But does the poor Tanzanian government have an option? The problem is that the government depends on donors and creditors for a big part of its development budget and, as a result, must heed its creditors and donors in order to survive. There are fewer incentives to heed the cries of the poor and disadvantaged.

Of greater concern is the fact that the gap in wealth between rich industrialised countries and least developed countries (LDCs) is widening, not narrowing. Meanwhile, this is the time when LDCs are being asked to open up their economies further for external competition. The number of LDCs has grown from 25 in 1981 to 49 today, according to Tanzanian President Mkapa.

Overseas Development Aid (ODA), essential to building domestic capacity for production and competitiveness, is declining, not increasing. According to the United Nations Conference on Trade and Development (UNCTAD), in real per capita terms, net ODA to LDCs has dropped by 45 percent since 1990, and is now back to the level of the early 1970s.

Promises of deep debt relief from rich industrialised countries through the enhanced HIPC initiative continue to be promises for most LDCs. Two full years since the enhanced initiative was launched in 1999, only Bolivia, Uganda, and Mozambique have reached the completion point, which qualifies them to the agreed debt relief

In the area of trade, the LDCs have continued to be the losers. The terms of trade for commodities that still dominate their exports continue to decline. Between 1988 and 1993, terms of trade in LDCs fell by 12 percent on average, says UNCTAD.

Perhaps the remedy to resolve these unfair trade terms would be if countries could manufacture and process 100 percent of their own products. But the processed products meet all kinds of tariff and non-tariff barriers in the markets of rich countries, even though they pose no significant threat to the rich countries' national economies.

UNCTAD calculates that, on average over the past 20 years, for every US$100 that came into Africa by way of aid, investments and loans, Africa paid out to rich countries US$106. Of this US$106, US$51 was lost on account of poor terms of trade, US$25 went to service foreign debts or was repatriated in profit, and US$30 was lost in capital flight and other payments.

President Mkapa, a leader of a poor country, says one of his biggest challenges is to overcome poverty and reduce the wealth gap within Tanzania and between Tanzania and other countries. Can he overcome these challenges?

Five months ago, the third United Nations Conference on the Least Developed Countries noted in Brussels that goals set out at the second UNLDC in Paris in 1990 had not been reached and the LDCs as a whole remain marginalised in the world economy.

All this continues to marginalise Africa and to nurture feelings of despair and violence. President Mkapa sums it up in these words: "The increasing gap between the rich and poor inevitably precipitates a level of desperation that provides fertile ground for desperate actions and reactions. In economies, as in politics, the loss of all hope for a better future is a major factor in driving people, especially young people, to crime and violence..."

That is why African ministers and civil society groups have vowed to oppose the launch of a new round of negotiations at the November World Trade Organisation (WTO) conference in Doha, emirate of Qatar. They have called for development issues to be placed at the centre of each negotiation.

"This will require addressing the imbalances in the WTO agreement, improving real access to developed markets for products and services of export interests to African countries, enhancing productive capacities and transfer of technology as well as improving technical co-operation and capacity building," the ministers were quoted as saying.

Dr. Yao Graham, co-ordinator of the Africa Secretariat of Third World Network, a non-profit, research, policy and advocacy organisation based in Accra, Ghana, said recently that the WTO, which actually replaced the General Agreement on Trade and Tariffs (GATT), had done more harm to Africa. He cited a lack of democracy and transparency in their dealings.

A draft declaration for discussion at the Doha meeting completely ignores complaints from Africa and other third world countries for fair treatment, he added. Martin Khor, Director of TWN International, described the draft declaration, which will be discussed at the WTO meeting in November, as very disappointing. "It is very imbalanced against the interests of developing countries," he said in press dispatches from Ghana.

All in all, the question of poverty must be resolved to reassure human peace. Like British Prime Minister Tony Blair said in his speech to the Labour Party conference in Brighton recently: "The state of Africa is a scar on the conscience of the world. But if the world as a community focussed on it, we could heal it. And if we don't....."

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