June 03, 2002
Mark Weisbrot
The Sacramento Bee, June 3, 2002
Knight-Ridder/Tribune Information Services, May 30, 2002
Whoever dreamed up this tour had a sense of theater. Paul O’Neill, the straight-laced, tough-talking US Treasury Secretary, former corporate CEO, and foreign aid skeptic; with Bono, humanitarian, highly worshipped Irish rock star, in trademark wraparound shades, the man who has brought the passion of his music to a campaign for canceling the debt of poor countries.
Their fact-finding trek through the poor communities, elementary schools, and hospitals of four African countries has captivated the press. But what will come of it?
After visiting HIV-positive mothers and their children at a hospital in Soweto, South Africa, Paul O’Neill was moved to say that “treatment must come first . . . there is something wrong if the system does not take care of here-and-now physical mothers and their babies.”
But behind the scenes, US officials are trying to prevent the Global AIDS Fund from buying generic drugs, according to Jamie Love of the Washington-based Consumer Project on Technology. The US government wants the AIDS Fund to buy patented, brand-name drugs. These are several times more expensive than the generic equivalents, even at the steeply discounted prices now offered by the big pharmaceutical companies (in response to international pressure). From 1997-2000 the United States threatened South Africa with economic sanctions for its Medicines Act, which allowed for the import of cheaper anti-AIDS drugs. The strategy of “putting patents first” continues, more quietly but still deadly.
Bono argued that those who fail to help AIDS victims are morally equivalent to people who ignored the fate of Jews being transported to concentration camps. What then of people who actively fight to limit these victims’ access to life-saving drugs?
And then there is debt cancellation: Uganda was a showcase for the tour, as one of the few countries that has benefited from the IMF/World Bank’s Heavily Indebted Poor Countries (HIPC) initiative. But even Uganda’s debt burden remains unsustainable, according to the World Bank’s own criteria. Six years into HIPC, most of the 41 HIPC countries are still spending more on debt service than on health care or education.
What is the justification for extracting this kind of debt service from a continent where three quarters of the 600 million inhabitants live on less than two dollars a day? Where 25 million people are infected with HIV/AIDS, and millions die each year from preventable diseases? O’Neill should have to answer these questions, since his Treasury Department has veto power at the International Monetary Fund—the world’s most powerful debt collector.
The creditor nations also use their power—mainly through the IMF and the World Bank—to impose conditions on loans and debt relief. Such conditions can be hazardous to people’s health: in Ghana, visited by O’Neill and Bono on Wednesday, these included a 95% increase in fees for water.
Even more damaging over the long run has been the set of economic strategies, often experimental, that the creditors have chosen. These strategies have failed miserably: over the last 20 years, income per person in Sub-Saharan Africa has actually fallen by more than 15 percent. In the previous 20 years (1960-1980), it grew by about 36 percent—not great by the standards of the day, but a lot better than the economic disaster that followed.
Of course there are African economists who know much more than foreign creditors about Africa’s development needs. “We need development strategies that absorb the economically marginalized and excluded—the vast majority of the population—into a dynamic, growing economy,” says Guy Mhone, a professor of economics at the University of Witwatersrand in South Africa. “We need to be allowed to develop our own capacities, rather than simply wait for foreign investment.”
Such ideas are not on the agenda, because Washington has decided that its formula of opening up to trade and investment, combined with privatization, can substitute for a development strategy.
Bono is to be commended for trying to extract whatever aid he can get from O’Neil and the developed countries, if it can save people’s lives. But this will not reverse Africa’s long economic decline. For that to happen, the United States and Europe will have to stop treating the continent as their colony. Much more than increasing aid, they need to respect a more modest principle: first, do no harm.
