GLOBAL ECONOMIC VIEWPOINT
DESPITE G8 DEBT DEAL, AFRICA’S FUTURE THREATENED BY U.S. NEGLECT
Jeffrey Sachs, director of the Earth Institute at Columbia University, is also an adviser to U.N. Secretary-General Kofi Annan on the U.N. Millennium Development Goals. He is author most recently of "The End of Poverty" (2005).
By Jeffrey Sachs
NEW YORK — Africa’s escape route from extreme poverty has now been charted. Several recent studies, including those by The New Partnership for Africa’s Development, the United Nations Millennium Report and British Prime Minister Tony Blair’s Commission for Africa, have all pointed in the same direction. Africa needs increased investments to rise outof pervasive hunger, disease and poverty. Those investments need to be funded partly by increased aid from the world’srich countries. Europe has come on board. Now Africa’s fate rests with a recalcitrant White House.
Africa’s investment priorities lie in four main areas: health, education, agriculture and infrastructure.
The health needs are urgent and obvious. Africa needs to fight AIDS, malaria and other killers. Africa requires investments in clinics, health workers, medicines and preventative measures such as anti-malaria bed nets.
Education, too, is paramount. Tens of millions of children are not completing school. There are too few teachers, classrooms and supplies, and the children are kept at home by their parents in order to carry out farm chores.
African agriculture is woefully unproductive, because farmers lack the basic inputs for modern agriculture, notably small-scale irrigation, improved seeds and fertilizer.
And lastly, Africa’s infrastructure is notoriously insufficient, with a lack of rural electrification, safe drinking water, sanitation, paved roads and telecommunications.
All four of these crisis areas can be solved. The needed investments are known and practical. The problem is mainly that African countries cannotafford these investments on their own.
Increased official development assistancefrom the rich countries is crucial, and has long been promised, but has not yet been delivered. Tony Blair’s Commission for Africahas called for a doubling of aid, from the current $25 billion to around $50 billion per year by 2010, and a tripling of aid to $75 billion per year by 2015. The other studies found a similar scale of needed aid.
These financial needs are not expensive to meet for the rich countries of the world.Since the gross national product of the high-income donor countries is now around $30 trillion per year, the current $25 billion of aid is just 8 cents per every $100 of GNP of these countries. By 2010 the needed aid would rise to around 16 cents per $100 and by 2015 to around 22 cents per $100. All in all, Africa’s needs are urgent — indeed are matters of life and death — but are very, very modest relative to the incomes of the donor countries.
The most urgent problem lies with the extremely low amount of aid given by the United States. Europe has agreed to the needed increases for Africa, but the U.S. has not. Despite being the world’s richest country, the U.S. has been one of the world’s stingiest donors. In recent years, U.S. aid to Africa has been a measly 3 cents per $100 of GNP. Even the 3 cents per $100 of U.S. GNP overstates the real help coming from the U.S. A large portion of U.S. aid is actually salaries of U.S. consultants rather than funds that can be invested in Africa’s health, education, agriculture and infrastructure.
The announcement last week of the G8 finance ministersthat they will cancel the debts of 18 African countries is a step in the right direction, but it is a very modest step towardmeeting Africa’s financing needs. The debt cancellation will save Africa about $1.5 billion in debt payments each year, but Africa will needan extra $25 billion per year in aid as of 2010. Thus, the debt cancellation represents less than 10 percent of Africa’s overall financing need.
The U.S. may not even provide its fair share of the debt cancellation. Each creditor country has agreed to repay the World Bank a part of the cash flow loss to the bank that will result from the debt cancellation. According to news accounts, the U.S. will fund its share of those payments by cutting other areas of aid! In other words, the help that African countries will get through U.S. debt relief will be subtracted from other U.S. aid programs. If this turns out to be true, it would be shocking.
The truth is that global poverty will not be solved until the United States ends a foreign policy that spends hugely on the military but dramatically under-invests in peaceful approaches to global security. The U.S. and the world will not be secure if the U.S. persists in spending $500 billion per year on the military but only $3 billion per year on aid to Africa. No level of U.S. military might will ensure U.S. security when hundreds of millions of people are hungry, disease-ridden and without economic hopes.
By denying Africa even the basic level of aid that is needed, the U.S. is leaving millions of Africans to die each year and threatening American and global security as well. The world’s leaders and citizens need to tell these basic truths to President George Bush in the next few weeks, in time for the U.S. to fulfill its long-standing and unmet promise to be a true partner of Africa’s economic development when the G-8 leaders meet in Scotland in early July.
(c) 2005, Global Viewpoint