While Live8 at Hyde Park sinks slowly into the mellow tones of the Floyd (I never got Pink Floyd and I'm afraid I still don't) I thought I'd try and get my arms round some of the underlying issues. Why Africa - What works has a bewildering array of facts about debt in Africa,
In 1980 Africa had a 6% share of world trade. By 2002 this had dropped to just 2% despite the fact that Africa has 12% of the world's population. If Africa could regain just an additional 1% share of the global trade, it would earn $70 billion more in exports each year - more than three times what the region currently receives in international assistance.
In 1970, wealthy nations agreed to a goal of spending 0.7% of GNP on development assitance. In 2003, these countries spent on average just 0.25%; the U.S. gives the smallest percentage of its wealth, 0.15%, to poor countries. (OECD)
Ghana can export raw cocoa duty free to Europe, but a 25% tariff is imposed if they process that cocoa before exporting it to Europe. It is this processing (tinning, roasting, labeling) which helps a country earn more money and develop its manufacturing base - and which allows its economy to grow. While fair trade could be Africa's ticket out of the vicious cycles of poverty, unfair trade rules like these trap Africa at the gates.
The Jubilee Debt Campaign also paints a sorry picture of the action currently taken to support developing countries
'HIPC' - too little, too slow, and with strings attached
- The Heavily Indebted Poor Countries (HIPC) initiative is the current international debt relief scheme
- The 'Paris Club' is a group of creditor countries which meet behind closed doors
- Countries which have received debt cancellation through HIPC -18
- Total debt cancellation through HIPC [between 1996 - 2005] -$30 billion
- Debt cancellation granted in one day to Iraq by the 'Paris Club' -$31 billion (Nov. 04)
- Number of qualified teachers which Zambia was unable to employ because of a public sector wage freeze imposed by the IMF in 2004 as a condition of receiving HIPC debt relief -9,000