May 30, 2002	Thursday	Rabi-ul-Awwal 17,1423

LONDON: Paul O’Neill, the US treasury secretary, and Irish rock singer Bono will be visiting Addis Ababa on the last leg of their 11-day tour of four sub-Saharan African countries. They have already seen some of the best and worst of the continent, ranging from computer and flower factories, vibrant markets, self-help and micro-finance programmes, to slums and new housing projects, under-resourced schools and hospitals.

Aside from the international PR and domestic political advantages of the trip, the broad intention of both individuals is to put Africa on the global economic map and to undermine the popular cliche, in the US at least, of it being a continent without hope.

Bono and O’Neill, like millions of Africans, know that the economic crisis is worsening. According to the UN, nearly half sub-Saharan Africa’s 600 million people live on less than one US dollar a day; the trend in life expectancy is declining; and improvements in health and education have been minimal in the last decade. Despite high growth rates, Ghana’s average wage of just under $400 a year is the same as 40 years ago.

More than one-third of all sub-Saharan African children are now malnourished, 40 per cent have no access to primary education and school enrolment rates are falling. Water is scarce and, for the very poor, ruinously expensive. The World Bank and the UK’s Department for International Development have acknowledged that the benefits of globalization are barely being passed on to sub-Saharan Africa and may have actually exacerbated many of its problems.

Wherever O’Neill and Bono have gone, just, they have met upbeat, optimistic people on every level who have strong ideas on how to improve the situation. They have been told many times by presidents as much as slum-dwellers that Africa does not want handouts, but a helping hand, that there must be a new economic relationship between the rich and poor and that investment from outside is vital.

In recent years, rich countries have significantly decreased the level of aid to Africa. Between 1990 and 1999 this fell by 40 per cent, and per capita aid to sub-Saharan countries fell from $34 to $20. The US, in particular, has come under criticism for contributing so little in official development assistance. Although it is by far the world’s largest donor, contributing almost $11 billion a year, the world’s richest economy contributes less than 0.1 per cent of its GDP to helping the world’s poor, well short of the OECD countries’ average.

President Bush, following a lead given by Britain, Canada and Japan, has now said that he intends to increase the US aid budget by almost 50 per cent, and a tranche of this can be expected to go to sub-Saharan Africa. Aside from the extra $5 billion a year that Bush has allocated for his Millennium Challenge foreign aid initiative, the US has also increased by 18 per cent its funding for the African Development Bank, and its funding of the World Bank’s lending programme for the world’s poorest countries by a similar amount.

The reality, say African NGO’s like Isodec in Ghana and British charities like Oxfam and Christian Aid, is that unless the trading relationship between north and south is significantly improved, all the benefits of official aid and debt relief may be worth little. Trade, they argue, is the key to development and is worth 20 times as much as aid.

At the moment, they say, the rules are tilted strongly against Africa, and its percentage of world trade has dropped sharply in the past 20 years. In real terms, says Oxfam, if sub-Saharan Africa had maintained its exports at the same level as 1980, its economy would be worth an extra $280 billion a year.

Official aid is increasingly being used to drive African countries towards trade liberalization. As Secretary O’Neill said in Ghana last week, the US package will be directed only to those countries who show good governance and who also “encourage economic freedom”. This means they must show that they are opening their markets, reducing subsidies and encouraging the privatization of industries, and this is already being achieved through a variety of mechanisms such as IMF-World Bank loan conditions, regional and bilateral trade agreements, and general policy advice.

The paradox, however, is that the US and EU, the world’s two largest trading blocks, are not implementing at home the free trade policies that they insist that African countries take. This was starkly seen last month when the US announced its new farm bill which will increase US farm subsidies by $35 billion, or more than $20,000 to each farmer.

European subsidies are only slightly lower, but the effect is that rich countries can continue to flood African markets with artificially cheap food and products, and that African producers who get minimal help from their cash-strapped governments find it ever harder to export. The Ghanaian rice industry, Bono and O’Neill saw for themselves, has collapsed in recent years as heavily subsidised US and Thai imports have flooded in. From being an exporter, Ghana now imports US dollars 100 million of rice a year.—Dawn/The Guardian News Service.