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Pete
Henriot, SJ (Lusaka, Zambia) I come to this conference immediately in-flu enced by several factors. First, I am less than two weeks out of Zambia, where I have lived and worked for the past 10 years. Zambia is one of the poorest countries in the world, ranking 146th out of 174 nations in the 1998 UNDP Human Development Index. Second, I have just been in my country of origin, the United States, experiencing again the cultural shock of the lifestyle of one of the richest nations in the world, leader and model of the globalising forces we are speaking about here. Third, I was last week participating in an international conference on the "Ethical Dimensions of External Debt", listening to the likes of James Wolfensohn of the World Bank, Michel Camdessus of the IMF, and Diarmuid Martin of the Vatican. (I will be quick to acknowledge that I found myself much more impressed by the ethical analysis and commitment of Monsignor Martin than by that of Mssrs. Wolfensohn and Camdessus!). And fourth, I am presently thinking about an appropriate celebration back in Zambia of the 50th Anniversary of the Universal Declaration of Human Rights, coming up in December. Now, these four factors influence my presentation here this morning at this Trocaire conference on "Global Ethics" as I speak about "Adjusting in Africa: For Whose Benefit?". As a non-African, I can only offer a perspective, an analysis based on my personal experience and the studies I and others have done, without presuming to offer an authentic, indigenous perspective such as would come from an African. I want briefly to address three points: 1. The situation of Africa as it undergoes "adjustment" to fit into the globalised marketplace. 2. The areas of ethical concern that are raised when we ask: who is benefiting from this adjustment? 3. The possible alternatives and paths of hope that can be offered under the influence of global ethics shaped by Catholic social teaching. 1. Africa adjusting To accurately speak about Africa and globalisation, we must admit that this is the fourth stage of the global impact of external forces on the continent. The first phase was that of the slave trade, when European, American and Arab traders stole Africa’s most precious resource, its women, men and children, for the benefit of economic progress outside of Africa. The second stage was colonialism, when Africa was divided up geographically, dominated politically, exploited economically, and damaged culturally, all for the benefit of outsiders, some of whom lived on the continent. The third stage, called "neo-colonialism" by Pope Paul VI in his great 1976 social encyclical Populorum progressio, ("On the Development of Peoples"), was marked by structures of an international economic order (trade, investments, aid and loans, technology, etc.) and a geo-political order (Cold War manipulations) that primarily benefited the so-called developed countries. We are now in the midst of the fourth stage, a globalisation driven by a neo-liberal economic ideology and a communications technology that integrates financial, information and cultural orientations on the continent that again are primarily for the benefit of outsiders. What has been the consequence of this new globalisation for Africa? Both the UNCTAD Trade and Development Report of 1997 and the UNDP Human Development Report of 1997 indicated that unguided globalisation has indeed contributed to increasing inequality between and within countries. While some global figures would show some improvements in Africa recently, when dis-aggregated these figures reveal that the economic well-being of the majority of sub-Saharan African states has either stagnated or is in decline. Rising rates of GDP growth in some parts of Africa are precariously fragile and benefits unevenly distributed. ¨ Of the 44 least developed countries in the UNDP ranking, 33 are in Africa. Zambia, for instance, has slipped from 136thplace out of 174 in 1996, to 142nd in 1997, to 146thin 1998. ¨The external debt of sub-Saharan African countries now stands at US$ 235 billion, with more money going out of Africa through debt servicing than is available to meet basic needs of health, education, food, water, sanitation, etc. ¨Foreign aid has fallen off dramatically in recent years, currently down by one-fourth in real terms in 1997 from 1990. ¨Direct foreign investment has been up, but primarily has come only to a few countries, such as the Republic of South Africa, and oil producers such as Nigeria and Angola. ¨Today in some circles it is popular to speak of an "African Renaissance", in political as well as econ-omic terms. I am afraid that I will not be one to use that term in our discussions here. 2. Ethics of Africa’s adjusting In order to fit into the globalisation process, Africa must "adjust" its economy. (I’m afraid that this means primarily that the African people must "adjust" their belts!). This adjustment occurs in three major areas: a) economic reform according to a neo-liberal model (Structural Adjustment Programmes), b) involvement in liberalised trade according to terms of the WTO, and c) service of a huge external debt. Each of these areas raises major ethical concerns around the question: to whose benefit? a) Structural Adjustment Programmes:
There is no question that African economies have had in recent years to make major structural changes in order to be both more efficient and more equitable. Collapse of industrial and agricultural capacities, decline of social services and physical infrastructures, drying up of outside investments: all these have been signs of the need to move away from over-centralised command economies, inefficient and sometimes corrupt management, ineffective and often inequitable subsidy schemes, etc. But to speak simply from the country I know best, Zambia, this needed economic reform was pushed forward with un-needed haste, ideological rigidity, and social insensitivity. The SAP model — designed, proposed and indeed imposed by the International Monetary Fund and World Bank — was challenged in 1988 by an "African Alternative Framework for Structural Adjustment Programme" put forward by the United Nations Economic Commission for Africa. ECA’s central challenge — valid then and valid today — is that SAP is a short-term fiscal management programme and not a long-term economic development programme. As implemented throughout Africa, it has been a shock treatment of austere measures, bringing under control some economic indicators such as inflation and budget deficits, but causing dramatic declines in social indicators such as education and health measurements. The recently completed external review of the Enhanced Structural Adjustment Facility (ESAF) programme of the IMF has similarly revealed that econ-omic reforms in Africa have lacked appropriate timing and phasing, adequate flexibility, and sufficient attention to social consequences. In a country like Zambia, ESAF is not working for the majority of people, as we experience massive retrenchments in the formal sector of employment, drastic declines in school enrolments, disturbing rises in mortality and morbidity rates, etc. Zambians are told SAP is necessary if we are to enter into the globalised economy. While there may well be pain in the short-run, our government and the IFIs tell us, there will be gain in the long-run. But Lord Keynes’ oft-cited remark that "In the long-run we will all be dead!" could have no truer application than in a country like Zambia. For here the life expectancy has fallen from 54 years a decade ago to 44 years today — the consequence of severe poverty exacerbated by austere economic reforms! Again and again, Zambians are asking — especially women and children, the most vulnerable, who is supposed to benefit from all this SAP? It is certainly not the majority of Zambians, the 70 per cent of the population that the World Bank says live below a line of absolute poverty. Our ethical concern prods us to ask: what country in Africa has benefited from the neo-liberal model imposed by the need to enter into a globalised economy? If anyone in this audience could answer that question I would be happy to bring the information back to my friends in Zambia. Two basic principles of Catholic social teaching are promotion of the common good and the preferential option for the poor. I submit that an ethical analysis of the SAP regimes imposed on Africa indicate clear violations of these principles. b) Free trade regime: I am sure that this audience is not unaware of the critiques that have been offered to the consequences of the Uruguay Round of negotiations that have brought a fully liberalised trade regime. The primary critique is that the benefits are distributed very unfairly. On Tuesday of this week, one Zambian newspaper (a benefit of technological globalisation — I can read the daily papers from Lusaka on the Internet!) headlined an article, "Africa Hasn’t Benefited from Global Liberalisation". The article repeated figures frequently offered to assert that while Europe will accrue an US$ 80 billion gain from the liberalised regime, China US$ 40 billion, Japan US$ 25 billion and the United States US$ 18 billion, Africa as a whole would in effect experience a US$ 3 billion loss. Indeed, Africa would not substantially benefit from the free trade regime but would face a loss of some of the very instruments that had been integral parts of the East Asian development strategies — strategies so often held up as models for Africa to follow. This point is made in the just-released 1998 UNCTAD report (pp. 220-221) that notes that the multilateral trade disciplines introduced by the WTO regime "prohibit the use of some key policy tools to promote exports and protect infant industries" and have "reduced the scope for using measures such as trade-related subsidies and imposing conditions on FDI, and for practices such as lax enforcement of intellectual property rights...". The WTO regime pushes a liberalisation model that reduces the scope of African countries to follow a vigourous infant industry protection and export subsidies. A central feature in the global liberalisation approach is the United States proposed legislation for the "Africa Growth and Opportunity Act", a major trade and investment bill now before the Congress. (It parallels the NAFTA arrangements between the United States and its neighbours). While I was in Washington DC earlier this week, I heard many objections voiced by African solidarity groups that the bill stands to benefit US corporate interests rather than the majority of Africa’s poor people. It lays out eligibility requirements for African countries to trade with the US by imposing harsh adjustments on their economies similar to the SAP conditionalities of the World Bank and the IMF. The Africa Faith and Justice Network in Washington DC notes that this SAP approach to economic reform has already caused significant harm to the poor. The Act, "represents a ‘trickle down’ model that would grant foreign investors unrestricted access to Africa’s natural resources and set the stage for exploiting its workers. The bill contains no binding debt relief provisions, labor protections or environmental standards". (Around Africa, June 1998) It is easy to see why President Clinton had to stand by in embarrassed silence earlier this year in South Africa while President Mandela spoke critically of this Act. Another example of the instruments of the liberalised trade regime that raise considerable ethical concern is the proposed Multilateral Agreement on Investment (MAI). Battered down earlier this year by a strong international mobilisation of NGOs, the MAI proposal is surfacing again, with the proposal last week to shift negotiations from the OECD to the WTO. Espoused by its backers as promoting "a level playing field for foreign investment worldwide", the MAI, if implemented in Africa, would deprive governments of the ability to effectively regulate transnational corporation activities within their countries, guarantee social and environmental protections for its citizens, and have a strong say in shaping their own development model and priorities. Again, to point to the ethical principles offered in Catholic social teaching, the solidarity of nations and people and the designing of an economy that puts people first is central to any effective global ethics. I submit that the liberalised trade regime currently being pursued under the guidance of the WTO does not promote these ethical principles, but, on the contrary, continues to distort the benefits, priorities and future directions of global relationships more and more in favour of the rich and powerful of the world. c) Debt servicing Much has been said, and will continue to be said, about the immense international debt burden of the poor countries of the world, especially the countries on the African continent. Here I want only to repeat two lessons that became more clear to me last week during the international debt conference I participated in in the United States. While I already knew these lessons, they became even more clear in the exchange between Wolfensohn, Camdessus and others during that conference. First, the debt problem around the world is primarily a political problem. True, it is an economic problem, with economic roots and economic solutions. But it is primarily a political problem because it can be solved through the political will to establish effective, equitable and sustainable debt relief for the poorest countries. Such relief has, for political reasons, been given historically to Germany after World War II, to Poland after the fall of the Soviet Empire, to Egypt after the Middle East settlements. Sufficient resources have been found, and are being found today, to bail out collapsed economies in Asia. Why no such generous assistance to the heavily indebted poor countries, especially those of Africa? Second, the exit to the debt problem that will be most desirable in terms both of efficiency and equity is Jubilee and not HIPC. Let me only briefly explain, since adequate treatment of this topic requires development at much greater length. Today debt servicing is a major block to development in Africa. Development requires economic growth which requires growth in social capital — educated, healthy and committed people. But debt servicing drains scarce resources away from investments in the social sectors of education and health. This is true in Zambia (where this year’s budget allocates more for servicing our immense debt of US$ 7.1 billion than for all education and health programmes combined) and throughout Africa. To demonstrate that, I cite the following quote from the World Bank’s report on Taking Action for Poverty Reduction in Sub-Saharan Africa (1996): "...on average debt service payments as a ratio to GDP are about 5%. Compare this with the average public expenditure by countries in sub-Saharan Africa on health as a percentage of GDP, namely 2.5%, and the burden of debt service payments on the provision of social services becomes starkly obvious" (p. 45). The World Bank and the IMF, acknowledging both the unpayable character and the social consequences of the debt overhang, began in 1996 its "Heavily Indebted Poor Country Initiative" (HIPC) to reach what its proponents called an "exit" to the debt problem by establishing "sustainable" levels of debt servicing. While HIPC might provide some level of debt relief for some nations, it is sharply criticised for five reasons: 1. it is too little — only a portion of debt is struck off the books, and huge debt servicing remains (e.g., Mozambique annual debt service will fall from $113 million before HIPC to only US$ 100 million). 2. it is too late — countries become eligible only after several years, mostly beyond the year 2000. 3. it is too limited — 41 countries are declared "eligible" for consideration, but many more poor countries deeply in debt are excluded. 4. it is too rigid — eligibility depends upon strict adherence to structural adjustment reforms, which by and large are discredited (even in the latest official ESAF reviews) as inadequate, unsustainable and inequitable paths to integral human development. 5. it is too unrealistic — debt sustainability is measured primarily in terms of arbitrary levels of debt to revenues (to guarantee meeting debt servicing) without considering the realistic levels of available resources for social and productive priorities (to guarantee meeting basic human needs). In brief, HIPC is a creditor’s scheme to guarantee some debt servicing and not a debtor’s scheme to restore the possibilities of integral development. Therefore a much more radically effective approach to debt relief is necessary if there is to be integral development that includes poverty eradication: outright cancellation of the unpayable debts of the poorest countries. This is the campaign of the Jubilee 2000 effort, and here in Ireland you have a strong alliance of campaigners I urge you to join in this campaign! Let me simply emphasise that Jubilee 2000 presents the case very clearly and strongly for the more realistic approach for debt relief that will have direct consequences for creating capacities for poverty eradication. Cancellation of debts by itself will not bring integral development, but no integral development will come without cancellation. Let me quote the clear statement three months ago of the joint ecumenical pastoral letter of the three major church bodies of Zambia (Catholic, Protestant and Evangelical): "Zambia’s total debt is clearly unpayable. Zambia cannot pay back because the debt burden is econ-omically exhausting. It blocks future development. Zambia will not pay back because the debt burden is politically destabilising. It threatens social harmony. Zambia should not pay back because the debt burden is ethically unacceptable. It hurts the poorest in our midst". Among those of us guided by the principles of Catholic social teaching, the central ethical concern for debt relief is obvious. Community and solidarity, common good and option for the poor, all these principles cry out for debt relief in Africa. This would be "adjustment" that would truly benefit the people! 3. Alternatives and hopes Let me conclude my perspective on "Adjusting in Africa: For Whose Benefit?" by emphasising three alternatives to the current trends in the process of liberalised globalisation. These alternatives offer hopes of even now building that globalisation spoken of by John Paul II in his 1998 World Day of Peace statement, a "globalisation without marginalisation, a globalisation with solidarity". The first emphasis, and one that is most appropriate on this occasion of the 50th Anniversary of the Universal Declaration of Human Rights, is the radical importance of promoting human rights concerns in economic decisions regarding reform, trade, investment, and financial policy in Africa. We must recall that the Human Rights Covenants include economic rights, a point reiterated by Pope John XXIII in his 1963 social encyclical, Pacem in terris,(Peace on Earth). I was cheered to read that at the 50th Session of the UN Commission on Human Rights, meeting in Geneva in August 1989, a resolution was adopted on "The international Economic Order and the Promotion of Human Rights". The Sub-Commission on Prevention of Discrimination and Protection of Minorities will study ways by which the primacy of human rights norms and standards can be better reflected in the international and regional agreements and practices (such as WTO, SAP, etc.) and how UN human rights bodies and mechanisms can play a central role in this regard. The ascendancy of an unfettered "market" in a liberalised globalisation regime has undermined many human rights protections for workers, consumers, women, the environment. We must push the ethical mandate for human rights to govern globalisation! My second emphasis is on the activity of civil society in promoting a more just economic order at global, national and local levels. This involves popular participation in good governance efforts. Here I can speak of the experience of Zambia, where we have a struggling but vital civil society composed of non-governmental organisations (NGOs), community based organisations (CBOs), churches, etc. To refer specifically to the churches, I work closely with our Catholic Commission for Justice and Peace. Three projects are particularly interesting. First, training local justice and peace and development groups around the country, we have a "SAP Monitoring Project" that gathers information on the impact on the poor of the economic reforms (e.g., cost of living, health and education access, retrenchments, etc.). Besides conscientising the local people for a deeper understanding of the economic situation, this information is used at the national and international levels for advocating more socially just policies. Second, relying on this information and other input from civil society as well as government sources, we are able to do a detailed budget analysis twice a year, during the preparation of the national budget and after it is presented to Parliament, to raise up the social and ethical dimensions for public debate. Third, we have an very active project focusing on Zambia’s debt, aimed at securing equitable and sustainable debt relief. Key to this is promotion of what I refer to as "social conditionality from below": monitoring debt negotiations and allocation of income from debt relief, so that the social and productive sectors of society will benefit and Zambia will not fall again into heavy and unfruitful debt situations. I conclude with my third emphasis, a call for international solidarity. In the face of the forces of a liberalised globalisation that does not put people first, we need increasing cooperation among individuals and groups who work for the integral and sustainable development of the entire human community. I want to tell you something you may already know. Returning to Africa, to Zambia, from a conference such as this gives me renewed insight and vigour. Yes, Trocaire means money for projects in Zambia, but it means much more in terms of the globalised compassion and commitment of Irish people that this conference so well demonstrates. I thank you for that! Something that Justin Kilcullen said last week in the United States during the debt conference we both were participating in has stayed with me. At one moment when we church-types were possibly curbing our positions (or holding our tongues!) in order to stay civil and reach consensus with the representatives of the banking and government communities, Justin reminded us of the need to stay prophetic and, like Jesus in the temple (Jn 2: 13-17), become angry at the injustices and exploitations around us. Perhaps this conference, or my own presentation, has not been marked with anger. But it is there with me, believe me, in the reality of what I will return to in a few days in Zambia! To give the actual answer today to the question: "Adjusting in Africa: For Whose Benefit?" cannot help but stir anger. To give a different, alternative and ethical answer for tomorrow, cannot but stir hope. Please, be with me — let’s turn our anger into hope! (Reprinted with permission from Trocaire).
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