AFRICA: EXPLOITATION AND FOREIGN DEBT
Africa has often been described as the forgotten continent. It is the poorest place on the planet, the one with most armed conflicts, the worst affected by pandemics and starvation, the one with the lowest school attendance and health care figures, the place, at the end of the day, in which life expectancy is lowest and most human rights are infringed.
This dramatic current situation is nothing new to an African continent marked by the merciless exploitation of the foreign powers which used African human and natural resources to construct an important part of their colonial empires (and, it should be remembered, of their current wellbeing). Emancipation from this devastating colonialism was for a long time the main aspiration of the African people. However, having obtained their freedom, the African countries had to face the terrible consequences of this colonial exploitation at political, economic and social levels, an inherited injustice from which, following different variations over time, they are still suffering today.
The former metropolises have continued to exert a decisive influence on many developing countries with a view to maintaining their own economic and geopolitical interests. Even more so, post-colonial tutelage of the battered African economy has been and still is in the hands of the rich countries, which, in an increasingly more global economy, draw up the macro-economic agenda for the African continent. In the last forty years, these economic directives have largely been managed by the World Bank and the International Monetary Fund. The methods used by these two organisations, together with the African Development Bank, have almost always been directed at making important structural reforms to the African economy in order to control inflation and convert the continent into a focal point for the export of raw material, with the idea of capitalising their profits and implementing gradual industrialisation.
But we have no option but to admit that these economic policies have drastically failed, given the deplorable situation of today’s Africa (not to mention large parts of Latin America and Asia), where most of the population lives in poorer conditions than it did a few decades ago. One fact, from among many others, clearly paints the picture: in Sub-Saharan Africa the average consumption per inhabitant is lower than it was in 1970.
Few measures better summarise the contradictions of the policies applied to economic development of the African continent than the foreign debt. In fact, the foreign debt originates in the continuing economic dependence of the recently freed countries upon their former metropolises, from which they continued to acquire manufactured goods with the increasingly lower income from their agricultural and mining exports. To cope with this imbalance, they were obliged to accept foreign capital loans, with which they also sought to construct infrastructures and achieve a first stage of industrialisation (both tasks naturally entrusted to companies from the former metropoli), endeavours which not only failed, but turned out to be far more expensive than expected, implying even greater debt.
The debt of many developing countries hit the roof in the 60s and 70s of last century with the rise in petrol prices, in the cost of imports, and the drastic drop in the price of raw material exports. This meant that indebted countries were obliged to take out new loans in order to be able to repay their previous debts with their extremely high interest rates. Although it is estimated that the countries in Sub-Saharan Africa have repaid their original debt 2.5 times, they are still unable to shake themselves free of their terrible burden.
In addition to the debt problem is that the aid given by rich countries to their agricultural and livestock producers are making prices on the international market drop even further, with the subsequent loss of income for the African countries that largely depend upon these exports.
The result is that developing countries are no longer spending a large part of their yearly budget on the basic needs of their populations, due to having to use it to pay off their debts. More than half of the African countries spend more on this payment than on health treatment for their citizens (in some cases up to four times more). The consequences of this financial drain are atrocious. For example, according to UNICEF figures, almost 500,000 girls and boys die each year due to the lack of health-care resources as a result of this situation.
The gradual and partial cancelling of their debt (only applied to countries receiving IMF approval) is but an inevitable rich country reaction to the evidence that it is impossible for the indebted countries to meet their payments. The cancellation is therefore the tacit recognition of the collapse of a perverse model of development aid that must be substituted by more efficient and truly fair measures ensuring that so many countries are not irremediably anchored to poverty.