The Acts of the Democracies

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2003

The Economy in Africa

In May a meeting occurs between the world's 8 richest countries (the so-called G8 Nations) to discuss the plight of poorer countries, especially Africa. The table below indicates some of the problems to be addressed in Africa.

Mesurement Africa The G8 Nations
Life Expectancy48 years77 years
Access to clean water45% (Congo)100% (UK)
Annual spending on health per person$1 (Mali)$2,534 (Canada)
Number of people per doctor50,000 (Malawi)169 (Italy)
People with HIV28 million1.5 million
Number of people living on less than $1 per day291 millionNone
Deaths of children under 5 per 1,0001746
Cars per 1,000 people14561 (USA)
Average annual income$1,690$27,854
Chance of death in pregnancy1 in 131 in 4,085

The above figures mean that 4,500,000 children under 5 years old die every year in Africa.

The G8 Nations spend $13,000 million on aid to Africa. However, the G8 Nations also spend $311,000 million subsidising their farmers (24 times the aid budget). This subsidy allows the rich countries to flood the poorer countries with cheap food that puts local farmers out of business. The USA has flooded Nigeria, Peru, Taiwan, Colombia, South Korea and Indonesia with subsidised grain, bankrupting local farmers and creating a captive audience. In 2003, the Philippines, a fertile country capable of growing its own food, receives more food aid from the USA that the starving desert regions of North-East Africa (like Ethiopia).

As an example, the USA gives a subsidy of $400 million to the rich "cotton belt" of the USA - this destroys the livelihood of millions of small cotton farmers in several African countries. It costs three times more to produce a kilo of cotton in the USA than in Mali. But Mali is being swamped with cheap subsidised cotton. Mali's pleas to the World Trade Organisation (WTO) have gone unanswered. In 2001, Mali lost $43 million in export earnings due to this USA policy. USA aid to Mali in 2001 was $37 million. The Western media only publicise the aid packages and not the unfair trade. Celine Charvariat of Oxfam says "American taxpayers are financing the destruction of the livelihoods of millions of cotton farmers in Africa. The cotton barons of Texas and Alabama are getting huge subsidies and driving more efficient African farmers out of business".

In Senegal, the national dish is thieboudienne, made from fish, rice, groundnut oil, tomatoes and onions. Each of these ingredients is abundant in the country but each is under threat. European Union fishing boats frequently fish within Senegal's six mile (10km) limit diminishing the stock of fish. The jobs of 600,000 fishermen are under threat. Dumping of subsidised rice from the USA and Asia is putting rice farmers out of business.

Senegal's farmers used to get free fertiliser but this was stopped after pressure from the World Bank and International Monetary Fund (IMF). Only 4% of the country's rice land is being used because of the loss of local subsidies. The price of groundnut oil used to be fixed and guaranteed by the state. After pressure from the World Bank, the industry was privatised and cheaper imports from France undercut the local producers. Tomato growers are being forced out of business by imports from Italy which receive subsidies of $400 million per year. Good quality local onions are being flooded by cheaper imports from the Netherlands which are often rejects from European supermarkets.

According to Oxfam, for every $1 in aid given to Senegal, $2 are lost from unfair trade. Flooding countries with cheap subsidised goods while denying these same countries the right to subsidise their own goods is a cause of much of the poverty in Africa.

In an apparent attempt to help, the USA has set up a series of trade preferences for countries in Africa. However, these are often tied with conditions like having to import yarn from the USA and enforcing USA business laws. These arrangements have been described by the International Monetary Fund as "unequal" and cost Africa up to $500 million per year.

Much poverty in poorer countries is caused by import tariffs imposed on their manufactured or processed goods. The poorer countries are forced to sell just the raw materials to the richer countries rather than processed goods. In addition, many countries have enormous debts incurred by unelected dictators supported by the West and unelected by the populations who are now having to pay off the debt. The cost for the rich countries to write off the entire sub-Saharan debt has been estimated at $6,400 million (over five years). In comparison, the rich countries subsidise their farmers with $350,000 million every year.

The European Union undercuts African farmers through its Common Agricultural Policy. Europe dumps subsidised sugar on Malawi, Zambia and Mozambique, surplus fruit and vegetables on Sengal, and subsidised milk and wheat on Kenya and Senegal. At the same time, African imports are restricted. In 2003, punitive duties on cut flowers from Kenya were imposed at the instigation of the Netherlands.

The president of France, Jacques Chirac, proposes that subsidies on goods sold to Africa should be suspended. The USA refuses.

In the poorer countries, 30,000 children die every day from HIV/Aids, tuberculosis, and malaria. Tuberculosis is a curable disease but kills 2 million children every year. Malaria (which can be prevented by the use of bed netting costing a few dollars) kills 1 million children every year.

Multinational companies (mainly from the G8 Nations) that make anti-AIDS drugs keep the prices artificially high, making it too expensive for the peoples of the poorer countries. The use of cheaper generic drugs is discouraged by threats of sanctions, especially from the USA. In 2001, the rich countries agreed that a waiver could be obtained to use generic drugs to fight medical emergencies. The USA insists that the waiver must be applied for to the World Trade Organisation for each case. Most poorer countries cannot afford to fight the might of the multi-national companies (like USA company GlaxoSmith Kline). In 2001 when there was an anthrax scare in the USA, the USA government forced the German company Bayer to half its prices for anthrax antidote. In contrast, the USA ignores the plight of 28 million Africans who are HIV positive to protect the profits of its own companies.

Only $25,000 million would pay for cutting child deaths by three quarters as well as universal education for the poorer countries.

According to Water Aid, in the next 25 years, two thirds of the world's people will face water shortages. In Africa, a child dies from a water related disease every 15 seconds. It requires an average of 2 hours per day to collect water in the rural areas of Africa. Each person in Africa consumes 10 litres of water per day for all uses. The World Health Organisation recommends a minimum of 50 litres per day. In the UK, average consumption is 135 litres per day. The $1.50 spent on a bottle of water in the UK would provide fresh drinking water for a person in Africa for 6 months. Children miss school because of having diarrhoea, scabies and bilharzia due to contaminated water.

© 2017, KryssTal


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