Can Geldoff Help African Nations Defend From G8 Debt

Perkins views the recent pledges by the G8 to Make Poverty History as the latest chapter in this legacy of economic entrapment.

"This program to forgive debt in eighteen nations, with another twenty-two on the back burner, that’s an amazing tool of economic hit men. I believe totally in debt forgiveness, but this is not about debt forgiveness. Every one of those countries is being asked to allow American corporations or international corporations to privatize their electric and water systems and many of their other resources. They are asked to accept the trade barriers we have in the United States and the other G8 countries and yet not keep their own trade barriers to protect their markets from our products. So we are using this debt forgiveness ploy as a way to get them more entrenched in the empire. It’s a very, very subtle and effective economic hit man tool and yet, most people don’t seem to realize that."

Just one month after the G8 leaders made their highly publicized vow to cancel debt for the poorest eighteen countries, a document leaked from the World Bank severely undermined the credibility of their promise. Penned by Geoff Lamb, the bank’s vice president for concessional finance, the document explained that "most countries receiving 100 per cent debt cancellation would be classified as 'green light' and therefore become eligible for new borrowing." Even more damning is Lamb’s reference to a G8 document instructing that those nations receiving debt relief should be "eased into new borrowing." According to Perkins, this borrowing will then funnel right back into projects earmarked for Western companies.

Commenting on the leak, Dave Timms of the World Development Movement (WDM) said the World Bank was essentially "asking the executive directors how quickly they can get the countries that receive debt relief back into patterns of borrowing and back into debt." A World Bank spokesman dismissed the controversy, describing the document as "an informal and preliminary presentation."

But what about Perkins’ assertion that, as a condition of the debt relief, these countries would be forced into privatizing their resources and lowering trade barriers? A quick glance at the Blair Commission report, the U.K. government’s analysis of African poverty that formed the basis for Bob Geldof’s partnership with Tony Blair in Live 8, is telling. Its opening line states that, "for its part, Africa must accelerate reform." Reform, of course, is a code word for privatize. Clearly, despite all the nice talk, this is still the modus operandi for the neoliberal forces of globalization. In September 2005, a report published by WDM showed that of the I.M.F. and World Bank’s official poverty reduction strategies (P.R.S.P.’s), which enforce conditions for debt relief, loans and aid on a country-to-country basis, "90 per cent contain privatisation measures… and over 70 per cent include trade liberalisation." Trade liberalization is another euphemism for lowering of trade barriers.

A report from the Council on Hemispheric Affairs explained the G8 "debt relief" scheme this way: "Candidates seeking debt relief are caught in a classic Catch-22 dilemma: in order to relieve poverty they must institutionalize the circumstances that created it in the first place. This compromise does not end when external debts are finally relieved. Rather, countries must continue to conform to IMF/World Bank expectations in order to win the good credit ratings that are the password for attracting foreign investments."

Finally, I decided to do a random check on one African country that was scheduled for debt relief – the New York Times op-ed writer Jean-Claude Shanda Tonme’s beloved Cameroon. In October 2005, just four months after Live 8, Cameroon announced that it "plans to privatise its state airline, water utility and telecommunications company as part of an IMF-backed economic reform programme aimed at obtaining debt relief."