Consequences of the international economic rescue effort
will not be felt for several months.
But African countries, which so far have only been indirectly shaken by
the financial institution collapse, stand to lose long-term pledges of aid,
which many international groups have fought long and hard to obtain. Jubilee
USA Network director Neil Watkins heads an alliance of groups seeking to erase
poverty and eliminate crushing debts in Africa and other developing
regions. He says the pessimistic outlook can only be tempered by a
resolve from the world community to live up to its pledges of the past several
years to continue investing and promoting Africa’s economic growth.
countries are going to have to make due with less. They’re going to have to use existing resources more effectively
and are probably going to have to be turning internally to look at domestic
sources of revenue, emergency taxes on investment, or domestic resource
mobilization, and also really looking at ways that they can reach out to the
international community for solidarity and support, both to urge the
international community to keep those existing pledges and, indeed, to think
about ways that those pledges can be increased,” he noted.
week, the World Bank pointed out that high food and fuel prices would raise the
number of malnourished people worldwide by 44 million to boost starvation
levels to 967 million by the end of the year.
Neil Watkins points out that the financial crisis is going to hit Africa
especially hard as the severe food emergency, accompanied by sharp price
increases, is already having an impact all across the continent.
means that some of the markets, some of the loans that might have been promised
to African nations, may now be drying up, due to a lack of available
credit. So I think that it’s urgent
that the international community redouble its efforts to help shield Africa
from this problem. If we can mobilize
the $700 billion to rescue Wall Street, we think that we should at least be
able to provide Africa what we have promised them and in fact go beyond that to
make sure that Africa gets back on track to meeting the Millennium Development
goals, which are fast nearing 2015,” Watkins said.
weekend World Bank and International Monetary Fund (IMF) officials voiced
reassurances that developing countries would not be abandoned in efforts to
contain the world economic crisis.
Watkins praised the integrity and intentions of those finance
institutions, but questioned the restraints and flexibility of terms and
conditions for borrowing that the Bank and the Fund continue to pose for needy
“One of the problems is that some
lending that has come from the IMF and World Bank over the years comes with
some very heavy conditionality. In the
case of the IMF, it comes on some not very concessional terms. It comes as loans that must be repaid in a
fairly rapid fashion, and for countries that are facing an economic downturn,
especially very poor countries that are struggling with the food crisis, we
certainly would question whether giving countries loans that aren’t
concessional to fight the food crisis would be appropriate. More appropriate, we think, would be grants
to help countries to be able to feed themselves, to be able to invest in
important social sectors such as health care and education,” he said.