Party of Eight: Deal or No Deal for Africa?

The political leaders of Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States converged on Tōyako, located on Japan’s northern island of Hokkaidō, on July 7th to discuss, among other issues, African development. According to Patrick Wintour and Larry Elliott in their July 7th Guardian article G8 Summit: West told to fulfil its African aid pledge, the 2005 G8 summit in Gleneagles, Scotland pledged to increase aid to Africa by a figure of $25 billion dollars by 2010. The article reported that with only two years left, an independent body called the African Progress Panel showed “…the bloc of rich nations was only 14% of the way towards hitting its target”. Although broken promises have become sadly commonplace amidst the routine compromising of politics, these agreements seem indispensible in the face of increasing food prices and poverty. According to Wintour and Elliott’s piece, the World Bank estimated that approximately 30 million more people could drop below the poverty threshold as a result of climbing food prices while the cost of food in Liberia has climbed by 25% in January, raising the poverty rate from 64% to more than 70%. While I believe these figures reflect patterns of growing African problems, there is reason to be suspicious of the World Bank.

Designed to stabilize national economies and invest in developing countries, the World Bank also has an incentive to identify African problems. Publishing reports delineating increasing food prices and poverty rates serves to create a demand for loans to African countries who cannot ameliorate their domestic problems alone as a result of war, droughts, rapid population growth, foreign debt, governmental corruption, and massive expenditures on AIDS treatment, prevention, and education programs. Thus, the World Bank secures statistical evidence that impoverished African nations are declining in certain measures of the quality of life in order to increase the likelihood that these nations will agree to loans with them. Stemming from its official independence from any nation or group (and this is reflected in its cosmopolitan name), the assumed creditability of the World Bank enables it to publish studies in major media outlets where this conflict of interest is concealed beneath statistics and methodological disclosures. Although the World Bank has an interest in the troubling patterns emerging from these studies, these patterns are nonetheless likely.

While it is challenging to predict whether or not the wealthy G8 nations will meet their pledge of African aid, it is even more challenging to provide a structural solution to the interrelated African problems. Agreeing to more loans from the World Bank may sink African countries deeper into debt or gut their domestic social welfare programs like education and health care. Refusing loans, on the other hand, may lead to crime, violence, and starvation as families become desperate for nourishment. Protectionist policies rather than foreign loans may also lead to both economic and social sanctions. Embargoes may serve to inhibit industrial growth fueled by foreign capital while framing African leaders as nationalists, dictators, and communists in media propaganda campaigns may undermine their public image and the trust their populations have in them. Echoing Fernando Henrique Cardoso in his 1972 article Dependency and Development in Latin America, African countries may need to resort to simultaneous modernization and dependency in order to keep short term problems at bay while slowly chipping away at their dependency on the affluent nations. This could take shape as African countries emphasize sustainable development and modernization, ignited by foreign capital, but later sustained by indigenous investments. Although declining foreign aid would certainly cause a recession in African countries, microcredit loans from African banks and African entrepreneurship may be able to boost the economy out of a recession and free of its dependency on the wealthy nations.