28 June 2002

NEPAD: G8 modest on aid, solidarity groups dissapointed

Near the top of the G8's Africa Action Plan delivered after their summit in Canada this week is Nepad's peer review process. "African leaders ... have formally undertaken to hold each other accountable" for the achievement of democracy and "sound economic management", and "to promote peace, security and people-centred development".

This element of Nepad (New Partnership for Africa's Development) seemed assessed as the G8 countries' best means to sell the rest of the plan to their constituencies in the industrialised North, where donor fatigue has taken hold in the face of Africa's seemingly irremediable plight.

It is the novel element in Nepad but also the vaguest element, though it already has an acronym. Just ahead of the summit SA foreign affairs officials spelled out some of the detail to be announced at the African Union inaugural summit next month. Each Nepad-participating country is expected to define a clear time-bound programme of action for meeting the commitments related to "best practices". Incentives (political, social and economic) will be created for "emerging democracies".

Members of the African Peer Review Mechanism (APRM) team, as well as their terms of reference, will be recommended by the AU's Council of Ministers for the approval by the Heads of State and Government Implementation Committee. The team would be led by an "eminent African personality" and nominees of the envisaged African Commission for Human Rights, Peace and Security Council and the Pan-African Parliament. There are already eight Draft Codes and Standards for Economic and Corporate Governance for Africa. These are seen as the key to persuading foreign investors to take the plunge in Africa and they are quite specific to corporate and financial management.

On the wider issues of democratic governance and human rights issues sceptics note that something akin to a peer review system was used to get Zimbabwe's President Robert Mugabe back into line at the time of his presidential election in March. Then SADC leaders as well as the Nigerian and South African presidents met repeatedly with him. In the end he won SADC backing. Sceptics also see solidarity, or lack of official concern, among regional leaders towards their presidential peers in other SADC countries whose 'governance' is currently in question.

SA officials say Nepad is a process that will make its changes over years. In the mean time the G8 has made only modest improvements in official development aid while it waits for the self-policing to kick in.

The summit came up with modest aid increases - the most significant per capita increase was that of Britain, promising to increase ODA from a current c. # 600m to # 1 billion by 2006. Development Minister Clare Short said UK aid would be used where there were reform efforts and that it was "very effective".

But overall aid organisations have condemned the international rescue package for Africa as „peanuts“. „Our hopes for progress on trade, aid, and education came to almost nothing“, said OXFAM in a statement. „The action plan is full of recycled old commitments, and vague good intentions but very light on new commitments, specific actions or new money.“

Criticism inside SA and in the rest of the continent has mounted on the basis that Nepad, and now the Action Plan, repeats the neo-liberal economic perspective embodied in the Washington Consensus with its emphasis on foreign private capital and export led growth, despite mounting criticism from mainline development economists in Washington. But support from African civil society, political parties and trade unions has been given on the basis that a process of debate has now started for which Nepad provides a framework.

Last week the UN Conference on Trade and Development (Unctad) called for accelerated debt relief to pull LDCs out of poverty. Unctad said there was a close association between the incidence of extreme poverty and dependence on exports of primary commodities. Measures should be introduced to mitigate the consequences of excessive price instability and "compensatory financing schemes" should be revamped to deal with price shocks. These should also link debt repayments to commodity prices. None of these suggestions made their way into the G8 plan of action.

Unctad also stressed the importance of trade access. The G8 plan also called for the liberalisation of trade within the context of the Doha round of the World Trade Organisation. But there was no mention of the massive farm subsidies current in the European Union and the US - sensitive domestic political issues. The US absolutely denies that its agricultural subsidies are hurting Africa - yet it is pouring billions into Mississippi cotton, also one of Africa's key cash crops.

There was also no mention of the problems Africa is contending with in such openings as AGOA - the US deal with Africa to allow better market access. African states say that it is difficult to plan for export since the US can withdraw its arrangements unilaterally, depending on what domestic lobby is effective. SA has learned this in the last few weeks, when the small pear canning industry in the US successfully called on the administration to put tariff bars on the SA product. (SouthScan)

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