Debt-Relief, Trade Reform and the "ONE Campaign"

Nathan Nelson @ Sollicitudo Rei Socialis castigates Domenico Bettinelli and St. Blog’s for their — our? — alleged lack of attention to the ‘Make Poverty History’ ONE campaign:

. . . I knew if I looked hard enough, I would find a neo-conservative Catholic who opposes the Make Poverty History campaign and its partner concert, Live 8, which was held today on four continents. I found him, and it doesn’t at all surprise me that the culprit was Domenico Bettinelli. Actually, I didn’t go out looking for someone opposed to Live 8; I went out looking for any neo-conservative Catholic coverage of the issue at all. I was somewhat — but not really — surprised that social/political Catholic weblogs like Catholics in the Public Square, Catholic Light, Loose Canon, Thrown Back, etc. didn’t cover it. They were, of course, too wrapped up in their endless culture wars to notice that a billion people worldwide are living in extreme poverty, meaning that they are living on less than a dollar a day. At first, I was pleasantly surprised to see the title, “Live 8 and African debt relief,” on Domenico Bettinelli’s blog — but I was soon disappointed to find that he had found a reason to oppose the campaign. . . .

According to the article that Dom called our attention to, there are some very difficult, yet undoubtedly necessary questions one must face before rushing headlong in advocacy of “100% debt forgiveness” for African nations (Whose jubilee?, Mindy Belz WORLD Magazine June 25, 2005, Vol. 20, No. 25). Among the criticisms leveled against the proposal:

  • Debt relief goes to governments of poor countries, not to poor people. Although the Bush administration insists on conditions to debt forgiveness, the Live8 and other proposals lay down no conditions.
  • Debt relief rewards poor countries with high debt without assisting the impoverished in equally poor but low- or no-debt countries.
  • Macro-goals make little room for the only kind of accountability that works: local supervision over the performance of specific programs on the part of bureaucrats, nongovernmental aid agencies, and church-based relief workers.
  • Debt elimination would have a chilling effect on credit . . . [becoming] a deterrent for both public and commercial lenders.
  • Debt elimination would have a chilling effect on private charity [particularly that from faith-based programs].

But never mind these objections. The real reason for Domenico Bettinelli’s suspicion of debt relief, says Nathan, is patently clear:

It occurs to me that perhaps Mr. Bettinelli’s real reason for opposing Live 8 is the group of people behind it: that is, liberal celebrities. For neo-conservative hardliners like Mr. Bettinelli, the sun rises and sets on the culture wars; anything that is supported by liberals must, by its very nature, be evil.

I don’t think it helps to casually dismiss discussion of issues like abortion, euthanasia, embroyonic stem cell research, gay marriage, et al. as an obsession with “the culture wars”. The fact that Catholic bloggers refrain from blogging about the issue of third-world poverty doesn’t necessarily mean they aren’t thinking or doing something. It may very well be the case that Dom’s idea of practical action doesn’t necessarily cohere with Bob Geldof’s rehash of Live Aid.

Nevertheless, if Nathan and company at Sollicitudo Rei Socialis can get over their urge to psychologically profile Domenico and apply the “neocon” label to all those with whom they disagree, it may very well be possible to have a civil and constructive dialogue on this topic. What say ye?

As Nathan had invited me earlier to join the ONE Campaign and promote the Live8 concert (sorry for the delay), I’d like to convey my thoughts and register some concerns about the project.

First, I’m 100% in agreement with Nathan, Bono, Brad Pitt, and Nelson Mandela that every American should educate himself on the issues of HIV/AIDS and world poverty in Africa and the “third world.” I’m also in agreement that the U.S. should commit itself to finding ways to “[provide] basic needs like health, education, clean water and food.” No argument there.

However, appeal to emotions aside, I believe in educating myself on a subject before signing my name to a petition or committing myself to a cause, and truth be told, the following demands on President Bush (as conveyed in the ONE campaign’s petition) strike me as somewhat vague:

  • help the poorest people of the world fight poverty, AIDS and hunger at a cost equal to just ONE percent more of the US budget on a clear timetable;
  • Cancel 100% of the debts owed by the poorest countries;
  • Reform trade rules so poor countries can earn sustainable incomes.

Not to mention the stated goal of “making poverty history,” which strikes me as a case of liberal idealism and/or eschatological utopianism. Surely an ambitious goal such as this deserves just as much critical analysis as, say, a “war on terror”?

Anyway, to assist in our consideration of the ONE Campaign’s proposals, I spent the past several days reading up on the subject of foreign aid and debt-relief in Africa and offer the following roundup.

  • Bono’s Deaf on Africa: Trade, not aid, is the answer, by Bruce Bartlett. National Review June 3, 2002. Mr. Bartlett points out some negative effects of humanitarian aid and the need to counter through trade reform:

    Once the prospect of long-term relief is established, it sets in motion forces that virtually guarantee its necessity. For example, food aid to help countries through a temporary famine often drives farmers out of business. How can they sell their produce when wealthy western countries, often overflowing with subsidy-driven agricultural surpluses, are giving it away for free?

    Partly for this reason, most nations of Africa have become dependent on food imports, even though they were food exporters not too many years ago. . . .

    If Western governments really wanted to do something to help Africa, the easiest thing they could do is open their markets to African products. The fact is that domestic subsidies and import tariffs prevent Africans from selling much of their agricultural output in Europe, North America, and Japan. These nations, it seems, would rather tax their citizens and force them to pay higher prices for food than allow poor farmers in Africa to sell their produce in their countries.

    This is an insane policy because it hurts domestic consumers as well as African farmers. By allowing African farmers simply to sell what they have produced in the West at market prices, consumers would have cheaper food and African farming would benefit, possibly obviating the need for aid.

    In all fairness to Bono, he does appear to have a good head on his shoulders and realizes the importance of trade — as shown by Marc Vander Maas in a critical-yet-sympathetic profile of Bono’s involvement in the ONE Campaign (Bono: Aid or Trade? Acton Institute Powerblog, June 2, 2005). Marc points to Bono’s comments on trade in an interview published by the Times Online (UK) and the fact that “Bono and his wife, Ali, have also started a clothing line – Edun – in an effort to bring economic development to underdeveloped areas.” Marc concludes:

    In my estimation . . . Bono has worked very hard to shine a light on a real human tragedy, and his advocacy has great value in that regard. But his focus needs to change. It’s clear that the value of trade and economic development has not been lost on him. But he would have a better chance of changing the world for the better if those items were the focus of his agenda, not just a sideshow.
  • The G-8 Summit and Africa’s Development by Roger Bate, Testimony to the Committee on International Rerlations’ Subcommittee on Africa, Global Human Rights and International Operations (Washington). July 1, 2005. Takes a hard look at the effectiveness of providing financial aid:

    . . . Inflation adjusted, Africa has received well over $400 billion in foreign aid since 1960. According to World Bank data, African GDP per capita fell on average by 0.6% every year between 1975 and 2000. In other words, official data show that individuals became poorer in the face of high levels of aid. . . .

    and the problems of rampant corruption among African governments which impede the real distribution of aid:

    Nigerian President Olusegun Obasanjo estimated, “corrupt African leaders have stolen at least $140 billion from their people in the [four] decades since independence.” Corrupt leaders do not discriminate between foreign aid and other revenue (such as oil wealth) when stocking their Swiss bank accounts, so it is nearly impossible to discern how much pilfered loot came directly from development funds. . . . the truth is that there are no quick fixes to African poverty. Like so many times in the past, the grand utopian visions of well-meaning Westerners are likely to crash on the hard rocks of African reality. In the end, Africans will get it right and prosper, but, as Robert Guest points out, “they will not succeed by imagining that somebody else is going to solve their problems for them, that aid is a panacea, or that anyone other than Africans can make Africa rich.

    and the “Making Poverty History” campaign:

    There is a lot about Make Poverty History’s agenda that makes sense. It opposes export subsidies as they distort trade at the expense of the developing world’s poor. It also advocates the cancellation of debt, which makes sense in some cases . . .

    Yet Make Poverty History advocates that developing countries adopt protectionist policies even as developed countries open up their markets. The campaign deplores free trade as ‘unfair’ as it sees the exchange of goods and services in an open market as merely shifting wealth from the poor to the rich rather than create wealth for all. But 200 years ago the Edinburgh economist Adam Smith observed that trade promotes economic progress and that the invisible hand of the market directs buyers and sellers towards activities that promote the general good. Nothing has changed to make that basic observation less true today. The trade protectionism for developing countries that Make Poverty History recommends is itself a trap for the world’s poor. Consider that, for decades, India was one of the countries caught in the trap, seeing its living standards fall during the 60s and 70s as it implemented the exact strategies recommended by Make Poverty History. Since India began to liberalize, its economy is growing at 8%-10% a year and its poor are becoming less so.

    And the role of the United States:

    No country has become wealthy from handouts from another. Lack of both good governance and rule of law, among other factors, keeps citizens poor and foreign aid that props up regimes which starve their people of these institutions is a sure way to starve them of bread, as well. For instance, many developing countries have tariffs and taxes on essential medicines, a self-inflicted, regressive and economically inefficient impediment to access to medicines that keeps their citizens from achieving decent health. . . .

    The US Administration has gone further than other G8 nations in trying to ensure that incentives bound up with aid packages are positive. By requiring prudent institutional changes ahead of aid delivery, the Millennium Challenge Account avoids a common aid pitfall: assuming that aid can promote sustainable policy improvements in countries where domestic stewardship of such changes is absent. However, as the experience of the MCA has demonstrated, such a careful and targeted approach to aid is difficult, slow, and decidedly unglamorous.

    In reality, economic growth depends on qualitative, not quantitative factors, thus running counter to the theory underpinning the increased aid model. Growth depends on the structure of property rights, whether and how the rule of law is applied, how large government is and how effective it is at delivering public services, and how open the economy is to local and international trade. Having such information makes it easier to devise and target aid strategy, which should focus on short run, primarily humanitarian efforts, to governments that are already reforming.

  • How can the West help Africa? A global Q&A July 1, 2005. The Christian Science Monitor interviews eight Western concert-goers and eight people in Senegal and Nigeria “to find out what some Western concertgoers really know about Africa, and where there is – and isn’t – common ground with Africans”:

    Our correspondents spoke with eight ticket-holders for concerts in Philadelphia, London, and Rome. They also interviewed eight people in Senegal and Nigeria, two indebted African nations.

    As it turns out, the two groups have different priorities. Nearly every Westerner mentioned HIV/AIDS as a top African problem. Only one African did. Every African cited poverty as a major worry. And most wanted investment – not aid.

    We also asked some lighter questions. Could the Westerners name even one African leader? (Only half could.) Did the Africans know what U2 is? (Most didn’t).

    The Africans universally agreed that their continent is culturally richer than many Westerners can imagine, but that their leaders are fundamentally corrupt. That’s why this group all advocated that “strings” be tied to aid to prevent it from going astray . . .

    The answers — especially from Africans — are interesting. Practically all of them are united in their judgement that throwing money at the problem won’t help (“To help us, they should not give money. That will only make us less happy. The people who need it most don’t get it. Only the big politicians get to keep it for themselves”), and that what is truly require to get off the ground is a stop to top-level corruption and industrial/agricultural development:

    Which helps more, trade or aid? Even if we are given billions of dollars, it’s like all the other billions of dollars that disappeared. The West must invest in Africa and help us develop our agriculture sector and our factories. Look at India. It is poor, overpopulated, and underdeveloped, but it produces enough to support itself.
  • “We want to work hard, and pay our debts”, Acton.org interviews the Right Rev. Bernard Njoroge, bishop of the Episcopal Church of Africa (diocese of Nairobi) and member of the Constitution of Kenya Review Commission, and Chanshi Chanda, chairman of the Institute for the Study of Economic Freedom and Human Dignity in Zambia, on the G8 deal to cancel $40 billion in debt owed by 18 of the world’s poorest countries and the underlying economic conditions that led to their plight.
  • Ethan Zuckerman from the international blog-compilation project Global Voices Online provides a Roundup of African bloggers on Live8. Many appear to be extremely skeptical towards Geldof and the prospect of yet another Western rock concert / campaign to assist them. What is desparately needed, they insist, is institutional reform and an end to corruption, or in the words of Ethiopundit: “encouragement of the development of the INSTITUTIONS of democracy and the free market in Africa.” (See his blog for an amusing take on why Geldof banned the Spice Girls from Live8).
  • Among Ordinary Africans, G-8 Seems Out of Touch by Emily Wax, Washington Post Foreign Service:

    On the world’s poorest continent, however, feelings about debt relief and aid money are far more nuanced than many Westerners may realize. Africans interviewed this week, from farmers to artists to health workers, say they are grateful for the outpouring of sentiment, and glad to hear that glamorous musicians and actors are championing their cause and that college students are wearing bracelets with the slogan, “Make Poverty History.”But they also said there was a dangerous disconnect between what the industrialized nations see as solutions and what Africans believe they need. Instead of debt relief and more aid, many Africans said they wanted the G-8 to focus on ending corruption and on improving roads, courts, banking and secondary education.

    Another useful step, many Africans said, would be to end Western countries’ trade subsidies for their own farmers, which make it impossible for African industries to do much more than survive. . . .

  • The need to root out corruption and establish the rule of law as a precondition for dispensing aid cannot be emphasized enough, according to Marc Vandermaas (“The Problem of Aid” Acton Institute Powerblog June 27, 2005), who points us to the story of corruption in Nigeria to the tune of 220 BILLION pounds (News Telegraph June 25, 2005):

    The scale of the task facing Tony Blair in his drive to help Africa was laid bare yesterday when it emerged that Nigeria’s past rulers stole or misused £220 billion.

    That is as much as all the western aid given to Africa in almost four decades. The looting of Africa’s most populous country amounted to a sum equivalent to 300 years of British aid for the continent.

    Gordon Brown, the Chancellor, has spoken of a new Marshall Plan for Africa. But Nigeria’s rulers have already pocketed the equivalent of six Marshall Plans. After that mass theft, two thirds of the country’s 130 million people – one in seven of the total African population – live in abject poverty, a third is illiterate and 40 per cent have no safe water supply.

    With more people and more natural resources than any other African country, Nigeria is the key to the continent’s success. . . .

  • The Free and Easy Charity of the ‘One Campaign’, Anthony Bradley questions Christians’ involvement in the ONE campaign, noting that “if American Christians gave 10 percent of their income to support the work of the church, it would provide $143 billion to equip the church to do what she is called to do” — He urges Christians to rally around their churches, not the government, and address issues of materialism in their own lives rather than promote “a depersonalized and sterile form of help characteristic of the secular appeal to radical individualism”:

    Interestingly, the campaign does not encourage sacrificial living by curbing purchases of music CDs or movies, so as to give more personal resources to help the poor, the sick, and the oppressed. Americans could have donated the $12.2 billion spent on music in 2004 to fight poverty and AIDS. In fact, in 2004 alone, U.S. consumers spent $21.2 billion on DVD sales and rentals, $9.9 billion on video games, $14.6 billion on chocolate, $9.4 billion at the box office, and $2.8 billion North American revenue from concert tickets. Besides, does anyone really need to go to a U2 or Jars of Clay concert?

    Personal sacrifice for the sake of the poor could mean a little less wealth and little less fame for the wealthy and famous entertainers behind the One Campaign. But that might not be a bad thing, since the music stars currently use their clout to make demands on how the government should use other people’s money.

    “One by one” is the campaign’s mantra. A far superior campaign for these artists to support is the “one by one” personal virtue of charity that God calls Christians to enact through the church and other faith-based organizations. Much more could be accomplished by bypassing the bureaucratic inefficiencies of government, freeing it to do other good things, and giving a portion of the $143 billion to those agencies that do charity better than government ever could.

To their credit, the ONE Campaign’s “Issues” page comments on the issue of corruption:

While corruption is harmful to all governments, losing resources to corrupt leaders is particularly devastating in poor countries where ever dollar lost results in one less child in school or one less well dug to provide clean water. Approaches like America’s Millennium Challenge which direct assistance to honest governments are the most effective, as is channeling assistance through private (and faith-based) relief and development agencies.

It also provides links to a number of organizations and resources by which readers can further educate themselves on issues like AIDS, extreme poverty, education, food and water shortage, debt cancellation and trade reform.

So check it out — even if you don’t necessarily find yourself rushing headlong to back the ONE Campaign’s petition to President Bush, it’s to our benefit to learn and talk about these issues, and find ways to contribute to combatting poverty, hunger and disease around the world.

Update

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