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Debt relief’s
bet is not on violent revolutions
E. Ablorh-Odjidja
June 15, 2005
A reprint from ThisWeekGhana
President Kufuor noted, in reaction to the
momentous decision by the G8 to rid Ghana and 17
other African countries of their crippling
foreign debt for good, that:
"We opted for the HIPC Initiative in 2001 to
allow us breathing space to recognize our
priorities and this is the reward."
Before 2001, the term HIPC was too much of a
putdown. As
such, Ghana, a proud country, reacted negatively
to the label.
The rejection must have been sound emotionally,
but not very realistic reasoning.
We couldn’t possibly be labeled as “HIPC;”
meaning a Heavily Indebted Poor Country. Ghana,
a very rich country, had all the necessary
natural resources for wealth creation.
But the facts on the ground were
different. We have been “broke” and for a long
time.
We could travel back through the generations and
administrations, at least through all the years
of Rawlings, and the prideful count on our
natural wealth, but the effort wouldn’t have
altered the fact that we were a “broke” and a
heavily indebted nation.
In the 90s under Rawlings and with the amiable
aid of the World Bank that was desperate to
describe Ghana as a success story for its own
ends, we put up the appearances of being well
off while under the heavy burden of debt.
Then came the Kufuor administration after 2000,
it became glaringly clear to them that we were
in dire economic circumstances.
And President Kufuor said so boldly to
the world.
So, on Saturday, June 11, 2005, the G8 finance
ministers, who had now recognized the need,
responded.
They declared that their nations would
recognize and support the HIPC concept as
proposed.
The end was debt relief for 17 HIPC countries in
Africa and other nations.
In
agreement with the G8 ministers were The World
Bank, the IMF, and the African Development Bank.
The agreement would also extend to 20 other
countries put on the list, provided these
countries met targets for "good governance and
corruption-fighting,” the G8 said.
It will help to note that the HIPC debt
forgiveness came close on the heels of the June
4th celebrations in Ghana; a day for the
remembrance of a coup by Flt. Lt. J. J. Rawling,
that had shed unnecessarily a lot of blood in
the name of eradicating corruption and poverty,
but failed spectacularly in doing so.
Juxtaposing Rawling’s
June 4th fiasco against what was achieved
without a single bullet being fired, or a drop
of blood being shed under this HIPC debt forgiveness
program should undergird the growth of the depth of our
political maturity under Kufuor.
On the PBS Jim Lehrer’s News Hour television
show in the US to emphasize the significance of
the debt forgiveness program was his guest, Dr.
George Ayittey of Free Africa Foundation.
Ayittey said the package was “a step in the
right direction.
Everybody knows that Africa is in a very
deep crisis. …. “
And continued, that “It doesn't address Africa's
long-term fundamental needs and how to put
Africa on the right track to development. What
Africa needs to do is to grow out of debt. What
this does is simply stabilize the situation.”
Indeed, HIPC, as understood, would only
stabilize the situation,
But it
also offered the opportunity and the platform on
which to grow our economy.
The Economist, describing the opportunities said
“In total, the agreement could be worth more
than $55 billion” to African countries.
Of this amount, some $4.1 billion will accrue to
Ghana’s coffers.
While Kufuor saw HIPC as the platform
and the opportunity to grow Ghana, others had
seen only derision in the name.
It should be apparent now that there is not much
left in the name to deride, but more for a cause
for celebration – and laughter – all the way to
the bank.
But caution. Some may not find pleasure in debt
forgiveness because misery dies hard.
They may even be disappointed that it has
happened at all; that it didn’t happen on their
party’s watch. Or
that the excuse to grouse against the sitting
administration, for hardships and perceived
mismanagement, has been taken away.
Indeed, the reality with HIPC is that it is a
windfall. But our treasury is back to health.
And also, it is time to caution those who would use
the opportunity to abuse the treasury from now
on, or give reasons for the cries of
mismanagement and the “Wadala” marches to
return.
Ghana has a fairly decent government now and
that was the first reason that brought the debt
forgiveness.
But there a recognition that is left for
Ghana alone to acknowledge; that a heavy debt
burden has been lifted from the nation’s
shoulders.
The injustice of a heavy debt is something that
has been with us for a long time.
General Kutu Akyeampong was one of the
first to recognize it in the 70s.
“Yen tua,” meaning our nation must
“refuse to pay,” he had cried out in the
vernacular.
The good General had come to power by a coup.
His approach was the simple "bravado"
politics of a soldier.
But underlying this soldier’s response
was also that of an anguished nation.
Then in the 90s, George Ayittey provided the
missing intellectual explanation that
Akyeampong’s argument against the debt lacked.
He described it as “Odious Debt” to cover what
was also owed by the Third World nations.
Ayittey's explanation was based on intellectual
and ethical reasoning. But his effort had
limitations, since the professor was not in a
position to cancel debts, or lacked the
sovereign authority and the political power that
could appeal to a body like the G8.
So, over the years the “odious debt” theory
became an overhang into Rawlings and the Kufuor
administrations.
Kufuor, rather than simply saying “Yen tua,”
took a chance on a confluence of events, the
guilt that the notion of "odious debt" brought
and the competence that his administration
displayed in handling matters relating to the
HIPC issues.
And with astute personal diplomacy, Kufuor was
able to elicit from the G8 the compassionate
feelings that then could accept the benefits and
the promises of debt forgiveness under the HIPC
arrangement.
For Ghana, the arrangement resulted in 100% debt
forgiveness, the biggest in its history and a
proud legacy for Kufuor.
Underlining all this achievement was one
remarkable achievement.
Kufuor’s election victory in 2000,
marking it the country's first real democratic
transfer of power in decades.
A political achievement of a courageous
leader who could then go on to opt for the HIPC
initiative as he had described it.
This year, Kufuor was at the White House in
Washington with Presidents Pohamba of Namibia,
Guebuza of Mozambique, Mogae of Botswana, and
Tandja of Niger as witnesses to the largesse
embodied in the HIPC.
"We believe by removing a crippling debt burden,
we'll help millions of Africans improve their
lives and grow their economies," said President
Bush, the host.
“These leaders have made (a strong statement
with their administrations) about democracy and
the importance of democracy on the continent of
Africa,” Bush continued.
Unspoken by President Bush was the fact that the
US was already the biggest economic aid giver to
Africa in the world.
At the White House reception were many African
citizens. Among them were proud Ghanaians who
were filled with joy to hear their president
mentioned as a fighter for democracy in Africa.
Of course, one may argue that Ghana is not a
stronghold of democracy yet, but one cannot deny
that it is certainly on its way to becoming one.
E. Ablorh-Odjidja, Publisher,
www.ghanadot.com, Washington, DC, June 15,
2005.
Permission to publish: Please feel free to
publish or reproduce, with credits, unedited. If
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