(First my comment: I understand it like this: banks have loaned more money than they received by savers: 9/10 of this loaned money is not covered … thus it was always only virtual money, thus it has never to be paid … yes, not paid back, as it never existed before.
We must take the right to state: virtual money is not made to be returned. Heidi).
Debt remains the key issue for AFRODAD. The experience of the African countries before and during the HIPC process suggests the need for concerted efforts to lobby and advocate not only for management of both the external and internal debt but to also secure that resources are procured and used for the benefit of growth and inclusive development … (Dept 1/2).
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Dept 2/2: Debt relief mechanisms: Debt relief mechanisms including the multilateral debt relief initiative (MDRI) have not offered a lasting solution to the fundamental debt problems in Africa. They have not been sufficient to support the full attainment of the MDGs to which all member states have committed.
Current risks such as high food and fuel prices, and future risks such as vulture funds and climate change, MDRI beneficiaries vulnerable to being ensnared in a new round of unsustainable and unjust debt which will contribute to the re-accumulation of debt. AFRODAD strongly believes that the problem of debt is a result of both internal and external causes and to this end; if countries are not to slide back into indebtedness both internal and external problems must be resolved.
Debt management:
- Debt management is one of the most critical issues for developing countries and economies in transition. Problems of debt management have ranged from: project design within parastatals, public or private enterprises; poor or no consultation with the intended beneficiaries; lack of feasibility studies; by-passing of certain loan approval procedures; poor monitoring of foreign funded projects, to; failure to repay the loans. Most African countries have failed to live within their constitutional and stated policy framework in terms of debt management. Experience in most African countries since independence has shown that institutions such as the finance ministry, central bank and even the legislature have tended to be overridden or weak institutions vis-à-vis the executive in ensuring that sound debt management practices are adhered to. The mere creation of these institutions and instruments is inadequate. Their effective function is key. Since 2004 AFRODAD has engaged intergovernmental agencies and ministries of finance from various countries on the debt management and loan contraction processes. The advent of new lenders such as China and India in the continent compels the organization to revisit the issue with the aim of avoiding the African leaders rolling their countries back into the debt trap through these new lenders. The whole idea is to advocate for strong debt management policies and strategies that should be applied to all lenders. Key to these is the notion of prudent lending and responsible borrowing.
Alternatives:
- Looking at alternative approaches to debt and aid problems is part of AFRODAD’s advocacy work. In partnership and solidarity with the Norwegian Church Aid, European Network on Debt and Development (EURODAD), Jubilee USA, and Jubilee South, AFRODAD will as part of implementing this strategic plan build public awareness of and political will for cancellation of odious and illegitimate debt, and strengthen our call for a Fair and transparent Arbitration process through broad based public education among member organizations combined with a targeted media and political strategy. Plans have also been set in motion for an advocacy project to look at the feasibility of a CSO-initiated alternative to the debt problems by calling for the establishment of a fair and transparent arbitration process that would result in the United Nations establishing an arbitration court or tribunal on debt issues.
- AFRODAD is determined to challenge the neo-liberal development paradigm which informs the current power imbalances between Debtors and Creditors in the resolution of Debt. AFRODAD is resolute in its pursuit to convince other African CSOs about the efficacy of dealing with debt issues through the Establishment of a Fair and Transparent Arbitration Mechanism under the United Nations. AFRODAD believes the mechanism will enable the debt crisis to be resolved in a way that preserves the integrity of debtor countries and ensures creditors share the responsibility for the failure of their bad development policy advice and the rise of the debt crisis. To this end, AFRODAD will ensure that CSOs continue to nurture the political steam about the issue within the UN and thus guarantee a positive impact. Debt audits and profiling become essential in this regard.
Debt in post-conflict societies:
- The perception that development policy is increasingly being subordinated to Northern security concerns has stimulated AFRODAD to look into the issues of debt and aid in post-conflict societies. The fact that people in post conflict countries such as the Democratic Republic of Congo and Liberia still pay arrears to creditors for debts incurred as a result of civil war expenses by ruthless regimes poses a lot of socio-economic justice questions. In addition to this, the notion that the administration of aid in these countries seem to be treated the same way as stable countries also brings to question the flexibility of the global aid architecture. A detailed research project, integrating views from citizens in these conflict and post-conflict countries especially the African Great Lakes region, will help challenge the current Aid and Debt discourse and promote the linkage between development, economic justice, human rights, and security both at the political level and in their programme work.
- Work on how conflicts affect African development and Debt issues will be studied by AFRODAD in the next three years. Countries emerging from civil war usually attract both aid and policy advice. There is need to investigate whether the absorptive capacity for aid is systematically different in post-conflict countries and to ascertain if their absorption of aid does not result in indebtedness. Equally important is the need to ascertain whether the contribution of policy to growth is systematically different in post-conflict countries as compared to stable economies, and in particular, whether particular components of policy are differentially important. Rapid political and social change in post-conflict situations generally demands a clear set of rules and control over development resources, introducing openness and transparency. These are substantial challenges for any political regime, but they can be monumental in a post conflict environment. There is always need in post-conflict societies to preventing funding from undesirable sources and abuse of state resources; establishing effective legal and procedural frameworks; and balancing sources of development finance with the ability of the recipient country to repay.
Main objectives for this programme are as follows: … (full long text).