Africa looks less and less to the West for help to end financial crisis. Bankers' meetings signal growing resolve to try to solve own woes
The 39 African financial leaders who met here this week were not surprised that the Venice economic summit, touted as one that would take steps to alleviate the developing world's debt crisis, revealed no new tactics on that front. The mood in Africa has changed. The usual chastisement of the West for a failure to provide massive, unrestricted aid was noticeably absent at this meeting. In its place was introspection, with participants stressing the need for ``pragmatism,'' self help, and professionalism in setting their financial agendas.
The separate, but related, meetings of the Association of African Development Finance Institutions (AADFI) and the African Development Bank (ADB) emphasized how much the economic and political climate has changed in recent years. Issues discussed included: privatization, scaling down development projects, and mobilizing internal African savings.
``I would describe the feeling here as realistic,'' said G. Henry Andrews, secretary-general of the AADFI. ``We are, after all, bankers. We have read the balance sheets, and we know we must act soberly to deal with our problems.''
A major focus of the meetings has been the recent announcement by the ADB of its plan to increase its modest capital by 200 percent and significantly increase its loan portfolio. Western economists have praised past ADB projects, and have noted that the bank has not defaulted on loans in its 23-year history.
``The ADB is the one bright light in a bleak period,'' one observer said. The ADB is one of a few major lenders controlled and largely managed by Africans.
The meetings here come in the wake of two decades of erratic and disastrous economic experiments. Droughts and a decade-long drop in many African-produced commodities have added to the woes.
As a continent, Africa owes more than $100 billion in foreign loans, a significant portion of which was spent to fund massive subsidies on basic commodities and wasted on ``white-elephant'' development projects. In most nations, the standard of living has stagnated or fallen, while economic growth has declined in real terms.
Last year, the UN devoted a special session of the General Assembly to Africa's financial crisis. It produced a 5-year, $128 billion plan of recovery, largely based on economic reform. Direct aid from the West was slated at $45 billion, although the West never implicitly pledged this amount.
Since then, several African nations have had their debts rescheduled, but only after agreeing to impose stringent and domestically unpopular economic reforms. The International Monetary Fund (IMF) has taken the lead for Western lenders, in most cases requiring debtors to liberalize currencies, decentralize economies, and lower or remove subsidies.
Most African nations have complained that these measures are overly harsh. Zambia, for instance, recently abrogated its year-long agreement with the IMF after riots and growing disenchantment with rising prices and a drastic fall in living standards threatened to destablize the government. Zambia now joins a half-dozen other African nations at odds with the IMF and in arrears on their debt.
A few nations have begun to see improvement in their economies.
When asked about the impact of the IMF strictures, bankers complained that the measures are often disruptive, but most said that some form of fiscal discipline is needed. ``I do not agree with all the IMF is doing, but let us see what happens,'' one West African banker said.
Participants here were noncommittal when asked if the West was fulfilling its role in the UN recovery plan.