Africa's Neediest Await Impact of Debt Deal

On Saturday, finance ministers from eight of the world's wealthiest nations formally agreed to cancel the debt owed to international agencies by 18 of the world's poorest countries — most of them in Africa. The total owed by those nations is at least $40 billion. Salih Booker, executive director of the advocacy group Africa Action, describes the ways the debt-relief deal may help the continent's neediest citizens.

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LIANE HANSEN, host:

Finance ministers from eight of the world's wealthiest nations reached an agreement this weekend to cancel billions of dollars in debt for 18 of the world's poorest countries. Meeting in London, the G8 ministers from Britain, Canada, France, Germany, Italy, Japan, Russia and the United States settled on a plan designed to allow debtor nations, most of which are in Africa, to borrow money again. It will be used to help build their economies and to develop health and social programs for their people. The arrangement is expected to be ratified at a G8 summit meeting in Scotland next month. Salih Booker is executive director of Africa Action. The advocacy group works to promote economic, political and social justice issues in Africa. It's based here in Washington, and he joins us by phone.

Thanks for your time.

Mr. SALIH BOOKER (Executive Director, Africa Action): Sure. Thanks for having me.

HANSEN: Let's talk about this agreement. It allows the countries to erase massive amounts of debt and it opens the way for them to borrow money again. Elaborate a little bit on what the new money will be used for.

Mr. BOOKER: Well, this particular agreement only will address 18 countries, 14 of which are in Africa, and a total of some $40 billion of debt will be canceled by this action. What it'll do is it'll allow those particular countries to stop having to pay each year hundreds of millions of dollars in debt servicing, and they'll be able to use that money for education, for health care, for the priorities of their own citizens. So it is, in fact, a first step toward addressing the larger problem, but one could still characterize it as a baby step.

HANSEN: Looking a little bit at the bigger picture, the final deal for this debt forgiveness was reached between Britain and the United States, but the Bush administration has refused to agree to double direct aid to these impoverished African nations. Now without direct aid, what are the chances these countries will fall again into debilitating debt?

Mr. BOOKER: To help African countries reach the millennium development goals--those goals of reducing poverty by 50 percent that were established in the year 2000 at the Millennium Summit and which are to be achieved by the year 2015--African countries need not only debt cancellation but increased resource flows, both in the form of official development assistance but also in the form of expanded earnings from trade, particularly in agriculture, which will require actions from the rich countries toward the end of this year when the World Trade Organization meets.

HANSEN: What about the World Bank? It's one of the largest lenders to African nations, and it has a new president, Paul Wolfowitz. He's a former Bush administration Defense Department official, and he's a strong advocate of free trade and private investment. Do you expect a new emphasis from the World Bank about how poor countries can best improve the life of their people?

Mr. BOOKER: Paul Wolfowitz will be making his first visit to Africa this coming week as president of the World Bank. He knows little about the African continent and, indeed, he knows little about the development world, of economic development in poor countries. And the most important thing will be that he listens to the people in Africa, both their governments and their citizens. I think there's a lot of interest in the visit of Paul Wolfowitz, a great deal of concern on the part of Africans who wonder why the United States would have selected particularly him to head up the world's most important development bank in terms of its importance to African economic development.

HANSEN: There's a plague of problems on the continent of Africa: collapsed economies, sparse school systems, AIDS, malaria, dysentery, you know, and that's the short list. How does a country begin to build a better society when it's faced with all of that?

Mr. BOOKER: Well, so many African countries are doing much better. Last year, for example, sub-Saharan Africa experienced over a 5 percent rate of economic growth. That's almost double the rate of population growth. But what I think African governments and citizens are focusing on is the need for those governments to be accountable first and foremost to their own citizens. In the current global system, African governments are mainly accountable to these international financial institutions in Washington. That's where the economic policies are being written for African governments over the past several decades. So I think there are hopeful signs, but certainly the challenges are great.

HANSEN: Salih Booker is executive director of Africa Action, an advocacy group based here in Washington.

Thanks so much.

Mr. BOOKER: Thank you for having me.

HANSEN: It's 18 minutes past the hour.

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