Our Common Interest by Bob Geldof

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Bob Geldof Our common interest

The Cold War is over. All the paradigms for development are outdated. The Commis- sion for Africa – with its 17 commissioners, a majority of them African, from the worlds of government, business and the development sector, and after consultations in 49 African countries, in every G8 country, throughout Europe, in India and in China – has put together a bold package of concrete recommendations to overhaul the system.

It began in June 2003. I was in Ethiopia to visit friends. But someone told me about the situation in the northern highlands where feeding camps had been set up again, just as 20 years before during the great famine of 1984 and 1985. I drove north to see. It felt like stepping back 20 years. What filled me with something bordering on despair, however, was the news from the south of the country. I went there too. I travelled to the lush green fields of Kafe – the region from which coffee takes its name. In the past, the people there would use the money they made from selling coffee to buy food. But the price of beans on world markets had crashed by almost 70% after countries like Indonesia and Vietnam had dramatically increased coffee production. The farmers in the birthplace of the crop were earning so little that they could not afford to buy food. Famine set in. We call it globalization, they call it hunger. I rang Tony Blair’s office in Downing Street. They patched the call through to Evian in France, where the prime minister was attending a summit of the world’s eight most powerful nations, the G8. “It’s happening again,” I exploded. “Calm down,” said the prime minister, “and tell me what the problem is.” “I can’t calm down,” I said. “Twenty years after Live Aid and things are no better. In some ways they’re getting worse. What happened to all the early warning systems we put in? What happened to the improvements in EU aid – they’re double-counting 033-043 GELDOF N. 29-30 ingl. 19-04-2006 18:33 Pagina 35

again. None of it is working. And there are all these new forces at play which nobody properly understands.” “Come and see me when you get back,” said Blair. I did. What began to form in my mind was that the notion that all the paradigms for development were outdated. They were based on the thinking of the Brandt report which had examined the relationship between the rich and poor worlds at the end of the 1970s – under the tutelage of eld- er statesmen including the former German chancellor Willy Brandt and the former British prime minister Edward Heath. The Brandt Commission’s report North-South had come up with the concept that “enlightened self-interest” was needed if the North was to prevent an eventual violent explosion of discontent by the poor people of the global South. But Brandt’s analysis was out of date. It was a product of Cold War thinking. Since then, the Berlin Wall had fallen. Apartheid had crumbled. September 11, 2001 had scarred the psyche of the Western world. Globalization had accelerated and the world was no longer divided into power blocs. Instead, the tectonic faultlines were those of trade. A new commission was needed. And this time it must not be run by politicians in retirement but by those in power. 35 Eventually, several meetings later, Tony Blair and his chancellor, Gordon Brown, were persuaded. In February 2004 the prime minister announced a Commission for Africa made up of 17 commissioners, a majority of them African, from the worlds of government, business and the development sector. They included two prime ministers, a president and two finance ministers – and one half-assed Irish pop-singer.

BEATING THE SKEPTICS. The launch of the Commission was greeted with a fair degree of skepticism. “Why do we need a Commission? Everyone knows what Africa needs” was a common response. So we asked people to tell us. We held consultations in 49 individual countries across Africa, in every G8 country, throughout Europe, in India and in China. The seminar we held in Italy – “The Future of Africa: the Commitment of Italian Society” hosted by Aspen Institute Italia in Rome in Oc- tober 2004 - was one of the most stimulating. In addition to the creative thinking that came out of the day itself, participants contributed a series of essays that made an enormous contribution to the Commission’s thinking. Globally, we received over 300 formal submissions and examined the vast wealth of analysis on aid, development and economic management over the last 50 years. At the end of it we were in a much better position to say what works and what does 033-043 GELDOF N. 29-30 ingl. 19-04-2006 18:33 Pagina 36

not, and to learn from past failures and successes. Our report reflects that. Reveal- ingly it comes to a rather different conclusion from many of those offered to us as self- evident at the outset by the riders of hobby-horses who had assured us Africa’s real problem was aid/trade/debt/AIDS/lack of clean water (delete as inapplicable) and that if we just started there then everything else would follow. We concluded none of these things. What we did conclude was that one factor un- derlies all sub-Saharan Africa’s difficulties over the past 40 years. It is the weakness of governance and the absence of an effective state. The term “poor governance” is often used to mean widespread corruption and un- sound government policies which discourage economic growth. Small wonder that in one African language, Wolof, the word politig has come to mean lying or deception. Bad policies and corruption are certainly problems for Africa – and the Commission offers recommendations to deal with them – but the core problem is less dramatic yet even more serious. Good governance is about much more than sound policies. Governments must be able to put those policies into effect. A number of practical factors constrain the capacity 36 of African states to do this. Africa has had insufficient money to invest in technology, health and education systems, roads, power grids, telecoms, affordable housing and water supply and sanitation. It has poor quality systems for the collection of da- ta, without which government policies can neither be properly formulated nor accu- rately monitored. Its civil servants, in national and local government, often do not have the training to analyze complex information or plan and budget effectively. The quality of management and incentive systems have been poor. Public servants are also being hit by AIDS. In Zambia, teachers are dying faster than they can be trained. What that means is that all the administrative machinery which is taken for granted by the citizens of developed nations – “capacity” in development jargon – is lacking. That is why one of the Commission’s main recommendations was that donors make a major investment to improve Africa’s capacity – starting with its system of higher education (particularly in science and technology) and working through the building of systems and staff in local and national governments, and also in transnational bodies like the African Union and the ten regional economic communities which are developing in west, east, central and southern Africa. This is at the heart of the Commission’s report. It is an understanding which, fortu- nately, has begun to take root all across Africa in the past few years. 033-043 GELDOF N. 29-30 ingl. 19-04-2006 18:33 Pagina 37

BACK TO THE FUTURE. Outside commentators tend to live in the past on the subject of Africa. They talk about economic stagnation and a continent dominated by corrupt dictators. There is, sadly, still plenty of that about. But those characteristics were set in the era of the Cold War during which both superpower blocs gave aid not to those who were poorest but to countries they saw as strategic allies. The result was the propping up of corrupt dictators who stuffed their own personal Swiss bank ac-

counts with money looted from the African people. “He may be a son-of-a-bitch,” a US leader said of one tyrant, “but he’s our son-of-a-bitch.” But the Cold War is over. Apartheid has crumbled. A new self-assurance is sweeping the African continent. Change is starting everywhere. Twenty years ago it was com- monplace for African countries to be run as dictatorships; today such governments are a minority. In the past five years, more than two-thirds of the countries in sub-Saha- ran Africa have had multiparty elections – some freer and fairer than others – with a number of examples of peaceful democratic changes of government. War has given way to peace in many places. And though overall continental economic stagnation is still the norm, growth exceeded 5% in 24 separate countries in 2003. A new entrepreneurship is in evidence and in several countries there is a growing mid- dle class. A rich variety of pressure groups and community organizations are beginning to change the world around them and learning how to hold their governments to account. 033-043 GELDOF N. 29-30 ingl. 19-04-2006 18:33 Pagina 38

Also striking is the role of Africans living in the developed world. The flow of cash back home to Africa from relatives abroad is still low, compared with other developing re- gions, but it has increased dramatically in recent years. Aid is much more effective than in the bad old days. Studies by the World Bank suggest that average rates of return on its aid projects in Africa exceed 20% – a good investment in anybody’s book. Every- where there are the first signs of what could be a real momentum for change. The Commission’s conclusion is that two things need to happen: reform must continue, and accelerate, in Africa; and Western countries must support that change – and stop doing things that hinder Africa’s development.

A LONG LIST OF TO DOS. The top requirement for African governments is to ensure that their systems are open to the scrutiny of their citizens. That means strengthening parliaments, the media, trade unions and the judiciary. It means making budgetary processes more open so voters can see where money is being allocat- ed and see it is spent as promised. Such transparency will help expose the rot of corruption, which is systemic in many African societies at all levels. It is there at the 38 bottom: in Côte d’Ivoire, to get a single lorry from one side of the country to the other typically adds 400 dollars to the journey in official payments and bribes. It is there at the top, adding at least 25% to government costs, frequently resulting in low-quality construction and unnecessary purchases. African governments must show the political will to root out corruption, not just through words but by putting in place open systems. Rich nations can help in this too. First, they should track down money looted by corrupt African leaders, now sit- ting in foreign bank accounts, and send that money back to the people from whom it was stolen. Western banks must be obliged by law to inform on suspicious accounts. This will send out a clear message to current and future leaders that they will not be allowed to profit from such immoral behavior. Second, the international community should tackle those who give bribes as well as those who take them. Foreign compa- nies, especially those in the oil and mining industries, must be pressed to publish what they pay to governments. And firms who bribe should be refused export credits. It is within this framework of good governance that the Commission’s specific proposals – it makes more than 90 – must be seen. They cover a wide range of areas. Africa and the international community, for example, should shift their emphasis from military intervention, humanitarian relief and post-war reconstruction to pre- ventative measures. That means: 033-043 GELDOF N. 29-30 ingl. 19-04-2006 18:33 Pagina 39

• using aid better to tackle the causes of conflict; • making international agreements on how to control the trade in diamonds, oil and other resources which fuel or fund hostilities; • controlling the trade in small arms which are mostly from G8 and EU countries; • guaranteeing post-conflict mediation and aid to prevent states from sliding back in- to armed hostilities. Africa needs to invest in health, education and schemes to protect the most vulnera- ble. Almost half of the extra 25 billion US dollars a year in aid that the Commission is proposing should be spent here. The poorest people in Africa need schools and clinics. This is a matter of basic human decency. But it is also sound economics: for a healthy and skilled workforce is a more productive one. And there will be no improvements in the ability of government ministries without an educated corps of civil servants. That requires rich countries to: • rebuild Africa’s health and education systems, many of which are now on the point of collapse; • keep the promises made to provide all girls and boys in Africa with basic education; • make major investments to train a million new nurses and doctors and develop new 39 medicines for the diseases which afflict Africa; • reverse years of decline in the funding of clean water and sanitation; • give priority to HIV/AIDS, which is killing more people in Africa – 6,500 people every day – than anywhere else in the world (in Zambia, by 2010, every third child will be an orphan); • target malaria and TB, along with other preventable, curable killer diseases – though initiatives against individual diseases will be to no avail without the rebuild- ing of the health systems on which all of this depends; • abolish fees paid by poor Africans for schools, clinics and hospitals (which bring in only 5% of health care budgets).

UNLEASH THE TALENT. Africa is poor, ultimately, because its economy has not grown. This is not because its people lack entrepreneurial talent, but because the right climate has not existed to allow that talent to be unleashed. To promote it, African governments must create the right economic, social and legal framework which will encourage firms and individuals to invest. That means basic functions such as providing security, setting sound economic policies under the law, collecting taxes and delivering adequate public services. 033-043 GELDOF N. 29-30 ingl. 19-04-2006 18:33 Pagina 40

It also means seeing that physical infrastructure is in place – roads, railways, water, electricity and telecommunications. At present, Africa’s transport costs are twice as high as those in Asia. Those costs impose the equivalent of an 80% tax on clothing exports from Uganda. And shipping a car from Japan to Africa costs less than a third of what it costs to move that car from one side of Africa to the other. As much as 50% of the harvest is lost in many parts of Africa as farmers are unable to get their goods to market because of poor roads. But there are also more abstract forms of infrastructure, such as legal systems to ensure respect for contracts and to protect basic property rights and human rights, all of which are essential in upholding order and providing a check on governments. To assist in all this, the Commission recommends that rich nations and Africa together: • back the program by the African Union’s New Partnership for Africa’s Development (NEPAD) to build public/private partnerships to create a better climate to encourage investors; • double their spending on infrastructure – from rural roads and small-scale irriga- tion to slum upgrading and larger projects including regional highways, railways, 40 power plants and information and communications technology; • improve agricultural productivity – 80% of the poor earn their living from farming; • help small enterprises, with a particular focus on women and young people. The detailed program for growth takes over a third of the extra aid being called for by the Commission.

THE POWER OF TRADE. Africa cannot grow without trade. That is what has allowed developing countries in Asia, which at independence were poorer than Africa, to transform their economies. Just two decades ago 70% of poor Asian countries’ trade was (like Africa’s today) in raw materials, but today 80% is in manufactured goods. By contrast, Africa’s share of world trade has collapsed from 6% in 1980 to 2% in 2002. Africa has been left behind and the task of catching up gets harder every day. The continent faces two major constraints here. The first is well-known. Africa is con- fronted by trade-distorting subsidies and by shameful trade barriers which tax its goods as they enter the markets of the rich world. These barriers and subsidies are politically antiquated, economically illiterate, environmentally destructive and ethi- cally indefensible. The Commission demands reform in a number of key areas. Rich countries must: 033-043 GELDOF N. 29-30 ingl. 19-04-2006 18:33 Pagina 41

• substantially reduce the US$350bn a year they spend subsidizing their agribusi- ness, which is 16 times greater than their aid to Africa and which undercuts the wages of poor African farmers. (The European Union is the biggest culprit here, along with the United States: the latter pays cotton subsidies to just 25,000 US farmers and yet threatens the livelihoods of more than 10 million people in West Africa who produce the crop for a third of the price.) Subsidies on cotton and sugar should end immediately and all others by 2010; • dismantle the barriers they have erected against African goods; • alter “Rules of Origin” which offer preferential terms to the poorest African countries but which make deliberately obstructive rulings (for example, that fish are inel- igible if the boat they are caught from is Ghanaian but the master of the vessel is South African); • make concessions to Africa in world trade rounds without demanding reciprocal concessions in return. The second constraint on trade highlighted by the Commission, however, will surprise many campaigners. Contrary to what is often supposed, trade barriers are not the pri- mary cause of Africa’s trading problems. Other developing countries have faced even 41 higher barriers yet have still broken into world markets. Examine the evidence, as the Commission has done: the other big problem is that Africa does not produce enough goods, of the right quality or price, to enable it to break into world markets. Nor do African nations trade enough among themselves. A mere 12% of all African goods go to other African countries. To improve its capacity to trade, Africa needs to make changes internally. It must improve its transport infrastructure to make goods cheaper to move. It must simplify the tariff systems between one African country and another. It must reform excessive bu- reaucracy, cumbersome customs procedures, and corruption by public servants. It must make it easier to set up businesses. It must improve the way African nations work within the continent’s regional economic communities. Changes here are easy, cheap, quick and in the hands of Africans themselves. In Mozambique, goods are now cleared 40 times faster than before customs reforms took place, and revenue in the first two years increased by 38%. Donors can help fund these changes, but African governments should make reforms in this area an extremely high priority.

HOW MUCH WILL IT ALL COST? The order of changes Africa needs will require US$75bn extra a year. The Commission estimates that Africa itself can pay for 033-043 GELDOF N. 29-30 ingl. 19-04-2006 18:33 Pagina 42

around a third of this. The rest should be financed by increases in aid. Aid should be doubled now – from US$25bn a year to US$50bn. If governance improves, as the Com- mission predicts – and if donors improve the efficacy of the way aid is given, as the Commission recommends in some detail – then in three to five years Africa will be able to effectively use another 25 billion US dollars. That is a trebling of aid from current levels. Alongside this, the Commission calls for an end to negative aid, which is what debt repayments constitute. For every dollar Africa currently receives in aid, it pays back nearly 50 cents in debt payments. The Commission recommends 100% cancellation of Africa’s debts to institutions like the IMF and World Bank. The amounts involved are large – the equivalent of a Marshall Plan for Africa. But the costs to the rich world are relatively small. The first US$25bn increase represents just 10 cents out of every 100 dollars earned in the rich world. Many will argue that this aid cannot be effectively spent. The Commission anticipates this with an extensive study on the effectiveness of aid, which has improved signifi- cantly in recent years. Where aid is linked to advances in governance, it works. But 42 it also needs donors to give grants not loans, make aid more predictable and better harmonized with the aid of other donors and the priorities of African governments. One key way in which aid needs to be improved is for rich countries to abolish the prac- tice of tying aid to the purchase of their own goods and services – something that Italy needs particularly to address as 92% of its aid is tied. Since the 1960s, the OECD has declared aid-tying to be ineffective and inefficient; it forces receiving governments to follow priorities that are set by donors and it requires them to purchase goods and services from donor countries, at prices that are often above those prevailing in world markets. Tied aid also undermines national ownership, weak- ens decision-making, bypasses local governance and accountability systems, and de- lays public-sector reforms. Thus, the extent to which aid is tied is commonly regarded as a key indicator of aid effectiveness. This is one vital area in which Italy needs to act immediately. In 2002, aid brought education – free – to 1.6 million children in Tanzania. Aid is bringing healthcare to Uganda – the number of poor out-patients has increased by 87% since 2000. It eradicates disease – smallpox was wiped out by a little more than 100 million dollars worth of targeted aid. It brings growth – Mozambique grew at an astonishing 12% in the 1990s, while aid accounted for about 50% of national income. All of these examples are representative of many more. 033-043 GELDOF N. 29-30 ingl. 19-04-2006 18:33 Pagina 43

ONE OTHER THING. The problems Africa faces are interlocking. Poverty is a series of vicious circles that reinforce one another. They must therefore be tackled together. The actions proposed by the Commission constitute a coherent package for Africa, not a shopping list from which donor nations can pick and choose. Taken together, all of these measures can create the opposite of a vicious circle – a virtuous one. But if they are done separately, in piecemeal efforts, spread over time, they will lose that mutually-reinforcing effect. To provide the amounts which are essential to give Africa the momentum it needs will require a lot of assistance now. The Commission recommends that G8 and EU countries take the aid money to be pledged for the next decade and spend a large amount of it up-front so that a critical mass of money can be deployed soon. It suggests this should be done by backing the British government’s plan for an International Finance Facility to raise the money immediately from international capital markets, with bonds backed by donor governments’ pledges as security. Reaching agreement on this package of recommendations was not easy. The members of the Commission came from a wide range of backgrounds, from me, with my pas- sionate activism, to Michel Camdessus, who was managing director of the IMF during 43 the time of some of its most controversial activities in Africa. At least six of us threatened to walk out at various points. Negotiations went to the wire. There were stand-offs over details on debt, the impact of economic growth on poor people and the pace of trade liberalization, to the eleventh hour, and beyond. In- deed, the report missed the printers’ deadline by ten hours. But for all the endless redrafting and compromises, the end result is, I believe, a package which is both bold and radical and yet which stands a realistic chance of being acted upon. The legacy of our times need not be fly-covered children dying on our TV screens every night, in perpetuity. Instead, we can imagine for the children of Africa the kind of future that every mother and father in the Western world wants for their own children. That they go healthy and happy to school. In a nation that can feed itself and trade fairly with the world. Under governments that make life better, not worse. In a country which is part of a prosperous, safe and secure world. That is the common interest of us all.

Twenty years after Live Aid, Bob Geldof, of Boomtown Rats fame, is still doing everything in his power to help the African continent. 044 GELDOF box n. 29-30 it 19-04-2006 18:34 Pagina 44

2006 update The Commission for Africa report, Our Common Interest, was published in March 2005. In July, at Gleneagles in Scotland, Britain hosted the G8 summit. Africa was at the top of the agenda, and the findings of the Commission formed the basis of the proposals on the table. In the months running up to the summit there was a groundswell of public pressure gener- ated by massive campaigns across the globe such as “Make Poverty History” in the UK, “Deine Stimme gegen Armut” in Germany and “Coalizione italiana contro la povertà” in Italy; culminating in the Live 8 concerts calling on the G8 to adopt the proposals. Over 3 billion people watched the concerts and over 30 million signed up to support the call. The result of all this was that the G8 did indeed adopt many of the Commission recommendations. Among others, they agreed to: • double aid to Africa by 2010; • cancel the debts of the heavily indebted poor countries; • deliver universal access to free, basic education; • provide AIDS treatment to, as close as possible, all who need it; • massively scale up action against TB and malaria; • many detailed measures to strengthen governance, reduce corruption and improve security; 44 It is estimated that if these promises are kept, and no new damaging conditions introduced, over 4 million lives per year could be saved. We all have to do what we can to keep the pressure on. A first major step has been taken already in that the World Bank has cancelled the debts of 17 countries and the IMF has cancelled those of 19 countries, freeing 300 million people from the chains of debt. The crucial issue of trade didn’t really get on the table at the G8 – that issue was to be dis- cussed at the WTO talks in Hong Kong. These negotiations were an abject failure, due large- ly to the complete unwillingness of EU or US officials to make the kind of concessions needed to break the current stalemate. Without a breakthrough at the WTO, and without improved infrastructure for intra-African trade, Africa’s ability to work its own way out of poverty will re- main a pipedream and its citizens will continue to be left behind in the onward march of globalization. Bob Geldof