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UK/Africa: The Damage We Do

AfricaFocus Bulletin
Jul 13, 2005 (050713)
(Reposted from sources cited below)

Editor's Note

"The African Union estimates that the continent loses as much as $148 billion a year to corruption. This money is rarely invested in Africa but finds its way into the international banking system and often into western banks. The proceeds of corrupt practices in Africa ... are often laundered and made respectable by some of the most well known banks in the City of London." - Royal African Society, London

This AfricaFocus Bulletin includes a press release and excerpts from a new Royal African Society report, published with little media attention just before the G8 Summit. The report focuses not on trade, aid, or debt, but on other issues on which western government policies, and British policies in particular, damage African prospects for development.

Prominent among these issues is corruption, which is often taken as an excuse for western governments not to act until Africans solve the problem. In contrast, the report stresses that corruption is facilitated by the failure of western governments to regulate their own financial institutions that are integral parts of the circle of corruption.

Another AfricaFocus Bulletin sent out today contains a statement from African civil society organizations at the conclusion of the G8 summit, a summary of aid commitments by G8 governments, and two commentaries from the weekly Pambazuka News, raising broader issues of the meaning of the summit and the Live8 phenomenon.

++++++++++++++++++++++end editor's note+++++++++++++++++++++++

Royal African Society

Press Release

5th July 2005

A Message to World Leaders: What about the Damage We Do to Africa?

A report published by the Royal African Society calls on world leaders to shift their focus on charity to Africa towards looking at the damage that we in the west do to the continent.

The report argues that we should stop characterising Africans as victims and recipients of charity who cannot look after themselves. Instead of salving our consciences by giving charity to Africa why not stop the damaging practices that hold Africa back and stop the countries of Africa earning their own living?

The report looks at the role played by western countries - particularly the UK - in the corruption and connected money laundering that has undermined so many African economies. It describes the city of London as the 'laundry of choice' since the UK has fallen behind Switzerland in cracking down on the laundering of the proceeds of corruption and repatriating stolen assets to countries of origin. The report also looks at the impact of the west's poaching of Africa's professionals on African countries - with more Malawian Doctors in Birmingham than Malawi it is the health of the Malawian people that suffers. The publication points to the damage done by the arms trade and the role played by mercenaries and at resource exploitation including oil and diamonds. Attention is also drawn to the damage done by the west's prioritisation of the war on terror for African countries from the impact on the tourist industry to potential support for dictators who back the war on terror while terrorising their own people.

The report concludes: "Signing cheques for debt relief or aid is one thing. Changing laws and systems is more difficult but, if the British Government is serious about helping Africa, that is what it must do"

ENDS

For more information please call Richard Dowden or Penny Jackson on 07952 045 226 or 020 7898 4390


A Message to World Leaders: What about the Damage We Do to Africa?

June 2005

Royal African Society

This report was written by the research team at the Royal African Society, headed by Richard Dowden.

[Excerpts only. For full text of the report and the seminar series on which it is based, in Word format, visit
http://www.royalafricansociety.org/ras_damagewedo]

It's not just about thinking up good things we should do to Africa - it's about the bad things we should stop doing

In the lead-up to the 2005 G8 summit politicians, aid agencies and celebrities are urging us to care more about Africa. Tony Blair and Gordon Brown want to double the amount the rich world gives the continent in aid. Africa has not suffered from lack of aid. It has had billions in the past but has little to show for it. In fact some argue that aid has been part of the problem. Aid experts say they now know how to use it effectively and coordinate it so that it really does bring education and health, and reduces poverty. But aid has other drawbacks. It leaves Africa and Africans characterised as victims, recipients of charity who can't look after themselves. Many Africans are offended by this image and are beginning to ask a different question: instead of salving your consciences by giving charity to Africa, why not stop the damaging practices that hold Africa back and stop us earning our own living in the world?

Africa faces many barriers to growth and development. The ravages of the slave trade, the European carve-up of the continent, followed by colonial rule and the seizure of African land and resources, the support of tyrants during the Cold War, all add up to a history of exploitation by outsiders. Today globalisation has had a mixed impact on the continent.

This year the Royal African Society convened a series of seminars prior to the G8 summit to discuss with experts the damage we in the West do to Africa in the 21st Century and to examine more closely issues ranging from money laundering to arms sales.

Issues of trade, aid and debt have already been exhaustively explored by other organisations. We know that Africa's debts, incurred with the complicity, even encouragement, of western leaders and officials, have been a burden for African countries for decades. Some have debts so unsustainable that servicing them - just paying the interest - takes up more resources than governments spend on the health or education of its citizens.

We also know that rich countries' trade barriers leave African exporters shut out from their markets. High tariffs on processed goods and agricultural subsidies that bring down the world price of food and cotton make African crops uneconomic. Meanwhile subsidised food from rich countries is dumped on their markets, undermining their economies further. Europe and America proclaim free-market principles but they don't practice them if it is not in their interest.

These debt and trade issues have been well analysed already so we decided to examine less-discussed problems. We cannot guarantee that aid and funds released though debt cancellation will be well used in Africa. We don't know if Africa could take advantage of a freer world trade system. But we do know that we can stop doing things that damage Africa's chance of development. That is deliverable.

So the focus of the seminar series and of this pamphlet is on the UK, the fourth richest country in the world and the country whose government is committed to putting Africa at the top of the international agenda during its G8 chairmanship and European Union presidency in 2005. Tony Blair rather undiplomatically called Africa 'a scar on the conscience of the world' but is Britain helping to heal it? Or are we actually causing it to fester?

Damage Factor 1 - Corruption and Money Laundering

The World Bank estimates that $1 trillion is paid in bribes each year throughout the world. African countries are prominent among those said to be corrupt in Transparency International's Corruption Index and the negative impact of high levels of bribery and theft is compounded by the tendency to take the ill-gotten proceeds out of the continent. Indeed, the African Union estimates that the continent loses as much as $148 billion a year to corruption. This money is rarely invested in Africa but finds its way into the international banking system and often into western banks. The proceeds of corrupt practices in Africa, (which the African experts group recommended in 2002 should be classified as a 'crime against humanity' because of its impact on ordinary people), are often laundered and made respectable by some of the most well known banks in the City of London or the discreet personal bankers of Geneva and Zurich.

But while the Swiss have been cleaning up their banking system, the City of London is now the laundry of choice for much dirty money. It is estimated that a third of the money stolen by the Nigerian military dictator, Sani Abacha, and found by the Swiss authorities in Swiss banks, had been deposited first in the British banking system until it was clean enough to bank in Switzerland. Switzerland has already repatriated some of the funds deposited by the Abacha family to Nigeria. The UK was strikingly unhelpful when the new Nigerian government authorities first asked the British for help in retrieving the stolen goods and so far has not repatriated any substantial amount of the money known to be sitting in London's banks.

The bribery of overseas public officials was only finally made illegal four years ago in a section of the Anti Terrorism Crime and Security Act (2001). However no British Citizen has yet been prosecuted under this act though some investigations are under way. While corruption is not easy to investigate and prove beyond reasonable doubt, non-enforcement makes a mockery of the law.

Meanwhile, in some of the British 'overseas territories' not only has this not been outlawed but payment of bribes is still tax deductible.

'Nine Eleven' spurred western leaders to crack down on terrorist financing. Rising drug crime has forced them to put resources into tracking the huge funds of the drug trade. Computerisation of finances has made tracing laundered funds much easier. This shows that if the political will is there, it can be done.

But the staff and resources and energy put into investigating drugs and terrorism funds have not been applied to corruption money. Yet, corruption may actually kill more people and wreck more lives than both drugs and terrorism. When a country's health budget is stolen clinics are left without drugs, hospitals without equipment, doctors are left unpaid and babies are not immunised. Corruption is a threat to the economic stability and security of countries whose resources have been stolen or diverted.

Many companies are ahead of the legislators in their codes and checks on bribery and corruption and some private security companies are already tracking corruption money. Some progress at government level has been made recently in the UK, following a series of EU directives. The rules guarding against money laundering now extend to property and the art market. But major ambiguities remain. In London the use of trusts, numbered accounts and shell companies with nominee directors remain serious loopholes.

Following the Proceeds of Crime Act (2002) the Assets Recovery Agency was established but its emphasis has been on domestic crime. Recovered assets revert to the British government. Repatriating the proceeds of overseas corruption will require real political will and the necessary funding. Funding is a key indicator of the importance - or lack of it - attached to the involvement of Britons and British based companies and banks in corruption in Africa. The unit charged with investigating corruption is under funded and under resourced. The Metropolitan Police's priority lies with local crime - understandably. Why should they put time and resources into fighting crime that occurs a thousand miles away? That is why the funds have to be clearly ear-marked by the government.

The other key indicator of the commitment to tackle corruption is legislation. British anti-corruption law is patchy and outdated. It has been rubbished by the OECD, Transparency International and British Parliamentarians. Draft legislation brought to Parliament by the government was severely criticised by the Joint Parliamentary Committee (JPC) in 2003 for containing obvious loopholes, inconsistencies and a general lack of clarity. In its response to the JPC's findings the Government agreed with some of the problems highlighted but remains unlikely to back down on some key issues. The government has not yet produced a revised version of the bill.

The Commission for Africa report argues for action on corruption in western countries as well as in Africa. It recommends increased transparency in export credit agencies and high standards in the governance of their projects. But the UK's Export Credit Guarantee Department quietly watered down some of its anticorruption guidelines without consultation. Only a court case brought by a British NGO forced the department to open up to consultation.

The Commission for Africa also recommended that western countries repatriate stolen assets to countries of origin. This could mean that the UK would return billions of pounds to African governments. But it will only be possible if there is the political will at the highest level to allocate the resources needed to investigate and trace the path of corrupt funds.

Despite putting African issues at the top of the agenda in international fora this year and despite specific recommendations by the Commission for Africa on fighting corruption, the government has yet to commit itself to enacting comprehensive and up to date laws to tackle the problem and providing agencies with resources and power to enforce them.

Damage Factor 2 - Poaching Africa's Professionals

One of Africa's most serious problems is a skills shortage, a lack of capacity in the professional sectors. ... Many professionals, especially health professionals, have left the continent for opportunities and better working conditions in richer countries. Others left to seek further training but never returned.

This 'brain drain' has impacted heavily on Africa's public and private sectors. The most noticeably affected sector has been health, where recruitment of African medical professionals, doctors and nurses, has shored up western health services but left the health sector in sending countries facing permanent crisis or even complete collapse.

However, the dynamics of professional recruitment are complex. Those who bring their skills to richer countries do so because those skills are needed in receiving countries and because they are better paid. These are colossal pull factors. High salaries also enable them to help their families through remittances and these also boost the economies of their home countries.

The British National Health Service is propped up by staff from developing countries, including many from Africa. In 1997 when the Labour government came to power, it was faced with a shortage of qualified nurses and a shortage of people training to become nurses. Since then it has recruited around 70,000 new nurses and by coincidence there are also not much less than this number of foreign nurses working in the NHS. Clearly not all of these were recruited in the last eight years. Before 1997 around 2,000 foreign nurses were recruited each year but in the last few years this figure has leapt to around 14,000 a year. Clearly it is cheaper and quicker to recruit nurses already trained abroad than to train our own. These foreign nurses plug a gap in the NHS. As individuals they benefit from higher pay and better working conditions than in many of the sending countries.

It is estimated that there are more Malawian medical professionals in Birmingham than there are in Malawi. Each year Malawi loses a third of its medical staff either to emigration or death7. Yet never have they been more needed. The country is in the throes of the HIV/AIDS pandemic which kills a high proportion of medical staff and increases the workload on the survivors.

[what is needed are] imaginative innovative solutions to turn what is at present a win lose situation into a 'win win win' one. This means solutions that benefit the sending country, the receiving country and the individuals. Rather than restrict freedom of movement, which would have other side effects, we need to recompense sending countries by assisting them to increase rates of training and - very important - to increase staff retention through loyalty schemes to hold onto the most experienced staff. By improving pay, working conditions and other benefits, more health staff will be encouraged to put their skills to use in their home countries. Health staff also need to believe that they can make a difference, that their work does save lives. This means they need the equipment, facilities, medicines and support that we take for granted in western hospitals.

Without a better life, more resources and opportunities, more and more educated young Africans will leave the continent. The push factor is so strong that in the UK there are hundreds, perhaps thousands of qualified African health professionals who are barred from getting jobs in our health service. For them it is often economically better to live here working as taxi drivers or in unskilled jobs not using their professional skills, than it is to use those skills in their home countries. Nobody wins, not the health sector in either the sending or receiving country and not the individuals who are unable to use years of training to make life better for others or themselves.

Reducing the push factor should be the main focus but reducing the pull factor is far harder. Receiving countries should adhere to the highest standards by not actively recruiting from countries with human resource crises. Nor should they allow private recruitment agencies to do so. UK government guidelines have been tightened but they remain just that - guidelines, allowing some less scrupulous private recruitment agencies to actively recruit in countries that cannot afford to lose trained staff to the British health system.

The migration of skilled professionals does not just affect the health sector. The rest of the public sector is also badly hit. School teachers and university lecturers are in short supply. Less talked about are public service managers - those people with the very rare skills that come with experience of managing scarce resources and helping front line workers provide the best possible service. Even the private sector has suffered but has been more successful in reducing the push factor by providing wages and conditions that are generally better than in the public sector.

Even international NGOs and multilateral organisations are part of the brain drain, offering qualified and experienced staff better pay and conditions to work elsewhere. It is important that Africa has its fair share of high level positions in international organisations but this is another way in which Africa's most talented and highly trained people are drawn out of the continent, tempting them away from domestic institutions and eroding local human resources.

Damage Factor 3 - Arms and mercenaries in Africa's conflicts

[see full report]

Damage Factor 4 - Exploitation of Natural Resources

[see full report]

Damage Factor 5 - New Global Politics and the War on Terror

[see full report]

Conclusion

At the launch of the Commission for Africa in March this year, Tony Blair declared its recommendations to be British government policy. Yet to implement the 80-odd recommendations will require legislation and a huge shift in the use of resources. We have heard a lot of rhetoric from the Prime Minister and the Chancellor about debt forgiveness and aid, but little about implementing the UN Convention on Corruption or curbing the activities of British arms dealers, both recommendations urged by his Commission for Africa. Signing cheques for debt relief or aid is one thing. Changing laws and systems is more difficult but, if the British government is serious about helping Africa, that is what it must do.


AfricaFocus Bulletin is an independent electronic publication providing reposted commentary and analysis on African issues, with a particular focus on U.S. and international policies. AfricaFocus Bulletin is edited by William Minter.

AfricaFocus Bulletin can be reached at africafocus@igc.org. Please write to this address to subscribe or unsubscribe to the bulletin, or to suggest material for inclusion. For more information about reposted material, please contact directly the original source mentioned. For a full archive and other resources, see http://www.africafocus.org