Message-ID: <mailto:40.1990.2859@channel1.com> Date: Sun, 11 Jun 1995 18:10:00 -0500 From: James Mccoy <mailto:james.mccoy@CHANNEL1.COM> Subject: After IDA, what? To: Multiple recipients of list DEVEL-L
Mr. Sanford:
In response to your question concerning whether Sub-Saharan Africa could cope with a termination of IDA concessional funding, I would refer you to page 336 of the book "Africa Betrayed"by George Ayittey, a Ghanaian scholar at American University in Washington. To summarize his comments:
"In truth, Africa needs less -- not more -- foreign aid. In 1989 Africa was spending $12 billion annually to import arms and to maintain the military. The elites illegally transferred from Africa at least $15 billion annually during the latter part of the 1980's. At least $5 billion could be saved if Africa could feed itself. Another $5 billion could be saved from waste and inefficiencies in Africa's 3,200 odd state enterprises. Civil wars raging in Africa exact a heavy toll in lost output, economic development and destroyed property. Adding up these savings and the foreign exchange generated from internal sources would yield at least $47 billion annually, compared with the $12.4 billion in aid Africa received from all sources in 1990."
Having spent four years (90-94) in an East African country trying to assist its government in reforming a parastatal that had long been a source of political patronage and was, even within that country, particularly corrupt, I can assure you that a substantial amount of IDA funds are squandered or embezzled. When I brought a particularly insidious example to the attention of the WB's resident economist (and second ranking official in the country) his response was "its their money and they can do with it what they want." As the money is technically a loan that must be repaid, he was fundamentally correct. However, as has been seen time and again, when one regime is replaced by another, such inattention to the purpose of the borrowing by the WB is often cited as justification for disavowing any repayment obligation.
In short, much of the non-emergency humanitarian assistance is used to pay for the things that national savings could be used for if the responsible officials were not stealing such funds, using them to sustain their luxury lifestyle, or simply allowing them to be wasted through inefficiency.
J. McCoy