I’ve been holding off posting today until the G20 talking shop in London wrapped up. The richest nations on Earth have managed to issue their communiqué and, after perusing it for titbits that might affect the developing world, and Kenya in particular, I have to say that I am pleasantly surprised.
Before the summit convened, there had been talk about how important it was not to overlook the plight of developing countries, who are not only the most vulnerable to a collapse in trading conditions, but also the least able to take remedial action to minimise the damage done to their economies. Today, amongst the talk of reforming the global financial system and coming down hard on tax havens, there were signs that the concerns of poorer countries had not been ignored.
The IMF, which was independently taking steps to ensure that finance was available for trade, is going to get an extra $500bn in funding, with “special drawing rights” (essentially an overdraft facility) for developing countires raised to $250bn. Another $50bn has been earmarked for the world’s poorest countries, and there is also a renewed commitment to the Millenium Development Goals, which had been in danger of falling by the wayside in the economic conflagration that has taken hold.
Another change that should make a difference to African countries being represented and having their voices heard at the top tables is also propsed reforms in the structure of both the World Bank and the IMF. Countires such as China will be given more influence and senior posts are now going to be open to candidates from the developing world. If the cosy old man’s club of the Bretton Woods system becomes more open and embraces the changes that were mooted last year, African countries may be apply to apply for international investment and aid on a surer footing than they have been able to thus far.
Finally, the UK is going to pony up £300 million to businesses in developing countries through the World Bank’s global trade liquidity programme, according to the International Business Secretary, Douglas Alexander. Kenya has made the list of countries where the money can be used. The encouraging aspect of this measure is that it is not macroeconomic, meaning that small to medium enterprises could get a piece of the action, along with the larger corporations that normally hoover up such largesse.
I have to say, last week, as I read about abot preparatoins for the summit and what the attendees hoped to achieve, I was more than a little cynical. As far as I was concerned, there would be much waffle, but there would be too many competiting objectives to get anything concrete done. Today, however, I’m willing to put my misanthropy aside and see if the proposals outlined translate into cold hard cash for Africa and her citizens.
Not entirely coincidentally, this week James Shikwati of the Inter Region Economic Network (IREN) and the African Executive has published a paper where he calls for Africa to reject the World Bank and IMF entirely, as he sees them as a proxy colonial power. If you can’t be bothered to pay Ksh1,500 for the whole thing, you can read the summary article. It would be interesting to see his reaction to the G20 statements, but sadly the African Executive doesn’t seem to publish daily. That’s something else to wait on, I suppose.
[Image by Khym54]