Promises to Keep

9 minute read

Bono was meeting with Gerhard Schröder, the German Chancellor, last April and didn’t like the body language. “He avoided eye contact,” the Irish rock star and activist recalls. “He stared at the floor, kept changing the subject.” The subject was by how much Germany could raise its contribution to the developing world, which at 0.28% of gross national income (GNI) has lagged behind that of many other European countries. Bono understood why Schröder felt awkward. One of his officials had recently insisted that spending any more on Africa would “bankrupt Germany.” “Fiscal discipline is a religious movement there,” Bono joshes.

But a competing faith has taken root in Europe: Africa. The idea that extreme poverty is both abhorrent and fixable, and that Europe should focus its fixing on Africa, has gone mainstream. A network of campaigners refused to let the matter drop. In December, German rock star Herbert Grönemeyer mustered other celebrities to write a joint open letter to Schröder, suggesting Germany would be a pariah if it didn’t do more on Africa. A few weeks later, at the World Economic Forum in Davos, Schröder announced that Germany would back the initiative of Gordon Brown, Britain’s Chancellor of the Exchequer, for a new funding mechanism to double aid to Africa. Privately, he promised to meet the E.U. and U.N. target of devoting 0.7% of GNI to development by 2015.

Schröder’s pirouette was just the first act in what is becoming Europe’s Year of Africa, as governments respond to pressure from antipoverty campaigners, their celebrity supporters, African leaders and the consciences of politicians like Schröder, Brown and British Prime Minister Tony Blair, who came of political age when the 1985 Live Aid concert organized by Irish musician Bob Geldof alerted a TV audience of some 2 billion people to Africa’s plight. Two weeks ago at a private reception at Lancaster House in London, Blair declared that “there is no more dramatic, more noble calling for a politician” than trying to help Africa.

This week an international Commission for Africa that Blair set up will disgorge a giant report laying out a blueprint for the continent. Time has learned it will call for a doubling of aid to Africa by 2010, as well as debt relief and sanctions against companies that pay bribes and banks that hold funds pilfered by corrupt leaders. Geldof, who sold Blair on the idea of the commission and serves on it, says the document “deals brutally with mutual failures — corruption and broken promises.” It will argue that the time is ripe to make a big push on Africa, for four reasons. First, the complexities of development are now well enough understood that a major effort would get results, and be cheaper in the long run. Second, Africa itself seems ready. Seventeen of the 48 sub-Saharan countries have grown at an average of 4% or better for the last decade and some governments are becoming more transparent. Third, the cost of getting Africa on the right track is surprisingly small; according to the campaigning organization Debt Aids Trade Africa (DATA), just 8� — the cost of a stick of gum — per day per person in the developed countries could adequately fund all of Africa’s development needs. Fourth, letting the continent continue to stagnate is morally outrageous and, in an age when failed states spawn terrorists, just plain stupid.

Nevertheless, since billions of dollars of aid have been plowed into Africa over the past few decades without reversing its decline, skepticism is understandable. Can the developed world really stay the course this time? Can Africa clean up its own act? Geldof says this year is “make or break.” Finally, there’s a chance politicians will put their money where their mouths are.

One prod to action will come from a U.N. conference in September that’s supposed to figure out why progress toward the Millennium Development Goals — some simple measures of success in fighting poverty — has been so lousy. In 2000, nearly every country in the world signed up to meet the goals in 2015, but not much has happened since. Activists have been wanting to change that for years, and see 2005 as their best chance. data was formed in 2002 with funding from Bill Gates, George Soros and Bono to build political support for fighting African poverty. Its European director, Lucy Matthew, says that “instead of going for a palette of small achievable things, we decided to go after something big. We figured that if we didn’t go for the gold, we would regret it.” Blair at first resisted the idea of banking so much on Africa, but after interventions by Bono, Geldof and government experts, he came around to the idea of combining the Africa Commission with a big push to find more money. Blair and Brown, says Geldof, “see how vital an issue this is. In private too, they talk with passion and knowledge. Their minds don’t wander, there’s a difference in their eyes.”

But to sell what Brown calls a “new Marshall Plan for Africa” (see interview), Britain had to lead by example. With just 0.34% of GNI devoted to overseas aid, it was lagging behind Belgium (0.6%), France (0.41%) and Ireland (0.39%), to say nothing of Norway (0.92%). As the government debated its budget in private last June, Geldof unloaded strategically in front of an audience of M.P.s: “I am sick of sitting with Tony and Gordon and hearing guff about scars on the face of the world, the grandiose schemes.” The aid budget eventually got its increase, to 0.47% by 2008 and 0.7% by 2013. “I lose my temper,” Geldof says now. “I just let it rip. Sometimes Bono tells me he thinks I have Tourette’s syndrome.”

Slowly, one bureaucratic and p.r. battle at a time, the 2005 Marshall Plan for Africa is taking shape. Here’s what it comprises:

MORE AID European countries are now committing themselves to meeting the Millennium target of 0.7% of GNI. But most won’t reach that level until 2015, which means Africa will be short of the funds needed to achieve those Millennium Goals in the meantime. Brown’s idea for finding the money fast is to borrow against future aid streams to come up with $50 billion extra a year as soon as possible. The extra money would come from private lenders, who would buy bonds secured by the pledges of donor governments to repay them over many years. The International Finance Facility (IFF) is the centerpiece of Britain’s proposals for the G-8 meeting in July. Brown has been working on it for a long time, drawing up a list three years ago of people he wanted to line up behind it, including Nelson Mandela, the Pope and Bono. “Who else do you want, God?” asked his adviser Shriti Vadera after he emerged from his office with the list. Brown got every endorsement, and now the IFF has received support from France, Germany and Italy.

Despite Schröder’s warm words at Davos, opponents of the IFF within his own government insist he is committed only to using the scheme for a $4 billion vaccination program spearheaded by Bill Gates. Schröder, however, told Time two weeks ago that he will go beyond the vaccination program. Washington opposes the IFF altogether. It doesn’t want to borrow against future aid flows when it’s clear that Africa will need steady amounts of aid for decades. “It’s one thing to spend money you’ve currently appropriated, and another to bet the future,” says a senior U.S. official — because those iff bonds have to be repaid with interest when Africa will still need more money. The White House also worries that a massive cash injection will lead to waste and corruption. Instead, Washington is pushing its own Millennium Challenge Accounts, which require recipient countries to make measurable progress in good governance before money will flow. Some $5.5 billion has been budgeted for this program since it started three years ago, but nothing has yet been disbursed because recipient countries haven’t jumped through the necessary political and economic hoops.

DEBT RELIEF Despite earlier efforts to cut Africa’s debts, the continent still owes $293 billion and pays $15 billion a year in interest and fees — meaning some poor African countries spend more on debt service than on health or education. Only seven countries have seen their debts come down to levels considered sustainable. Campaigners would like 100% write-off of poor-country debt, including money owed to multilateral institutions like the World Bank, which hold one-third of all African debt. As a start, Britain and Canada have agreed to pay their proportional share of the debts of 21 poor countries to multilateral institutions, and are hoping others will join in.

MORE TRADE One obvious but politically difficult route for rich countries is to cut subsidies, especially in agriculture, that keep out African goods. If Africa could grab a 3% share of world trade instead of the current 2% — in 1980, it was 6% — that would represent some $70 billion in annual income, three times what they now receive in aid, and a permanent step up the growth ladder. The World Trade Organization will discuss this, again, in December.

NEW TAXES To create a separate, reliable stream of money to fund the needs of developing countries, French President Jacques Chirac proposed taxing either international financial transactions, airline tickets or deposits in tax havens. But the idea of international taxes is unpopular in the U.S. and Britain.

Former U.S. President Bill Clinton thinks the world’s remarkable response to the Asian tsunami may lead to what he calls the “democratization of aid. More than half the money for tsunami relief in the U.S. came through the Internet,” he has said. All in all more than $7 billion has been pledged. He hopes donors can be encouraged to extend sympathy to victims of Africa’s many “silent tsunamis” of disease and malnutrition. In the U.S., Evangelical Christians have recently turned their attention to Africa’s problems, too, using their formidable publicity and fund-raising machines to push for more foreign aid. “The really dangerous photo is where you see musicians and actors hanging out with Evangelicals and soccer moms,” says Bono. “That’s when politicians will feel they have permission to spend money. Incrementalism doesn’t work. For history to happen, there need to be bold steps.”

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