This article argues that there has been a widespread ‘policy failure’ in remote rural areas. The focus on livelihoods development, based on successes in non-remote areas does not take account of the special risk, exclusion and marginalisation characteristics of remote rural areas.

Widows who have been bereaved within the past two years have been banned from running as candidates in this year's parliamentary election. This has enraged women's empowerment groups who are already bristling under cultural restrictions that regard Swazi women as legal minors.

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We think this newsletter is relevant for our information needs.

Albert Kenyani
Multinational Fund For Development Aid, Nairobi, Kenya

At the end of January, the UN Secretary General's special envoy for Humanitarian Needs in Southern Africa, James Morris, completed a tour of four countries in the region and said the HIV/Aids pandemic was threatening the very future of nations. One president told him: "My country is on the verge of extinction."

When the world marked the 50th anniversary of the London Agreement, which dealt with the debts of the then West Germany, Western leaders and the major international bankers hung their heads in unmitigated shame.

For if the terms of that agreement had been applied to today's indebted countries, we could have avoided the deaths, sufferings and humiliations of hundreds of millions of people.

The London Agreement dealt not only with the debts of the defeated enemy of World War II, but of an enemy that in the annals of world history stands out as having been particularly evil. Germany, of course, was not only the enemy in World War II, but the defeated enemy in World War I, too. It had not repaid the debts incurred on the money borrowed to pay the reparations arising from the previous war. The London Agreement therefore dealt, additionally, with Germany's outstanding World War I debts.

In other words, the creditors and the creditor governments that met in London in 1953 did so to consider the debts of a country perceived to have been responsible for two world wars and the deaths of countless millions, along with the repeated destruction of huge parts of Europe and elsewhere. No less relevant, when viewed against Third World debt, the German people were seen as having been overwhelmingly enthusiastic supporters of their government's war efforts during most of both world wars.

The contrast between the guilt behind the German debts and the innocence of most of the Third World debt could therefore not be greater.

The origin of much of the Third World debt lies in the recklessness of Western bankers who, in the early 1970s, deliberately unloaded surplus capital on the Third World in the form of loans. What is more, much of these aggressively marketed loans were “odious” in terms of international law and therefore not covered by the obligations of sovereign debt. The Doctrine of Odious Debt removes any duty to repay the debt if the loan was contracted by dictatorships primarily for the benefit of the dictatorships and the creditors were aware of the nature of the regime to which they were lending.

It is clear that most people suffering from Third World debts today have had nothing to do with either creditor recklessness or the odious debts contracted by their unpopular rulers.

Notwithstanding their innocence, the First World has insisted on its full pound of flesh. Full debt repayment has been required regardless of all other considerations, including even the right to life itself. An exceedingly limited rethink did take place in 1996, but then only because the unpayability of the debt could no longer be avoided. The awful suffering caused by the debt had little if anything to do with this rethink. Similarly absent from consideration were questions of morality or international law. The debt was regarded as unpayable only because it was palpably unpayble in strictly financial terms: debtor countries were becoming increasingly indebted because of having to take out new loans in order to repay previous loans granted to repay original debt.

The outcome of this slowly developing rethink was the Highly Indebted Poor Country (HIPC) initiative. HIPC, presented with much fanfare as an example of unparalleled Western generosity, laid down very strict economic criteria for inclusion under the scheme. To be poor was not sufficient; neither was being heavily indebted. To qualify for consideration as a HIPC country and therefore potentially benefit from its partial debt “forgiveness”, a country had to be both extremely poor and very heavily indebted. In the event, only 41 countries qualified for consideration under the HIPC. This initial qualification, however, did not in itself result in real debt reduction.

The Germany of 1953 would have come no way close to being considered a HIPC candidate, notwithstanding the destruction of its economy during the war or the poverty of its immediate post-war inhabitants. In terms of today's criteria, the Germany of 1953 was positively well off and would be ranked a middle-income country. This did not matter in the slightest to the London negotiators. Neither did Germany's culpability in two world wars have any bearing on the terms of the London Agreement. The agreement was designed to assist Germany, not punish it, regardless of the enormity of Germany's perceived guilt.

Not one of the main arguments nowadays put forward by the G7, the World Bank, the International Monetary Fund and other international bankers as to why they simply cannot do more to help ease the burden of the HIPC debt is to be found in the London Agreement. Politicians and bankers tell us how tied their hands are by economic imperatives way beyond their control. To a person, they assure us as to the nobility of their intentions, were it not for their powerlessness in the face of cold economic realities. They claim to have stretched the integrity of the world economic and financial system to its limits, in their desire to be as helpful as possible in ameliorating the problems of Third World debt.

The contrast between the terms of the London Agreement and the HIPC initiative gives the lie to their arguments and exposes the hypocrisy of their proclaimed intentions. Consider the following:

Germany was required to pay a maximum of 3,06% of its annual export income on repaying its debt. For the poorest countries on Earth, the HIPC initiative required them to use between 20% and 25% of their export income on debt servicing.

To qualify for consideration under the HIPC initiative, a country's total external debt had to be 160% of its gross domestic product. Mainstream economists see “debt ratio” as being problematic if it is anything between 80% and 100%, that is, if the debt is equivalent to between 80% and 100% of what a country generates a year in its own currency from all economic activities. Germany's debt ratio in 1953 was a mere 21,2%.

To qualify for consideration under the HIPC initiative a country's foreign debt had to be at least 250% larger than its national budget. Germany's “fiscal debt ratio” in 1953 was 4,9%.

The contrast between the London Agreement and the HIPC initiative is even starker when measured against the additional HIPC conditions that have to be met before debt relief is rewarded. Stringent public expenditure cuts in health, education, housing and social security schemes, along with policies and practices to promote and protect a “market economy” free of import restrictions and attractive to foreign investors, are core HIPC conditionalities. A candidate country has three years in which to introduce these requirements. It has a further three years in which to demonstrate the consolidation of its good behaviour before receiving very limited debt relief. The London Agreement placed no similar conditionalities on Germany.

What the London Agreement did was to place conditionalities on the creditors. The HIPC initiative ignored such demands on the creditors. The London Agreement required three major benefits from creditors. First, creditors had to promote German exports because the debt payments were made entirely from trade surpluses. No trade surplus meant no debt payments. Second, Germany had the option of imposing import restrictions if the balance of trade with any of the debtor countries failed to produce a surplus. Finally, creditors were given no resort to sanctions against Germany, in the event of any German infringement of the agreement. The most that the creditors could expect was the convening of direct negotiations with the option of seeking advice from an appropriate international organisation.

The extraordinarily generous terms of the London Agreement are no more difficult to understand than the extraordinary punitiveness of the HIPC initiative. Their differences lie in their political purposes. The London Agreement seems to be generous only when compared to what our governments, financiers and economists now say about what can be done to ameliorate the enormous debt burden of the Third World. The London Agreement was not designed as an instrument of control, as is the HIPC initiative. Rather, the London Agreement was designed politically to promote Germany's reconstruction, but without having to cancel Germany's debts.

What is clear is that in spite of First World claims that everything that can possibly be done to ease the current burden is being done, Third World debt is a very effective killer and continues to destroy innocent lives by keeping hundreds of millions of people trapped in poverty, ignorance and disease.

What the London Agreement exposes clearly is that the Third World debt trap is an instrument of deliberate policy. At the stroke of a First World pen, things could be very different. A contemporary London Agreement would go a long way towards freeing the Third World from its debt bondage.

* Mpumelele Giyose is the chairperson of Jubilee South Africa
* Send comments on this editorial to

* NOTE TO SUBSCRIBERS: Please note that Pambazuka News will not be released next week due to staff leave. The next edition of the newsletter will be on 20 March 2003.

This document describes strategies devised by five private sector tourism enterprises in South Africa, to address poverty and development issues in neighbouring communities. The enterprises include land-based safari operations, a diving operation, and a large casino-golf resort. Each of the enterprises had been assessed against a number of the country’s national Responsible Tourism Guidelines – in relation to economic, social, and environmental impacts.

Approval of a draft Convention by the AU Executive Council on 5-6 March would pave the way for an African instrument to prevent and combat graft and help countries to live up to their NEPAD promises, says an anti-corruption organisation. Transparency International, the world's leading anti-corruption organisation, and its national chapters in Africa have urged AU ministers to approve the draft African Convention on Preventing and Combating Corruption.

Confronted with sophisticated fraudsters and increasing levels of corruption, experts are now seeking systems that can empower leaders to spearhead the fight against the two vices. A major effort is already going on, particularly within the local corporate sector, to adopt an anti-corruption and anti-fraud culture, to encourage employees to " blow the whistle" on such activities.

Zimbabwe's opposition has obtained evidence that President Robert Mugabe won re-election in March last year with the help of as many as 1.8m "ghost" voters who were added to the electoral roll. Tobaiwa Mudede, the registrar-general and a Mugabe loyalist, has repeatedly refused requests by the Movement for Democratic Change for a copy of the roll to be used in a court action challenging the result - even though the roll is a public document.

Tourism's economic input is often significant in developing countries, but the relationship remains inherently inequitable, with the rich visiting the poor and prescribing the conditions which they expect to find. Economic benefits tend not to reach the poorest, leaking out to Western based tour operators and national governments. So, to date, the poorest have been most impacted and least rewarded. Visit this Eldis page for their feature on tourism and poverty; policy and research.

If trade is not an end in itself but a means to balanced, equitable and sustainable development, the current global trading system must be reoriented towards the satisfaction of the needs of the world's people. This paper examines the present system and its implications and offers some suggestions for improving it. The paper - produced by the Third World Network - is a detailed report on the WTO and the multilateral trading system.

The fraud trial of Nelson Mandela's ex-wife, Winnie Madikizela-Mandela, has resumed in South Africa after months of delays and postponements. The well-known and controversial character, known as "the mother of the nation" in South Africa, is facing 85 charges of theft and fraud relating to a bank loan scam.

A public hearing in the Nigerian Senate will begin next week into the Independent Corrupt Practices and Other Related Offences Commission (ICPC), widely regarded in Nigeria as under-performing and heavily criticised for alleged corrupt practices.

Newly elected Kenyan President Mwai Kibaki, his government and ordinary Kenyans have launched one of the biggest house cleanings in post-colonial African history. Kenyans, fed up with their east African country being branded as one of the most corrupt nations on Earth, are fighting back against corruption. But at the same time Zimbabwe's political and economic crisis relentlessly deepens and Africa's other leaders have steadily increased their support for Zimbabwe's corrupt President Robert Mugabe.

At five-feet tall, former Zambian President Frederick Chiluba, known as Titus Jacob , is on the way to becoming more noticeable than when he lorded over Zambians with impunity. That's because he has quite a tall order: sixty-six counts of corruption and a pursuit of his jugular by President Levy Mwanawasa, who once served as Mr Chiluba's number two.

A top adviser to UN secretary general Kofi Annan has warned that the importance of preserving biodiversity in poor countries is not being adequately conveyed to those responsible for implementing economic development policies, and suggests that a global system of environmental 'hotspots' could help to focus their attention.

The Committee on the Elimination of Racial Discrimination will meet at the Palais des Nations from 3 to 21 March to review anti-discrimination efforts undertaken by the governments of Côte d'Ivoire, Ecuador, Fiji, Ghana, Morocco, Poland, the Russian Federation, Saudi Arabia, Slovenia, Tunisia and Uganda. These countries are among the 167 States parties to the International Convention on the Elimination of All Forms of Racial Discrimination, a treaty that first took effect in 1969. The 18-member Committee, the first body created by the United Nations to review actions by States to fulfil obligations under a specific human-rights agreement, examines reports submitted periodically by States parties on efforts to comply with the Convention. Government representatives generally present the report, discuss its contents with Committee members, and answer questions.

Trade - simply put, it's an exchange of one thing for another. A straightforward concept, yet it's the most important issue in global relations, and the impact of it touches all our lives. There is growing concern that trade on the global scale may be doing more harm than good and that human and environmental needs are being forgotten. Keep up with the news, actions, background information and possible solutions by visiting the campaign page of Oneworld at http://www.oneworld.net/campaigns/trade/front.shtml.

What happened at the World Summit on Sustainable Development? The World Comes to One Country attempts to answer this question from a civil society perspective, based on interviews with insiders, ongoing discussions with prominent players from all sides and the author's own experience. It introduces the main actors in South African civil society and documents how they engaged in a fierce contest for control of the international civil society forum, and South African preparations for it. The story is told against the background of the South African government strategy as Summit hosts, the role of the New Partnership for African's Development (Nepad) and the dynamics in international civil society.