Markets Around Africa
Generalised Solutions For Peculiar Problems
by Ben Mensah
The summit in London took place in an atmosphere of modest economic recovery in the western world yet its coincidence with a crisis in the banking sector for which the inability of certain countries to repay their debts has been partly blamed puts the third world countries on the line of those expected to be affected by decisions taken by the summit.
But even if there were no summit the leaders of the world's largest economies are in a position to take decisions which can bring either relief or hardship to third world countries. For instance a decision by the United States Treasury and the Federal Reserve to bail out American banks out of their insolvency as a result of defaults by Latin American debtors has been received with much delight by the affected governments which would have defaulted or imposed harsher taxes on their people to be able to settle their debts.
A summit of the leaders of the United States of America, Japan, West Germany, France, Britain, Canada and Italy therefore merely offered an opportunity for the co-ordination of the various strategies aimed at solving the problems of bank and exchange rates, banking policies of their own economies and also the debt problems of Third World countries.
The tone for the summit was set in various suggestions urging the Reagan administration in particular to endeavour to cut US budget deficits so that American rates may fall in consequence to enable debtor nations to meet their obligations.
Further the leaders were urged to have a look at the General Agreement on Trade and Tariffs (GATT) so that it would be more easy for the developing countries to export enough of their products to the developed countries and through that earn enough revenue to settle their debts.
Undeniably among the defaulting debtor nations are Mauritius, India, Brazil, Argentina etc countries like which given the kind of treatment suggested to the summit of the leaders of the richest seven nations in the western world, would be able to overcome some of their financial problems.
Take the case of Brazil which has such a buoyant economy which is able to manufacture aircraft that could be exported to any of the industrialised world. Yet imagine how long and the amount of effort that had to be harnessed to get the United States of America to import just two aircrafts from Brazil.
Instead, the vast majority of developing countries would want Brazil to export its aircraft to other third world countries on a south-south level of trade even though such developing countries are already saturated with imports from the industrialised countries.
There is also the case of Mauritius which under the Lome agreement cannot export her surplus textiles and sugar to markets in the European world. Economic community due to quota restrictions.
For countries in the above category, it is definitely proper for the various economists and financial experts to impress on leaders of the rich countries to change their attitudes to things like import restrictions on goods from the developing world other than primary agricultural products.
Unfortunately however, there aren't many such developing countries who have proved self sufficient and are looking for markets for their surplus products.
Instead the vast majority of developing countries particularly in Africa, are below the poverty level whose inability to repay their loans need to be properly scrutinised by the financial experts. These are the countries which cannot produce enough to feed their own peoples despite the inflow of foreign capital and have to depend regularly on international food aid.
In this group of countries are Ethiopia and Bangladesh which mainly due to natural disasters such as recurrent floods and drought plus some amount of ineptitude on the part of their governments have known hunger and poverty for as long as records can testify. Then there are others like Nigeria, Ghana, Sierra Leone etc which were net exporters of food and other products but which today can't even produce enough to meet the basic needs of their own peoples and have experienced shortfalls in the production of their naturally endowed resources like gold, cocoa, diamonds etc.
Undoubtedly the energy crisis of the seventies introduced a major problem to all these countries yet neither that nor high US rates could be held entirely responsible for their plight. For such countries, when the leaders of the industrialised world reduce their countries' interest rates or remove restrictions on imports, it would be discovered that there are other reasons which prevent their governments from thrusting their peoples up from the poverty line.
These are the problems the financial experts must endeavour to analyse when they seek to influence meetings of the leaders of the rich industrial countries such as the London summit of the seven rich nations in the western world.
Otherwise they would erroneously continue to seek Brazilian, Mauritian, Mexican, Indian and Argentinian solutions to the problems of countries which can best be described as backward and under-developing.
Ministers appeal for aid
African economic ministers have ended a five-day meeting in Addis Ababa with a strong appeal to the international community for urgent and appropriate assistance to enable African states to deal effectively with their current economic and social crises.They adopted a special memorandum of the Economic Commission for Africa (ECA) on Africa's economic and social crises as Africa's collective views on the situation.
The special memorandum demands liberalisation of IMF's terms and conditions for granting loans to African states.
Co-operation with Bulgaria
The Federal Military Government is to give adequate attention to the outcome of the agreements reached at the recently concluded meeting of the Nigeria-Bulgaria joint commission.Exchanging views with the Deputy Prime Minister of the People's Republic of Bulgaria, G. Stoichkov, at Dodan Barracks, the Head of State, Maj-Gen Muhammadu Buhari, commended Bulgarian firms.
