M. Essop Goolam Pahad, Atlantic and the World : change for global government. A perspective from South Africa

The global financial crisis and its broader economic resonance throughout the international system has, among other things, served to refocus attention on the need for "enhanced North-South dialogue in arriving at a new compact among nations on global governance.

Over the last decade or two the process as well as the outcomes of globalisation has benefitted the more powerful economies of the world at the expense of the developing countries especially in Africa. Yet the global financial crisis has a disproportionate negative impact on the African economies.

The African continent has already suffered a decline in foreign direct investments, the tourism industry, levels of aid and assistance, exports and remittances of nationals living and working in the more developed world.

Khadija Sharife in an article in the "The Thinker" - a journal published in South Africa which I edit - points out: "Each year more than 1 trillion in capital flight is 'spirited' from developing countries. According to the African Union $148 billion is siphoned from Africa alone with 80 - 90 % permanently stashed in tax havens, many of which specialise in certain services, ranging from hedge funds to geographic proximity and the incorporation of shell companies."

She also argues that more than 60% is the "product of multi-national transfer mispricing." (1)

African countries many of whom straddle the Atlantic - face unprecedented levels of underdevelopment, poverty, unemployment and lack of basic health care, education and infrastructure. It is clear that the socio-economic conditions of these countries will only worsen, unless there is a collective will and a collective commitment on a global scale to address these challenges. Surely one of the critical starting points is to conclude the Doha negotiations in favour of the most marganilised. Both the USA and Europe have to be ready to make the necessary compromises on agricultural subsidies without demanding compensation from these countries to open their markets to the detriment of their own economies.

Another challenge is to transform international institutions such as the United Nations and its agencies, the World Bank and the IMF to enable them to be more responsive to the real needs of the African countries

How then should we characterise the April 2009 meeting of the G20 in London. Even a cursory glance at the decisions taken shows that in many important respects they failed the test. Take the commitments to ODA. In 2005 the G8 announced with great fan-fare a decision to double their ODA, in particular to African countries. Four years later they find solace and comfort in renewing the same pledge. One hopes that we would not have to wait another four years for the same pledge to be repeated.

It is true that at the London meeting they agreed to increase from $ 250 to $ 750 billion the IMF lending capacity. There is a further commitment to double the borrowing limits of the poorer countries and to bring about greater flexibility. Leaders of African countries, civil society in the developed and developing countries, other international agencies involved in assisting the poorest of the poor have to be vigilant, if they are to protect their interests.

The more powerful countries should not be allowed to introduce other conditionality's which would impose a structural adjustment type programme in another guise.

Nevertheless increases in ODA, other forms of aid, cheaper and more flexible borrowing and repayment facilities and more and better access to the markets of the more prosperous and developed world can only be effective if you have a responsible, caring, honest government based on the will of the people. Within this framework political leaders across the political spectrum, political parties, trade unions, business associations and religious bodies, academics, intellectuals, the military establishment and civil society as a whole have to learn the art and culture of putting the national interest first.

They have to demonstrate - even when they disagree - a deep passion and commitment to the well being of the poorest of the poor. Without this type of depth and breath of commitment the political economic and intellectual elites may well prosper but the given country will continue to lurch from one crisis to another.

By Dr. Essop Pahad

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