The hypocrisy of this is stunning: US agribusiness is heavily subsidized by the American government, but if Malawi wants to pay its people to grow food, the IMF will punish it by demanding harsh repayment on debts that were mostly incurred when institutions like the IMF loaned money knowingly to dictators who spent the funds on alcohol and Parisian shopping trips. In multiple African countries, the IMF has demanded an increase in exports, meaning farmers are told to grow cash crops for sale in the West rather than staple foods for sale domestically. So, much like during the potato famine in Ireland, when food was actually leaving Ireland and being shipped to England even as people in Ireland starved to death, famine in Africa is usually concurrent with food being shipped from the starving country to countries where people are largely not starving. It’s just that the food is too expensive for the starving people to buy.
In the end, it’s never a guarantee that anything we do to help will in the end actually be helpful. But transforming the world in which we live is impossible unless we act with both an open heart and an open mind. Whether or not dropping food on people from helicopters is a good idea probably depends on the circumstances. What is constant, however, is the fact that if we worked to change American policy toward Africa, we could stop debating how to feed and clothe people who would not need our help being fed or clothed, if only our government stopped funding their dictators, ruining their climate, and demanding they pay back money they never borrowed in the first place. Essentially, people in the west are donating money to Africa in a desperate attempt to paper over the vast destruction done to the continent by western institutions.
It’s not working.
It’s better than nothing.
For the most part.
To answer that question as it pertains to the DRC, we must first take a step back. The conflict in the DRC is the product of both malicious and inept foreign intervention. French support for Rwanda’s genocidal government in the early 1990’s helped spark a killing spree in that country that was more ruthlessly efficient than the Nazi concentration camps. American, French, and British inaction on the UN Security Council ensured that UN peacekeepers stationed in Rwanda would be unable to stop the killing. The American government was so desperate to avoid sending troops to Rwanda because of the public relations nightmare that had occurred when US troops were killed in Somalia just months earlier (i.e. Black Hawk Down) that it refused to call the genocide a “genocide:”
Elsner (Reuters): How would you describe the events taking place in Rwanda?
Shelly (State Department Spokeswoman): Based on the evidence we have seen from observations on the ground, we have every reason to believe that acts of genocide have occurred in Rwanda.
Elsner: What’s the difference between “acts of genocide” and “genocide”?
Shelly: Well, I think the—as you know, there’s a legal definition of this … clearly not all of the killings that have taken place in Rwanda are killings to which you might apply that label … But as to the distinctions between the words, we’re trying to call what we have seen so far as best as we can; and based, again, on the evidence, we have every reason to believe that acts of genocide have occurred.
Elsner: How many acts of genocide does it take to make genocide?
Shelly: Alan, that’s just not a question that I’m in a position to answer.
The Rwandan genocide then directly led to the beginning of the Congo conflict. A French intervention aimed at saving Paris’ genocidal allies allowed massive numbers of refugees and armed militias to flee into what is now the DRC, all at the invitation of the West’s favorite kleptocratic dictator, Mobutu Sese Seko. Rwanda’s new government then invaded in an effort to wipe out the genocidal armies arrayed against it and funded a Congolese rebel army that marched thousands of miles to Kinshasa and toppled Mobutu. This is known as the First Congo War.
But it is the Second Congo War, beginning in the late 1990’s, that still rages today. Rwanda and Uganda, capitalizing on the weak government in the DRC and the geographic distance between its capital on Africa’s western coast and the resource-rich hinterland in the East, began attacking the DRC again, ostensibly to fight the remnants of the genocidal militias, but with a far more sinister motive in mind: resource extraction. Rwandan and Ugandan backed rebels massacred civilians, looted valuable minerals, employed slave labor and child soldiers, and even in one instance took apart an entire factory and moved it across the border into Rwanda.
All the while, Rwanda and Uganda have continued to be the darlings of Western governments and corporations. Foreign companies have profited from the conflict in the Congo, in some cases even doing business directly with murderous rebel groups. Rwanda and its clean streets, female-heavy legislature, and environmentally conscious leadership is supported heavily by Western countries and wooed, often patronizingly so (“a functioning African state! Oh my!) by Western companies and religious groups.
Every reputable independent report on the conflict has concluded that Rwanda and Uganda are largely responsible for the millions of deaths in the Eastern DRC. In December, independent organizations called on the US to sanction Rwanda and suspend all military aid to the country, arguing that “US efforts at ‘quiet diplomacy to address Rwandan involvement in eastern Congo have failed to deter Rwanda’s continued incursions and use of proxy armed groups.” If the United States and the UK put pressure on their allies, they could influence the situation in the Congo. Instead, the United States is supporting the creation of the UN “intervention” force designed to stop the bloodshed that its own allies are perpetrating.
If this doesn’t make much sense, it’s because in one fundamental way, the United Nations itself doesn’t make much sense: if the UN is the collective voice of its members, why does it so often intervene in ways that conflict with the actions of those members? It is not clear what level of success the UN will have in the DRC, though it’s easy to be pessimistic about its chances. It is also not clear whether the deployment of peacekeeping forces in general is the best method for protecting innocent people and bringing an end to conflicts. What is certainly clear is that supporting UN peacekeeping missions gives powerful countries a means for appearing to proactively support a peace process without actually having to take the difficult step of interrupting the business of capitalism and resource extraction.
And so the UN force arrives as a band-aid on a gaping wound. If the UN fails, as it has so often in the past, it will certainly be roundly criticized by those who consider it weak and inept. But perhaps that is not fair to the UN. International institutions are, after all, only as good (in any sense of that word) as the countries that run them. The irony is, then, that what would make the UN a force for good in the world is if its member states were forces for good. But if the conflict in the DRC teaches us anything, it’s this: if the UN member states were forces for good, we wouldn’t need a United Nations at all.
At the same time, beneath the dominant blanket of media coverage focused on the attack, there are Americans asking questions about the manner in which the Boston bombings have been treated in American society. Why is it that the three tragic deaths in Boston received such a disproportionate amount of media attention relative to the fourteen tragic deaths at the site of the fertilizer plant explosion in Texas? If the answer to that question involves the distinction between murder and natural disaster, then why do routine triple-homicides in America’s inner cities not receive similar outpourings of grief? And how would the media be covering the Boston attacks if the perpetrators had been native-born Americans protesting U.S. tax policy rather than immigrants protesting U.S. foreign policy?
At the heart of these questions is a very simple perspective: our media’s obsession with this case and with the Muslim, Foreign, Chechnyan, Immigrant, Jihadist brothers at its epicenter demonstrates a very skewed perspective on the value of human life and on the unity of the human race. The enemy is defined as anti-American terrorists. If “we” is defined as Americans, then this makes sense. But if “we” is defined as humanity, then a very different enemy needs to be identified.
That enemy is violence. Violence, in all of its forms, leaves a path of hatred and destruction in its wake. A path of dead children and grieving mothers and broken lives. This notion isn’t merely the expression of a particular political, religious, or even spiritual ideology, but rather the acknowledgement of a central truth: for every instance in which violence has allegedly made life better in some way, there are literally thousands of instances in which violence intended to do good has destroyed lives. This is a practical argument. Violence, as an ideology, as a tool, has failed.
So if we as Americans can identify violence and all of its manifestations (Sandy Hook, Boston, the streets of Chicago) as the real enemy, then we are faced with a very simple proposition: Either we believe a dead Congolese child is just as important as a dead American child, or we don’t. Either we believe that the families of dead children in our inner cities suffer a grief just as powerful as that of the families of the suburban victims in Aurora, Colorado, or we don’t. Either we believe that Palestinian lives are as valuable as Israeli lives, that Afghan lives are as valuable as French lives, or we don’t. And either we believe that children in Mozambique do adorable things and have nicknames and spend nights looking up at the stars and wondering about the nature of the universe and when they are taken from their families way too soon the loss their parents feel is as debilitating and crushing as it would be if our children were taken from us, or we don’t.
If we believe that, then our actions need to reflect it. Our media coverage needs to reflect it. Our government’s policies need to reflect it. If we as Americans believe so highly in the value of human life, we should urge our government to stop supporting dictators, to stop using drones to attack funeral parties, to stop exporting weapons. We should pass gun control measures that are supported by more than 90% of NRA members and could curb gun violence. We should support economic policies that decrease food insecurity in areas of the world vulnerable to famine. Caring about human life has to mean more than just wearing a “Boston Strong” shirt and shaking our fists at the terrorists.
There are some cynical reflections on Boston floating around cyber space that in essence imply that given the discrepancy in media interest between the loss of white/American life and the loss of black/brown/foreign life, perhaps we should all just care less about what happened at the marathon.
No. We should care more.
Every child’s death should matter as much as 8-year old Martin Richard’s. In a photo released to the Boston Globe, Martin, who was killed in the bombing attack, is shown holding a sign that says “No more hurting people. Peace.” Maybe that’s partly what makes the death of children so painful: in some sense, they are better than we are, because they know so much less and yet they know so much more. They get it.
I made the following speech at the University of San Francisco graduation ceremony on Friday, December 14, 2012.
First Posted at Jubilee USA Network’s Blog the Debt:
By: Andrew Hanauer
The “Debt Case of the Century” took a surprisingly positive turn this past week when a U.S. Court of Appeals ruled that Argentina has more time to appeal a ruling against it in its battle with vulture fund creditors. Argentina had faced a December 15 deadline to make a terrible choice: pay the vulture funds that are holding the country hostage or default on all of its creditors. For now, at least, that choice will not need to be made.
The appellate ruling now gives Argentina more time. But the ruling itself may have had little to do with Argentina’s compelling moral arguments against the vultures and more to do with the complaints of Argentina’s other creditors, which argued that it was unfair for the vultures to receive 100% payment when the vast majority of stakeholders were accepting only 25-30%. As Business Insider points out, this argument has far-reaching implications for international debt: “After all, why should any creditor accept a restructuring deal at all if another bond holder can hold out and get all their money?”
Confused? You’re not alone. One of the struggles of the debt relief movement is that clear and compelling moral issues, often determining the fate of some of the world’s poorest people, are shrouded in the technicalities of international finance. Argentina’s battle with the vultures is no exception: the issues are confusing and the stakes are high. In the hopes of providing some clarity, here is some historical background on the situation.
The plot of Argentina vs. The Vultures is captivating enough for a Hollywood movie. Such a movie, to accurately capture the essence of this story, would need to start with Argentina’s brutal military dictatorship of the 1970s, during which time 30,000 Argentineans “disappeared.” The dictatorship borrowed heavily from foreign creditors, racking up large sums of debt largely in an effort to fund repressive institutions and enrich corrupt leaders. By the time the dictatorship ceded power in 1983, the country was more than $45 billion in debt.
When dictatorships borrow money, the subsequent debt is often labeled as “odious” or “illegitimate” on the grounds that the loans were not incurred with the consent of the nation’s people and were often spent on projects that brought little public benefit. Such lending also has been shown to fuel capital flight (the act of sending money abroad where it cannot be taxed or later recovered) and to incentivize leaders to loot natural resources. It also has helped tyrannical regimes maintain power longer.
In Argentina, lending did all of the above, but it also led to more lending aimed at paying off the dictatorship’s debts. Such lending is not odious in the classical sense because it was borrowed by a democratic government, but it is the direct result of illegitimate loans. This is crucial in the Argentine case because some of the country’s creditors are claiming that Argentina’s current debt is legitimate because most of it came after the military regime was ousted; however, new loans are used to repay old loans, which is how the debt cycle continues.
As Argentina’s debt grew ($148 billion by 2001), the country implemented a number of austerity measures at the behest of the International Monetary Fund, and its economy only got worse. In 2002, the Argentine government dramatically altered course, rebuffed the IMF, and initiated a remarkable economic turnaround. The government “re-nationalised key productive sectors like aviation, pensions and most recently oil, increased social protection and income transfers to the poor, and reduced poverty substantially. Real wages have increased, and wage inequalities have been reduced.” Argentina is now a dazzling economic success story, one of the strongest economies in the world just a decade after a period of instability so severe that at one point the country had five different presidents in two weeks.
At this point we reach the beginning of the current drama. Argentina defaulted on its debt, but offered to renegotiate it and even paid off the IMF in one lump sum (to achieve economic freedom) rather than declare its debt odious and repudiate it. Despite only being offered 25 to 30 cents on the dollar, roughly 90% of creditors accepted the deal, and Argentina has been paying them back, mostly from its currency reserves. Under United States bankruptcy law, if 70% of creditors accept a certain course of action, the so-called “hold-out” creditors must do so as well. And yet a group of hold-outs, mostly hedge funds that bought Argentine debt at record-low prices, have refused to accept any rescheduling and continue to demand that Argentina pay them back in full. These are the vulture funds.
The lead vulture fund in this case is NML Capital, led by billionaire vulture capitalist Paul Singer. Singer has gone to such great lengths to try to compel Argentina to pay him (which Argentina’s president has vowed she will never do) that he even recently orchestrated the seizure of an Argentine naval vessel by authorities in Ghana on the grounds that Argentine property was subject to confiscation given its outstanding debts.
Do Singer and his fellow vultures have any standing whatsoever to demand repayment on these debts? No. Aside from the fact that the debt was largely illegitimate in the first place, the vultures refused to accept the terms of the vast majority of Argentina’s creditors. They could have received repayment, but chose instead to be intransigent. More importantly, they are merely speculators, not legitimate lenders. They bought the loans at rock-bottom prices, illustrating the risk they were willing to take as multimillionaires gambling for either a large payout or a loss of insignificant proportions to them.
Argentina is not the only entity to take issue with the vultures. In the latest court case, the country’s other creditors – the ones who accepted the renegotiation – argued that it was unfair that the creditors who negotiated with Argentina in good faith should have to accept 25 cents on the dollar for their loans while the vultures received repayment in full. They further argued that Judge Griesa’s ruling was harmful in that non-holdout creditors would be completely denied even the lower rate of repayment if Argentina refused to pay the vultures and opted for default.
In this sense, “hold-outs” is truly an apt phrase for Singer and his fellow vultures. Because of their refusal to accept large profits on loans they never made rather than the astronomical profits they now seek, the hold-outs are dragging an entire country and its creditors through a drawn-out legal process, threatening an entire sub-set of international financial norms in the process. All the while, they continue to hold Argentina hostage, both figuratively in American courtrooms and literally in a west-African port. Hostage-taking: even actual vultures don’t do that.
In the developing nation debt conversation, creditors are often portrayed as neutral third parties. Yes, it is acknowledged, they lent to dictators, but they were misled by false promises and their kind-hearted attempts to reform broken African states were thwarted by corruption and greed. Their money was stolen, and now they are forced to choose between demanding repayment from some of the poorest people on earth and accepting the claim that they are not entitled to repayment at all. In some cases, they are accused of having been negligent (“they should have known better”), and thus bearing some responsibility for the debt problem, though not moral culpability.
This façade of neutrality does not account for the numerous incidents in which western lenders deliberately lent money to repressive regimes despite full awareness of both the nature of the borrower and the final destination of the borrowed funds. This lending had catastrophic effects on African countries and their people, and was entirely avoidable. In some cases, lenders extended loans to further their own economic interests; in other cases, western governments lent money solely for political reasons. Sometimes loans were pushed for internal institutional reasons, and reflected a broken system more than a sinister manipulation by a particular entity. Regardless, creditors have interests and motives for lending, and those interests often matched those of the borrowing despot for selfishness and greed. Lenders are not neutral. And they deserve a starring role in any accounting of Africa’s odious debts.
Perhaps the symbol of irresponsible lending is former Citicorp chairman Walter Wriston. Wriston (in)famously declared that “sovereign nations don’t go bankrupt,” essentially implying that long after a dictator has left office, the residents of a country will have the capacity to pay the bill, no matter how poor they might be.[i] So even if a despot were to flee with his stolen loans and stash the money in an opaque Swiss bank account, a lender could rest assured that repayment would come, and with interest. In the 1960s and 1970s, lenders took this assurance to heart, giving billions of dollars to kleptocrats, tyrants and military dictatorships, knowing full well that much of it would be stolen, laundered and/or used to repress dissent. These loans are now being repaid by citizens of African countries who rarely benefited from the money in the first place, while the creditors have in many cases received repayment for the original loan plus huge sums in interest. And in many cases, the loans actually perpetuated autocratic rule, thus consigning Africans to additional years of dictatorial rule and its accompanying misery.
Why, one might ask, would western governments and private creditors do this? Unfortunately, a number of perverse incentives exist for loaning money to dictators:
- It’s the money. If you’re confused as to why creditors would lend money to thieving dictators given the financial risk, just remember Walter Wriston. If countries don’t go bankrupt, creditors don’t lose their money. And while it may take years for the country to pay back the loan, the accrued interest often means the creditors make a hefty return on their original “investment.” These loans are often accompanied by upfront fees which the creditors simply take out of the amount of the loan. The borrowing despot doesn’t care, because he’s still getting free money. But the people stuck with the bill pay that much more.
- It’s that time of year. Economics professors Leonce Ndikumana and James K. Boyce note that for many creditors, including multilateral institutions such as the World Bank, lending money near the end of a fiscal quarter is deemed critical. After all, “failure to use appropriated funds by the end of the fiscal year may trigger reduced appropriations the following year.”[ii] As a result, loan agents are urged to push loans regardless of the recipient, and “a loan officer who delays loans…owing to concerns about leakage of the money into private pockets…is not on the fast track to a promotion.”[iii]
- It’s the Communists (or Terrorists). Much lending is also done for political reasons, regardless of the human rights record of the loan recipient. Mobutu Seso Seko is the most commonly cited example of this; the Zairian dictator was a notorious kleptocrat who stole billions of dollars from his impoverished citizens and ruthlessly repressed dissent, but he was friendly to the West. The end result was that the money kept flowing, and while Mobutu’s personal wealth was estimated in the billions, the Democratic Republic of the Congo (DRC) now has a debt burden hovering around $10 billion. In short, creditors got paid, Mobutu got rich and the DRC got stuck with the bill.
Law professor Anna Gelpern argues that in many cases, odious debt is certainly odious but it is not truly debt. That is, many of the loans made by western governments to African dictators, particularly those made for political reasons, were essentially grants and not loans, but had to be classified as loans to garner domestic support.[iv] That African countries are now paying back these obligations is a result of the lack of western domestic support for such assistance to dictators in the first place, and speaks to the odious nature of these “debts.”
Realizing the extent of western complicity in Africa’s debt crisis should call into question many of the assumptions we make about both Africa and the West. So often, western institutions are portrayed as neutral arbiters of senseless third-world conflicts or problems. So often, the truth is murkier. Westerners seeking to help the third-world through programs and aid might first want to push their governments to obey the Hippocratic Oath, and “first do no harm.”