Famine, with all the trimmings

Twelve years after Band Aid, millions are still condemned to poverty by the burden of Third World debt. It's time for a gesture of goodwill from the West, says Paul Vallely

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You may as well stop reading this now. This is not a subject which most of us find comfortable in this season of indulgence and over-consumption. After all, you can take this goodwill-to-all-men business too far.

"Do they know it's Christmas?" sang Geldof and Co a dozen years ago; and one of the most shocking things about the Ethiopian famine of 1984 was that its appearance on our screens at the height of Band Aid coincided with the cornucopia of our Yuletide fest. It was the juxtaposition which made that particular disaster - though it was in reality only one among many - sear itself on to the conscience of the Western world.

It always seemed to me that the contrast between those stark scenes of crisis in Africa and our normality were made more unbearable by the fact that most people watched the TV footage from living rooms which were warm and well stocked with seasonal fare, and trimmed with the glitter and tinsel of our celebration.

For me, it was different. I was sent out to cover it. And oddly enough, though there were scenes of awfulness which it may be impossible ever to forget, it was a mitigated experience. For those of us who were there came upon the terrible scenes gradually, after a two-day journey in an RAF Hercules and then a two-day drive north across the dusty Abyssinian plateau.

There was a process of acclimatisation. And if it was a journey of horror it was not one of despair, for most of the travelling was done in the company of aid workers who brought with them hope - albeit a bare, minimal one - to the destitute folk we came across in the dusty plain of Korem.

No, it was not the emergency which struck me most forcibly, there in Ethiopia and in the dozen or so other African countries on which I reported in the next five years. What was most shocking was not the dire circumstances of those devastated by drought and famine. Rather, it was the baseline on which most Africans lived their ordinary life, when things were going well.

It was an existence of such material paucity that even the smallest difficulty could push these people into a crisis of life and death. They routinely lived on tiny handfuls of cereal with only a few scrubby vegetables to give the minimal staple any relish. The children showed signs of vitamin deficiencies of all kinds. Their frail, stunted little frames made me ashamed of all those slimming regimes on which I had periodically put myself. Theirs was a life with no margins to absorb sudden setbacks. To live there was to live clinging constantly to the edge of existence.

So what has this to do with Christmas? Only this: that a season of goodwill ought to extend beyond those we meet to those who live outside our immediate horizons.

And yet the reality is the opposite. For this is not so much a time of goodwill as an era of bad faith, in which, whether we are aware of it or not, we take away from the poor with one hand far more than we give them with such ostentation, in our diminishing aid budgets, year by year.

The truth is that our sophisticated times have developed ever more sophisticated mechanisms for ensuring that the fifth of the world's population who go to bed hungry - almost 1,000 million people - are maintained in that poverty because it is in our interests to keep the world ordered in that way. We are not neutral in this situation: we are part of the problem.

Two recent reports have highlighted the paradox. They sound arcane. One, by Oxfam, named Trade Liberalisation: the Corn Sector in the Philippines, looks at issues of international trade. The other, The Highly Indebted Poor Countries Initiative, by Jubilee 2000, considers the issue of Third World debt which, though it never now makes the headlines, lingers as a crushing burden on the shoulders of the world's poor, handicapping their efforts at self-sufficiency.

The reports may sound obscure, but they deal in issues which are all too literally life and death matters for those millions in the Third World who daily clutch at the straws of survival.

Listen to the rhetoric of the politicians, and you gain no idea of this. International trade, they say, since the recent foundation of the World Trade Organisation (WTO) to take over from the previous General Agreement of Tariffs and Trade (Gatt), has become much more of a "level playing field". Now the interests of rich and poor alike will prosper under a system of increasingly fair trade.

The argument by the advocates of the WTO, which met earlier this month in Singapore, goes something like this: increased trade will act as a spur to increased efficiency across the globe; it will bring increased investment by the rich in poor countries; and in the long run everyone will benefit.

The devastating report by Kevin Watkins of Oxfam's policy unit spells out what the short- and medium-term consequences of that will be to millions of the poorest individuals in the world.

He chose for his study the corn markets of the Philippines, but they are a microcosm of markets in a whole range of commodities in countries across the Third World.

Over the past two decades parts of the developing world have developed very rapidly. The Asian tiger economies have been so successful that the average person in Singapore and Hong Kong, for example, is now richer than the average citizen of the UK. But for most, the term "developing" is just a sick joke. At least 19 of the world's poorest countries are poorer today than they were in 1960. Yet Citibank, which operates in 97 countries worldwide, says that the return for international investors in developing countries have averaged what it calls a "spectacular" 30 per cent (it is only 18 per cent as a worldwide average because the return on investment in the industrialised world is much lower - Japanese banks, for example, are struggling to achieve even 2 per cent at home). So while the poor are doing worse, the rich are doing better than ever from their dealings with them.

The notion that trade and investment are what will help the world's poorest to begin pulling themselves up by their own bootstraps is what the Oxfam report considers. The effect on the ground of the agreement reached at the end of the Uruguay round of Gatt, which the WTO now administers, is that the incomes of 6 million of the Philippines' poorest farmers will be cut by 15 per cent by the year 2000, and by as much as 30 per cent of their present income by 2004. The cause of this is that under the agreement the Philippines is now forced to open its markets to foreign imports of corn. Yet there is to be small change at the rich end: the European and US farmers with whom the poor will now directly compete are still massively subsidised through the Common Agricultural Policy and its American equivalents.

Subsistence farmers in Mindanao, with average incomes of less than $300 a year, will be forced to take on US farmers who, according to OECD figures, each receive $29,000 a year in subsidies alone. Western policy-makers argue that free trade will, in the long run, maximise human welfare everywhere, albeit with some regrettable transitional costs. In the long run, perhaps so - if trade were truly free. But in the short run, wasted and stunted children, in areas where a quarter of infants already suffer from malnutrition, will undoubtedly die. Oxfam suggests a programme of measures which could mitigate the worst effects on these most vulnerable groups.

So, too, does Jubilee 2000 in its report. There was a time when Third World debt was big news. In the Seventies the whole world community benefited from the growth of this debt, which recycled international capital flows generated by a series of oil price crises.

In the Eighties it became clear that this money had been distributed so recklessly by Western banks that there was a real possibility that the international banking system could collapse when the over-burdened debtors, beginning with Mexico in 1982, defaulted on the massive loans. The system was saved by a serious of complex deals brokered by the International Monetary Fund (IMF), which rescheduled the debts.

The crisis was over - for the banks. The world's poor, on the other hand, have since continued to labour to pay off these renegotiated deals. Last year these poor nations paid the IMF $1bn more than it lent them in new loans. The counter-intuitive truth is that far more money flows from the poor to the rich through debt repayments than goes the other way in aid. To date, the Jubilee 2000 report shows, Africa has repaid what it borrowed one-and-a-half times over - axeing its health and education budgets to do so. And yet thanks to the miracle of compound interest it still owes more than it ever did.

The poorest of the poor carry the burden of Third World debt like a man sinking in quicksand with an unnecessarily massive pack on his back. The double irony is that it is investment in human and social capital - that means health and education - which has produced such rapid growth in the tiger economies (64 per cent of growth comes from this, compared with only 16 per cent from investment in machinery, building and infrastructure, according to a recent UNDP study of 192 countries).

Jubilee 2000 sets out to put this right. Inspired by the Old Testament notion of Jubilee - which required the forgiveness of debts and the freeing of slaves every 50 years, so that no one ever entirely lost their stake in contributing to the well-being of society - its coalition of aid agencies and churches have devised a programme to reduce debt to a sustainable level, forgiving it entirely for the poorest nations, mainly in Africa, and reducing it to repayable levels or schedules in the middle-income debtor nations.

These are not outbursts of Christmas idealism, but practical programmes of realistic measures. All they need to work is political will. There are signs that this may be achievable; the British government, in particular, has made some sensible proposals to the industrialised world on the debt issue. But there is much more needed to be done.

When the plum pudding has settled, the discarded wrapping paper has been tidied away and the attractions of Boxing Day television have palled, why not follow up our modern Christmas with an act of goodwill of equal modernity? In the dull time between Christmas and New Year you might put pen to paper to ask these campaigners what there is you can do to help change these structures of injustice. And in the meantime, have a merry Christmas.

Kevin Watkins, Oxfam Policy Unit, 274 Banbury Road, Oxford OX2 7DZ; Jubilee 2000, PO Box 100, London SE1 7RT.

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