Joining HIPC is Not an Invitation to Free Lunch

Ghana has finally taken the decision to join the HIPC Initiative of the World Bank and the International Monetary Fund (IMF). I believe strongly that President J. A. Kufour took this difficult decision in the supreme interest of Ghana after taking account of all relevant factors and listening to the advice of experts.

No doubt the arguments will still rage as to whether joining was the best course of action for our country to take, although these arguments will now be more of an academic exercise.

One thing Ghanaians must be mindful of is that we will be deluding ourselves if we think the HIPC Initiative was born out of any altruistic intentions on the part of the IMF and World Bank towards Third World countries.

The people from these Bretton Woods institutions do not give free lunches. What they give with their right hand, they take back with their left. It is the general belief worldwide that their policies have done more harm than good to the countries they were supposed to have assisted.

We in Ghana do not need to look far for empirical evidence in support of the failure IMF and World Bank's economic prescriptions to bring about an improvement in the living standard of people in debtor countries.

For over a decade and a half, Ghana's economy was virtually being managed by the IMF and World Bank under a host of economic policies with acronyms like SAP (Structural Adjustment Programmes) etc.

Not more than two years ago our economy was being touted around as a success by the IMF and a model for other Third World countries to emulate. We heard things like our macro and micro economic fundamentals (whatever these mean) were solid.

All that it took to expose the emptiness of this illusory economic success story was the fall in the world prices of cocoa and gold and the rise in crude oil prices. Looks to me like these days the Country Director of the World Bank; Mr. Peter Harrold doesn't have much to tell Ghanaians about how sound our economic fundamentals are.

While we were encouraged to liberalize our economy so that all kinds of goods ranging from what we eat, wear, drive etc. would pour into our country from the developed world, what did we get in return in terms of assistance to increase our export earnings and improve upon our capacity to create wealth, in order to raise our standard of living?

We mostly heard about poverty reduction as exemplified by the provision of finance to dig bore holes for water. Because of our dire economic situation, Ghana will continue to rely on these donor agencies for financial assistance.

We should, however, be careful about the conditions, which are attached to such assistance. I have this advice to give to our government. When you meet with representatives of these donor agencies and they tell you to look up, make sure you use only your left eye to look in the direction they point to, but keep your right eye firmly down.

The welfare of our people is the last thing they have on their minds when the IMF and the World Bank talk about giving assistance to our country. I see the HIPC Initiative as a mechanism which has been devised to keep the economies of Third World countries from total collapse so that we can be in the position to continue to service the huge amounts of debts owed to the developed countries.

It is stated that HIPC is designed to provide exceptional assistance to countries following sound economic policies to help them reduce their external debt burden to sustainable levels, that is to levels that will comfortably enable them to service their debt through export earnings aid and capital inflows.

From this statement of purpose, it can be deduced that the intention behind HIPC is not so much the cancellation of Third World debt but rather finding a mechanism that would ensure that these debts are paid back without destroying the economies of the debtor countries. (You don't kill the goose that lays the golden egg, do you?).

Put in a much simpler language, this is a more humane method that has been worked out to keep Third World countries in perpetual debt. Our inability to think and do things for ourselves is the root cause of Ghana's economic problems.

I, therefore, fully agree with the statement by Mr. Akoto Ampaw in his Daily Graphic article of Friday 9th, March 2001 entitled "Ghana's Economic Crisis …the debt and the HIPC factors.

He wrote and I quote "Under HIPC, the IMF on behalf of all the creditors, forces the beneficiary country to develop dependence on borrowed capital and investors, and a lazy mind in leaders" unquote. Are we therefore surprised when we hear our former deputy Minister of Finance, Mr. Victor Selormey come out to say things like it is normal for Ghana to inherit empty government coffers? (I will devote a whole article to this statement by Mr. Selormey).

The leaders of the past government delegated the thinking function of running their country's economy to foreigners while they grew fat and lazy on state largesse, a development perfectly in tune with the machinations of the IMF.

The Chronicle reported in its Thursday, March 8, 2001 issue that a team of high level officials from the IMF has been in the country over the last fortnight poring over figures and indices that will be used for the tough decisions confronting the Finance Minister' Mr. Osafo Maafo and his team.

The British Chancellor of the Exchequer, Mr. Gordon Brown recently presented his country's budget to their Parliament. Prior to that I don't recall reading anywhere that a team of high level officials from Ghana flew to London to assist Gordon Brown in the preparation of his government's budget.

Where do we draw the line concerning this utter dependency on foreigners to dictate and determine the future pace and direction of our country's progress? As we celebrate our 44th anniversary of nationhood, can we not give concrete meaning to those famous words by Dr. Kwame Nkrumah when he declared at the dawn of Ghana's independence that "let us now show the world that the black man is capable of managing his own affairs"?

These days we see images of space stations being built by the advanced countries, which will serve as launch pads for further exploration and exploitation of the cosmos.

But what do we see in our own country. We want to privatize our water industry and the companies that have lined up to buy and run this utility service are all foreign and white owned. If our nation cannot so much as dig trenches, put pipes in them and pump water efficiently to homes and businesses for dwindling and other uses, then what are we capable of doing?

What is the meaning and where is the dignity in calling ourselves an independent people if we cannot do anything for ourselves? The economic salvation of Ghana and its people should not rest on time real or imagined Benevolence and assistance of the IMF, World Bank and other foreign donor agencies These donor communities are interested in our welfare only to the extent that it serves their national interests.

Our economic salvation must be built on the virtues of hard work, personal sacrifice, thriftiness, ingenuity, commitment, discipline and patriotism on the part of Ghanaians.

We should endeavour to place our destiny back into our own hands. It is not impossible. Malaysia and other South East Asian countries have shown the way. Let us also learn from their example.