UN Renewing Effort To Rescue Sliding African Economies
WASHINGTON — WHILE the world's attention is focused on assisting the Soviet Union, the United Nations is intent on rescuing Africa from the grip of poverty. Five years after the UN issued a highly publicized report linking domestic African reforms with international support, the continent is in worse shape than ever before. Reforms have faltered. Outside financial flows have actually declined. Food shortages are rampant.Next week the UN will try again. In a special session on African poverty beginning Tuesday, it will lay out a new plan with a goal of doubling Africa's per capita annual income of $350 by the year 2015. If international efforts falter again, UN Secretary General Javier Perez de Cuellar says in a report released today, the continent will sink deeper into "an unrelenting crisis of tragic proportions." Poor outside investment, high debt, and wild swings in export earnings are the primary obstacles to Africa n nations as they struggle to achieve economic recovery. The new UN plan, released today, calls for: 1. Stepping up overseas development assistance to $30 billion by 1992 (up from $21 billion in 1989), with 4 percent annual growth until the year 2000. 2. Reducing the continent's $270 billion external debt. 3. Diversifying national economies and exports. Africa has seen only a marginal increase in overseas development assistance (ODA), while international export credits and commercial bank loans have all but dried up during the past five years. Even as aid flows in at a lower rate, domestic resources are flowing out at a higher rate, as capital flight and high debts deplete national savings. From 1986 to 1989, African nations combined spent $21 billion a year - 30 percent of their export earnings - to service external debts. The burden proved too heavy f or debt-distressed sub-Saharan Africa, a region that, during the same period, paid only half of the debt it was originally obligated to pay due to reschedulings, forgiveness, and arrears. During meetings in London last month, the world's leading creditors - the Group of Seven industrialized countries - pledged debt relief to Africa's poorest countries. UN officials say all G-7 debts must be written off as a precondition to economic recovery. Africa's debt is more than 100 percent of its gross national product, more than twice the burden shouldered by Latin America and four times that of East Asia. Because African economies rely on revenues from mineral and agricultural exports for precious foreign exchange, they are particularly vulnerable to the volatility of international commodity prices. According to UN statistics, falling commodity prices cost Africa $50 billion in lost export earnings between 1986 and 1990, the equivalent of a full year's export earnings. The World Bank, a major source of African assistance, says many African nations are wasting resources by protecting local markets against foreign competition. "They have a tradition of extensive protectionism," says outgoing World Bank President Barber Conable. "They think they can create an economy behind walls." In a worrisome Catch-22, UN officials say economic conditions will have to improve before subsidies can be gradually phased out. Moving too fast, they caution, could trigger the kind of bread riots that have already rocked several North African countries. Africa's limited resources are urgently needed to deal with this daunting array of problems, according to the UN: * Food. Food self-sufficiency is a more remote prospect for many African countries today than it was five years ago. The majority are producing less food than they were in 1986. Dependence on food imports leaves little money to revitalize domestic agriculture. The UN says that famine now affects 30 million Africans. * Environment. Africa's population continues to strain its natural resources. Forests are being depleted faster than they can be replenished. Soil erosion alone could lower agricultural output by 25 percent between 1975 and 2000. * Population. As population growth rates fall around the world they continue to soar in Africa, often exceeding rates of economic growth. By the end of the decade, Africa's population will nearly double to 800 million, with more than half aged 15 or below. Nullifying economic gains, the population explosion leaves even less money for needed family planning programs. * Children. Africa has one of the highest mortality rates in the world for children under five. Of the survivors, nearly half are malnourished. Deteriorating economic conditions have impinged on the quality of education and health care. * Women. Declining economic circumstances have eliminated tens of thousands of factory and office jobs held by urban women. In rural areas, meanwhile, where women constitute the backbone of the labor force, lack of access to credit and technical training has impeded food self-sufficiency. * Health. Life expectancy in Africa is the lowest in the world. Most health programs trace directly to poverty, which has undermined the ability of many governments to sustain even basic preventative programs. With nearly 6 million adults now affected, AIDS is potentially Africa's biggest health problem.