The Politics of Development Study Theme 3E

Africa Africa is a continent of approx 690 million people made up of 53 independent countries, amongst which are 15 of the least developed nations in the world. 70% of Africa’s population live on less than $2 per day, yet Africa has numerous natural resources, minerals, land and seaports how can this be?

In Africa (excluding south Africa) in many countries people’s most basic needs are not met, people often suffer from starvation, poverty and illness and have little access to education- ‘Developing Countries’

What factors affect development? There is no simple answer to this question, there is a complex combination of economic, political and social factors which impede development in Africa. This is a popular topic for examination!!

Natural Disasters Undoubtedly, natural disasters such as drought, flooding, crop failures and climate change play a large part in creating large scale food shortages. However it is the inabilities of these countries to cope with these disasters that is the underlying challenge facing the countries affected.

Issues of education, health, gender, armed conflict and economics provide the background to the development issues within Africa.

Economic factors affecting development Effects of Debt Each year Africa faces $14.5 billion in debt repayments. Many African countries borrowed money from developed countries governments, ‘The International Monetary fund’ or ‘The World Bank’ in order to fund development.

The International Monetary Fund (IMF) is an organization of 186 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

The World Bank is an international financial institution that provides leveraged loans to poorer countries for capital programs with a goal of reducing povertyinternational financial institutionpoorer countriescapital programspoverty

Changes in interest rates, fluctuating market prices for goods sold abroad and the dependency on a limited range of cash crops has meant it has been difficult if not impossible for countries to repay these debts.

The IMF The IMF attaches conditions when lending money, which can lead to extreme hardship for countries- They can insist that education and health programmes are cut to reduce government spending.

If conditions are not followed, then finance can be stopped. For example Ghana faces this dilemma, education and healthcare are no longer free in order to help repay the debt.

The Heavily Indebted poor countries Initiatives (HIPC) In 1996 the world bank and IMF launched the HIPC initiative to provide relief from debt to HIPC countries. This initiative prompted UK government to ask the G8 to cancel debt. July countries had agreed to begin providing relief from debt.

However, for HIPC to qualify they had demonstrate that for the previous three years they have been following sound economic policies and poverty reduction programmes. Relief of more than 70 billion was agreed, but Make Poverty History pointed out in 2005 little more than 10% of the debt owed by HIPC has been cancelled.

Effects of cash crops In non-developed nations, cash crops are usually crops which attract demand in more developed nations, and hence have some export value. A condition of receiving a loan from the World Bank or the IMF is usually the requirement of growing crops to sell on the open market for profit.

This seems like a sensible way for a country to generate income, but there were associated drawbacks. For example, In Sudan a condition for receiving a loan was the growing of cotton for export and importing American grain for food. The cotton market in Sudan failed which left no money for to buy grain to eat. Sudan was once had food surplus, but faced famine due to this.

Mozambique was once the worlds leading nation in producing raw cashew nuts. In the 1970’s the government of Mozambique banned the export of them in favour of selling processed variety. However in the 1990’s the World Bank abolished these restrictions and Mozambique could not compete in the world market. The industry collapsed and 90% of those in the industry lost their jobs. This highlights the precarious situation of relying too heavily on one or few cash crops.

Cash crops are a controversial issue, they do generate income, but smaller farmers can lose out and the land available to grow food for domestic purposes becomes limited.

Terms of Trade. Africa’s share of world trade has dropped from 6% in 1985 to 2% in Half of all the food produced has rotten by the time it reaches the market place as a result of inadequate infrastructures.

African producers do not compete on equal terms in world markets. The World Trade Organisation (WTO) insists on free markets, therefore subsidies by African Governments to their producers are not permitted nor are import taxes that would inhibit free or equal trade.

In reality, African producers are significantly disadvantaged. For example US cotton farmers receive $4 billion in subsidies while European farmers are subsidised through the Common Agricultural Policy (CAP) The aim of the common agricultural policy (CAP) is to provide farmers with a reasonable standard of living, consumers with quality food at fair prices and to preserve rural heritage

CAP can produce surpluses which are dumped cheaply on African countries, undercutting local producers and puttng them out of business. For example, Sugar production shows the apparent issues. In Africa it costs appox £75 to produce a tonne of sugar but in Europe the cost is around £300. Two factors work against this- CAP subsidies European sugar producers with £550 million annually. EU applies huge tariffs on imported African sugar. Making it impossible for producers in Malawi and Mozambique to compete and sell their sugar in Europe.

Group Task In groups of three or four create a mind map detailing the main economic factors that affect development in Africa. Your mind map should include example of African countries.