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Five years after Africa was centerstage at a meeting of the G7 heads of state in Gleneagles, it has all but vanished from the priorities of policymakers from the rich and emerging economies. At the G20 Summit in London this week, heads of state will debate new resources for the IMF, in the range of $250 billion. But these resources will likely be deposited in the New Arrangements to Borrow (NAB) facility, which will be far too expensive and out of reach of most African countries. Rather they will be used by Eastern European countries to bailout Western European banks—an arrangement that suits the large number of European countries participating in the Summit.
It is not the case that we are lacking good ideas. A month ago, Nancy Birdsall called for unlocking $1 trillion in new resources. UN Secretary-General Ban Ki-Moon sent a letter to the Summit organizers on March 25 with a similar proposal, including an SDR issuance for the low income countries. He also reminded all governments -- rich and poor -- about their commitments to the Millennium Development Goals. World Bank President Bob Zoellick proposed that 0.7% of every country’s stimulus package to be set aside for assistance to low income countries. And Prime Minister Meles Zenawi of Ethiopia made a plea for IMF gold sales (echoed by the One Campaign and others). But none of these plans have gained any traction. The IMF continues to be extremely reluctant to sell its gold -- the best chance now is for a small sale to cover “administrative costs.” Overall, there has been little response to these ideas from Summit participants, who are largely obsessed with bailing out their own banks with the world’s available resources.
Why is there so little accountability when it comes to Africa? One reason is the lack of proper representation of African governments and African people at the Bretton Woods and other institutions. The entire continent is represented in the G20 by South Africa; at the last minute, an invitation to NEPAD has been issued to make the African presence somewhat stronger. A sweeping reform of global governance mechanisms will help to address this problem but in an era of bailouts and bonuses, it appears that the hardest hit countries are left only with promises unfulfilled.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.