The poverty pandemic, foreign debt, and public health activism as a means of poverty alleviation in Ethiopia and elsewhere.
I. Introduction; the poverty pandemic
At the dawn of the 21st century, the Alma Ata declaration of achieving health for all by the year 2000 (1) seems more elusive than in 1976, when the measure was adopted. Almost three decades later the evidence shows that poverty has risen to epidemic levels worldwide. Over a billion people live on less than a $1 a day, and half of the world's population, over three billion people, lives on less than $2 a day (2). Since the 1970's eighty countries have steadily become poorer (3). Basic sanitation and housing are denied to most of the world's population (4). The gains achieved in increasing life expectancy in past decades are being eroded as a consequence of rising poverty as well as the scourge of AIDS (5).
Income inequality, a proven determinant of health, has steadily increased between and within countries (6,7). According to the 1999 UN Human Development Index Report the gap in income between the fifth of the world’s people living in the richest countries and those living in the poorest countries has skyrocketed. The gap was 30 to 1 in 1960 and steadily rose to become 74/1 in 1997 (6). In addition, while 15% of the world's population living in the rich western countries controls 80% of the world's income, a miserly 20% is left for the rest of the world's population (6, 8).
Moreover, foreign debt is debilitating and perpetuates poverty. In 1980 Latin American countries owed US$191 billion in foreign debt (9). By the year 2000, after structural adjustment programs (SAPs) prescribed by the IMF had been widely implemented, the debt had risen to US$750 billion. Debt repayment from the region during the period 1980-1999 amounted to US$1.65 trillion (9). In Sub-Saharan Africa foreign debt constitutes 108% of the region's Gross National Product (GNP) and debt repayment averages 30% of export earnings (10).
The negative impact of poverty on the health and well being of populations is a well-established factor (11). The late British economist, Brian Abel-Smith, who served as advisor to WHO’s Director General on health economics, provided compelling evidence that factors such as poverty, income inequality, land reform, nutrition, and female education were far more important determinants of health than simple medical intervention (11). It is clearly this realization that in recent years has prompted International public health organizations, such as the World Health Organization (WHO), to include the reduction of poverty as an essential ingredient in promoting the health of populations.
The WHO together with other international organizations and world leaders has pledged to reduce the number of people living in extreme poverty by half in the year 2015. This initiative known as the Millennium Development Goal (MDG) was adopted in the year 2000 (12). Success in regaining the achievements made so far in the public health arena and furthering the goals of public health is inextricably linked to a reduction of poverty (2,11). Achieving this goal requires identifying the policies and conditions that have constituted past failures and finding effective measures that will counteract these policies.
Clearly the causes of poverty are complex and it is impossible to attribute them to a sole condition or process. A myriad of conditions and institutions have been cited as some of the contributing factors leading to the escalation of world poverty. These include corrupt governments, endless wars, natural disasters, globalization, foreign debt, the International Monetary Fund (IMF), the World Bank (WB), The World Trade Organization (WTO), and transnational companies (4, 13).
In this paper I discuss the effects of foreign debt and the IMF’s structural adjustment programs around the world with a special focus on Ethiopia. Since Ethiopia is a highly indebted country currently participating in the IMF’s latest foreign debt sustainability program, it offers a good example of the SAP process and the detrimental effects of foreign debt. The paper starts with a description of the globalization process, a brief history of the IMF, and the structural adjustment process. It follows with a general description of experiences from countries that have implemented SAPs for the past two decades as well as the conditions in Ethiopia after a decade of IMF prescribed SAPs. It continues with examples and recommendations through which public health activism can be used to achieve foreign debt cancellation. It concludes with a call for reform of the Ethiopian government’s land policy, which contributes to a continued increase in poverty and a recommendation for an expansion of the realm within which public health operates.
Globalization is the process through which trade barriers, subsidies, tariffs and other protection measures that a sovereign nation previously enjoyed are lifted, attempting to make the world one big common marketplace (14-16). Institutions such as the IMF, the WB, and the WTO promoted this approach as a means of reducing poverty worldwide (9, 13). It has been two decades since these measures have been widely adopted and the results show that such measures have had detrimental consequences for the majority of the world's population (13,14). Instead of reducing poverty they have contributed to an increase in poverty, inequality, marginalization, forced immigration and urbanization (5).
Clearly one of the problems of globalization has been the absence of a level playing field. The more robust western economies have undermined its potential by providing massive subsidies in sectors such as agriculture to their populations. Recently, the U.S. president, George W. Bush, approved a US$190 billion Farm Bill to benefit US farmers, noting that the "livelihood of farmers depends on things they cannot control: the weather, crop disease, and uncertain pricing” (17). While protecting the livelihood of the 3% of farmers that live in the US, this move jeopardized the lives over 70% of farmers that make up the majority of the population in developing countries (18). Since most developing countries depend on one commodity to provide a large part of their export revenue, they are highly vulnerable to market fluctuations. The decline in commodity prices, caused by the flooding of markets with cheaper, subsidized products from the richer countries, has therefore been detrimental to the economy of developing nations (19,20). As the World Bank’s chief economist, Nicholas Stern, put it, “the average European cow is subsidized about $2.50 per day, and the average Japanese cow is subsidized $7.00 a day, 75% of the population in Sub-Saharan Africa live on less than $2.00 a day” (19). Furthermore, whilst most developing countries have dutifully opened up their markets, they have been met with stiff resistance to entering the markets of the developed countries (19,20).
Although globalization has always existed in some form or other, its scale and magnitude have never been felt worldwide as much as in present times. The IMF and its structural adjustment program have further worsened the inequalities of globalization (9,13).
III. The International Monetary Fund (IMF).
The IMF is a public institution that was formed in 1944 (13). The main aim was to ensure the stability of the global economy, which at the time was in shambles (9,13). The devastation that resulted from both the Great American Depression of the 1930's as well as the Second World War had left the world economy in disarray. There was a consensus among nations of the world and, in particular, western countries that an international system was needed that would regulate world economy and prevent its collapse (9,13). As a result the IMF came into being (9,13).
Initially, its purpose was to aid countries facing economic difficulties by providing short-term loans and allowing sovereign countries to formulate their own solutions to their problem (9). The money for the loans is provided by taxpayers around the world, as well as from interest received from the sale of bonds (9,13). By the 1980’s the debt burden of developing countries had reached unsustainable levels and many countries were either in default or on the verge of it (9). It was during this period that the IMF expanded its role and formulated SAPs as a means to promote fiscal responsibility of borrowing countries. When deficits of debt repayment occur these countries are advised by the IMF to institute SAPs (13,14,15).
The IMF argued that the institution of SAPs would promote an orientation towards a market economy. It would render a country attractive to foreign investors, which would lead to an inflow of foreign investment and employment opportunities. It would make government spending more efficient and make more funds available for development projects and aid in poverty alleviation (13, 16). It has been two decades since SAPs have been implemented throughout the world but, as we shall see in the following paragraphs, the benefits predicted by the IMF haven’t materialized.
IV. Structural Adjustment Programs (SAPs)
The main features of SAPs are decentralization of administrative regions, an institution of free trade policies, capital market liberalization, privatization of state owned and operated enterprises, removal of government subsidies, and other austerity measures such as increased taxation, currency devaluation to increase exports, institution of high interest rates, and an increase in export production that ensures timely foreign debt repayments (9,14,15). The developing nations have no choice but to follow these rules. Creditworthiness and the privilege of continued loans from the IMF and other lenders depend on their adherence to these rules (9,13,).
It is not quite clear on what type of historical background or research the IMF based this policy. One of the most outspoken critics of the globalization process and SAPs has been Joseph Stiglitz, winner of the Nobel Prize in Economics in 2001. Dr. Stiglitz served as senior vice president and chief economist for the WB from 1997 to 2000 (13). According to him the most successful economies achieved their accomplishments by following a course opposite the one being proposed for the countries of the developing world (13). The G7 countries as well as most successful Asian economies never adopted these rules during their rise to economic prosperity (8,13). The U.S., Western Europe and Japan maintained tightly shut financial markets until the 1970's, ensuring that their markets had ample time to develop and withstand any outside competition (7,13). The IMF had in effect decided that people living on less than $1 or $2 a day in the developing world would somehow become major players in a world economy that continually creates barriers and excludes them (19,20,21).
Predictably the experience of poor countries that have adopted SAPs has not been positive as will be seen in the following section. The developing world was ill equipped to deal with such drastic measures (13,21).
i. Experience of SAP's
In Sub-Saharan Africa and South America, where these IMF prescriptions have been rigorously adopted for the past two decades, one would be hard pressed to find any country better off today as a result of these programs (22-25). Most of the countries that have adopted these programs have seen their foreign debt increase astronomically, unemployment and poverty rates have risen, the foreign investment that was supposed to flood their countries has never materialized and trade terms have deteriorated (26-29). Capital inflows in the form of Overseas Development Assistance (ODA) had, according to the IMF, “fallen to a historic low of 0.22 percent of donor GNP by 1997” (30).
Prior to the 1970's, the total outstanding debt of developing countries was approximately US$62 billion. In 1996, after nearly two decades of widespread implementation of SAPs, the foreign debt had risen to US$2 trillion (9). Yet the IMF is still imposing SAPs (8,9,13).
In Uganda, which is frequently cited by the IMF as a success story, the debt servicing in 2000 was almost twice as much as expenditures on health and infrastructure and 10 times more than for the agricultural sector (31). After two decades of SAPs, the debt-to-export ratio is still double the amount deemed sustainable by the IMF (31). The only gain is in the education sector where, in the year 2000, education expenditure amounted to twice that of debt servicing (22,31,32). However, the gains achieved in the education sector in Uganda are not representative of the experience of most Sub-Saharan countries that have undergone SAPs. The WB asserts that compared to the 1980’s, per capita expenditure on education decreased in Sub-Saharan Africa and Latin American countries that implemented SAPs (33).
On the other hand, countries that resisted SAPs have prospered and improved the lives of their population. The Asian Miracle of the past three decades that has put countries like China, South Korea, Thailand, Malaysia and Indonesia at the economic forefront was achieved precisely because these countries avoided adopting IMF prescriptions in the form of SAPs (13). Contrary to IMF mandates, the governments of these countries played a major role in all aspects of development (13). They instituted high tariffs, let state-owned industries flourish, invested in education and health, and adopted trade liberalization after strengthening their industries (13). The U.S. and Europe followed similar paths to achieve their current prosperous status (9,13). During the Great Depression, the U.S. disassociated the dollar from the IMF’s gold standard, instituted steep import tariffs and allowed its industries to flourish before opening its doors to foreign competition and the international trading system (9). This same strategy applied to Europe. At the end of the Second World War, Europe benefited from the U.S. Marshall Plan, which poured over US$13 billion dollars into rebuilding its economy (9). Europe followed the path that the U.S. had taken during the Great Depression ensuring the survival and prosperity of its industries when it eventually opened its doors to the international trading system (9,13).
ii. Experience of SAPs in Ethiopia.
In the Ethiopian experience, as in most of the rest of Africa, SAPs occurred without the essential safeguards in trade agreements or the necessary infrastructure to ensure and support the type of growth that would reduce poverty.
The Ethiopian People's Revolutionary Democratic Front (EPDRF) came into power in 1991. Since then the new government has engaged in massive SAPs (34). In 1996 the IMF devised a new program known as the Heavily Indebted Poor Countries (HIPC) initiative for countries whose foreign debt exceeded 250% of their export revenue. To remedy this untenable situation, eligible countries institute SAPs and when the IMF deems they have instituted the necessary level of SAPs, they become eligible to receive debt relief (35-37). Ethiopia has been part of this program since its inception (35,36).
Economists at the North-South Institute have been critical of the HIPC process and the IMF’s unrealistic projections (36,37). These critics have argued that the proposed cuts and programs will not achieve substantial reductions in debt that can be translated into poverty alleviation programs by the poor countries (36,37). They argue that the projections of the IMF assume unrealistic future export and income growth rates by the countries participating in the HIPC initiative. Actual past growth rates of these poor countries participating in the initiative between 1970 and 1998 were a modest 2.7% annually. The projections by the IMF assume that the participating countries will achieve future annual growth rates exceeding 6% (35-38).
According to Befekadu Degefe, an economist at the United Nations Economic Commission for Africa (UNECA), the HIPC process would have negligible benefits for Ethiopia (36). His economic analysis showed that the proposed debt reduction initiative would have only achieved a decline of 7% in the debt-service burden (36). In a country as poor as Ethiopia, this amount falls short of accomplishing the proposed goal of poverty reduction (36). Other analyses by the North-South Institute and the World Bank support the claim that the HIPC process will not achieve its intended goal of freeing up the funds necessary to tackle the problem of poverty (37,39,40).
Almost a decade after implementation of SAPs, an IMF country assessment shows that in 1997, a year after entering the HIPC programs, Ethiopia had fallen into arrears of debt repayment (38). External debt as a percent of GDP had doubled between 1994 and 1999, rising from US$77.1 million to US$142.7million (38). The overall balance of payments has worsened in an exponential manner and had reached a deficit of almost US$ half a billion by 1999 (38). This occurred even though Ethiopia's debt servicing amounted to 65% of export earnings, almost double the amount of 35.1% in 1994 (38). Exports, of which coffee constitutes over 60%, have experienced an overall decline, while imports during the same period have doubled, exacerbating an already precarious economic situation (38). There has been a steady deterioration in the current account balance, government reserves have dwindled and overall terms of trade have worsened (39,40).
According to a 2002 WB document, the growth rate in Ethiopia attributable to a decade of adjustment policy amounts to 1.1% per annum, far less than IMF projections of 6% (40). Further economic analysis reveals a negligible 1.4-% growth gain between pre- and posts adjustment periods in Ethiopia (40). The WB blames this on unrealistic growth projections by the IMF, poor infrastructure, poor trade terms, environmental degradation, poor government policies in regards to land tenure and the advent of AIDS (40).
Although the IMF continues to present rosy projections for future growth both in Ethiopia and all the countries in which SAPs have been implemented as a means of future debt sustainability and poverty reduction, the experience so far can hardly support these claims (38,41). More prudent assessments by other organizations such as the North South Institute, the WB, OXFAM and debt reduction advocacy groups, such as the Jubilee 2000 movement, have shown since the beginning of the HIPC initiative as well as at present that these assertions are unrealistic (42-45).
Recently, with the Russian government dropping its claims on over US$4 billion of debt, Ethiopia's foreign debt burden has been reduced to US$5.6 billion (40). Still, using IMF calculations, the debt burden for Ethiopia with HIPC implementation shows little possibility of achieving sustainability. In 2001 foreign debt was 46.2% of GDP and about 284% of exports, far above the sustainable levels of 150% given by the IMF (41). Debt repayment accounted for over 55% of export earnings while the country is languishing in the midst of one of the worst famines it has ever experienced (41,46).
Debt repayment and sustainability are rendered practically impossible by the country’s continued borrowing. The amount of foreign loans far exceeds debt repayment (30,39,44). Foreign financing of government deficit has steadily increased in Ethiopia. It was 8% of GDP in 2001, whereas during the communist era (1973-1991) it was 4.9% (36). According to the IMF, in 2002 this amount will rise to 9.7% (46).
Perhaps a clear indication that SAPs have failed to achieve the beneficial results projected by the IMF is the condition of the majority of the Ethiopian population ten years after widespread implementation of SAPs. According to the 2002 UNDP Annual Human Development index (HDI), Ethiopia ranks 168th out of 174 countries (47). In Ethiopia today, 76.4% of the population lives below the income poverty line, on $2 a day, while half of these, about 31.3%, survive on $1 a day (47). Fifty-five percent of Ethiopians have access to health services, which in rural settings usually means within three days walk, 25% have access to safe water and 15% to sanitation. Forty-eight percent of children under the age of 5 are malnourished and preventable diseases kill over 100,000 children annually, while debt repayment far exceeds public spending on healthcare (47,48). The adult literacy rate is 40% and it is estimated that 10% of the population is now infected with the AIDS virus (40,47).
Government expenditure for health and education is 1.3% and 13.7% respectively, while defense expenditure is 13% of GDP (36,40). Furthermore, in a nation where agriculture employs over 85% of the population and provides over 90% of export revenue (36,40,49), the government's contribution to agricultural development is a negligible 10% of GDP (36).
Ethiopia is currently facing one of the worst famines, affecting more than 15 million people, as a result of climate conditions and crop failures. This factor in combination with a recent civil war, the AIDS epidemic, deteriorating trade terms, less aid inflows, as well as the unfulfilled promise of foreign investment, paint an economic outlook opposite the one projected by the IMF. After participating in SAPs for the past decade, Ethiopia has never achieved the debt sustainability threshold assumed by the IMF, even during the few years when growth rates of greater than 6% occurred (38). Therefore it is clear that unless other, more reasonable, measures are adopted to achieve the poverty reduction goal, the present HIPC initiative, even with the many revisions it has undergone (46), is a formula for failure.
V. Recommendations for the role of the public health community in Poverty reduction.
The international public health community, having already committed itself to a role in poverty reduction in the year 2015 through the Millennium Development Goal initiative, will have to employ all possible avenues to achieve this goal. It will have to build upon successful past experiences while adopting new formulas that will ensure its success in this endeavor. There are several methods and causes that international public health institutions, the Ministries of Health (MOHs) of individual countries as well as other organizations in public health practice can undertake and champion to attain this goal. One such measure is actively advocating for the cancellation of the foreign debt of poor countries.
The detrimental consequences of poverty on health have been well-documented (11). There is ample evidence indicating that reducing poverty is one of the main factors in improving the health of populations (11). Poor countries are unable to improve social conditions while servicing foreign debt within the current international trade system that excludes them. The overly optimistic economic projections of the IMF have little chance of being realized, therefore, dropping the debt is one way to reduce world poverty and promote health. Furthermore, the IMF itself admits the intractable nature of foreign debt. The IMF has stated that the amount of borrowing by poor nations continues and will continue to be higher than the debt service, thus perpetuating a vicious cycle out of which these countries have little possibility of exiting (30,40,50).
Therefore, the public health community should aggressively advocate debt cancellation for these poor countries as one means of poverty alleviation. It is in the best interests of the people it serves. As will be explained in the following section, it should form alliances with individuals and organizations, aggressively publicize the issue, formulate credible responses to arguments against debt cancellation, and present clear and viable solutions for the use of these funds in the fight against poverty.
i. Forming alliances.
Forming alliances among different organizations and entities to attain public health ends has proven successful in the past. The gains achieved in educating the American public about the health hazards of smoking and greatly reducing tobacco consumption in the U.S. came about as a result of such cooperation. Public health, medical, legal and government groups worked in concert to provide epidemiologic evidence, massive advertising campaigns, legal action and the enacting of laws to achieve this goal (51). Other successes have been cease-fire agreements brokered by international public health institutions in order to conduct immunization campaigns worldwide. In Afghanistan, during the civil war between the Taliban and the Northern Alliance, the UN managed to obtain a cease-fire agreement and conduct a polio immunization campaign in 2000 (52). The WHO also managed a cease-fire in the Democratic Republic of Congo to conduct a three-day polio immunization campaign in the summer of 2001 (53).
In pursuing debt cancellation for poor countries, the public health community in the form of international public health organizations, such as the WHO, as well as the Ministries of Health (MOHs) of individual countries, will have to raise awareness of the problem worldwide. There is already a growing movement demanding that this debt be cancelled. International public health organizations as well as the Ministries of Health (MOHs) of individual countries should add their voice and give legitimacy to this movement.
In recent years an angry public in Europe, South America and increasingly in the U.S., has charged the IMF, the WB, the WTO and the globalization process with worsening the plight of the poor around the world. The riots and protests that have accompanied and continue to accompany every major meeting of these organizations in the past few years give testimony to an increasingly aware and concerned public demanding change (54-56). A central demand of their protest has been to cancel the debt that poor countries owe, known as the “Drop the Debt” campaign (54-56).
Different initiatives have been adopted and promoted by groups such as the Jubilee 2000 Movement, a debt cancellation advocacy group, whose members include Oxfam International, UNICEF and, religious organizations such as Catholic Relief Services, to name a few. One successful move has been the increased participation of individuals, organizations and U.S. cities in boycotting World Bank bonds (57). Fashioned after the boycotts that helped end apartheid, this boycott is designed to persuade the WB and IMF to cancel the foreign debt of poor countries and promoting programs that reduce worldwide poverty (57).
On the legal front, supporters of the “Drop the Debt” initiative, such as Oxfam International and the Jubilee 2000 Movement, have begun arguing that most of these debts fall under the category of “odious debts”, debts incurred by governments considered non-representative of the people and deemed eligible for cancellation. In 1927 Alexander Sack, a renowned Russian lawyer, formulated the doctrine of odious debts based on the legal precedence set by the successful cancellation of the debts of Cuba and Costa Rica (58). In 1898 the United States defeated Spain in the Spanish-American war and acquired Cuba, but refused to pay Cuba’s debt, successfully arguing that these were illegitimate debts used to suppress the Cuban people (58). In 1923, the Costa Rican government successfully argued and had their foreign debt cancelled when they claimed that the Royal bank of Canada knowingly lent money for the personal use of the Costa Rican dictator Federico Tinoco, who fled Costa Rica and took the money with him (58). Another argument of these same groups as well as international organizations, such as the UNDP, has been that these debts are unpayable and inhumane since they violate the basic human rights of billions of poor people worldwide; therefore it is morally right to drop the debt (59).
ii. Publicizing the issue.
While forming coalitions with these different groups and promoting these initiatives, international public health organizations, such as the WHO, should aggressively publicize the issue of poor countries’ foreign debt burden and its consequences to the Western world. The majority of the votes in organizations such as the IMF, the WB and the WTO belong to Western countries. Therefore, the people living in Europe and the U.S. can be powerful allies in achieving debt cancellation since they can vote into office representatives that will promote the issue (60). This ability to effect change was seen in 2000 when the U.S. congress passed legislation opposing user fees for health and education in developing countries after the lobbying of activist organizations such as RESULTS and 50 Years Is Enough. Now the WB, which had for years been an advocate of user fees, has reversed its position and is calling for an elimination of these fees for basic healthcare and primary education (60).
One recent example illustrates the power of advertising an issue and calling on the public’s support. Last year Nestle, the world’s largest coffee company, was demanding that the Ethiopian government pay it US$ 6 million as compensation for revenue lost in 1975 when the communist government came into power and nationalized one of Nestle’s companies (61,62). While Ethiopia was experiencing one of the worst famines it has ever faced, Nestle, which had profits of US$5.5 billion in 2002, was insisting that it be paid (61). Oxfam International publicized the issue over the Internet and through news media agencies, such as the BBC, and called upon the public to sign a petition demanding Nestle drop its claims (61,62). Within a few months, 40,000 signatures and widespread reporting on the issue forced Nestle to accept a US$ 1.5 million dollar settlement which it immediately donated to efforts combating the current famine (61,62).
Another example of effective publicity is the victory over AIDS patent laws in South Africa. In 2001, 39 major pharmaceutical companies were forced to drop their lawsuit against the South African government, which had proposed to import cheaper AIDS drugs (63). A grassroots movement that included the participation of Doctors Without Borders, Oxfam International, South African AIDS activists as well the South African Ministry of Health, all collaborated on this issue. They informed and enlisted the support of the public through Internet letter writing campaigns and news articles to publicize the issue and forced the drug companies to drop their lawsuit (63).
The above examples show the benefits that can be reaped from the collaboration of public health entities with the public, political organizations and activist groups with similar goals. It also illustrates the power of the media and other communications tools such as the Internet in furthering the goals of public health.
iii. Responding to arguments against debt cancellation.
The IMF has been one of the main opponents of debt cancellation arguing, that it would lead to fiscal irresponsibility and that there are no funds to achieve this goal (64). Argentina’s economic crisis in 2001 illustrates the extent of influence and power that the IMF exerts on developing countries. In 2001, when Argentina defaulted on foreign debt repayments, the IMF suspended all loans to the country. This resulted in a countrywide civil unrest and the collapse and change of government several times during 2001-2002, which has devastated the country (65). According to Atitlio Boron, Executive Secretary of the Latin American Council of Social Sciences in Buenos Aires, it is fear of such consequences that forces highly indebted developing countries to continually adopt IMF prescriptions even if they are detrimental (65). The IMF claims that the highly indebted developing countries will continue to borrow more than their annual debt service (64), which ensures the IMF’s power over them and guarantees that the IMF’s conditionalities will continue to be adopted. Therefore, the claim that these countries will indulge in fiscal irresponsibility is absurd, since the IMF can suspend their loans at any given time and drive countries to the brink of disaster.
Furthermore, the IMF’s claim that there are no funds to accomplish debt cancellation has been challenged by activist organizations such as the Drop the Debt campaign that replaced the Jubilee 2000 movement. Drop the Debt commissioned an independent, London-based accounting firm, Chantrey Vellacott, to examine the veracity of the IMF’s claim that it could not afford debt cancellation (66). According to this accounting firm, both the IMF and the WB are able to cancel the debt of the HIPC countries without jeopardizing any of their programs and projects. Furthermore, Chantrey Vellacott asserts that they are able to cancel the debts of many of the other developing countries that are not currently eligible to participate in the HIPC initiative (66). International public health institutions as well as the Ministries of health of individual countries should commission more accounting firms to conduct such analyses to show that both the IMF and the WB are able to cancel the debt of poor countries without impacting their programs.
iv. Programs to benefit the poor.
Presenting sound projects and programs to ensure that the benefits of debt cancellation will indeed reach the poor should be an integral part of the debt cancellation campaign. One promising program has been to place funds resulting from debt relief in a separate account, monitored by auditors. This program, developed in Uganda, was put in place to ensure that the funds freed up from the HIPC process would be used in fighting poverty (67). The Ugandan government set up a Poverty Action Fund for funds resulting from debt relief. These funds are then allocated to poverty alleviation programs such as primary education and are transparently monitored by donors and representatives of civil society (67). Additionally, poverty alleviation programs have to be country specific. In the final section of this paper the need for reform in the land tenure policy of the Ethiopian government is discussed as a means of reducing poverty in Ethiopia.
v. Poverty reduction through land tenure reform in Ethiopia
In Ethiopia, agriculture employs over 85% of the population and accounts for over 90% of export earnings (36,40,49). As a result, any type of reform that is undertaken in the name of breaking the cycle of poverty in the Ethiopian context will greatly benefit from policy reforms and development projects geared towards the agricultural sector.
Following adoption of SAPs, the current Ethiopian government has extensively instituted privatization, particularly in urban areas, but refuses to adopt this policy in regards to rural land, which still remains the property of the State (40,49). Therefore, farmers are given land and can till it, but they cannot sell it, buy more land or use it as collateral for credit (40,49).
In this system farmers receive credit against the crops they plant and hope to cultivate in the future. Since over 90% of agriculture is rain-fed, this is a costly gamble as is evidenced by frequent droughts. As one government foreign advisor aptly noted: “this leads to the ludicrous situation where farmers are taxed on land they do not own for crops they have not yet produced.” (68). However, the government argues that allowing land ownership will result in massive urbanization, with farmers selling and abandoning their land when faced with difficulties (40,49).
Anyone evenly vaguely familiar with Ethiopian history knows the near-fanatic attachment that Ethiopians have to their land. Ethiopians love their land and the question of land ownership has been of central importance throughout most of Ethiopia’s history. A failed coup in 1960 had land reform as its central theme (49). The main slogan during the 1974 revolution that ended the reign of one of the longest ruling Monarchs, Emperor Haile Selassie, was "Land for the tiller" (49). Moreover, during the communist period, thousands of farmers are reported to have died during the government's forced resettlement program while trying to return to their less fertile ancestral lands (49). At the height of the ongoing famine, the BBC reported in January 2003 that one poor farmer who had planted three times only to see his crops wither, defiantly refused to accept the government's offer of resettlement (69). It is not hard then to imagine how much more reluctant Ethiopians would be to abandon land they own when they display such loyalty to land they are only allowed to till. Clearly, land ownership has been and remains of vital importance to Ethiopians, 85% of whom live in rural areas. The current government's refusal to even discuss the issue hints at ulterior motives, such as ensuring government control over the population (49,68,70).
The benefits of land ownership and the efficiency of small farms have ample precedence, even in the Ethiopian context. During the past administration peasants were allowed to own their own land and they constantly outperformed the heavily government subsidized state farms and co-operatives (49). Evidence of the importance of land ownership and small farm holdings has been well-documented (40,49,71).
Breaking the cycle of poverty in Ethiopia is linked to a change in policy towards land ownership. The selective manner in which the present Ethiopian government has instituted SAPs has undermined any possible benefits of the process. The WB together with the Economic Commission for Africa and opposition party members in Ethiopia have all called for a change in this policy (40). International public health institutions, as well as the Ethiopian MOH, should join these groups, by publicizing the issue, reminding the public of its health consequences and calling for a change in government policy. They should question why the IMF, which insists on privatization, does not consider government ownership of land a violation of its SAP mandates.
Finally, the growing ethnic divisions being created in Ethiopia have to be mentioned. The new government immediately adopted decentralization, an integral part of SAPs, in 1991 when it came to power. The government achieved decentralization by dividing the country along ethnic lines, essentially reviving the now defunct apartheid-era practice of “Bantustanization” and ensuring ethnic conflicts, which have already devastated the country (49). In this new system Ethiopians are now constrained to live and work within their newly designed ethnic zones. Ethiopians, who for centuries have intermarried and lived together peacefully, have to now define themselves according to their father's ethnic background. It is not hard to imagine the future consequences of such measures. The most violent civil conflicts in recent memory have been ethnic conflicts. In Rwanda the death of a million people within six months provides the most devastating example. Therefore this detrimental government policy should also be publicized and condemned by the international public health institutions, the Ethiopian MOH, as well as NGOs in Ethiopia, to ensure that the devastating ethnic conflicts that have occurred around the world do not happen in Ethiopia.
Finally, in trying to reach the Millennium Development Goals, the international public health institutions, as well as individual countries, have to devise and embrace new strategies that will achieve this goal. As discussed above, one of the main determinants of health is poverty. Thus, the international and local public health institutions must extend beyond their usual realm of healthcare projects and programs. These public health entities will have to include poverty reduction as an integral part of their health promotion programs. The recent adoption of the Millennium Development Goals provides an opportunity to include poverty reduction as a means of improving the health of populations. It is evident that public health goals cannot be achieved by exclusively tackling healthcare delivery projects, unless the underlying causes of poor health, such as poverty, inequality, political instability and other conditions, are addressed. Activism should be an integral part of the public health culture in alleviating poverty and promoting health in Ethiopia and elsewhere. Actively exploiting the Internet, the media and other available communication tools will prove powerful in achieving public health goals. In addition, building alliances with increasingly informed public, activist organizations such as Oxfam International and Doctors Without Borders, as well as political leaders with similar goals, will further advance public health goals.
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