Madam, - The idea that Africa needs good governance in order to develop (Dr L.F. Lacey, May 22nd) is valid. However developed countries and donor institutions can take actions that could have dramatic benefits.
Tanzania, for example, one of the poorest countries in the world, is a peaceful democracy and one of the main beneficiaries of the Irish Government's overseas aid programme. After 10 years of positive policy reforms and macroeconomic stability, Tanzania has benefited from the debt relief scheme for Heavily Indebted Poor Countries (HIPC). Perversely however, by now having a sustainable debt burden, it no longer qualifies for some World Bank loans and grants, while countries which have not undergone these reforms still do. Are these the sort of incentives the donor community is trying to create?
Secondly, like most African countries, Tanzania does not wish to depend on donors and is making efforts to broaden its tax base which the ultimate aim of becoming self-sufficient. Tax exemptions mean lower domestic revenues. As reported last week in the local media, total exemptions last year were equivalent to the annual running costs for seven government ministries. Ironically, tax exemptions on donor-funded projects comprise a substantial amount of this total. Do donors and NGOs need these incentives to carry out their work?
Thirdly, my Tanzanian colleagues often tire of hearing the astronomical sums quoted for aid, saying too much of it is simply returned to developed countries. A precondition of much aid is that it must be spent on goods or technical assistance from the donor country. Aid should not be tied and more should be given directly to proven governments as budget support. Irish Aid has proved itself a world leader by untying all of its aid and others should follow its example.
Donor projects also consume valuable government resources as they often have numerous administration and reporting requirements. Increasing the funds going to direct budget support would avoid these shortfalls and also make governments more accountable to their citizens, strengthening the democratic process.
Lastly, the single most effective action developed countries could take would be to open up their own markets. However, this would necessitate taking on powerful special interest groups and democracy has proven itself to be poor at achieving this. The Doha trade talks have disappointed again and a new way forward must be found.
We cannot be idealistic about development. Not every penny spent will be spent productively. However, there is no reason why Africa should remain perpetually poor.
Fifty years ago Asia and Africa had a similar standard of living. Asia has since grown exponentially while Africa has stood still and, in some cases, slipped backwards.
It can develop. It must take actions itself but the outside world can help hasten this process of development. And everyone stands to gain from this. - Yours, etc,
JOSEPH LAKE,
Dar es Salaam,
Tanzania.