Africa 'could be worst economic casualty'

WORLD NEWS: Africa 'could be worst economic casualty' WORLD

BANK WAR AGAINST TERRORISM AND GLOBAL SLOWDOWN MAY

HIT CONTINENT HARD:

Financial Times; Oct 23, 2001

By JAMES LAMONT

The World Bank has warned that Africa may become one of the worst

economic casualties of the war against terrorism and the global economic

slowdown.

Lack of investment, worsening trade terms and dwindling aid threaten

hard-won political reforms on the continent, Mamphela Ramphele, the

World Bank's managing director for human development, said this week.

"African democracies have had to go through so much to get where they

are. If political leaders are not rewarded it becomes more difficult for them to

take the next step," she said.

Speaking at a Southern Africa Financial Markets conference, Ms Ramphele

said the attacks on the US have further reduced growth, commodity prices

and aid commitments, which spelled disaster for Africa. "Aid flows have

halved over the past few years. We anticipate further cuts," she said.

Since the end of the cold war, African countries have lost much of their

strategic value to the developed world and have also lost ground in

attracting foreign direct investment.

Over the past six years, the region's share of world flows fell from 1.25 per

cent to just under 1 per cent, representing Dollars 40bn (Pounds 28bn).

The economic pressure is having an impact. Eleven African nations have

slipped in the United Nations' human development ranking over the past 25

years.

Of the world's 36m HIV positive people, 70 per cent live in Africa, while

sub-Saharan Africa has 46 per cent of the world's share of people living on

less than Dollars 1 a day. Per capita income has fallen across the region

since 1975.

As the west's attention is drawn by Asia and the Middle East, reduced aid

is likely to stall the re-construction of some of the poorest and most

war-weary countries, including Somalia, Sudan, Eritrea and Ethiopia.

"There is no way in which countries that are so behind can make it on their

own," Ms Ramphele warned.

She urged the world's financial institutions to make a more lenient

assessment of political stability in African markets in their investment

strategies. Otherwise the continent would face a "bleak future".

Others, however, think Africa stands to benefit from the risk aversion

gripping the world.

Southern Africa is expecting a boost in its travel and tourism sectors as

European holidaymakers see it as a safe haven far away from the conflicts

of the war against terrorism.