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.

 

                     Copyright: The Financial Times Limited