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
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
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
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