AU · 2019-06-03 · Anzetse Were says both the debt-trap narrative and the anti-Chinese sentiments...
Transcript of AU · 2019-06-03 · Anzetse Were says both the debt-trap narrative and the anti-Chinese sentiments...
AU – CHSV Model UN 2019
|
Greetings from the Executive Board!
We take great pleasure in welcoming you to the African Union in this iteration of CHSVMUN 2019.
We will be discussing the following agendas-
Effect of debt trap diplomacy on the African continent with special reference to China’s Belt and Road initiative
Flouting of medical manufacturing and distribution rules with reference to the Codeine epidemic
Both agendas have a lot of room for discussion and debate, as they both pertain to crises that are plaguing (forgive the pun) the continent. We expect all the delegates to be well researched, diplomatic, and most importantly, realistic.
The background guide is merely a starting point for your research, these topics are vast and most of it has only been lightly touched upon in this guide. We expect you to explore several other documents and make yourself well versed with the current scenario.
All the best, we look forward to seeing you at the conference!
Warm Regards,
Ann Sarasa Guest Chairperson
Koshal Ram Guest Chairperson
Sanjay Baskaran Guest Chairperson
AU – CHSV Model UN 2019
|
African Union (AU) is an intergovernmental organization, established in 2002, to
promote unity and solidarity of African states, to spur economic development, and to
promote international cooperation. The African Union (AU) replaced the Organization
of African Unity (OAU).
THE OBJECTIVES OF THE AU ARE THE FOLLOWING
To achieve greater unity, cohesion and solidarity between the African countries and
African nations, to defend the sovereignty, territorial integrity and independence of its
Member States, to accelerate the political and social-economic integration of the
continent, to promote and defend African common positions on issues of interest to the
continent and its peoples.
The African union encourages international cooperation, taking due account of
the Charter of the United Nations and the Universal Declaration of Human Rights. The
African Union aims to promote peace, security, and stability on the continent.
It promotes democratic principles and institutions, popular participation and good
governance, to promote and protect human and peoples' rights in accordance with
the African Charter on Human and Peoples' Rights and other relevant human rights
instruments, to establish the necessary conditions which enable the continent to play its
rightful role in the global economy and in international negotiations.
The union promotes sustainable development at the economic, social and cultural
levels as well as the integration of African economies.
To promote co-operation in all fields of human activity to raise the living
standards of African peoples.
To coordinate and harmonise the policies between the existing and
future Regional Economic Communities for the gradual attainment of the
objectives of the Union.
To advance the development of the continent by promoting research in all
fields, in particular in science and technology.
To work with relevant international partners in the eradication of preventable
diseases and the promotion of good health on the continent.
AU – CHSV Model UN 2019
|
A debt trap is a situation in which a borrower is led into a cycle of re-borrowing, or
rolling over, their loan payments because they are unable to afford the scheduled
payments on the principal of a loan. These traps are usually caused by high-interest
rates and short terms.
Debt-trap diplomacy is a type of diplomacy based on debt carried out in the bilateral
relations between countries. It involves one creditor country intentionally extending
excessive credit to another debtor country with the alleged intention of extracting
economic or political concessions from the debtor country when it becomes unable to
honor its debt obligations (often asset-based lending, with assets including
infrastructure). The conditions of the loans are often not made public and the loaned
money is typically used to pay contractors from the creditor country.
AU – CHSV Model UN 2019
|
The Belt and Road Initiative (BRI) encompasses 64 countries across Eurasia and Africa,
which account for 43.4% of the world population (3.21 billion) and 16% of global GDP
(USD $12 trillion). These figures significantly increase to 61.9% of world population and
30.9% share of global GDP if China is included.
The Belt and Road Initiative (BRI) aims at enhancing infrastructure connectivity and
boosting trade and investment of Eurasian countries, spanning from China’s west
through Central Asia to Europe.
The Belt and Road Initiative is not an entity, neither a mechanism. It is an open and
inclusive platform for international economic cooperation, geographically covers but
not limited to countries along the ancient Silk Road. Simply put, BRI is a massive
transnational economic cooperation blueprint for growth and development for Eurasia
proposed by China.
Neocolonialism, neo-colonialism, or neo-imperialism is the practice of using capitalism,
globalisation and cultural imperialism to influence a developing country instead of the
previous colonial methods of direct military control (imperialism) or indirect political
control (hegemony).
AU – CHSV Model UN 2019
|
Many analysts contend that China has become the new face of neocolonialism in Africa,
having loaned tens of billions of dollars to the continent’s governments while knowing
that in all likelihood, many of those debts will never be repaid. Beijing proceeded on the
presumption that its access to Africa’s markets, enhanced influence, and ability to
exploit the continent’s rich deposits of natural resources would compensate it for any
unpaid loans.
In 2000, China’s official loans to Africa had
been just in the millions of dollars. Johns
Hopkins University has estimated that
between 2000 and 2015, the Chinese
government, banks, and contractors had
loaned $94 billion to African governments
and state-owned enterprises. Many
countries welcomed Chinese investment
because it did not come with strings
attached, such as a requirement for free
elections, gender equality, anti-corruption
programs, or government accountability.
Many African leaders’ willingness to agree to Chinese funding–whether for natural
resource extraction, infrastructure building, or for commercial purposes-has come at a
cost.
The loans must, at least in theory, be repaid to China, adding to governments’ debt
burden. Two Highly Indebted Poor Countries (HIPCs)-the Democratic Republic of
Congo and Zambia-have particularly high levels of Chinese government debt, raising
the question about how those loans may ultimately be repaid, at what cost, and what
sacrifices the governments may have to make to repay those loans. This has led some
analysts to suggest that the relationship between China and Africa has become toxic.
AU – CHSV Model UN 2019
|
Some NGOs consider the accumulation of debt unnecessary and reckless on the part
of African governments, which, they maintain, certainly share the blame for the
continent’s predicament vis-à-vis China. After all, no one forced them to accept the
loans. Some projects were considered “vanity” spending, to help get politicians
elected or re-elected.
In Zambia, for example, Chinese loans paid for two new airports and a variety of
“roads to nowhere,” while the country still lacked so many basic needs. While it takes
two to tango (a lender and a borrower), development loans are often difficult to
obtain, so free-spending Beijing had an obligation to ensure that the borrowers
understood the implications of accepting its money, yet responsible long-term
lending has often taken a back seat to near-term objectives, such as resource
extraction. No one in Zambia believes that China was simply going to forgive its debt.
Sinophobia is a sentiment against China, its people, or Chinese culture. It often targets
Chinese minorities living outside of China and is complicated by the dilemma of
immigration, development of national identity in neighbouring countries, disparity of
wealth, the fall of the past central tribute system and majority-minority relations.
Factors contributing to Sinophobia include disapproval of the Chinese government,
historical grievances, fear of economic competition, and racism. Sinophobia also stems
from much older ethnic tensions across Asia, such as those related to Indian nationalism,
Japanese nationalism, Korean nationalism, and Vietnamese nationalism.
Chinese loans are currently not a major contributor to the debt burden in Africa; much
of that is still owed to traditional lenders like the World Bank. Yet Kenyan economist
Anzetse Were says both the debt-trap narrative and the anti-Chinese sentiments have
intensified because African nations like Kenya have a fundamental problem with fiscal
transparency and because the continent’s past relationship with external forces, both
pre- and post-independence, was one defined by exploitation. “The general public, she
said, remains in the dark about the deals with China. “We don’t know how much we owe;
we don’t know the terms.”
AU – CHSV Model UN 2019
|
Western leaders, drawing on these examples and wary of China’s rising financial and
economic might, have cautioned African states against taking out these loans.
Observers have also pointed to the fact Beijing offers financing with fewer strings
attached and isn’t part of the global multilateral framework for official creditors known
as the Paris Club. This has raised questions about the transparency, sustainability, and
commercial viability of Chinese state-sponsored lending, which has grown tenfold in the
past five years in Africa. With no officially published contracts and “no written
predictable rules” of how Beijing responds to a loan default, “people are free to
speculate,” says W. Gyude Moore, a visiting fellow at the Centre for Global Development.
Between 2000 and early 2019, there were 85 instances when China cancelled or
restructured debt globally, most recently in Cameroon.
The Paris Club is an informal group of
creditor nations whose objective is to
find workable solutions to payment
problems faced by debtor nations.
The Paris Club has 19 permanent
members, including most of the
western European and Scandinavian
nations, the United States of America,
the United Kingdom and Japan.
The Paris Club stresses the informal nature of its existence and deems itself a "non-
institution." As an informal group, it has no official statutes and no formal inception
date, although its first meeting with a debtor nation was in 1956, with Argentina.
China is not clear about their lending terms
FUN FACT- In Congo, the debt situation was so ambiguous that the
president visited Beijing in July 2018 just to clarify what they owed.
AU – CHSV Model UN 2019
|
A credit rating is a quantified assessment of the creditworthiness of a borrower in
general terms or with respect to a particular debt or financial obligation. A credit rating
can be assigned to any entity that seeks to borrow money — an individual, corporation,
state or provincial authority, or sovereign government.
The rising gap between developmental needs and available financial resources—
including poor revenue collection – has pushed sub-Saharan African governments to
consider different options to support their budgets.
One route to raise capital has been the issuing of sovereign bonds on international
financial markets. But to do this successfully, governments need a sovereign credit
rating from at least one of the three dominant international credit rating agencies.
These are Standard & Poor’s (S&P), Moody’s and Fitch. The number of African countries
seeking a sovereign credit rating has increased from one in 1994 to 31 in 2018. There’s
been growing dissatisfaction with the three agencies. A number of rated countries on
the continent, such as Nigeria, are unhappy, joining a chorus of dissatisfied voices
around the world. Their unhappiness stems from the fact that, outside the US and the
European Union (EU), the agencies don’t subscribe to any international regime or
governance body. This means that their misconduct remains largely unchecked. The
international rating agencies have operated unregulated even though the need for
them to be regulated has become apparent.
Economic relations between China and African nations have generated much interest
among development experts and practitioners over the last two decades. Behind this
attention lies the high stakes for Africa regarding the opportunities and challenges
involved in the deepening relationship with the Asian giant.
There is broad recognition that China’s engagement in Africa has positively
contributed to the impressive growth experienced across the continent over recent
years.
However, numerous observers have questioned the balance and quality of the
relationship from an African perspective, noting China’s appetite for natural resources
AU – CHSV Model UN 2019
|
and seeming lack of interest in certain aspects of the continent’s long-term
development. Others have highlighted the potential for African countries to take
advantage of their economic ties with China, with some calling for a more strategic
approach by African leaders to increase African agency and make the best use this
relationship.
Importantly, in a context of slowing Chinese demand and shrinking African borrowing
capacity, the intensification of China-Africa economic relations seems to have subsided
in recent years, pushing the complexity of the debate yet further. Data from the China
Africa Research Initiative reveal that three key indicators – Chinese investment in
Africa, China-Africa trade, and Chinese loans to Africa – have all been decreasing since
2013-2014. Against such a background, and ahead of the upcoming 2018 summit of
the Forum on China–Africa Cooperation (FOCAC) that will take place in September, this
issue of Bridges Africa offers a range of reflections on what the future may hold for
economic cooperation between China and African countries.
Sub-Saharan African countries are experiencing economic distress from the U.S.-China
trade war. Although not the target of the trade dispute, U.S. tariffs have precipitated
drops in commodity prices, local currencies, and major stock exchanges. African
Development Bank experts warn that the trade tensions could cause a 2.5 percent
reduction in GDP in resource-intensive African countries and a 1.9 percent reduction
for oil exporters by 2021.As the U.S.-China tariff negotiations proceed, the U.S.
government should seek to counterbalance the trade war’s negative effects on sub-
Saharan Africa. There are a series of measures available to Washington to strengthen
its U.S.- Africa strategy, including through its Prosper Africa initiative, and resolve the
contradictions surfacing between its global and regional policies.
AU – CHSV Model UN 2019
|
(Infographics only for reference)
Kenya was forced to relinquish control of its largest and most lucrative port in Mombasa
to Chinese control as a result of Nairobi’s inability to repay its debts to Beijing. Other
assets related to the inland shipment of goods from the port, including the Inland
Container Depot in Nairobi and the Standard Gauge Railway, were also threatened to be
compromised in the event of a Chinese port takeover. To make matters even worse,
Kenya agreed to the Railway deal with the understanding that any investment disputes
would be subject to Chinese law and occur in China. Should default occur, China’s Exim
Bank would take possession of the assets from Kenya’s Port Authority.
Zambia's public debt has increased significantly in recent years, and concerns over a
possible crisis have lately the attention of Western media. On September 3, a report by
British business intelligence outlet Africa Confidential warned of escalating debt caused
by allegedly unsustainable Chinese loans and claimed that Zesco, the state-owned
national electricity company, has been in talks about a takeover by a Chinese company.
The Zambian government refuted the allegations and denied the existence of plans for
Zesco's privatisation.
AU – CHSV Model UN 2019
|
On the surface, Nigeria's recent agreement with the Paris Club over the much talked
about debt relief program for the West African country may seem like a cause for
celebration. But a close look at this dubious gift gives one a real cause for concern
and scepticism. A critical analysis of the "debt relief" shows that, on balance, Nigeria
comes out as the big looser of a lop-sided game in which the odds were against
Nigeria from the onset. The deal confirms what the literature of the international
economic order has long argued colonialism grafted Africa into an inclement
international financial system, which is designed to benefit the haves of the wealthy
Northern hemisphere at the expense of the Southern hemisphere. It vindicates
dependency theorists' contention that this inclement international economic order
inevitably produces dependent development and creates structures of poverty in the
post-colonial societies.
In sum, the Nigeria-Paris Club agreement provides that the club will "write off" 60%
of the debt that Nigeria owes members of the club. Nigeria, on its part, will pay back
the remaining 40% in two phases. As a news report puts it, "in real terms, the Paris
Club will cancel $18 billion of Nigeria's debt, or about 60% per cent of the about $30
billion owed to the Club. But the Club will be paid `an amount of $12.4 billion.'"
It's also reported that the Paris Club members "endorsed Nigeria's economic reform
programme," which, sometimes, is characterized as Nigeria's poverty-reduction
program-- a euphemism for IMF's structural adjustment program that historically
leaves a "reformed" country worse off economically than it was at the onset. It should
be of interest to Nigerians, at home and abroad, that under this so-called poverty-
reduction program, hundreds of employees have been or are being relieved of their
jobs by the federal government. What a way to reduce poverty! Indeed, it would
appear that the parties responsible for the execution of this "poverty-reduction"
program possess a diabolical sense of humour.
AU – CHSV Model UN 2019
|
Sri Lanka is often portrayed as a country that fell into a debt trap as a result of
public investment projects financed by China. One such investment project was
Hambantota port, which was leased to China Merchant Port Holdings Limited (CM
Port) for 99 years for $1.12 billion in 2017. This project is largely the reason as why
Sri Lanka is widely cited as a clear example of getting trapped in Chinese debt and
being forced to hand over assets with national and strategic importance to China.
The general belief seems to be that Sri Lanka was unable to pay off the loans
obtained from China to construct Hambantota port in the first place, and therefore
had no choice but hand over the port to Chinese control to pay off the debt.
AU – CHSV Model UN 2019
|
The International Finance Corporation (IFC) estimates that Africa accounts for
25% of the global disease burden
More than 50% of the global deaths of children under five
3% of the world’s healthcare workers deployed
Consumes only 1% of global healthcare expenditure
Medicine manufacturing, regulation and availability have a huge role to play in the above
statistics, and we’ll get to that in a bit. Let’s take a look at other factors- The delivery of
healthcare requires more than just medicines. There are widespread reports of
understaffed health centres and facilities are often not situated where they are most
needed. When they are present, they often lack the essential medicines that are needed.
It is further estimated that more than a third of the available highly skilled African
scientists are now living in the developed world.
The lack of proper infrastructure also contributes to poor health outcomes. For
example, there is anecdotal evidence that due to the distribution difficulties caused by
insufficient infrastructure in some countries, a percentage of donated drugs expire on
shelves in government central medical stores without ever reaching the areas of
greatest need in rural clinics and hospitals.
African healthcare systems have historically been severely underfunded. Despite the
Abuja Declaration in which African Heads of State and Government committed to
spending 15% of GDP on healthcare, very few countries have done so and many still
grapple with chronic underfunding and very limited healthcare budgets. Inevitably, this
funding gap compromises care since the delivery of healthcare in Africa is largely
dependent on public sector funding albeit that a few markets have fairly developed
private sector healthcare delivery platforms. Even in instances where the public sector
is the primary method of health delivery, various sources estimate that out of pocket
spending, especially for medicines, is as high as 60% as a result of frequent medicine
shortages at public institutions.
As a consequence of the funding gap, many donors have come forward and today a large
proportion of the health budgets and treatment programmes on the continent are
financed or subsidized by international donors. The over reliance on donor funding,
especially for the pandemic conditions, is laden with difficulties especially in the current
setting of reducing donor commitments and increasing treatment gaps.
AU – CHSV Model UN 2019
|
Moreover, many people still do not have access to the essential medicines they need.
This is a result of a multitude of factors, including the lack of local production capacity,
weak institutional capacity and poorly regulated supply chain systems that enable sub-
standard products (locally produced and imports) to reach patients, and the emerging
scourge of Africa’s insidious public health crisis - counterfeit drugs. As a consequence,
access to essential medicines in Africa has been hampered because products are not
available, not affordable, or ineffective, amongst other reasons.
Even when medicines are available, their quality is suspect due to the weak nature of
regulation and widespread non-compliance with international Good Manufacturing
Practice (GMP) and other critical components of the quality system. There have been a
limited number of surveys on the quality of drugs in Africa with most focusing on
products for the high-profile pandemic diseases such as tuberculosis and malaria.
Despite the lack of information across the much broader range of drugs required for a
functioning health system, there is already a critical mass of evidence to suggest that
the impact of sub-standard drugs is grave.
For example, a recent WHO study looking at product quality of anti-malarial products in
selected African countries found that 39% of products tested in Ghana were sub-
standard and the proportion was as high as 64% of products tested in Nigeria (the
samples taken included imported as well as locally produced drugs).
You might be wondering why international bodies don’t take action on this issue, but
here’s the thing - the current WHO prequalification system is limited to a very narrow
range of essential medicines (HIV/AIDS, TB, malaria, pandemic flu, opportunistic
infections, zinc sulphate, and some oral contraceptives), whilst the oversight of all other
products used on a daily basis depends largely on National Medicines Regulatory
Authorities (NMRAs), many of whom face serious structural, functional and capacity
constraints.
The absence of functional NMRAs in any country,
Exposes the populace to unsafe medical products of variable quality &
effectiveness;
Facilitates the proliferation of substandard, spurious, falsely labelled, falsified and
counterfeit (SSFFC) medical products;
Prevents rational use of medical products, all of which are detrimental to public
health and patient safety.
AU – CHSV Model UN 2019
|
THE PHARMACEUTICAL MANUFACTURING PLAN FOR AFRICA:
Recognizing all the aforementioned issues, the member states of the AU decided to
adopt a comprehensive business plan that not only aided industrial and economic
growth, but also the healthcare landscape in Africa. Basically, the PMPA strives to
develop a system of locally manufactured medicines that cater to international quality
standards.
“The PMPA is premised on the inalienable principle that access to quality healthcare,
including access to all essential medicines that are affordable, safe, efficacious, and
of good quality, is a fundamental human right.”
To get more information on PMPA-
https//apps.who.int/medicinedocs/en/m/abstract/Js20186en/
AFRICAN MEDICINES REGISTRATION HARMONISATION (AMRH) INITIATIVE:
The AMRH initiative has been created to assist African countries and regions to
respond to the challenges posed by medicines registration – as an important, but
neglected area of medicines access. It seeks to support African Regional Economic
Communities and countries in harmonising medicines registration and seeks
interested donors and other stakeholders that can help offer the requisite support.
For more information on AMRH
https//apps.who.int/medicinedocs/documents/s20130en/s20130en.pdf
AU – CHSV Model UN 2019
|
Codeine is usually found in cough syrups in which the main ingredient(codeine) is a mild
opioid narcotic, making it a target of abuse for people seeking narcotic highs. Many
codeine cough syrups no longer contain alcohol. This drug is intoxicating and dangerous
and has become a target of abuse. It is very easy to overdose on this drug, in part
because opioids depress breathing to the point of oxygen deprivation while the person
is asleep. Mixing alcohol and opioids enhances the effects of both drugs, making it
harder for emergency responders to treat the overdose.
Opioids are commonly prescribed to treat pain, as they bind to receptors in the brain
and spinal cord that block pain. This pain blockage can also result in a feeling of euphoria,
or "high." It is easy to become addicted to this high feeling, leading to drug misuse.
More compelling than the high, though, is the need to block pain. Your body becomes
accustomed to the drugs over time, resulting in a need for continually higher dosages in
order to maintain potency.
This frequently leads to a dependency and dangerous addiction on the opioids. These
prescriptive opioids can also serve as a gateway to the more dangerous heroin drug.
For detailed information on Codeine and its effects-
https//medlineplus.gov/druginfo/meds/a682065.html
The Codeine issue in a nutshell
Codeine is a pain killer but also an addictive opioid. Taken in excess, it can cause
organ failure and trigger schizophrenia.
Codeine syrup is commonly mixed with soft drinks and often consumed by
students.
Codeine syrup addiction is a problem across Africa, with reports of addiction in
Nigeria, Zimbabwe, Kenya, Ghana, Niger, and Chad.
AU – CHSV Model UN 2019
|
Pop culture- Codeine is commonly glorified in pop
culture, especially with rappers and TV shows making
frequent mentions of the ‘purple drank’. An alarming
number of Africa’s youth is hooked onto Codeine and
peer pressure, stimulated by pop culture, is only
making that number higher.
Lack of regulation- Since Codeine is less potent than
other ‘more dangerous’ opiates, and used as a common painkiller, its regulation is
difficult. Linked to what was mentioned earlier regarding the inefficiency of
NMRA’s, According to WHO, there are 54 NMRAs in Africa, but their capacity is
variable with most of them incapable of performing the core functions expected
of NMRAs. The WHO report shows that only 7% of African countries have
moderately developed capacity with more than 90% having minimal or no
capacity. Basically, most national regulatory bodies aren’t even capable of getting
the issue under control.
Unemployment - According to the World Bank, 60% of Africa’s unemployed are its
youth. This means that without any productive work, their likelihood of taking to
drugs is a lot higher. According to a BBC documentary, illegal codeine is is cheaper
than most drugs and easy to get a hold of, making it easily accessible to the idle
youth.
THE DOCUMENTARY
https//www.bbc.com/news/av/world-africa-43944309/nigeria-s-deadly-codeine-
cough-syrup-epidemic
NOT-SO-FUN FACT - Rapper Lil’ Wayne was admitted to the
intensive care unit in March 2013 with seizures and
unconsciousness caused by extremely high levels of
codeine. Though he survived, he was in critical condition
after having his stomach pumped three times to remove
the drug from his system.