Open World Conference of Workers In Defense of Trade Union Independence & Democratic Rights

From: International Liaison Committee for a Workers International

Friday, January 28, 2000 12:28 PM

INTERNATIONAL TRIBUNAL
TO JUDGE THOSE RESPONSIBLE FOR THE DEADLY EVOLUTION
THAT THREATENS THE VERY EXISTENCE
OF THE WORKERS AND PEOPLES OF AFRICA

Document Number 5

Structural adjustment and evolution of investments in Africa

Structural adjustment plans were supposed to clear the way for the creation of an "economic environment" favourable to the mass entrance of foreign capital.

20 years after the beginning of these "structural adjustments", what is the current state of things?

"Between 1978 and 1994, 35 out of 43 Sub-Saharan countries went through economic recessions. 20 of them have seen their income per head fall lower than it was twenty years ago.

"According to the UNDP, gross domestic investment fell in many countries between 1970 and 1985: from 26 to 15% of GNP in Malawi, from 16 to 6% in Sierra Leone. In the 1990-1995 period, yearly growth continued to be negative in many countries: - 10% in Zambia, - 11% in Malawi, and - 16% for Togo.

"Since the eighties, foreign direct investment (FDI) in these countries has been negative. The FDI flows towards developing countries has increased a lot, passing from 23.7 billion dollars in 1990 to 120.4 billion in 1996. But these flows largely ignored Africa.

" In 1996, total FDI reached $3.3 billion in sub-Saharan Africa, 1.4 billion going to Nigeria and 300 million to Angola. But higher investments are not necessarily desirable, as investors require a return rate higher than elsewhere because of risks in the region. It reached 24-30% a year in 1990-1994 in Sub-Saharan Africa, against an average 16-18% for developing countries as a whole.

"The absolute value of trading loans and financial investments has fallen by a half after reaching 65.5 billion dollars in 1991. 6 African countries only receive financial portfolio investments. Public funding hardly covers the interest paid to the creditors." (European Bureau of the PNUD, 1999)

The World Bank itself has acknowledged that:

"Aggregate resource flows declined from $19 billion in 1997 to $17 billion in 1998. Net official finance remained roughly at the $12 billion level of 1997, as both grants and net official loans remained at the level of the previous year. Net official finance to the region has fallen by about $5 billion since 1990, a decline of more than 50 percent in real terms.

"Net private flows to Sub-Saharan Africa fell from $7 billion in 1997 to $6 billion in 1998. Net private debt flows rose from about zero in 1997 to $600 million in 1998. Net private debt flows to Nigeria collapsed in 1998, with the decline in the price of oil and difficult political conditions. Net private debt flows to South Africa remained unchanged.

"Foreign direct investment into the region, directed mainly to the minerals and metals sector, has increased substantially from near zero in 1990. In recent years, significant foreign direct investment flows ($500 million) have come from Asia to eastern and southern Africa (predominantly to South Africa). FDI to South Africa equalled $1.1 billion in 1998, down significantly from $1.7 billion in 1997. Nigeria receives the second largest amount of FDI in the region and, despite the oil price decline and civil conflict, FDI was unchanged in 1998 at $1.6 billion.

"Portfolio equity flows fell from $1.5 billion in 1997 to $366 million in 1998. Flows to South Africa, which accounts for 90 percent of the total portfolio equity flows, showed the largest decline."

As for the USA:

The share of US exports to Africa is but 7% of the continent total exports. And even in a country which is a symbol so as to say of the ruling power of the USA, Mandela's South Africa, the situation is not fundamentally different. South Africa exports 29.1 billion dollars (1996), of which 2.9 only to the USA. South Africa imports total 27 billion dollars, of which only 3.1 from the USA. And present trends show that this percentage is still being reduced.

Economic relations between the USA and Sub-Saharan Africa can be portrayed through a few figures and comments:

- US exports towards Africa total 1% of its exports and 2% of its imports, the US trade deficit towards Africa tends to grow.

- 71% of US imports coming from Africa come from energy and mainly oil.

- US exports towards Africa go to very limited territories: Nigeria and South Africa alone represent 63% of its exports.

- US imports from Africa also come from very limited territories: Nigeria, Angola, South Africa and Gabon provide 84% of continental exports towards the USA.

- "traditional" African exports (agricultural products") towards USA are taxed 16 times more than oil.

- US investments in Africa (already quite marginal) are constantly falling: 865 million dollars in 1993, 797 in 1995, 540 in 1996. In 1996, Nigeria and South Africa obtained 96.5% of these US investments.

- "Aid to development" through the USAID fell by 25% between 1995 and 1996.

- US exports, concerning mainly African industries (chemical industry, etc.) fell from 478 million dollars in 1995 to 263 in 1996.

- Manufactured product exports from Africa to the USA fell by 31% between 1995 and 1996.

Friday, January 28, 2000 12:28 PM

INTERNATIONAL TRIBUNAL
TO JUDGE THOSE RESPONSIBLE FOR THE DEADLY EVOLUTION
THAT THREATENS THE VERY EXISTENCE
OF THE WORKERS AND PEOPLES OF AFRICA

Document Number 6

Privatisation, deregulation and working conditions

With, SAPs and privatisation the role of Africa in the world economy is diminishing. Jeune Afrique writes (November 1st, 1999): "Sub-Sahara Africa participation in the industrial production of the world reaches at best 0,3%", instead of 1,5% in 1975.

The accelerated destruction of industry is added to an overall offensive against protective labour rights.

The destruction of labour Codes is intrinsically linked to the SAPs. But these Codes are a fundamental element of the constitution of nations in Africa. National independence arose from a struggle which was centred on the demand that international labour standards be acknowledged and the only possible framework for this was national independence.

The World Bank especially ceaselessly demands that labour Codes be modified. To what end? Let us take the case of Ivory Coast.

"Labour laws in Cot e d'Ivoire were the result of the Labour Code of Overseas territories of 1952, then of the Law of August 1st, 1964 on the Labour Code completed by the inter-professional collective bargaining agreement of July 20th, 1977...

"The aim was to impose a greater flexibility inside and outside the firm. Outside, it introduced the official liberalisation of workers' being hired by doing away with the monopoly of the employment Office, now called the Agency on employment promotion (Agepe). From now on, the firm can hire employees directly or call upon specialised employment agencies.

"The new Labour Code legalises negotiated termination of the labour contract, which is in the interest of both employers and employees, especially to allow job cuts for economic reasons. In any case, the new Code gives the manager the authority to determine the reasons for lay off measures, the criteria for it, the list of people to be laid-off, the date of lay-off, and there is no longer an authorisation needed... Besides there is a great potential for flexible work hours allowing to adjust the volume of employment and a better use of equipment. The new Code permits modulated work hours, part time jobs, individual work hours." (Jeune Afrique Economic, special issue: "Cote d'Ivoire's Target: the year 2000")

Another example of the reforms proposed by the World Bank is even more explicit. The following document was given by the World Bank to the Benin trade unions (excerpts):

"Article 13 (former text): Limited term contracts extend beyond two years renewable once. (New text): Limited term contract cannot extend beyond two years, renewable twice. "Article 52 (former text): Whatever the employer's stated motive, economic or not, any lay-off which does not have a serious objective reason gives the wage earner the right to claim damages in relation to the prejudice received defined by the competent tribunal. Damage allowances cannot amount to less than six months of wages.. (new texts): ... for all workers who have been employed for at least 5 years". (Complementary amendments of the World Bank and IMF for the draft Labour Code).

The result has been a skyrocketing of the "informal" jobs sector (or black market), where workers are over-exploited, without labour Code protection, as shown by a ICFTU document: "Two thirds of workers in towns are in the deregulated so-called "informal" sector, and unemployment has doubled since the seventies. It totals between 15 to 20% of the labour force. Real wages in industry fell steeply in the eighties by an average 12% yearly in the 15 countries where the ILO has verified information. The present structural adjustment policies don't allow for the satisfaction of essential human needs and don't reduce the debt weight either and therefore do not lead Africa on the path of lasting economic growth. The informal sector in Africa attains the following proportions as compared to the labour force in towns:

Benin 72.6%
Burkina Faso 60.2%
Burundi 45.1%
Congo 36;9%
Cote d'Ivoire 60.8%
Gabon 21.8%
Ghana 38.3%
Guinea 61;2%
Madagascar 22.7%
Malawi 23.0%
Mali 32.9%
Nigeria 65.1%
Niger 68.5%
Rwanda 47.5%
Senegal 4.3%
Togo 69.4%
Zaire 66.2%

Average for the African continent 59.0%" (Source: ILO)

Job deregulation has developed alongside a general weakening of State institutions. The same document states: "The lack of any legal system capable of covering the market creates a climate of insecurity which is a fertile ground for corruption, intimidation and financial gangsters." (ICFTU Congress resolution, June 25th-29th, 1996).

Privatisation and deregulation has led to massive unemployment

"Although statistics concerning productive jobs in Africa are not definitive, not accurate and unpublished, the elements of documenting we have show that there is a severe employment crisis in Africa. Productive jobs creation rate in the region reached an average 2.4% a year in 1991 while its active population grew by 3.2% a year during that same period.

"As for its distribution, the formal sector labour force is not only very limited but is indeed declining, its average rate in the region falling from 10% in 1980 to less than 8% in 1990. On the other hand, employment in the informal job sector in towns has seriously increased in the eighties, and includes 25% of the work force in 1991, showing that the informal job market has developed. The remaining 2/3 are in agriculture and in rural area jobs.

"Estimates show that unemployment rose from 7.7% in 1978 to 22.8% in 1990 and should reach 30% before the year 2000. Unemployment is especially high in urban regions, although it is also on the rise in rural areas. The unprecedented rate of migration from countryside to town (due to war, collapse of agriculture and a generalised refusal of the unbearable living conditions in rural areas) has exacerbated unemployment in urban centres. Other factors contributed to aggravate the situation of employment in some countries, such as drought, physical environment degradation, social unrest.

"Linked or added to unemployment, there is the question of jobs in the public sector. Civil servant of public firm jobs have been frozen or reduced because of budget restrictions linked to economic recovery programs. In the eighties, the public sector provided over 50% of the formal sector jobs on the continent. This rate should fall to 30 to 35% of formal jobs in the nineties."

Economic Commission for Africa (UN)- January 20-21, 1994.

Structural adjustment plans and employment.

A recent ILO Bureau report was published by Jeune Afrique on January 18th, 1998:

"Employment is still in a critical situation. Economic develop is not sufficient to absorb the work force which increases by 3% a year. Economist Samir Radwan, main author of this report, explains: "Moreover one must add the decline or stagnation of wage-earning jobs, the decrease of real wages and the deterioration of living and working conditions. The majority of African workers are not in the modern sector, but rather in deregulated economic sectors with low profit rates, such as food, agriculture and the informal sector in towns. The latter regroups a crowd of small crafts and trades from the shoe-shiners to peddlers, including those who put plastic films on your identity papers. You can find them just the same on the sidewalks of Ouagadougou, Cotonou or Kinshasa. They are ever more numerous, but this hasn't prevented the average unemployment rate in towns from nearly doubling throughout the continent in the last 15 years to now reach over 20% (it should reach 30% in the year 2000). If one considers undocumented unemployment, half of the work force is in fact looking for a job."

This degradation also reaches countries such as South Africa.

"Over one-third of able-bodied South Africans are without a job - a figure that rises to 47% for Blacks. Employment is falling at a 4% annual rate. Job hunting prospects are not helped by the fact that 40% of black adults are illiterate. To achieve social stability, living standards need to rise sharply. Instead, they are falling as real GDP growth of less than 1% lags well behind a population that's growing at 2-3% a year." (Wall Street journal, November 9th, 1998).

INTERNATIONAL TRIBUNAL
TO JUDGE THOSE RESPONSIBLE FOR THE DEADLY EVOLUTION
THAT THREATENS THE VERY EXISTENCE
OF THE WORKERS AND PEOPLES OF AFRICA

Document N¡ 7

The health and life of African populations are prey to the disastrous effects of "structural adjustment".

Illnesses, and epidemics are spreading first as a direct result of the dismantling of State infrastructures. 48% of sub-Saharan Africa population are deprived of any access to drinkable water. 55% have no access to basic sanitary facilities (World report on Development, PNUD-UNDP, 1998)

According to the UN-ECA,

"78. Access to health care is generally poor in Africa, a situation which has been accentuated by the economic crisis that engulfed the continent since mid-1980s. The per capita distribution of facilities has dropped drastically, institutions have weakened, and the rising cost of services following economic liberalisation has priced them beyond the means of poor. A rapidly increasing population, high rates of urbanisation and the escalating threats to public health have also widened the gap between the supply of and demand for health services. Health infrastructure remains under-funded and poorly managed.

"79. It is currently estimated that 90 per cent of deaths world-wide that are traceable to malaria have occurred in Africa. Of the 23 million people living with HIV/AIDS epidemic in the world, nearly two thirds, almost 14 million persons, live in Sub-Saharan Africa. If has been reported that 50 percent of more of all beds in medical institutions in Central and East Africa are being occupied by AIDS patients.

"80. Africa also includes the greatest number of countries with the lowest access to safe drinking water, adequate sanitation and health services. The low health and nutritional standards have strapped Africa to its 1960s levels of life expectancy. Only four countries, Algeria, Botswana, Cape Verde and Mauritius have recorded levels above the -targets in the WHO's strategy for Health for all by the year 2000."

AIDS takes on epidemic proportions:

"The epicentre of AIDS world-wide is still in sub-Saharan Africa. Since the beginning of the epidemic, 34 million African have been infected and over 12 million have already deceased. In 1998, the region registered four million new infections and a growing number of decease due to AIDS, as shown by the 5,500 funerals per day according to estimates. In the South part of Africa, the epidemic is recent, the rates of infection went on growing at high rates last year. Four countries consider that now between 20 to 26% of adults have been contaminated by the HIV, one new contamination out of seven concerning South Africa...

"In nine countries, where less than 10M adults have been contaminated by HIV, observers consider that AIDS will soon lead to lower life expectancy by an average 17 years in relation to what it should have been without the epidemic. This is not only due to adults' deaths. Over half a million children - most of them infected during pregnancy, at birth or by mother milk - died in 1998 alone. In Namibia for instance, the mortality rate should be 72 for 1000 in 2005-2010 instead of 45 for 1000 without AIDS.

"We know now that in spite of these already considerable HIV infection rates, the worst is still to come in the South Africa. The region is headed towards a human disaster of an unheard of scope", M. Piot, physician, declared.

"In Mutare, Zimbabwe, the elements of the survey indicate that nearly 40% of pregnant women are infected and that probably 30,000 adults are infected by HIV.

"In Zimbabwe, AIDS will mean that 350 people will be buried every day two years hence. In 2005, more than 900 000 orphans under 15 of age will have to struggle to survive without their mother. At that date, AIDS patients will occupy 2/3 of the beds in the public hospitals of the country."

(UN report on AIDS, November 1998)

"Loss is an inevitable corollary of disease and death, but the wrenching toll taken by AIDS is unique: So far the disease has left 8.2 million children without a mother or both parents, the vast majority of them in sub-Saharan Africa. And the total continues to grow, expected to reach 13 million by the year 2000, of whom 10.4 million will still be under the age of 15.

"In most parts of the industrialised world, usually no more than 1% of the child population is orphaned. Before the onset of the AIDS epidemic, societies in the developing world absorbed orphans into extended families and communities at a rate just over 2% of the child population. In contrast, a staggering 11% of children in Uganda are now orphans because of AIDS. In Zambia, 9% are orphans; in Zimbabwe, 7%; and in Malawi, 6%. Where prevalence rates among women are high, so are the numbers of children left behind."

(The progression of Nations, 1999, UNICEF)

"Blacks' disease"? No, an illness born from social disintegration and wars.

"Wars and armed conflicts create favourable conditions for the propagation of the virus. The UNAIDS/AOM report notes that in Rwanda, before the upheavals of the middle of the nineties, the infection rate was about 10% in the towns and 1% in the countryside where the population mostly lived. In 1997, the rate has reached over 11% in the countryside as well as in the towns. A telling fact is that the rate of infection was multiplied by 6 essentially among the population which fled from the countryside to refugee camps."

(UNAIDS report, 1998)

But there is not just AIDS:

"Almost 300 million clinical cases of malaria occur world-wide each year and over one million people die (see Annex Table 8). Almost 90% of these deaths occur in sub-Saharan Africa, where young children are the most affected. Malaria is directly responsible for one in five childhood deaths in Africa and indirectly contributes to illness and deaths from respiratory infections, diarrhoea disease and malnutrition. Though malaria is still a big problem, huge progress has been made since the beginning of the century; its recent resurgence in Africa contrasts dramatically with the global decline in mortality since 1900."

(The World Health Report - WHO -1999)

Malaria had begun to recede in Africa after independence. It has undergone a new and brutal development since the structural adjustment plans began to be implemented in Africa.

.../... Annual Malaria mortality rates since 1900 (per 100 000 population)

250 233 216

200 194 192184 174 172 150165 148

100107

50 4818 39 1617 7 021 1900 1930 1950 1970 1990 1997

World minus sub-Saharan Africa

World

sub-Saharan Africa

(The World Health Report - WHO - 1999)

The problem raised is that of means. While Africa is forced to pay 33 billion dollars of debt, 1 billion dollars would be enough to save the life of almost 1 million children:

"The focusing of public resources on a limited number of highly effective, low cost interventions will include preventive and primitive actions, and treatment of malaria. For example, the Integrated Management of Childhood Illness (IMCI) package is an initiative to improve the treatment of the most common childhood diseases and conditions. Malaria is one of five key conditions included in the strategy, along with acute respiratory infections, measles, diarrhoea and malnutrition. Integrated management involves the training of health care staff and the provision of guidelines to help health care providers to recognise the considerable overlap in the signs and symptoms of these common diseases, and to encourage prevention and appropriate treatment of children at home and in the health facility.

"Preliminary estimates suggest that, in Sub-Saharan Africa alone, IMCI could avert annually over 400 000 deaths due to malaria in children. In addition, IMCI could avert a further 350,000 childhood deaths due to malaria in children. In addition, IMCI could avert a further 350,000 childhood deaths form other causes in sub-Saharan Africa and perhaps five times this number globally. Through strengthened health systems, total malaria deaths could be halved for about $1 billion per year."

(The World Health Report WHO, 1999).

But the states are forbidden to use these sums for health care:

A majority of African states today have to expend more for refunding the debt than for the budget of Education and Health together. Tanzania for instance uses 35% of its budget to refund the debt and only 11% for Health care, Malawi 29% against 8%, Ivory Coast 25% against 5% and Cameroon 22% against 4% according to the study UNDP-UNICEF 20/20 Public Expenditure.

First the debt payment.

For instance, "new and more efficient therapies associating several anti-retroviruses have allowed sick people in North America and Europe to live longer and better. In the United States, the number of deaths due to AIDS fell by 2/3 between 1995 and 1997 as soon as these therapies were used on a broad scale basis."

(UNAIDS report, 1998).

But the World Bank considers that AIDS treatment must be a business first and foremost and proposes: "that priority be given to interventions increasing private sector interventions". The World Bank has decided that the only feasible policies towards AIDS is to help sick people to die: "retrovirus therapies, which led to considerably bettering the state of health of a few individuals in high income countries, are too costly and demand such a health environment that they cannot be an opportunity in the short-term for the millions of contaminated poor in developing countries. A survey of alternative treatments shows that health care given on a community basis and at home will transfer the costs for tax payers from the national to the local community level, thus reducing considerably the cost of health care and therefore will provide hope to improve for a reasonable cost the quality of life for patients with AIDS." The World Bank considers that: "The government should take care that AIDS patients will benefit from the same access to heath care as other patients suffering from equivalent diseases and with a similar ability to pay for care." (World Bank: Summary of Confronting AIDS; Public Priorities in a Global Epidemic).

The World Bank considers that the 17.5 dollars African states use yearly to take care of each patient sick with tuberculosis is still too much: "Costs can be reduced to use a small number of less costly drugs and by treating people outside hospitals and in their community as far as possible." (The World Bank Group, investing in HIV-AIDS)

No money? No drug. This is what is clearly explained by an article published by the French newspaper Liberation (August 17th, 1999) on the basis of recent WTO studies concerning tropical illnesses, especially in Africa:

"The sleeping disease could be defeated. There is a drug, a recent and efficient one. But this product for poor countries is not profitable. And although the World Health Organisation is now owner of this molecule, sick people risk not to getting it. An accident. In the eighties, the WHO became aware of the phenomenon and thought about finding a substitute drug. The answer came from the USA in 1985. Researchers in a laboratory of the US firm Merell-Dow discovered that a molecule called DFMO has trypanocide activity enabling it to kill the sickness agent. The laboratory's discovery is a bit of a hazard, as they tested the molecule against some types of cancers. A clinical study between 1987 and 1991 on over 400 patients in Congo in the Brazzaville region is organised under the control of Jean Jannin, physician of the WHO. Mr Jean Jannin is immediately enthusiastic: "Results were genuinely spectacular. Some patients nearly dying were injected DFMO and a few days later they could stand up and go home." The production is launched by Merell-Dow in a Midland factory in Michigan to produce a first series of blisters allowing to cure about 20,000 people.

"But in 1995, the firm's fusion with Hoechst, and the programme was stopped. The new firm, the HMR, defines new priorities, and the DFMO is no part of it, for it will yield no profits. This product was not interesting for our group", for it was sold for no profit to the WTO, HMR explains, adding that "war in many of these countries would make it difficult for people to have access to the drug. Therefore we were at risk of remaining with unsold stocks of the drug."

"Tropical illnesses are the worst killer illnesses on earth. Still only 11 drugs have been sold on the market since 1975 out of 1200 produced. These products are sometimes no longer produced because they yield no profit. And when they are produced, poor countries cannot buy them. As a consequence, tropical illnesses killed 13.3 million people in 1998, almost a fourth of the deceased in the world this year. Drugs are more and more considered as a merchandise like any other."

"Five tropical illnesses looking for sponsors

Illnesses Number of deaths per year Instances of drugs which are not available Problems met Lung infections 3.5 million Deftriaxone anti- haemophilia vaccine Too expensive Malaria 1.1 million Pyronaridine Not produced at present AIDS 2.3 million anti-retroviruses Too costly sleeping sickness 150 000 DFMO Not produced at present Tuberculosis 1.5 million sodium aminosalycilate Production not regular

(LibŽration, sources WHO, MSF)

"This occurs when the insured persons use health services much more than they would have if they had no social insurance. Insurance companies can reduce potential risks by regrouping their clients and forcing them to pay for their coverage, or by associating fund providers in health services, by offering them incentives to invest in the financial systems to develop the private sector.

"The key elements to set up successful prices policies for insurance services are the following:

"- Formulating an explicit prices policy "- Review the question of to who m the subsidies should go "- Underline the importance of efficient management of installations. "- Authorise the providers of basic services to keep part of the income received. "- Encourage communities' participation in the governance of health care institutions in the region. "- Better practices for drug supplies especially. "- Promoting the participation of the private sector and setting up an information base for analysing the results of these policies afterwards."

(Source: R. Paul Shaw and Charles C. Griffin. 1995. Financing health care in Sub Saharan Africa by prices of services and insurance. "Development on its way", World Bank, Washington).