CUTS ARC SOUNDS Vol. 1 No. 2

Promoting South-South Civil Society Cooperation
Vol. No. 4 of 2002

A Bi-monthly E-Newsletter Published by CUTS- Africa Resource Centre, Lusaka, Zambia

CONTENTS

EDITOR’S NOTE
Southern Africa Hunger threat and GM Food offers from donors

EVENT REPORT
South Africa IFD NRG meeting

NEWS BRIEFS
Utilise AGOA, COMESA challenges firms
Corruption in Lesotho
AIDS Overshadows Botswana’s Economic Success

EVENTS AND ANNOUNCEMENTS
Regional workshop under FEATS to be held at Kampala

The southern African region is faced with hunger as a severe consequence of crop-failure in the last farming season. The international community including FAO (Food and Agriculture Organisation) and other international food aid agencies have expressed concern over this alarming situation.

The situation has, however, highlighted the issue concerning GM (Genetically Modified) foodstuff. The donor countries have been offering GM foods in a bid to address the threat of hunger in the region. However, Zimbabwe has refused to accept food aid from the US, citing fears associated with health and environmental risks associated with GM food. Zambia stated that it would rather starve than get the GM food without taking expert advice on the matter. Mozambique even refused to have their country used for transit of the GM food to landlocked countries. At the same time the US has insisted that GM maize it intends to send to southern Africa is safe.

Since then varied views have been expressed in media accusing the US of dumping the GM food, which its citizens cannot eat. It has also been stated that the effects of GM food are more deadly than AIDS because of its ability not only to destroy humans but also plant life. Apart from the inevitability of cross-pollination and genetic contamination of organic farms, GM crops also threaten non-target species like the Monarch Butterfly, kill beneficial insects, damage soil fertility, create super weeds, and super pests immune to pesticides, etc.

Local experts argue that given the high incidence of HIV/AIDS in the southern African region, fears being expressed are genuine as GM foods could suppress immune systems in human bodies, and could bring about complications such as allergies and antibiotic resistance. It is being further argued that although scientists have dispelled fears about bio-safety of GM foods, most of them are still divided over the matter, resulting in lack of consensus, especially in the European Union (EU) which has banned the commercialisation of GM foods.

In such circumstances governments in the region should be given a chance to make informed decisions over the matter and donors should be informed that they are not promoting the region’s interest by dangling GM food before a population under a threat of starvation.

The second National Reference Group (NRG) meeting of South Africa under the Investment for Development (IFD) project took place at the Institute for Global Dialogue (IGD) office in Johannesburg on 25^th June 2002. The IFD project aims at creating awareness and building capacities of stakeholders on investment issues in South Africa, Tanzania, Zambia, Bangladesh, Brazil, Hungary, and India.

Brendan Vickers of IGD, IFD Researcher in South Africa presented the project findings in South Africa. His presentation covered the following main points:

The expected rewards of FDI in South Africa are seen in the attainment of capital formation, raising the productivity of labour and capital, technology transfer and innovation, access to international markets, access to management skills and techniques, generating employment and achieving environmentally sound production.

Crowding out domestic investment, impact of FDI on domestic competition, transfer pricing and instability (ploughing back profits) were identified as issues, which were hindering development in South Africa.

Civil Society perception of FDI is that it has contributed to South Africa's national economic development objectives over past two to five years. It was noted that foreign investors are not interested in getting access to the domestic market characterised by low per capita income.

Civil Society recommended that no sector should be closed to foreign investors and that automobiles, technology, middle level manufacturing, processed agriculture, industry should be targeted for FDI. UK, US, Germany, Australia, Japan, Malaysia, Switzerland, China and Canada were identified as most important investors.

The Common Market for Eastern and Southern Africa (COMESA) has challenged eligible countries under Africa Growth Opportunity Act (AGOA) in the region to firmly seize the opportunity. COMESA’s acting Secretary General, Sindiso Ngwenya made this statement during the tour of Zambia-China Mulungushi textiles in Kabwe. Mr. Ngwenya said poverty in Africa could be addressed through increased beneficial intra-regional and international trading arrangements. He hoped AGOA would help African Firms in Africa to sell their products on the USA market with minimal difficulties. (TOZ August 2, 2002)

On 17 September, a Lesotho court found Acres International, a Toronto-based firm, guilty of passing $260,000 as a bribe to the chief executive of the project, Masupha Sole. In June, Mr Sole was convicted of 13 counts of bribery and of accepting more than $2 mn. The company, which was involved in Lesotho Highlands Water Project, is a part of two more dams, in Uganda and Laos, which are expected to receive World Bank funding, and it has helped build enormous reservoirs such as the Three Gorges Dam in China. It is known from the World Bank that they would now determine whether further action by the Bank is warranted to exclude the company from future bids.

On 18 September, the African Union said it too would ratchet up efforts against graft, which it guesses costs the continent nearly $150 bn a year by increasing the price of goods. While the officials are often to blame, the Lesotho government hopes the new conviction will change the image of African governments as being hopelessly corrupt.

Botswana has the highest HIV prevalence in the world. One-third of its working-age group adults are infected. Life expectancy, now estimated to be in the low 40s, is plummeting and could drop below 30 years by the end of the decade. Government leaders, who once celebrated the country’s striking economic successes, now warn of the threat of ‘extinction’. Employees dying of AIDS is a cost to the companies and hence an economic loss. The diamond house Debswana contemplated the potential human and economic losses related to AIDS absenteeism and death, and decided to fund a programme that pays 90 percent for its employees and their spouses. Even with the diamond trade, Botswana’s economic resources are limited. The government estimates it will cost $500mn over five years to provide its HIV-positive citizens with anti-retroviral treatment, which means that development projects probably will be scaled back. Parliamentarians are telling their constituents that there is no money for another water well or school or paved road. (WSJ, 2002.08.30)

CUTS-ARC Lusaka, Zambia, in collaboration with Consumer Education Trust (CONSENT), Kampala, is organising a regional workshop at Kampala, Uganda on 20-21 December 2002 under the FEATS project. The seminar aims to enhance participation of consumer and civil society organisations in the region in socio-economic policymaking.

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