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


|

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.


|


|

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.

https://en.m.wikipedia.org/wiki/Debt


|

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).


|

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.


|

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.”


|

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.


|

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


|

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.


|

(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.


|

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.


|

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.


|


|

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.


|

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.


|

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

https://apps.who.int/medicinedocs/en/m/abstract/Js20186en/

https://apps.who.int/medicinedocs/documents/s20130en/s20130en.pdf


|

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.

https://medlineplus.gov/druginfo/meds/a682065.html


|

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.

https://www.bbc.com/news/av/world-africa-43944309/nigeria-s-deadly-codeine-cough-syrup-epidemic

https://www.bbc.com/news/av/world-africa-43944309/nigeria-s-deadly-codeine-cough-syrup-epidemic

au · 2019-06-03 · anzetse were says both the debt-trap narrative and the anti-chinese sentiments...

Documents