A Kenyan economist and Executive Director of the African Forum and Network on Debt and Development (AFRODAD), Mr. Jason Rosario, has made a compelling case for the reform of the global economic architecture.
He argued that the current system is not serving the interests of citizens but rather a few countries and multinational corporations.
“We have four countries that have defaulted on their debt, Zambia, Ghana, Ethiopia, Chad, and there are a few others that are not too far from the edge of default, including my very own country in Kenya,” Rosario said.
He also pointed to the rise of public protests across the continent and in other developing countries, indicating a growing demand for change, accountability, and transparency from leaders.
Rosario, who was speaking in a recent virtual press conference by AFRODAD, explained that the current fiscal gaps at the national level on the continent, resulting from trade deficits, balance of payments deficits, illicit financial flows, and taxation rules, are forcing governments to borrow to plug these gaps.
“This creates a fertile ground for governments having to borrow in order to plug those gaps,” he said. “But in the current context, the borrowing that many African countries are doing is actually very bad because a lot of it is being used to run government operations rather than investment in development.”
The economist emphasized the need for a fairer, more just economic architecture that addresses the debt issue from the perspective of the borrower, not the lender.
“We need a level playing field, we need a transparent playing field where workers are able to sit down together with their landlord and hash out a deal,” he said. “At present, this is not happening. We have a system that predominantly favours creditor coordination.”
Rosario proposed a process under the auspices of the United Nations where developing and developed countries and creditors can negotiate in a fair, transparent way.
“We should have a similar process to what Chennai has described with the tax work and the tax rules, to have a similar process under the auspices of the United Nations,” he said.
He also highlighted the importance of national, continental, and global interconnectedness in reforming the global architecture. “It’s that interconnectedness between national, continental and global remains extremely important if there is going to be a coherent position,” he said.
Rosario concluded by stating that the protests taking place across the global south are an opportunity, as people are realizing that the current system is not working for them.
“People are finally realising that the system is not working for them. It’s working for a few elites, and that can no longer be the order of a state of play that we operate in because people’s lives are at risk, people’s lives and livelihoods are endangered of being affected by the kinds of decisions and the kind of system that we work in,” he said.
