How China changed the game for countries in default

Robin Wigglesworth and Sun Yu  in The FT

Zambia, struggling from an economic and financial crisis compounded by the Covid-19 pandemic, first missed an interest payment on its international bonds. Two and a half years later it remains in limbo, unable to resolve the default on most of its $31.6bn debts. 

That an impoverished and vulnerable country has for so long unsuccessfully laboured to reach a deal with creditors and move on from the crisis is an illustration of the messy process to deal with government bankruptcies, which some experts fear has now broken down completely. 

The consequences could be severe for the spate of countries that have recently defaulted on their debts, and the topic has been high on the agenda of this week’s spring meetings of the IMF and World Bank in Washington. 

In her opening remarks at those meetings, the IMF’s managing director Kristalina Georgieva noted that about 15 per cent of low-income countries were already in “debt distress” and almost half were in danger of falling into it. 

“This has raised concerns over a potential wave of debt restructuring requests—and how to handle them at a time when current restructuring cases are facing costly delays, Zambia being the most recent example,” she told attendees.  

While domestic laws and judges govern the bankruptcies of companies and individuals, there is no international law for insolvent countries — only a chaotic, ad hoc process that involves working through a hodgepodge of contractual clauses and tacit conventions, enduring tortuous negotiations and navigating geopolitical expediency. 

A decade ago, US-based hedge fund Elliott Management exploited that landscape to notch up several lucrative victories by suing defaulters for full repayment of their debts. But this fragile patchwork is now under threat of unravelling completely due to the emergence of a new, disruptive, opaque and powerful force in sovereign debt: China. 

Some experts say Beijing’s lending spree to developing countries and refusal to play by western-established rules represents the single greatest impediment to government debt workouts and threatens to leave some countries in debt limbo for years. 

But Yu Jie, a senior research fellow on China at think-tank Chatham House, believes Beijing’s stance “is less about economic rationalities and more about geopolitical competition”. 

“The multilateral financial institutions are run largely by Americans and Europeans. China had hoped to be able to shape the agenda of debt relief, not to have it dictated by the west,” she says. 

Jay Newman, the former Elliott fund manager who successfully sued Argentina for $2.4bn after its 2001 debt restructuring, says the emergence of China as a significant player has left the entire system in uncharted waters. “You now have one big state creditor with the power to dictate terms and the patience not to make a deal if it doesn’t suit them. It has completely changed the game.” 

The new landscape 

In a grim sign of the times, Alvarez & Marsal — one of the world’s biggest corporate bankruptcy advisers — this year set up a sovereign practice for the first time. Underscoring its expectations for the business, it hired Reza Baqir, a former senior IMF official and governor of Pakistan’s central bank, to lead the new unit. 

The potential is clear. The latest IMF data from the end of February indicates that nine poorer countries — such as Mozambique, Zambia and Grenada — are already in what it terms “debt distress”, while another 27 countries are at “high risk” of falling into it. A further 26 more are on the watchlist. Baqir points out that there are also a lot of struggling state-controlled companies in these countries that will need help as a result. 

“The timing was right” for A&M to set up a sovereign advisory unit, he says. “Given that there are more than 50 countries in various stages of debt distress there is an opportunity for a more holistic approach.” 

Baqir is among those that say the debt restructuring process is broken, largely because it was primarily designed for a bygone era, when creditors were overwhelmingly western countries and western banks. 

Decades ago, the Paris Club was formed to co-ordinate between government creditors, while bankers formed the London Club to restructure their debts. Broadly speaking, western governments drove the process, and occasionally leaned on banks to accept painful settlements. It was largely improvised and often slow, but it mostly worked. 

But the decline of bank lending and the growth of the bond market shook things up in the spate of sovereign defaults that started in the early 1990s. Creditor co-ordination became trickier with myriad bondholders trading claims around the world, rather than just a handful of banks. 

Argentina’s default on $80bn of bonds in 2001 led to years of fights between Buenos Aires and investors such as Elliott, which refused to accept the terms agreed by other creditors. At one point the hedge fund famously seized an Argentine naval vessel when it docked in Ghana. Its reputation became such that bondholders would sometimes invoke the mere spectre of Elliott to scare countries contemplating a default, while policymakers used it as prima facie evidence of the sovereign debt restructuring system’s weaknesses. 

In the wake of the Argentine debacle the IMF responded by attempting to set up a kind of bankruptcy court for countries with itself as judge. But the sovereign debt restructuring mechanism foundered after attracting little support from the IMF’s biggest shareholders. Instead, the US championed the insertion of “collective action clauses” into bonds, which compel recalcitrant creditors to accept a restructuring agreement made by a majority. After Greece’s debt restructuring in 2012 these CACs were beefed up further. 

However, many bonds still lack these clauses. Moreover, they can only help ease a restructuring agreement once it is struck. Many experts point out that they do nothing to solve the biggest fundamental problem: countries are far too slow to seek a debt restructuring as they are wary of a messy process with the potential of worsening an economic crisis and the inevitable political humiliation of defaulting. 

“If I was a finance minister, I’d find it hard to tell my prime minister that we have a clean framework to work with,” says Baqir. 

When they are finally forced into a debt restructuring, the financial relief that countries secure is often too little to ensure a durable upswing. In the few cases where it does clean up their balance sheet, it sometimes only leads to another debt binge. 

This flawed process has now been further complicated — some say wrecked — by China’s vast lending programme across the developing world over the past decade. Many of these loans are opaque in size, terms, nature and sometimes even existence. 

The overall size of the lending programmes is hard to judge, given that China does not report most of it to the likes of the IMF, OECD or Bank for International Settlements. But AidData, a development think-tank based at William & Mary’s Global Research Institute, estimates that the loans amount to about $843bn. China is not a member of the Paris Club, and in most cases the loans are made by its myriad state-owned or merely state-controlled banks, muddling things further. 

It’s like the international financial policy community spent the past decade trying to clean up around the street light, oblivious to the mounds of rubbish piling up unseen around the rest of the darkened street, says Anna Gelpern, a professor of law and international finance at Georgetown University. 

“We spent 20 years focusing on contractual tweaks, assuming that bonds were the problem,” she says. “The problem is the state of global politics, and the fate of low-income countries just isn’t a big priority anywhere.” 

Life in default 

Zambia is a prime example. Of the roughly $20bn of external debt that the IMF tallied when forming its programme in 2022, $2.7bn was lent by international development banks, $1.3bn comes from various western governments, bank loans come to $1.6bn, local kwacha-denominated bonds held by non-residents are $3.3bn and international dollar-denominated bonds account for $3.3bn. But the biggest chunk is nearly $6bn owed to China. 

The IMF has reached a support agreement with Zambia that is conditional on its debt burden becoming sustainable. But other bondholders do not want any relief they offer to simply go towards paying off China. Beijing has in principle agreed to accept a “haircut” on its debts, but experts say it appears to not want anything it offers to go towards improving the recovery of private creditors, leading to the impasse. 

In the meantime, Zambia says it has accumulated about $1.2bn in arrears since its default. Including missed payments to various government contractors, the IMF has estimated that the arrears are actually nearly $3bn. 

Highlighting how China also appears to be leveraging these situations to undermine the western-designed global financial architecture, in January it called for international organisations such as the IMF and World Bank to participate in the debt restructuring. This would overturn half a century of convention that these organisations are “super-senior” creditors exempt from debt restructurings, as participating would imperil their ability to lend to other countries. 

One senior adviser to the Chinese government says that “there is no law that requires World Bank loans to be prioritised” and that the country was “not happy” with a practice that originated in an era when western countries were generally the only creditors. “If we allow the World Bank to take precedence over us, we need to have bigger voting rights and take larger stakes at the bank. China’s duty doesn’t match its rights in development finance.” 

Another increasingly common wrinkle in debt restructuring is what to do with domestic bonds, which local banks and financial companies have often gorged upon. Here too, Zambia is a good example. 

The $3.3bn of local currency bonds held by non-residents have also been cordoned off from the debt restructuring. Lusaka fears that reducing the value of kwacha bonds could wreck its banking industry and do more damage than they are worth. But some holders of other international bonds argue that they should also be included in the restructuring. 

“In the sovereign debt restructuring business we didn’t really think much about local debts,” says Lee Buchheit, a leading lawyer in the field. “There often wasn’t much of it, and we always assumed that the sovereign has a much broader palate of mechanisms it can use to deal with domestic debt.” 

But what to do about Zambia’s Chinese loans remains the thorniest issue and has risen to the highest levels in Washington and Beijing. US Treasury secretary Janet Yellen this year raised the stand-off with Chinese president Xi Jinping’s economic adviser Liu He, and said that it had “taken far too long already to resolve this matter” when she visited Lusaka in January. 

China’s exceptionalism? 

For the most part, experts say China seems mostly content with rolling its debts rather than restructuring them, handing out new loans to ensure that its domestic banks can be repaid in full. But it prefers to act alone, at its own pace, and feels no need for transparency. 

A recent paper by several economists, including Harvard University’s Carmen Reinhart, estimated that China has made 128 bailout loans worth $240bn to 20 distressed countries between 2000 and 2021. About $185bn was extended over the last five years of the study, and more than $100bn in 2019-21. 

Reinhart says that China’s lending stands out for its “extreme” opacity but stresses that its overall behaviour is not as unusual as some people say. “China is really playing hardball because it is a major creditor. US commercial banks also played hardball back in the 1980s,” she says. Baqir agrees, saying: “Whatever the colour or creed of a creditor, creditors think like creditors.” 

The Chinese government adviser also points to factors such as the country’s relative inexperience with debt workouts. “China is still at an early stage in coming up with its debt relief programme,” he says. 

Incomplete domestic financial reforms have also made it harder to offer debt relief to overseas creditors, while some Chinese banks are also struggling with big hits from the country’s wilting real estate sector. 

“We need co-ordination from the top level, which now has other priorities,” the adviser says. He also points out that the pressure on developing countries has intensified following a series of US interest rate rises, and that as a result Washington “should be responsible for the debt trap”. 

But whatever the root cause, most agree on the end result. “All of this [creditor] fragmentation is leading to paralysis,” says Sean Hagan, a former general counsel at the IMF who now teaches international law at Georgetown. 

 There are few solutions being floated around. The IMF in February announced a new Global Sovereign Debt Roundtable to bring together the full gamut of creditors and debtors, and hopefully thrash out ways to “facilitate the debt resolution process”. It is an initiative that few experts harbour much hope for. 

Buchheit likens the impact of an assertive new player on an already fault-riddled debt restructuring system to someone having a bad cold that a doctor struggles to treat, who is then impaled by a spear. “The cold hasn’t gone away, but the doctor is likely to focus more on the spear,” he says. 

Ironically, both Buchheit and Newman — who clashed many times over the years as the leading lawyer for and suer of bankrupt countries — advocate for the same basic approach: countries should restructure the debts they can, remain in default to China, and the IMF should drop its “kumbaya” approach and accept semi-permanent arrears to its biggest shareholders. 

But most expect Zambia-like debt limbo to be the likeliest outcome for a lot of countries. “I suspect this is going to be a recurring problem,” says Reinhart. “And the longer these countries are in the [debt] netherworld . . . the [more the] fabric of the country is affected.”  

Africa has been failed by westernisation. It must cast off its subservience

Chigozie Obioma in The Guardian






One of the greatest ironies in the history of the collapse of any civilisation must be the initial interaction between Africans and Europeans. The Igbos in the east of Nigeria, for instance, initially saw the Europeans as madmen of strange appearance and ill-formed ideologies. On banking, the Igbos wondered how an adult in his right mind could hand over his possessions for others to keep for him. By the end of the 19th century, the “madman” had overturned their civilisation, and they had adopted his.

The irony is especially relevant in these times when, given the relative failures of most former western colonies, there have been renewed calls for recolonialisation. In September, American professor Bruce Gilley wrote an essay arguing for a recolonialisation of some states, replicating colonial governance of the past “as far as possible” and even building new colonies from scratch.

If the very foundations of his arguments are flawed, it is because he, like most people today, has come to accept that the only metric for measuring modernity is through the western lens. This is the heart of the problem.

Colonialism across most of Africa was so thorough – especially among the former British protectorates – that in its aftermath Africa was essentially hollowed out. The civilisations of the peoples, their various cultures and traditions, their religions, political philosophies and institutions, were eroded or even destroyed.

Today most of the nations in Africa should not even be called African nations, but western African nations. The language, political ideology, socio-economic structures, education, and everything that makes up a nation, even down to popular culture, do not originate from within these countries. African nations have a total dependency on foreign political philosophies and ideas, and their shifts and movements.

It is the feeblest position a state and its people can be in, because it is a position of chronic subservience. It also means that whatever becomes normalised in the west will eventually be adopted in, say, Uganda or Togo. 

This has resulted in Africa being slowly emptied of its essence, and becoming a relic, no different in substance from a statue or a museum.

Celebrations of Africa on the international scene mostly involve dancing, music, traditional fashion and other cultural artefacts – hardly ever showcasing African-originated economic ideas, social ideologies or intellectual theories. It is not that these do not exist, but the world has successfully convinced everyone – including Africans themselves – that everything African is inferior.

Central to this psychology is the proliferation of Africans being educated in the west. This trend has resulted in the rise of an army of western-influenced elites who continue the colonialism of their own people.
Imagine what can happen when an African nation with a high unemployment rate imbibes a gun culture. Consider the potential danger of a situation in Nigeria, where the Hausa man insists his culture is being appropriated by the Yoruba. Or the Christian Igbo embracing their identity, recruiting allies, and ostracising anyone who will not acquiesce with their cause.

But this is becoming Africa’s reality. Increasingly, our elites tell us that the way of the west is “modern” and “civilised”, echoing the early colonialists who dismissed our civilisations as “barbaric”, “archaic”, and “uncivilised” to install theirs. They tell us that our institutions are corrupt, that our societies are patriarchal, and that the African traditional religions are heathenish. As western supremacy entrenches itself in our psyche, we are developing a complex that embraces western ideas without considering whether or not they are compatible with our own political, social, economic and cultural system.

Although Americans may be rightly calling for “diversity”, given a history that excluded a major demographic population of black people, Nigeria’s struggle from inception has been how to unify its enormous diversity. It was the lack of that unity that resulted in the civil war of the late 1960s. This is the same for Angola, Rwanda and Uganda, to name just a few.

But this is of little concern to Africa’s elites. What matters is to find what the political currency is in the US or Europe, and to uncritically follow it. Whereas people in the west are de-emphasising patriotism and nationalism, Africans need these to build sustainable nations.

  ‘The most viable pathway would be for Africa’s elite to look within the vast political and ideological resources on which successful civilisations were built.’ Timbuktu in Mali. Photograph: Sean Smith for the Guardian

In fact, the lack of them, in favour of ethnic allegiance, has been the bane of most African nations, from Congo to Somalia: the result of the Berlin Conference of 1884, in which European leaders divvied up African territories among themselves, ignoring traditional ethnic borders.

In making a case about east Asia and citing the success of Singapore, Taiwan, Hong Kong and others, Chinese philosopher Zou Shipeng argued that the west’s claim to its culture as the only pathway to modernity creates unfair hegemony. Is it possible, he asked, to achieve modernity solely through Chinese culture?

The Middle Eastern nations are another example of cultures that have accepted material modernity but have not been westernised ideologically. They have retained their political systems which, given their theocratic cultural framework, seem best suited for these countries. Every time western nations have tried to disrupt those systems and install a western-style democracy, it has failed.

This was also the case with the first two centuries of European contact with west Africans. The Portuguese and the Dutch traded with many west African tribes from the mid-15th century without colonising them. For 200 years, the Igbos had “Dane guns”, mirrors, and gins, among others, but held on to their own traditions and cultures. It could therefore be argued that the “modernism” orchestrated by western colonialism, isn’t organic to the Africans. Yet proponents of recolonialisation and the African elites fail to see this.

With the sudden unexpected rise in rightwing populism across the west, it is challenging to decide what a viable future may look like. One would think African nations would take this opportunity to think for themselves, to come up with unique African systems.

However, rather than do this, the African elite class largely insists that Africa is not western enough, and is trying to drag the continent, still grappling with western modernism, into the west’s evolving postmodernist regime.

The most viable pathway would be for Africa’s elite to look within the vast political and ideological resources on which successful civilisations (the Zulu, the Igbo, the Malian dynasties of Timbuktu, the Oyo empire, etc) were built. In most Igbo states, for instance, there was an egalitarian system where an older member of a clan represented his people in the elders’ council. There were no kings or presidents. Perhaps there could be a way to adapt this unique political structure to replace the western one which has so far failed.

We need to look into these systems and extract coherent policies that can help form workable and uniquely African social and political systems. This is the only viable path to preventing the continent from fully becoming western Africa – and the only way to ending the continent’s long-term political decay.

More than jihadism or Iran, China's role in Africa is Obama's obsession

Where America brings drones, the Chinese build roads. Al-Shabaab and co march in lockstep with this new imperialism

• 
• • John Pilger
  • The Guardian, Wednesday 9 October 2013 20.15 BST

Hu Jintao, who stepped down as Chinese president last year, in Tanzania on a tour intended to cement China's ties with Africa. Photograph: STR New / Reuters/REUTERS

Countries are "pieces on a chessboard upon which is being played out a great game for the domination of the world", wrote Lord Curzon, the viceroy of India, in 1898. Nothing has changed. The shopping mall massacre in Nairobi was a bloody facade behind which a full-scale invasion of Africa and a war in Asia are the great game.

The al-Shabaab shopping mall killers came from Somalia. If any country is an imperial metaphor, it is Somalia. Sharing a language and religion, Somalis have been divided between the British, French, Italians and Ethiopians. Tens of thousands of people have been handed from one power to another. "When they are made to hate each other," wrote a British colonial official, "good governance is assured."

Today Somalia is a theme park of brutal, artificial divisions, long impoverished by World Bank and IMF "structural adjustment" programmes, and saturated with modern weapons – notably President Obama's personal favourite, the drone. The one stable Somali government, the Islamic Courts, was "well received by the people in the areas it controlled", reported the US Congressional Research Service, "[but] received negative press coverage, especially in the west". Obama crushed it; and last January Hillary Clinton, then secretary of state, presented her man to the world. "Somalia will remain grateful to the unwavering support from the United States government," effused President Hassan Mohamud. "Thank you, America."

The shopping mall atrocity was a response to this – just as the Twin Towers attack and the London bombings were explicit reactions to invasion and injustice. Once of little consequence, jihadism now marches in lockstep with the return of unfettered imperialism.

Since Nato reduced modern Libya to a Hobbesian state in 2011, the last obstacles to Africa have fallen. "Scrambles for energy, minerals and fertile land are likely to occur with increasingly intensity," report Ministry of Defence planners. As "high numbers of civilian casualties" are predicted, "perceptions of moral legitimacy will be important for success". Sensitive to the PR problem of invading a continent, the arms mammoth BAE Systems, together with Barclays Capital and BP, warns that "the government should define its international mission as managing risks on behalf of British citizens". The cynicism is lethal. British governments are repeatedly warned, not least by the parliamentary intelligence and security committee, that foreign adventures beckon retaliation at home.

With minimal media interest, the US African Command (Africom) has deployed troops to 35 African countries, establishing a familiar network of authoritarian supplicants eager for bribes and armaments. In war games a "soldier to soldier" doctrine embeds US officers at every level of command from general to warrant officer. The British did this in India. It is as if Africa's proud history of liberation, from Patrice Lumumba to Nelson Mandela, is consigned to oblivion by a new master's black colonial elite – whose "historic mission", warned Frantz Fanon half a century ago, is the subjugation of their own people in the cause of "a capitalism rampant though camouflaged". The reference also fits the son of Africa in the White House.

For Obama, there is a more pressing cause – China. Africa is China's success story. Where the Americans bring drones, the Chinese build roads, bridges and dams. What the Chinese want is resources, especially fossil fuels. Nato's bombing of Libya drove out 30,000 Chinese oil industry workers. More than jihadism or Iran, China is Washington's obsession in Africa and beyond. This is a "policy" known as the "pivot to Asia", whose threat of world war may be as great as any in the modern era.

This week's meeting in Tokyo between John Kerry, the US secretary of state, Chuck Hagel, the defence secretary, and their Japanese counterparts accelerated the prospect of war. Sixty per cent of US naval forces are to be based in Asia by 2020, aimed at China. Japan is re-arming rapidly under the rightwing government of Shinzo Abe, who came to power in December with a pledge to build a "new, strong military" and circumvent the "peace constitution".

A US-Japanese anti-ballistic-missile system near Kyoto is directed at China. Using long-range Global Hawk drones the US has sharply increased its provocations in the East China and South China seas, where Japan and China dispute the ownership of the Senkaku/Diaoyu islands. Both countries now deploy advanced vertical take-off aircraft in Japan in preparation for a blitzkrieg.

On the Pacific island of Guam, from where B-52s attacked Vietnam, the biggest military buildup since the Indochina wars includes 9,000 US marines. In Australia this week an arms fair and military jamboree that diverted much of Sydney is in keeping with a government propaganda campaign to justify an unprecedented US military build-up from Perth to Darwin, aimed at China. The vast US base at Pine Gap near Alice Springs is, as Edward Snowden disclosed, a hub of US spying in the region and beyond; it is also critical to Obama's worldwide assassinations by drone.

'We have to inform the British to keep them on side," McGeorge Bundy, an assistant US secretary of state, once said. "You in Australia are with us, come what may." Australian forces have long played a mercenary role for Washington. However, China is Australia's biggest trading partner and largely responsible for its evasion of the 2008 recession. Without China, there would be no minerals boom: no weekly mining return of up to a billion dollars.

The dangers this presents are rarely debated publicly in Australia, where Rupert Murdoch, the patron of the prime minister, Tony Abbott, controls 70% of the press. Occasionally, anxiety is expressed over the "choice" that the US wants Australia to make. A report by the Australian Strategic Policy Institute warns that any US plan to strike at China would involve "blinding" Chinese surveillance, intelligence and command systems. This would "consequently increase the chances of Chinese nuclear pre-emption … and a series of miscalculations on both sides if Beijing perceives conventional attacks on its homeland as an attempt to disarm its nuclear capability". In his address to the nation last month, Obama said: "What makes America different, what makes us exceptional, is that we are dedicated to act."

The long and short of open defecation

 

DEAN SPEARS in THE HINDU

  

TOPICS

peoplechildren
social issues (general)health and hygiene
social conditions

There is statistical data to show that the height of Indian children is correlated to their and their neighbourhood’s access to toilets

You can learn a lot from measuring children’s height. How tall a child has grown by the time she is a few years old is one of the most important indicators of her well-being. This is not because height is important in itself, but because height reflects a child’s early-life health, absorbed nutrition and experience of disease.

Because health problems that prevent children from growing tall also prevent them from growing into healthy, productive, smart adults, height predicts adult mortality, economic outcomes and cognitive achievement. The first few years of life have critical life-long consequences. Physical or cognitive development that does not happen in these first years is unlikely to be made up later.

So it is entirely appropriate that news reports in India frequently mention child stunting or malnutrition. Indian children are among the shortest in the world. Such widespread stunting is both an emergency for human welfare and a puzzle.

Why are Indian children so short? Stunting is often considered an indicator of “malnutrition,” which sometimes suggests that the problem is that children don’t have enough food. Although it is surely a tragedy that so many people in India are hungry, and it is certainly the case that many families follow poor infant feeding practices, food appears to be unable to explain away the puzzle of Indian stunting.

‘ASIAN ENIGMA’

One difficult fact to explain is that children in India are shorter, on average, than children in Africa, even though people are poorer, on average, in Africa. This surprising fact has been called the “Asian enigma.” The enigma is not resolved by genetic differences between the Indian population and others. Babies adopted very early in life from India into developing countries grow much taller. Indeed, history is full of examples of populations that were deemed genetically short but eventually grew as tall as any other when the environment improved.

So, what input into child health and growth is especially poor in India? One answer that I explore in a recent research paper is widespread open defecation, without using a toilet or latrine. Faeces contain germs that, when released into the environment, make their way onto children’s fingers and feet, into their food and water, and wherever flies take them. Exposure to these germs not only gives children diarrhoea, but over the long term, also can cause changes in the tissues of their intestines that prevent the absorption and use of nutrients in food, even when the child does not seem sick.

More than half of all people in the world who defecate in the open live in India. According to the 2011 Indian census, 53 per cent of households do not use any kind of toilet or latrine. This essentially matches the 55 per cent found by the National Family Health Survey in 2005.

Open defecation is not so common elsewhere. The list of African countries with lower percentage rates of open defecation than India includes Angola, Burundi, Cameroon, Democratic Republic of the Congo, Ethiopia, Ghana, Kenya, Liberia, Malawi, Rwanda, Senegal, Sierra Leone, South Africa, Tanzania, Uganda, Zambia, and more. In 2008, only 32 per cent of Nigerians defecated in the open; in 2005, only 30 per cent of people in Zimbabwe did. No country measured in the last 10 years has a higher rate of open defecation than Bihar. Twelve per cent of all people worldwide who openly defecate live in Uttar Pradesh.

So, can high rates of open defecation in India statistically account for high rates of stunting? Yes, according to data from the highly-regarded Demographic and Health Surveys, an international effort to collect comparable health data in poor and middle-income countries.

International differences in open defecation can statistically account for over half of the variation across countries in child height. Indeed, once open defecation is taken into consideration, Indian stunting is not exceptional at all: Indian children are just about exactly as short as would be expected given sanitation here and the international trend. In contrast, although it is only one example, open defecation is much less common in China, where children are much taller than in India.

Further analysis in the paper suggests that the association between child height and open defecation is not merely due to some other coincidental factor. It is not accounted for by GDP or differences in food availability, governance, female literacy, breastfeeding, immunisation, or other forms of infrastructure such as availability of water or electrification. Because changes over time within countries have an effect on height similar to the effect of differences across countries, it is safe to conclude that the effect is not a coincidental reflection of fixed genetic or cultural differences. I do not have space here to report all of the details of the study, nor to properly acknowledge the many other scholars whose work I draw upon; I hope interested readers will download the full paper at http://goo.gl/PFy43.

DOUBLE THREAT

Of course, poor sanitation is not the only threat to Indian children’s health, nor the only cause of stunting. Sadly, height reflects many dimensions of inequality within India: caste, birth order, women’s status. But evidence suggests that socially privileged and disadvantaged children alike are shorter than they would be in the absence of open defecation.

Indeed, the situation is even worse for Indian children than the simple percentage rate of open defecation suggests. Living near neighbours who defecate outside is more threatening than living in the same country as people who openly defecate but live far away. This means that height is even more strongly associated with the density of open defecation: the average number of people per square kilometre who do not use latrines. Thus, stunting among Indian children is no surprise: they face a double threat of widespread open defecation and high population density.

The importance of population density demonstrates a simple fact: Open defecation is everybody’s problem. It is the quintessential “public bad” with negative spillover effects even on households that do not practise it. Even the richest 2.5 per cent of children — all in urban households with educated mothers and indoor toilets — are shorter, on average, than healthy norms recommend. They do not openly defecate, but some of their neighbours do. These privileged children are almost exactly as short as children in other countries who are exposed to a similar amount of nearby open defecation.

If open defecation indeed causes stunting in India, then sanitation reflects an emergency not only for health, but also for the economy. After all, stunted children grow into less productive adults.

It is time for communities, leaders, and organisations throughout India to make eliminating open defecation a top priority. This means much more than merely building latrines; it means achieving widespread latrine use. Latrines only make people healthier if they are used for defecation. They do not if they are used to store tools or grain, or provide homes for the family goats, or are taken apart for their building materials. Any response to open defecation must take seriously the thousands of publicly funded latrines that sit unused (at least as toilets) in rural India. Perhaps surprisingly, giving people latrines is not enough.

Ending a behaviour as widespread as open defecation is an immense task. To its considerable credit, the Indian government has committed itself to the work, and has been increasing funding for sanitation. Such a big job will depend on the collaboration of many people, and the solutions that work in different places may prove complex. The assistant responsible for rural sanitation at your local Block Development Office may well have one of the most important jobs in India. Any progress he makes could be a step towards taller children — who become healthier adults and a more productive workforce.

Banker with African experience: 'Send everyone into real banking first'

A man who worked in major British banks across Africa says banks have lost touch with simple financial transactions
 

• Joris Luyendijk
• guardian.co.uk, Thursday 31 January 2013 14.59 GMT

He wrote in to the banking blog saying "You haven't had anything about investment banking in Africa. Have I missed something?" We are meeting in a Starbucks off Bank, in the heart of the "square mile". He was born in east Africa, of Indian descent and worked for many years for major British banks, first across the African continent, later in London. He left some years ago for America.

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"I am good at maths and had the intellectual capacity to trade CDOs and other complex financial instruments. But it's just not real banking.

"I grew up in Kenya and in those days the British banks were sources of stability and pride. Indeed, they were the real safety net. My mother worked at a British bank. She never paid a medical bill in her life. The bank took care of that. In many African countries it was the biggest single employer, the biggest single taxpayer … The bank was funding people to go to university … Back in those days banking was a very staid, very respectable profession.

"I went to work for one of the British banks and it was great. I would work in all of the areas of proper commercial banking, each time in a different country. So I'd spend three months in Ghana, in Kenya, Ivory Coast, Zimbabwe. And learn about asset finance (help companies buy equipment), trade finance (help companies trade), balance sheet advisory, structural financing … This would be alternated by six months stints in London to learn risk and treasury management.

"As I said, I have a quantitative background and later on I worked in commodity trading, in London. I was analysing a £2bn book on a daily basis. I'd risk analyse all the trades, which was a truly privileged position as I could see everything that went into a decision to trade or not, as well as get to see the process from trade through settlement to collateral management.

"Working on a trading floor in London was an interesting and different experience. On a trading floor you'd have the back-office doing the paperwork, the middle-office looking at risk and compliance, traders in front office. In Africa the back- and middle-office could be in one person before skill levels built up enough for separating the functions.

"More importantly, the distance between your work and its consequences on the ground was very short in Africa. But in London the actual economy was so far removed from your work it might as well not exist. Traders would come into work, turn on the computer and on their screen they find money, right there. That creates such a different mentality from what I had been doing in Africa. That was very surprising for me to see, that you could be a trader without ever having seen what banking actually is. To this day I can go to Lagos and say: I built that shopping mall. And that bridge. What actual, concrete achievement can a trader point to? I hear someone complained there was no social function to trading recently?

"Why am I different from those who went onto the trading floor? I suppose it's personality and values. In the late 90s in Africa, I saw whole families, solid middle-class people, get wiped out by a combination of bad government and IMF policies and a corrupt financial sector. That really drove home to me just how important stable financial institutions are. Over-indebted countries, an insolvent banking sector, rising unemployment as social spending falls… may seem new to southern Europe but some of us watched this movie before.

"After a few years on that commodity trading desk, I was hired by a major European bank to set up an Africa desk. I thought, great. Some time after that, they closed the desk because they had decided to concentrate on the American sub-prime market. In essence, they went from real banking to moving around and speculating with pieces of paper.

"This showed how people at the top of banks have huge influence. They govern how capital is allocated. Given all the new regulation like Basel III and the Dodd-Frank act… All that happens with new, ever more complex rules is that people get very good at getting round them. More and more, success in investment banking amounts to being able to game the rules and get capital. Trading floor politicians, I call them.

"There was a time that you could be a very successful manager at a major company, say, Boots, and after managing and growing that business for a decade, you'd become a bank chairman. That is no longer the case. Now bankers are recruited straight out of elite universities, they've never seen how you actually run a business. All the way to the top it's an insulated community.

"Still, the financial industry can turn around very fast. You change the hiring and recruiting. Send everyone into real banking first, before they can go into investment banking. So everyone starts in retail, where you actually see that old lady stumble in with her savings to make a deposit, see that local businessman struggling to run his company and pay wages. You make a number of real loans to businesses, proper commercial lending. Next you spend two years in restructuring, cleaning up after a bad loan – and you learn what happens when your bank lends money to the wrong party.

"I recollect one bank, Standard Chartered used to do this. You could not go into corporate or investment banking before working in retail commercial banking.
"The industry also needs to change the rules. Banking must become very simple again, where everyone should be able to determine the health of an institution.
"I seem to recall reading that Barclays paid more in bonuses than in taxes or dividends one year? First time in my life that I wondered about what our industry had become? I thought of Zambia, Kenya, Nigeria… All these places were Barclays and Standard Chartered were the single biggest tax payer, single biggest employer. Tells you why the industry is pivoting away from the city.
"You're asking about finance and development? Well, there are difficult choices. Tobacco, agribusiness, mining used to build more schools, clinics and houses in Africa than any amount of aid. Do we want to see corporations increase their footprint? That's a typical trade-off. Major companies are often the only real safety net for their employees and families. But, say, with tobacco, is it acceptable … Canada is having this debate now.
"Anyway, by now they've probably stopped caring for employees anyway, forced by their shareholders to concentrate exclusively on their quarterly earnings. This has been happening across the board. When companies' decisions should factor in the next 25 years, these days it's more the next 25 weeks!
"It's rarely easy in Africa. Sure, you can demand that this western bank or that stop funding, say, mining. Let me tell you, there is a lot of shady money clamouring to replace us. Drug money, money from piracy, from trading blood diamonds and other illicit resource sales, money looted by corrupt officials … The mining company prefers to deal with a western bank, as they have high professional operating standards and support. If western banks withdraw, for example because we don't want to do any business in Zimbabwe any longer, then it's the other money moving in. That shady money will have no standards regarding corruption, pollution and workers' rights. Banks can spot and be a part of stopping corruption.
"In my experience battling corruption in Africa often comes down to a gut feeling. You're taking a company public, in a so-called IPO. Among the shareholders there's this one mysterious party holding 5%. Do you demand that party release all the names behind it, not just the shell companies but the actual owners? In return for access to western investors, our banks could if they wanted to.
"Africa desperately needs so-called 'deeper capital markets'. If more local people make local deposits, and they invest those in their own country, there are none of the currency or inflation risks you have with foreign investors. But since there are so few solid local places for the African middle class to invest in, most of it goes into real estate which then becomes massively overheated.
"Securitisation, currency and interest swaps ... These instruments, if applied correctly, could do a massive good in Africa. Africa desperately needs 10, 20, 30 years' money, ie long-term investments. To build roads, railroads, bridges, airports, irrigation projects.
"The City could do this. Go back to real banking."

Islam is not the real issue we are facing in Africa

Christians and Muslims have co-existed here for centuries. Corruption and climate change are much more pressing problems

• 
• • Eliza Griswold
  • The Guardian, Friday 8 February 2013

Algerian firemen carry a dead hostage from the gas plant at Amenas. At least 38 civilians and 29 militants died during the crisis. Photograph: Rex Features

 

Stretching from west to east across Africa – from the Atlantic Ocean to the Red Sea – the Sahel today is a militant's dream. Despite the French military's recent routing of al-Qaida in the Islamic Maghreb and its allies in northern Mali, the threat of safe haven for the west's enemies is not going to end there any time soon.

Although, for the moment, the militia have melted from sight, the latest battles in Algeria and Mali are harbingers of a larger catastrophe: the Sahel, the vast grassland north of the equator, has become the latest battleground in the west's war against Islamist militants.

France's plans to withdraw its 4,000 troops from Mali in late March are premature. From the air, US surveillance drones and French fighter planes will not be enough to keep peace in the Sahel – which includes Mauritania, southern Algeria, northern Mali, Chad and Sudan, as well as Somalia, where a 2006 Ethiopian invasion, tacitly backed by the US, looked at first like an utter defeat for the Islamists. Six months later, the militants returned to wage exactly the kind of war Ethiopia and the US had feared.

So how does the west avoid repeating the pattern? By understanding the root causes of the troubles that plague the Sahel.

First, many of its states are weak, if not utterly failing. Ethnic and religious allegiances are much more binding than those of national identity. Exploiting these ties – as well as the growing importance of a global Islamic identity – foreign fighters have decamped from the drone zone of Afghanistan and Pakistan to melt into the lands of North Africa.

All of these factors sharpen the longstanding religious divide that runs along the southern edge of the Sahel, 700 miles north of the equator – the tenth parallel where, thanks to geography, weather and centuries of human migration, most of North Africa's 500 million Muslims meet the 500 million Christians of sub-Saharan Africa. There is nothing new about the co-existence of Muslim and Christian communities at this latitude – it dates back to the seventh century. There's not so much that's new, even, about the emergence of a political form of Islam that sparks conflict with both Christians and more traditional Muslims. Since the Mahdi Muhammad Ahmad launched a 19th-century jihad against the British in Sudan, Islam has gone through periods of revival and rebellion in Africa.

What might be emerging more clearly into public consciousness is a sense that Africa is a zone of strategic concern for the west. Rather than being a place that crosses our radar because of famine, civil war or the legacies of colonialism, we're entering an era in which it becomes a place where western powers directly intervene to protect their interests. So what might this mean for the continent, for some of those key countries, to be placed in this position? And how will it affect our perception of Africa and Africans?

One of Africa's vital interests, which is linked to the rise in militancy, is climate change. Nowhere is this a more urgent issue than in the Sahel, where both flash floods and droughts – which contribute to the Sahara desert's southern spread – are growing more extreme. In Africa, there are now more people fleeing the weather than fleeing war.

Many of these environmental refugees are nomads whose itinerant way of life is in peril. In North Africa, most are Muslims. Since water and grasslands are being replaced by sand dunes, nomads of the Sahel are being forced into different means of survival, such as smuggling cocaine and cigarettes to Europe along ancient salt routes, or joining up with one militant outfit or another.

Another disastrous pattern is that across the continent, Muslim nomads are pushing south into settled land, which tends to belong to Christian farmers. In many places, what begins as a local fight for land and water becomes a globalised battle for religion. In Sudan, for example, the Islamist regime of the north has armed paramilitary Muslim nomads to push south for the sake of their cattle's survival. Deep beneath the surface, that push allows Khartoum to secure its rights to oil.

Oil underlies much of the Sahel – and its well-known curse leads to that curious paradox in which governments such as Nigeria's or Chad's, which receive billions in revenue each year, impoverish their citizens. Despite vast wealth, these states don't safeguard most people's rights to the basic infrastructure of roads, water, electricity or education. Once again, both Muslims and Christians turn to their local mosque or church to help them survive. The resulting corruption on behalf of governments across the region also feeds rebellion in the name of Islam.

Militants use the notion of a return to an idealised Islamic past to control populations from Sudan to Somalia to Nigeria to Mali. This rallying cry for Islamic law, which is reduced to its most extreme measures, is an outgrowth of the rising role of religious identity, but it's also the most expedient means to terrify a population in the name of religion. In many cases, fellow Muslims are the first to suffer at the hands of militants. This is especially true in North Africa, where most Muslims practise Sufism, a mystical strain of the faith that many hardliners see as heretical.

During the cold war, the west fought proxy battles against the Soviets across Africa. In some ways, the vacuum the cold war left behind has left room for a new political contest between Islam and the west. The west's greatest mistake would be to do nothing but militarise this conflict and to shore up corrupt leaders just because they parrot the right kind of western-friendly speak, as we have done in the past.

Far more important – and more daunting – is the need to address the underlying causes of this burgeoning conflict. Corruption and climate change top the list. Until then, American surveillance drones are going to fly over a growing desert that's increasingly hospitable to its enemies.

Want to Help Someone: Shut Up and Listen

Africa's natural resources can be a blessing, not an economic curse

Resource-rich countries have, on average, done poorly but progress is possible if they get economic and political support

People in countries rich in natural resources, such as Tanzania, pictured, can benefit if given the right political and economic support. Photograph: Remi Benali/Corbis

Joseph Stiglitz in The Guardian

New discoveries of natural resources in several African countries – including Ghana, Uganda, Tanzania and Mozambique – raise an important question: will these windfalls be a blessing that brings prosperity and hope, or a political and economic curse, as has been the case in so many countries?

On average, resource-rich countries have done even more poorly than countries without resources. They have grown more slowly, and with greater inequality – just the opposite of what one would expect. After all, taxing natural resources at high rates will not cause them to disappear, which means that countries whose major source of revenue is natural resources can use them to finance education, healthcare, development and redistribution.

A large literature in economics and political science has developed to explain this "resource curse", and civil-society groups (such as Revenue Watch and the Extractive Industries Transparency Initiative) have been established to try to counter it. Three of the curse's economic ingredients are well-known:

• Resource-rich countries tend to have strong currencies, which impede other exports

• Because resource extraction often entails little job creation, unemployment rises

• Volatile resource prices cause growth to be unstable, aided by international banks that rush in when commodity prices are high and rush out in the downturns (reflecting the time-honoured principle that bankers lend only to those who do not need their money).

Moreover, resource-rich countries often do not pursue sustainable growth strategies. They fail to recognise that if they do not reinvest their resource wealth into productive investments above ground, they are actually becoming poorer. Political dysfunction exacerbates the problem, as conflict over access to resource rents gives rise to corrupt and undemocratic governments.

There are well-known antidotes to each of these problems: a low exchange rate, a stabilisation fund, careful investment of resource revenues (including in the country's people), a ban on borrowing, and transparency (so citizens can at least see the money coming in and going out). But there is a growing consensus that these measures, while necessary, are insufficient. Newly enriched countries need to take several more steps in order to increase the likelihood of a "resource blessing".

First, these countries must do more to ensure that their citizens get the full value of the resources. There is an unavoidable conflict of interest between (usually foreign) natural-resource companies and host countries: the former want to minimise what they pay, while the latter need to maximise it. Well-designed, competitive, transparent auctions can generate much more revenue than sweetheart deals. Contracts, too, should be transparent, and should ensure that if prices soar – as they have repeatedly – the windfall gain does not go only to the company.

Unfortunately, many countries have already signed bad contracts that give a disproportionate share of the resources' value to private foreign companies. But there is a simple answer: renegotiate; if that is impossible, impose a windfall-profit tax.

All over the world, countries have been doing this. Of course, natural-resource companies will push back, emphasise the sanctity of contracts, and threaten to leave. But the outcome is typically otherwise. A fair renegotiation can be the basis of a better long-term relationship.

Botswana's renegotiations of such contracts laid the foundations of its remarkable growth for the last four decades. Moreover, it is not only developing countries, such as Bolivia and Venezuela, that renegotiate; developed countries such as Israel and Australia have done so as well. Even the United States has imposed a windfall-profits tax.

Equally important, the money gained through natural resources must be used to promote development. The old colonial powers regarded Africa simply as a place from which to extract resources. Some of the new purchasers have a similar attitude.

Infrastructure (roads, railroads, and ports) has been built with one goal in mind: getting the resources out of the country at as low a price as possible, with no effort to process the resources in the country, let alone to develop local industries based on them.

Real development requires exploring all possible linkages: training local workers, developing small- and medium-size enterprises to provide inputs for mining operations and oil and gas companies, domestic processing, and integrating the natural resources into the country's economic structure. Of course, today, these countries may not have a comparative advantage in many of these activities, and some will argue that countries should stick to their strengths. From this perspective, these countries' comparative advantage is having other countries exploit their resources.

That is wrong. What matters is dynamic comparative advantage, or comparative advantage in the long run, which can be shaped. Forty years ago, South Korea had a comparative advantage in growing rice. Had it stuck to that strength, it would not be the industrial giant that it is today. It might be the world's most efficient rice grower, but it would still be poor.

Companies will tell Ghana, Uganda, Tanzania, and Mozambique to act quickly, but there is good reason for them to move more deliberately. The resources will not disappear, and commodity prices have been rising. In the meantime, these countries can put in place the institutions, policies, and laws needed to ensure that the resources benefit all of their citizens.

Resources should be a blessing, not a curse. They can be, but it will not happen on its own. And it will not happen easily.

Is the EU taking its over-fishing habits to west African waters?

The UN says EU trawlers are out-muscling 1.5 million fishermen, who themselves warn west Africa could 'become like Somalia'

• 
• • John Vidal aboard the Arctic Sunrise
  • guardian.co.uk, Monday 2 April 2012 14.01 BST

Mauritania's waters are crowded. Twenty-five miles out to sea and in great danger from turbulent seas are small, open pirogues crewed by handfuls of local fishermen, taking pitifully few fish. Also here within 50 miles of us are at least 20 of the biggest EU fishing vessels, along with Chinese, Russian and Icelandic trawlers and unidentifiable pirate ships.

We are closest to the Margaris, a giant 9,499-tonne Lithuanian factory trawler able to catch, process and freeze 250 tonnes of fish a day, and a small Mauritanian vessel, the Bab El Ishajr 3. Here too, in the early mists, its radio identification signal switched off, is Spanish beam trawler the Rojamar. The Arctic Sunrise, Greenpeace's 40-year-old former ice-breaker, is shadowing one of Britain's biggest factory trawlers – the 4,957-tonne Cornelis Vrolijk. Operated by the North Atlantic Fishing Company (NAFC), based in Caterham, Surrey, it is one of 34 giant freezer vessels that regularly work the west African coast as part of the Pelagic Freezer Association (PFA), which represents nine European trawler owners.

The ship, which employs Mauritanian fish processing workers aboard, is five miles away, heading due south at 13 knots out of dirty weather around Cape Blanc on the western Saharan border. By following the continental ledge in search of sardines, sardinella, and mackerel, it hopes to catch 3,000 tonnes of fish in a four- to six-week voyage before it offloads them, possibly in Las Palmas in the Canary Islands.

But, says NAFC managing director Stewart Harper, while most of its fish will end up in Africa, none will go to Mauritania, despite the country facing a famine in parts. "Unfortunately Mauritania does not yet have the infrastructure to handle cargoes of frozen fish or vessels of our size," he says.

The west African coast has some of the world's most abundant fishing grounds, but they are barely monitored or policed, and wide open to legal and illegal plunder. According to the UN's Food and Agriculture Organisation, all west African fishing grounds are fully or over-exploited to the detriment of over 1.5 million local fishermen who cannot compete with them or feed their growing populations.
Heavily subsidised EU-registered fleets catch 235,000 tonnes of small pelagic species from Mauritania and Moroccan waters alone a year, and tens of thousands of tonnes of other species in waters off Sierra Leone, Ghana, Guinea Bissau and elsewhere.

A further unknown amount is caught by other countries' vessels, but the individual agreements made between west African countries and foreign companies are mostly secret.

Despite possible ecological collapse, and growing evidence of declining catches in coastal waters, west African countries are now some of the EU's most-targeted fishing grounds, with 25% of all fish caught by its fleets coming from the waters of developing countries.

Willie MacKenzie, a Greenpeace ocean campaigner, said: "Europe has over-exploited its own waters, and now is exporting the problem to Africa. It is using EU taxpayers' money to subsidise powerful vessels to expand into the fishing grounds of some of the world's poorest countries and undermine the communities who rely on them for work and food. The EU has committed some €477m for agreements with Mauritania over the past 10 years, essentially paying for vessels like the Cornelis Vrolijk to be able to access these waters," he adds.

According to the PFA, about 50 international freezer-trawlers are active in Mauritanian waters at any one time, of which 30 originate from countries such as Russia, China, Korea or Belize. "By targeting fish species that cannot be fished by local fishermen, we avoid disrupting local competition and growth and always fish outside the 12-13 mile fishing limit for our type of vessel," says a spokesman.
"Not all international operators active in Mauritanian waters meet the EU's safety and environmental standards. This threatens our efforts to foster sustainable practices in the region."

Greenpeace says the over-exploitation of African fisheries by rich countries is ecologically unsustainable and also prevents Africans from developing their own fisheries. It takes 56 traditional Mauritanian boats one year to catch the volume of fish that a PFA vessel can capture and process in a single day. Since the 1990s, the once-abundant west African waters have seen a rapid decline of fish stocks. Local fishermen say their catches are shrinking and they are forced to travel further and compete with the industrial trawlers in dangerous waters unsuitable for their boats.

"Our catch is down 75% on 10 years ago. When the foreign boats first arrived there was less competition for resources with local fishermen and fewer people relied on fishing for food and income. Governments have become dependent on the income received by selling fishing rights to foreign corporations and countries," says Samb Ibrahim, manager of Senegal's largest fishing port, Joal.

"Senegal's only resource is the sea. One in five people work in the industry but if you put those people out of work then you can imagine what will happen. Europe is not far away and Senegal could become like Somalia," said Abdou Karim Sall, president of the Fishermen's Association of Joal and the Committee of Marine Reserves in West Africa.

"People are getting desperate. For sure, in 10 years' time, we will carry guns. The society here destabilises as the fishing resource is over-exploited. As the situation become more difficult, so it will become more and more like Somalia," he said.

There is now growing concern that illegal or "pirate" fishing is out of control in some waters. According to the UN, across the whole of sub-Saharan Africa, losses to illegal fishing amount to about $1bn a year – 25% of Africa's total annual fisheries exports.

Guinea is thought to lose $105m of fish to pirate fishing a year, Sierra Leone $29m, and Liberia $12m. An investigation by Greenpeace and the Environmental Justice Foundation in 2006 found that over half of the 104 vessels observed off the coast of Guinea were either engaging in or linked to illegal fishing activities.

Surveillance and monitoring of overfishing is now urgently needed or fish stocks will collapse, leading to humanitarian disasters in many countries, says the UN. Increasingly, ships are transferring their catches to other vessels while at sea, rather than directly off-loading in ports. This conceals any connection between the fish and the vessel by the time the fish arrives on the market, meaning the true origin of the catch is unknown.

However, the PFA says banning EU vessels from African waters would not be sensible.
In a statement it said: "Less regulated, less transparent and less sustainable fishing operators would replace the European vessels. This would be a bad deal for Europe and the African countries we partner with.

"They would see less strategic infrastructure investment, reduced transfer of skills and knowhow, as well as scientific research and more depleted fish stocks. And in Europe we would damage a viable part of EU's fishing economy to the benefit of countries such as China.

"All of the fish caught by the PFA is destined for west-central African communities rather than consumers in developed countries. In fact, the fish caught and distributed by the PFA is often the only source of essential protein for the people in countries such as Nigeria."

• John Vidal's travel costs to Senegal were paid by Greenpeace. The NGO had no say over editorial content.