One question on the minds of many is just what is the International Monetary Fund and World Bank and why do they keep lending money to African countries already buried under enormous debt?
Political Science Professor Paul Kaiser was forced to answer that very question as he expounded briefly on Africa's current political and economic conditions in an interactive discussion last night.
Kaiser opened by emphasizing that Africa, as a whole, is in the midst of two major transitions.
"Most of Africa is moving away from one-party regimes to multi-party democracy. It is also facing a new trend of economic liberalization," Kaiser said.
To illustrate his point, he compared two visits to Tanzania. In 1991 as a semi-communist state, Tanzania owned most of its means of production and had no street children roaming the capital, Dar es Salaam. When Kaiser returned five years later, the streets were littered with homeless children.
A Tanzanian friend of his called this "the price of progress."
"A lender like the IMF or the World Bank has its own logic. It hurts the credibility of a creditor not to impose conditions on a loan," Kaiser said.
Many of these conditions require that African nations cut subsidies in social services such as health and education.
"The IMF and the World Bank were created in a post-World War II era to revitalize and reorganize the infrastructure of European states," Kaiser told students.
He acknowledged that both the IMF and World Bank had lent money to tyrants and dictators in the past without doing a thorough "credit check." Many of those leaders used the loans to purchase villas on the French Riviera and open untouchable Swiss bank accounts.
Those countries must still service those debts even though their pilfering leaders may be long gone.
"It's like loaning money to criminals and then expecting their families to pay it back," one student said.
Kaiser did not disagree but cautioned that nothing is absolute or "all bad" and that a larger global economic order was at stake.
After an hour, Kaiser re-focused the discussion on the positive aspects of Africa and urged students to nurture the entrepreneurial spirit that was there.
"I say if we want to improve Africa, the challenge is to put dollars into small businesses.... That way it's not help, it's partnering and we tap into the brilliance on the ground," Kaiser said.
"I was surprised," said Wharton senior Omolara Sofola-Martins, who is originally from Nigeria. "He gave a good view of both sides of the issue and I came up with a few good ideas to help out my country."
The event, organized by the Penn African Students Association, drew over a dozen students to the ARCH Auditorium.
