Growing wealth gap 'obscene'

JOHANNESBURG - "Obscene inequalities" between the rich and the poor are widening, South Africa's Finance Minister, Trevor Manuel, has said, while criticising international trade policies as benefiting wealthy nations.

Manuel made the comments as his British counterpart, Gordon Brown, arrived in the country before a meeting of Britain's Commission for Africa, which aims to boost prosperity on the world's poorest continent.

"The problem is not that international trade is inherently opposed to the needs and interests of the poor, but that the rules that govern it are rigged in favour of the rich," Manuel wrote in an article about the meeting's agenda.

"Already, obscene inequalities between rich and poor are widening."

At the weekend, Brown said he would announce plans to boost trade in poor countries during the commission's talks in Cape Town, which will also be attended by 18 other African finance ministers.

"You can't just say open the door - you have to help people walk through the door," Brown said, after touring a sugar plant in Mozambique on a tour of Africa aimed at kicking poverty to the top of the world agenda.

Africa accounted for 6 per cent of world trade in the 1980s, but this has dwindled to 2 per cent. Manuel said if Africa's share of world exports rose by 1 per cent it would generate US$70 billion, five times what it gets in aid.

Brown has said rich nations must dismantle unfair subsidies that discriminate against developing countries while also helping them develop the infrastructure they need to compete on the world stage.

He also called on rich nations last week to back a three-pronged "modern Marshall Plan" for poor countries to include cancelling debt, smashing trade barriers and doubling annual aid to US$100 billion to help fight Aids.

Manuel said the commission would release a report in mid-March which would recommend steps to strengthen Africa's development efforts before a summit in Scotland of the G-8, which includes the seven main industrial nations and Russia.

He said sub-Saharan Africa had made great headway on economic stability and growth, citing figures that show the region will expand by an average 5.4 per cent in 2005, while budget deficits stand at 0.9 per cent of gross domestic product.

But that progress had to be backed by steps from developed partners as gains to economic governance would be weakened by large-scale financial assistance with tight conditions.

"For that and other reasons, conditions attached to financial aid need to be redesigned in conjunction with Africa's development partners and the Bretton Woods institutions," Manuel said, referring to the World Bank and IMF.

In a speech in Scotland two weeks ago, Brown said Africa looked set to miss by 135 years the UN Millennium goal of halving poverty by 2015.

- NZPA