To a full audience in the Campus Center Auditorium on Wednesday, October 3, Professor Léonce Ndikumana announced, "I know nothing about this man [Plato]." Not a pronouncement one would expect at the outset of a lecture titled "What Would Plato Say about Africa’s Odious Debts: On the State, Rulers, and Justice."
Ndikumana, it turns out, was understating his knowledge, yet the talk did focus more on the economics of African debt than on the political arguments of Plato. The professor of economics outlined stereotypes of Africa, including severe indebtedness, aid dependency, being a burden on Western taxpayers, and being prone to corruption. Ndikumana, however, showed the realities of the African continent as quite different.
Africa often pays more to service its debt in a year (interest payments and repayment) than it receives in new debt. It is also a net creditor; since 1970, Africa has taken on $177 billion in new debt, but unofficial transfers of money out of Africa, known as capital flight, amount to $944 billion over the same period. If all capital entering and leaving Africa was properly recorded and tracked through account books, the balance of this money should be $0. If this $944 billion were returned to African nations, the continent would be able to pay back its debt five times. If Africa kept resources onshore, it would not need financial aid from the West.
Professor Ndikumana says this problem arises from the "revolving door" between corrupt government officials and bankers. Often, officials pocket millions of dollars. And for every dollar borrowed by African nations, only 50 cents stays within the continent, the rest dissolved as capital flight.
The professor defines an "odious debt" as (1) a debt borrowed without the consent of the people, (2) a debt that did not benefit the people, and (3) when the lender knew about conditions 1 and 2.
After this economic explanation, Plato enters the arena. Ndikumana believes that the debt results from the failure of the state. The debts borrowed in the name of the people do not benefit the people; the debts benefit dysfunctional leaders and are protected by a global financial system that puts profit first. This, he says, represents a severe social injustice.
Ndikumana proposes Plato’s "perfect state" as a model for breaking the cycle. Plato’s state is represented by rulers that meet four conditions: wisdom, courage, temperance, and justice; they are philosophers who act in the common interest of the people. Such a state must act as an agent for the people by borrowing only to finance economic and social development.
Finally, Professor Ndikumana believes that Plato would not think it fair that Africa pay back odious debts, as doing so would be unjust to the African people. The professor has a just solution that would demand a systematic audit resulting in repayment of only the debt that supported the people. This action would shift the burden of proof to the lender. Professor Ndikumana co-authored the book Africa’s Odious Debts with James Boyce, which presents a far more detailed look at the problem of debt and capital flight in Africa.
Léonce Ndikumana was born in Burundi and, in the late 1980s, spoke out against the killing of civilians in his nation. He was sentenced to five months of solitary confinement and declared a prisoner of conscience by human rights groups. Ndikumana left Burundi and came to the United States for doctoral studies at the University of Washington St. Louis. He is a respected expert on African economies and the global flow of money. The professor speaks at G20 summits, served as director of operational policies and research at the African Development Bank, and, for the last five years, has been chief of macroeconomic analysis at the United Nations Economic Commission for Africa.
Ndikumana is the Andrew Glyn Professor of Economics and director of the African development policy program at the Political Economy Research Institute at UMass Amherst.
The Honors Faculty Lecture Series continues on Wednesday, November 7 at 6:30 p.m. in the Student Union Ballroom with biology Professor Sheila Patek’s lecture "(Un)silent Sea."