Taking a break from patronising the working classes here, Polly Toynbee and Harriet Harman flew to Ghana to patronise some black people. Toynbee’s hack piece – which could have been churned out before leaving, being the standard rant against IMF conditionalities – is printed in today’s Guardian.
http://www.guardian.co.uk/commentisfree/2009/apr/18/ghana-economy-imf-polly-toynbee
Those who have read The Catholic Orangemen of Togo will know of my deep love for Ghana. Indeed, I was there last week. Among other things, I spent a delightful evening with my old friend Kwabena Duffour, now the new Finance Minister, and his extremely intelligent and well-informed family. We talked over the macro-economic situation in some detail.
Plainly Toynbee has not read “The Catholic Orangemen” or her article would not contain so many basic errors.
The first thing to say is that Ghana’s revenue base is very strong. In fact, contrary to what Toynbee says, the “credit crunch” has had very little effect on Ghana so far. It had little exposure to toxic debt and, unlike ours, its economy was not based on a series of Ponzi schemes.
Toynbee is right to note the problem of high inflation, in particular in world food prices, but quite wrong to link this to the credit crunch. Third world food inflation has been an escalating problem for at least four years. The credit crunch may actually ameliorate it. Of course falling demand in the World economy and lack of availability of commercial credit must start to show some effect. But Ghana, unlike the UK, should not go into recession.
There is no structural problem. The rather sad fact is that the Ghanaian government is facing a liquidity crisis due to what may be politely described as fiscal racklessness, but I would more bluntly describe as looting, by the outgoing government.
I say that with a heavy heart because President Kufuor and several senior ministers were good friends of mine, but they seemed unable to control corruption in the last couple of years – which is generally agreed to be a major factor in why they lost the election.
I agree with Toynbee absolutely on the question of water metering for the poor in third world countries. I rail against it in The Catholic Orangemen and it was a Malthusian example of the neo-con control of the IMF. But actually we won that one a few years ago. Still, an easy Aunt Sally for Toynbee’s lazy piece.
It is worth noting that Toynbee will have been paid more for her turgid outpourings in the Guardian just this week, than the ladies of the credit union she touchingly describes will see in ten years.
Toynbee is simply wrong when she writes that “The IMF wants subsidies for electricity removed, again hitting the poorest hardest”. Ghana provides electricity to all its users at below the cost of production. The situation has got worse as the availability of hydro-electric power reduces due to climate change. Electricity is subsidised by the Ghanain taxpayer. Taxation in Ghana falls most heavily on the poor: – it is not very progressive, with VAT the major contributor. So the poor are paying for the subsidy.
But the poor use very little electricity. The electricity subsidy is probably worth no more than a few dollars a year to the ladies she patronised with their cash in a biscuit tin under a tree. By contrast, the US Embassy, with its two vast office buildings, Ambassador’s Residence, compound, school and scores of staff houses, receives an electricity subsidy of over a quarter of a million dollars a year from the Ghanaian taxpayer.
Electricity subsidy disproportionately benefits the rich at the expense of the poor. The solution is a social tariff to help the poor, not the continuation of blanket subsidy. Toynbee is fighting the IMF of ten years ago – perhaps understandable at her age. The IMF in fact has a pretty open mind on the matter. I have discussed it with them directly – unlike the lazy Toynbee.
Toynbee is a dull New Labour hack, an apologist for war criminals, and a well-paid patrician from a wealthy family who likes to cluck around showing how sorry she is for the poor. Just like Harman, in fact. Neither of them know anything about Africa. They do as much good for Africa as the stunts of Madonna.
Toynbee thinks she can fly in for a few days and suddenly become an expert on Ghana. Yet she has cheer-led for New Labour for twelve solid years without noticing they have been a disaster for social mobility, education, civil liberties and international law.
Polly Toynbee, self-appointed guardian of the poor of the world – and stupid muddled-headed old bat.