Is Europe's freedom to be defended in the Sahel?

 

"Germany's freedom is being defended in the Hindu Kush." Former German Defence Minister Peter Struck said so in 2014. Then, Struck had in mind the prevention of the Taliban regime and the civil war in Afghanistan. Where totalitarian Islamic fundamentalists take control of an entire country, people try to flee from oppression and manslaughter. As grotesque as Struck's dictum may have sounded at the time, it still finds defenders today with reference to the migration crisis at Europe´s external borders.

However, the NATO mission in Afghanistan is now widely considered a "fiasco", even if no counterfactual comparison can be made[1]. The International Security Assistance Force (ISAF) was a NATO-led military mission in Afghanistan, established by the United Nations Security Council in December 2001. After almost 20 years of war, NATO had to accept that it was not possible to implement a Western political system there militarily. ISAF ceased combat operations and was disbanded in December 2014. After the US-Taliban deal of February 2020, United States and its Nato allies have agreed to withdraw all troops within 14 months if the militants uphold the deal[2].

The war in Afghanistan also highlights the fact that no longer interstate wars prevail but armed conflicts with and among non-state actors. These are no longer manageable with military armament. A similar insight increasingly applies to Iraq. Contrary to the hopes of Bellicists and Neocons (Bannon, Rumsfeld, Wolfowitz), Western democracy cannot be enforced by military means.

Organisational beginnings of the so-called Islamic State go back to the Iraqi resistance shortly after the invasion by the Coalition of the Willing. In 2004 the group was known as al-Qaida in Iraq (AQI) and from 2011 to June 2014 as the Islamic State in Iraq and Syria (ISIS, later IS), or under the transcribed Arabic acronym Daesh[3]. Former British Prime Minister Tony Blair, although a close ally of George W. Bush, sees the US-led invasion of Iraq as partly responsible for the creation of the terrorist militia Islamic State. He now admits "elements of truth" in the assertion that the Iraq war caused the rise of the IS.

After the destruction of the Caliphate and the occupation of the remaining territories of the IS in Syria in 2017, the Islamic state also shifted to the Sahel, partly in the form of the terrorist organisation of Nigerian origin Boko Haram, but similar in methods: assault, murder, robbery, enslavement and rape.

So the wildfire of terrorism has long since reached the Sahel. Boko Haram, an Islamist terrorist group in northern Nigeria, is also active in the neighbouring countries of Chad, Niger and Cameroon. Recently, it was the deadly attack on a convoy of French aid workers in Niger and the coup in Mali that put the Sahel back on the front pages. As was previously the case for the 'Hindu Kush', appropriate stabilisation strategies for the Sahel are now again being discussed, as was the case last week at the meeting between the German chancellor and the French president in his summer residence.

The Sahel renews the question of what use of military means is appropriate. Bamako, the capital of Mali, is the base for two multinational military missions, MINUSMA and EUTM.  MINUSMA (Mission multidimensionnelle intégrée des Nations Unies pour la stabilisation au Mali), the United Nations peacekeeping mission, was established by UN resolution in April 2013. This UN mission, the deadliest to date, originally comprised 11,000 (currently more than 13,000) soldiers and police officers. Since 2013, the European Union Training Mission in Mali (EUTM) has been tasked with "restoring lasting peace and stability in Mali", which is "essential for long-term stability in the Sahel and wider Africa and Europe"[4]. The EU mission oversees the training of 14,000 Malian soldiers.

The 'Opération Barkhane' is a French-led military operation to eliminate Islamist terrorism that has been taking place in the African Sahel since August 2014[5]. It currently comprises 4,500 soldiers (as of 2020). The area of operations covers the former French colonies of Burkina Faso, Chad, Mali, Mauritania and Niger. These countries form the G5 Sahel, which was created in 2014 and provides a rapid reaction force (G5 Sahel Joint Force) of 5000 soldiers and police officers (since 2019 led by Nigerian Brigadier General Oumarou Namata, on photo above)[6].

An interesting (French) map by Sara Bosmann (Twitter: @mindthemap) was recently published by NeoGeoPo, a French geopolitical newsletter. The map illustrates the locations of military operations and the geostrategic mix (raw material fields, trade routes, escape routes) in which they operate.

Figure 1: The geostrategic situation in the Sahel

Source: Sara Bosmanns, via NeoGeoPol

At the end of May, the German Bundestag extended the mandates for the participation of the Bundeswehr in European Union (EUTM Mali) and United Nations (MINUSMA) military missions in Mali. This means that a total of up to 1,550 German soldiers can be deployed in Mali and the Sahel, more than in Afghanistan at present. In a clever essay[7], Denis Tull (SWP Berlin and Institut de Recherche Stratégique de l'École Militaire, Paris) asks the crucial question, but unfortunately it cannot be answered clearly: What lessons can be learned from the engagement in Afghanistan to operate more successfully in the Sahel?

Security, political and social trends in the Sahel are mostly negative. This would suggest that the military approach is not working, as it already didn´t in the Middle East. The massive use of military means in the Sahel region may be counterproductive. A shift in emphasis towards a stronger focus on civil security forces, justice and law enforcement agencies, possibly against French security interests, is conceivable. However, the call for more autonomy combined with empty governance formulas ignores conflicting interests and conflicts between local actors, and Europe's fear of migration and terrorism weakens the instrument of conditionality.

Mali's institutional instability raises questions about the future of French and multinational military operations. It is always delicate to engage militarily in a country whose sovereignty is undefined. It is even more delicate for French troops in a former colony, especially after years of counter-couping. Although France rules out direct military intervention, fearing to be accused of colonial invasion with reference to its former role, it is still afraid of being accused of colonialism. (This will of course not prevent such accusations from being made anyway). But if the power vacuum in Mali deepens, French and other expats are directly threatened, a division of the country cannot be ruled out and totalitarian Islamic fundamentalists could take control of Mali.

Will we want to defend Europe's freedom in Mali?

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[1] Michael von der Schulenburg (2020), “Ende mit Schrecken“, ipg-journal, 25/3/2020.

[2] Wikipedia, Withdrawal of U.S. troops from Afghanistan, retrieved 25/8/2020.

[3] Wikipedia, Islamic State of Iraq and the Levant, retrieved 25/8/2020.

[4] EUTM, Mission Background, https://eutmmali.eu/factsheet-eutm-mali/

[5] Michael Goya (2020), “Coup d’État militaire au Mali: «Barkhane se retrouve visible au cœur du désordre», Le Figaro, 21st  August.

[6] Oumarou Namata (2020), „A Long-Term Struggle”, adf-magazine, 23rd June.

[7] Denis M. Tull (2020), “German and International Crisis Management in the Sahel: Why Discussions about Sahel Policy Are Going around in Circles”, SWP Comment 2020/C 27, June 2020.

The New DAC Method of Reporting Debt Relief as ODA: HIPC Redux?

Donors have agreed on a new accounting method aid treatment of debt relief on 24/07/2020. At first glance, these are good news for Covid-stricken poor countries. Debt write-offs have helped in the past stimulate new investment and lower funding cost as a debt overhang has been removed, most notably via the HIPC and MDRI initiatives[1]. But to what extent does the new DAC method of reporting debt relief as aid improve funding prospects for the poorest countries?

To help alleviate funding shortfalls among the world’s poorest economies, many of which are in sub-Saharan Africa (SSA), international organisations and the G20^[2] had called on bilateral creditors to suspend debt payments from fiscally constrained countries. A debt service relief package has been approved by some of the world’s biggest lenders for more than 25 African countries, including the World Bank, the International Monetary Fund, the G20, the African Development Bank, and all Paris Club creditors.

So debt service payments to official multi- and bilateral creditors have been effectively halted since the Covid pandemic. However, neither China nor private creditors seem to have bought into a formal debt relief deal orchestrated by official efforts^[3]. These creditors might be free riders of official debt relief as their claims could gain in market value.

End July 2020, members of the OECD Development Assistance Committee (DAC), comprised of 29 donor countries and the EU, have agreed on a method for reporting debt relief as grant-equivalent ODA. Alongside reporting on a grant-equivalent basis, ODA figures will continue to be calculated, reported and published on the previous cash-flow system[4]. The DAC Chair, Susanna Moorehead, hailed the new accounting method on Twitter (30/07/2020): “Really important milestone! This collective decision by the DAC will generate much-needed support and development impact. It responds to developing countries' calls for increased debt relief by increasing incentives for donors to issue debt relief whilst protecting #ODA integrity”.

Oil exporting countries and Heavily Indebted Poor Countries (HIPC) have been the main drivers for the rapid accumulation of public debt in SSA). Fitch Ratings forecasts the median government debt/GDP ratio for the 19 Fitch-rated SSA sovereigns to reach 71% at end-2020, from 57% at end-2019 and 26% in 2012^[5]. With an average SSA export/GDP ratio (2018) of 25% according to the World Bank WITS, the prospective end-2020 median SSA debt/export ratio can be quickly approximated at 280%. To be sure, post Covid debt ratios can´t be estimated with any precision as foreign exports as well as domestic currencies and GDPs have tumbled, leading to inflate debt ratios through a multitude of channels.

 As we learned 20ys ago (HIPC), however, the amount of *true debt relief* implied by the new DAC method will depend on how far the market value of debt forgiven was below its face value. Relief is zero if discount is at 100% and even negative if other ODA is lowered[6]. Again today, the new DAC method seems distorted by a lack of perspective on the ‘market value’ of the debt which is ´reliefed´. Understandable, because SSA official debt is not quoted on secondary markets. But it can be simulated, as Cohen (2000) did twenty years ago (see Table).

Table: Cohen´s Price Estimates

D/X, %	D, Secondary Market Price	D, Marginal Price
150	61	30
200	46	10
250	36	2
300	23	-3

D/X= debt-export ratio, %.

The appropriate ‘market value’ takes account of the risk of non‐payment: arrears, rescheduling and ‘constrained’ refinancing of various sorts. Building on econometric evidence that relied on middle income debtors in the 1980s, the Cohen had argued that the HIPC initiative was about ten times less generous than face value accounting had suggested. With a prospective end-2020 median SSA debt/export ratio approximated at 280% (see above), imputed secondary market prices are below 30% and marginal debt prices at zero.

One can certainly argue with the numbers but not with the principles: DAC donors are granting relief on debt that was almost worthless anyhow. While thus probably helping DAC donors to overstate ODA numbers via debt relief along the grant-equivalent method, the new method of accounting for debt relief might also crowd out traditional aid flows. The new DAC accounting method would free few ressources in itself while the reduction of traditional aid flows would be a net loss for aid recipients.

It is important, therefore, to resuscitate a former ODA concept: Country Programmable Aid (CPA) reflects the amount of aid that can be programmed by the recipient at partner country level[7]. CPA is necessary to reestablish DAC donors´ balance sheet truth and clarity. Otherwise, the new DAC method of debt relief will allow DAC agencies to brag big ODA numbers that do not reach needy low-income country budgets.

 

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[1] HIPC (Highly Indebted Poor Country) coordinated debt relief was provided by bilateral Paris Club creditors from 1996 and was reinforced by the MDRI (Multilateral Debt Relief Initiative) in 2005 to allow for the cancellation of claims on HIPC completion point countries by the IMF, WBG and the AfDB.

[2] Jonesday (2020), G20 Debt Relief for Developing Countries—Less Simple than it Appears, Insights, July. See also the call by the African Union for debt relief https://www.statecraft.co.in/article/african-union-calls-for-debt-relief-and-suspension-of-sanctions-amid-covid-19-crisis. 

[3] The Conversation (2020), Why African countries are reluctant to take up COVID-19 debt relief, 28/07/2020.

[4] The new methodology for reporting on debt relief in the grant equivalent system is complicated. It takes 26 (!) pages of description; see OECD (2020), Reporting on Debt Relief in the Grant Equivalent System, DAC, 30/07/2020.

[5] Fitch Ratings (2020), Rising Debt Distress in Sub-Saharan Africa, Special Report, London, 30/06/2020.

[6] Daniel Cohen (2000), The Hipc Initiative: True and False Promises, OECD Development Centre Working Paper No. 166, October. Also published as Cohen (2003), International Finance, Vol. 4.3., Winter 2001, pp. 363-380.

[7] CPA is defined through exclusions, by subtracting from gross ODA aid that is unpredictable by nature (humanitarian aid and debt forgiveness and reorganisation), entails no cross-border flows (development research in donor country, promotion of development awareness, imputed student costs, refugees in donor country and administrative costs), does not form part of co-operation agreements between governments (food aid and aid extended by local governments in donor countries), is not country programmable by the donor (core funding to national NGOs and International NGOs), or is not susceptible for programming at country level (e.g. contributions to Public Private Partnerships, for some donors aid extended by other agencies than the main aid agency). See DAC Glossary of Key Terms and Concepts.