The British Government is selling a Ł28 Million air traffic control system to Tanzania using money released from Debt Cancellation. Tanzania is one of the world's poorest countries - half the population lacks access to clean water and one in four Tanzanians dies before the age of 5.

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The sale of the Air traffic control system

Clare Short's (Development Secretary) attempt to block the sale

Facts about Tanzania

Jubilee Debt Campaign's response

Tanzania, Civil Society organisations' reponse

Take action by writing a letter

Just what they need - a Ł28m air defence system

You may be aware of the controversy that has broken out over the impending sale of expensive military aviation equipment to Tanzania. For your information, here follows a brief summary of developments on this issue, and a short JDC response.

ISSUE

It has been reported that Tony Blair, Jack Straw, Geoff Hoon (Defence) and Patricia Hewitt (Trade and Industry) are strongly backing the sale of a new Ł28m ($40m) military air traffic control system to Tanzania, to be supported by the Export Credit Guarantee Department. Gordon Brown and Clare Short (amongst others) oppose the deal (Guardian, 18/12/1), considering it a waste of money (Tanzania reportedly has only five military aircraft). This view is shared By the World Bank (FT, 14/12/1) who would like to see Tanzania purchase a civilian system at one-quarter of the cost (Report by the International Civil Aviation Organisation, commissioned by the World Bank). The news comes hard on the heels of the announcement (World Bank, 27/11/1) that Tanzania has reached Completion Point within HIPC (see JDC Factsheet 1) and will receive debt cancellation that is supposed to fund poverty reduction measures.

Short renews attack on air traffic deal

David Hencke, Westminster correspondent, Guardian

Thursday February 14, 2002

Clare Short, the international development secretary, has renewed her attack on British Aerospace's Ł28m military air traffic control system for Tanzania. In an outspoken letter to Norman Lamb, Liberal Democrat MP for North Norfolk, she reiterated that Tanzania did not need a military system, and that she was working with the World Bank and the International Civil Aviation Authority to get the decision reviewed.

The system was the subject of a cabinet policy row - with Gordon Brown and Clare Short disapproving of the order, while Tony Blair, Geoffrey Hoon, the defence secretary, and Patricia Hewitt, the trade secretary, keen to award the contract to BAE systems. The order eventually got an export licence from Ms Hewitt after lobbying from British Aerospace warning that 250 jobs at the company's Isle of Wight factory were at risk. Mr Hoon has been actively promoting British Aerospace orders, including the Ł1bn Hawk jet training aircraft for India, at a time when India was close to going to war with Pakistan over Kashmir.

Ms Short and Mr Brown were furious that Tanzania was going to get itself in further debt just after Britain had agreed to wipe out some of its debts so it could spend more on health and education. The country is one of the poorest in Africa. Ms Short said: "The government of Tanzania has made good progress in recent years in drawing up a credible poverty reduction strategy. The proposed purchase does not sit neatly within these priorities. It is for this reason that the government of Tanzania has now agreed to work closely with the International Civil Aviation Authority and the World Bank to review the purchase to ensure that the suitability of the system and value for money concerns are addressed."

The US government had put pressure on Tanzania to acquire an air traffic control system so it could increase its tourist revenue. But it did not press for a military system.

KEY FACTS

One in four Tanzanians dies before the age of five (Oxfam).
Half the population lacks access to clean water (The Guardian).
Even after HIPC cancellation, the World Bank's own (controversial) analysis shows that Tanzania's debt will not be sustainable until 2007. Further this analysis doesn't account for recent falls in commodity prices (on which Tanzania depends) and post-September 11 economic problems (Jubilee Plus).
Tanzania's Completion Point debt cancellation amounted to about $3 billion($2 billion in Net Present Value terms); between now and 2011 annual payments will fall 47% on average from a mean of $193 billion p.a. to $116 million per annum (World Bank). The $40m (Ł28m) military system therefore costs the equivalent of half of one year's debt payment reduction ($77m). In reality the relative cost will be higher than this as Tanzania will need to borrow to make the purchase.
BAE (who will manufacture the system at their facilities on the Isle of White) claim the order supports 250 jobs. Proponents argue a military system is needed for (e.g.) providing a defence against poaching and smuggling (BBC Today Programme).
Leading industry journal Jane's Air Traffic Control say that the system is too expensive and cannot be used for civilian purposes (BBC World at One).

JDC RESPONSE

JDC coalition partners (e.g. Oxfam) have criticised the proposed sale as putting profits before people. Yet Tony Blair has singled out poverty reduction in Africa as being an overriding international concern. The UK government should therefore not claw back from Tanzania hard won debt cancellation in the form of unnecessarily expensive exports (which will only add to Tanzania's debt burden).

Unlike individual partners JDC as a whole takes no formal position on the arms trade, nor on Tanzania's foreign/trade policy, but given that the Ł28m cost of the system could pay for basic healthcare for 3.5m people in one of the world's most impoverished countries (Oxfam), this smacks once again of the rich world giving with one hand and taking with the other. Plus, the "if we don't sell It someone else will" argument won't wash if the UK seriously desires to take a international lead in attacking extreme poverty.

Tanzania Civil Society Organisations' response

Recently the Government of Tanzania (GoT) concluded a deal to buy a sophisticated radar air control system from the UK firm BAe Systems worth US$40 million. The issue only came to light in Tanzania after major differences of opinion within the British cabinet were leaked to the British press. To date, both Tanzanian and British governments have failed to clarify (albeit the attempt by Tanzanian government in the 'Daily News' yesterday) the military or commercial nature of the equipment, or the rationale for the large price tag, when adequate equipment for civilian purposes costs one quarter of the price, and can be obtained through grant aid.

Given that Tanzania is a highly indebted poor nation which has just qualified for debt relief under the HIPC initiative, it is very shocking to learn that the Tanzanian Government has secretly committed the nation to an additional $40 million of commercial debt to add to its existing unsustainable debt stock.

We, Tanzanian civil society organizations (CSOs) note with concern that the negotiations for the radar system have been going on secretly for a number of years, and a down-payment made, during which time we and other like-minded organisations have been campaigning for debt cancellation in order to improve access to basic services for the majority of Tanzanians.

British Prime Minister Tony Blair is concerned about protecting the jobs of 250 BAe workers in the Isle of Wight, while ignoring the cost of the radar to Tanzanian citizens, who on average earn US$250 a year. We strongly condemn the decision by the UK Government to issue a license to BAe for the radar, an act that is inconsistent with their international aid, debt relief and sustainable development policies. It is most unfortunate that the progressive work of Gordon Brown and Clare Short in terms of promoting these noble objectives should be undermined by such an unwise deal.

It is ironic that the UK gives budgetary support to Tanzania worth US$40 million a year, thus giving vital support for debt relief with one hand and taking it back with the other.

We Tanzanian CSOs are convinced that the BAe radar is too expensive for Tanzania to afford, and that we do not have the military capacity to make good use of the equipment in question, if indeed it is a military system.

The Tanzanian public deserves answers to the following questions: On whose authority and with what internal scrutiny in the cabinet and parliament has this deal been negotiated? Have MPs ever had the opportunity to deliberate on it? Has it been the subject of discussion under the Public Expenditure Review and other financial policy bodies?

Why was there no tender floated by the Government for such a big transaction? Why does the government insist on buying such expensive equipment when there is a cheaper alternative available under grant aid? Why is Barclays Bank extending a loan to the GoT at lower than commercial rates? Have we been informed of the total cost of the deal or just the first installment of something much more expensive, bearing in mind that when the radar deal was originally proposed the price tag was more than Ł100 million?

How was it possible for BAe to proceed to assemble the radar equipment without formal government approval? We are thankful to the Bretton Woods Institutions for showing concern for the people of Tanzania by opposing the deal. We would like to see the demands for public interest scrutiny such as the radar extended to all major investment projects, including those financed by soft loans from the IFIs themselves.

We urge our government to forthwith suspend the deal to purchase the radar, pending a full public enquiry into the issues raised above.

We also demand that, in future, any acquisition of multilateral, bilateral or commercial debt should be made public and involve wide participation of people, including parliament, where we believe the people's interest should be protected.

We urge Clare Short, U.K. Minister for Overseas Development, to instruct the Department for International Development (DfID) to withhold the budgeted $40million (Ł28 million) in budget support for the GoT for 2002/03 pending the results of the public enquiry into the deal.

Lastly, we Tanzanian CSOs urge the governments of Tanzania and the UK and the donor community in general to take seriously their collective commitment to open government and pro-poor policies, which will fail miserably if such murky deals are allowed to proceed unsanctioned.

SIGNED: TCDD, TANGO, TADREG, PELUM Tanzania, ACTIONAID Tanzania, The Leadership Forum, National Youth Forum, TGNP, IGODENI and OxfamGB Tanzania.

WHAT NEXT?

Mr Paul Evans, Clerk of the Commons Committee on Strategic Export Control, tells me that there has been no announcement as such of the granting of an export licence for the ATC for Tanzania. It might be published only as part of an annual report either in June this year or in June 03, depending on whether it was granted (if at all) in, say, December 01, or January 02. So it would be possible to assume that no decision has been made yet. Even if, in reality, the decision has been made, a protest should be made in order to deter HMG from making similar decisions in the future.

Patricia Hewitt, Secretary of State for Trade and Industry, is due to appear before the Committee on Strategic Export Control on 14 March and Jack Straw, Foreign Secretary, on 21 March.

Please write to the members of the Committee, protesting at the 'proposal' of the British Government to grant the license for this $40m military ATC, and drawing their attention to the statement, below, of Tanzanian Civil Society. It is important to major on this in order to deal with any accusation that British complainants are neo-colonialists pretending to know what is best for Tanzania.

Please write (to arrive by 11 March, if possible) to Mr Paul Evans, Clerk of Strategic Export Control Committee, Committee Office, House of Commons, London SW1A 0AA.