Africa

Patrick Bond pbond at SPAMwn.apc.org
Wed Dec 1 19:33:51 MST 1999



On 30 Nov 99, at 11:30, Louis Proyect wrote:
> ...The only use for this modest little mailing list in coming to
> grips with the African crisis is the same as it is elsewhere.

Here's a modest little effort (full paper available if you write me
offline, including an appendix which is the call by left social
movements in Lusaka for an "Africa Consensus" to replace
Washington and Post-Washington Consensi):

***

The Impact of Globalisation on the Periphery:{PRIVATE }
The Case of Africa

Paper presented to the conference "Globalisation and the New World
Disorder"
Russian Academy of Sciences Institute of Comparative Political Studies
(Moscow)
and Focus on the Global South (Bangkok)

Moscow, Russia • 25 November 1999

by Patrick Bond
Associate Professor
University of the Witwatersrand Graduate School of Public and
Development Management
Johannesburg, South Africa

EXECUTIVE SUMMARY

The average African household today consumes 20% less than it did 25
years ago. This is just one surface indicator of our continent's durable,
far-reaching socio-economic-environmental crisis.
        In a discussion document issued last year, the top leadership of the
ruling Alliance between the ANC-SA Communist Party-Congress of SA
Trade Unions blamed the North and West, in part, for the "global
capitalist crisis, rooted in a classical crisis of overaccumulation and
declining profitability. Declining profitability has been a general
feature of the most developed economies over the last 25 years. It is
precisely declining profitability in the most advanced economies that
has spurred the last quarter of a century of intensified globalisation."
        This is a reasonable argument, but it requires that we consider two
other aspects of the crisis: the trade/finance nexus which from the
1970s pushed Africa ever further down a steep, slippery slope; and the
macroeconomic and social policies that the World Bank and
International Monetary Fund -- and now the World Trade Organisation -
- have been promoting. These institutions, whose ideology has been
called neoliberalism or the "Washington Consensus" (after the site many
are based, and the importance of the US Treasury Department, Federal
Reserve and White House in their operations), are the primary vehicles
for ensuring the global capitalist is displaced from the northwestern
centre to southern and eastern sites of far less political-economic power.
        (To be sure, a variety of internal problems bedevil Africa, such as
inherited colonial legacies and the illogicality of many borders, and the
transition from colonialism to undemocratic, often corrupt, highly-
militarised neo-colonial regimes which adopted development strategies
that benefitted a few urban elites at the expense of peasants, women,
workers, local manufacturers and the environment.)
        At the global scale, Africa's problems parallel those of Russia. Firstly,
free trade has had a devastating impact on Africa, given the fact that
Washington has been forcing all developing countries to intensify
exports of agriculture products and minerals. According to a World
Bank study, the prices of crops and minerals (other than fuels) fell by
77% during the 1970s and 1980s. During these years, the continent took
on unrepayable debt. Whereas real interest rates averaged -4% (that is,
inflation was 4 points higher than the interest rate) during the mid-
1970s when foreign loans were easy to acquire, the real interest rate
soared to +4% by the 1980s, leaving Africa in a profound debt crisis.
        As a result, Africa has faced marginalisation through an ever-
shrinking global trade share. Africa was the only continent projected to
lose out from the Uruguay Round of GATT which set up the current
global trade structure, with annual net loss due to free trade estimated
at $2.2 billion.
        Likewise, during the 1980s Africa suffered the continual
rescheduling of overdue loans by the IMF and World Bank, which
typically set a figure of around 25% of debt payments/export earnings
as "sustainable." The African debt crisis may ebb very slightly as a result
of the Cologne and related "debt relief" schemes, but Washington's
Highly-Indebted Poor Countries initiative has so many neoliberal strings
attached and is so stingy that very little will really change. For low-
income Mozambicans, for instance, 1998 debt relief by the World Bank -
- amounting to paying $100 million instead of $110 million the year
before (far more than health and education spending combined) -- was
conditional upon privatisation of the country's urban water systems,
much higher water prices, and a quintupling of cost-recovery from the
public health clinics. Debt has been the biggest killer of Africans (far
more than HIV/AIDS), yet debt relief according to the Washington
Consensus also kills.
        There is a related problem shared by Russia and South Africa (and to
some extent Zimbabwe) that deserves mention. As described by South
Africa ANC-Alliance leaders, "These trends have resulted in the greatly
increased dominance (and exponential growth in the sheer quantity) of
speculative finance capital, ranging uncontrolled over the globe in
pursuit of higher returns."
        What Russia and South Africa together witnessed during mid-1998
was a combined, if terribly uneven, attack on both countries' hard
currency reserves by speculators. In both cases misguided policy-
makers spent enormous sums trying fruitlessly to defend their
currencies. When Russia defaulted, South Africa (amongst other
countries) witnessed a dramatic outflow of capital. The Johannesburg
Stock Exchange dropped by 40% within a few months, while the
currency was down 30% over a few weeks, and would have fallen
further were it not for a rise of 7% in the interest rate, which in turn
dropped the country into a recession. Zimbabwe had an even worse
moment in November 1997, when over the course of four hours,
speculators caused a crash of 74% in the value of the Zimbabwe
currency.
        For most of Africa, geopolitical conflict has been one logical result of
the disintegration of states, economies and societies under this kind of
free trade, debt and speculative-financial pressure. Within the last
decade, the following African countries have witnessed extremely
serious conflict (ranging from genocide to attempted coups): Angola,
Benin, Burkina Faso, Burundi, Cameroon, Chad, Congo, Cote d'Ivoire, the
Democratic Republic of Congo, Ethiopia, Gabon, Ghana, Guinea-Bissau,
Kenya, Lesotho, Liberia, Malawi, Mali, Mozambique, Namibia, Niger,
Nigeria, Rwanda, Senegal, Sierra Leone, Somalia, South Africa, Sudan,
Togo, Uganda, Western Sahara and Zambia.
        Is there any hope for Africa? The ruling South African Alliance
offers the following note of optimism:  "As the depth and relative
durability of the crisis have become apparent, the dominant economic
paradigm (the neoliberal Washington Consensus) has fallen into
increasing disrepute." However, as South Africa itself shows,
Washington's lack of intellectual and practical credibility does not
mean a lack of legitimacy, nor a lack of power. In Pretoria, the South
African finance minister continues to religiously follow the dictates of
an supposedly "homegrown" structural adjustment policy, which in fact
was supported by the World Bank's macroeconomic model and
coauthored by two Bank staff. Neither that programme's failure nor the
strongest labour movement in Africa (nor the ANC politicians sometimes
radical rhetoric) have been able to budge Pretoria out of the Washington
lock-step.
        Nevertheless, the African crisis is generating not only wars and
anarchic desperation, but also a radicalised cadreship in labour
movements, civic groups, NGOs, churches, women's and youth groups,
and environmental organisations. The continent-wide crisis conditions
and the creative modes of resistance they are provoking are in these
respects the basis for solidarity from, and to, Russians.
        By way of illustration, last weekend in Johannesburg, the Jubilee
2000 South Summit convened. The very best social movement leaders
and activists from the Third World resolved to pressure their respective
national leaders to repudiate the debt that they have suffered under for
so long, and to form a debtors' cartel of countries against Washington
and the financiers it represents. The Jubilee Summit also called for the
closure of the IMF and World Bank. Likewise in Seattle next week, the
World Trade Organisation will come under unprecedented pressure
from Africans and other activists not to move towards a new millennial
round, as Washington and Brussels want.
        The Jubilee campaign against debt, and the anti-WTO activists now
gathering, together represent the best traditions of thinking globally,
acting locally, and acting globally. In these regards, the progressive
community is supporting globalisation of people, while rejecting the
globalisation of capital, and of Washington's power and ideology. Thus
the prospect appears that the ongoing displacement of crisis to the South
and East can ultimately be blocked, in part by intensifying global
citizens' cooperation and restoring national sovereignty over the
destructive forces of free global trade and finance.









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