[Marxism] that pig Kristof is at it again

Patrick Bond pbond at mail.ngo.za
Tue Oct 18 22:30:46 MDT 2005


----- Original Message ----- 
From: <acpollack2 at juno.com>
> Here's an idea for Yoshie's MRZine or a Patrick Bond article
> for Zmag or for whomever else bites.

I'm very interested but am not a Times Select reader so can't download this. 
I saw The Nation (Andrew Rice) review of Africa books recently, thanks to 
Louis' forward of the full text. (Forwarding the full text of articles is 
*enormously* appreciated, by the way, to so many of us who are e-hermits due 
to our backward expensive Third World locations, sometimes restricted to 
slow dial-up, whereby we do not have good surfing capacity and instead just 
periodically phone in and download emails.) Rice didn't even seem to 
consider the idea that there are structural features in the world economy 
that make Africa poor; amazing. A paper I've been presenting - e.g. in the 
Southern African Social Forum networks - tries to document the looting. The 
paper's 360kb but has 2 megs of slide attachments. I'm happy to send it 
along. And while I'm at the advertising game, there's a nice 
free-to-download book on the next trick to loot Africa's ecological wealth: 
carbon trading. By Joan Martinez-Alier's reckoning, the South sends $75 bn 
per year merely in carbon sink support to the North, completely 
uncompensated. Now a game is emerging whereby awful projects in the South - 
like a toxic dump not far from where I'm writing - get a World Bank subsidy 
to become guinea pigs in the creation of a carbon market. Our book this week 
tries to raise consciousness; yesterday's national state-sponsored climate 
change conference near Johannesburg featured the environment minister - 
formerly head of the apartheid National Party - in total denial of the fact 
that SA too is a huge carbon emitter, twenty times worse than the US using 
the indicator of per capita economic carbon intensity. 
http://www.nu.ac.za/ccs/files/CCS_ENERGYSERIES_1005_COMPLETE.pdf

***

The Dispossession of Africa's Wealth



By Patrick Bond



Summary


The question as to who and what is responsible for African underdevelopment 
can be answered at two levels. Firstly, the answer is that the operation of 
the imperialist system bears major responsibility for African economic 
retardation by draining African wealth and by making it impossible to 
develop more rapidly the resources of the continent. Secondly, one has to 
deal with those who manipulate the system and those who are either agents or 
unwitting accomplices of the said system.

-- Walter Rodney, How Europe Underdeveloped Africa



1. Why is Sub-Saharan Africa getting poorer? The subcontinent suffers from 
what we can term the 'dispossession of wealth', along two trajectories: 
resource flows from South to North, and adverse class formation. In the 
former case, the central processes are associated with exploitative debt and 
finance, phantom aid, capital flight, unfair trade, and distorted 
investment. In the latter, instead of an organic middle class and productive 
capitalist class, most African countries witnessed the post-independence 
emergence of an excessively powerful comprador ruling elite whose income has 
been based upon financial-parasitical accumulation, which in turn is subject 
to leakage through capital flight. But since much mainstream literature 
about Africa overstresses the 'mistakes' of elites, it is crucial in the 
analysis that follows to contextualise Africa's wealth outflow.



2. Writing by African diasporic scholars over several decades has unveiled 
many of these relations: Claude Ake, Samir Amin, Steve Biko, Amilcar Cabral, 
Frantz Fanon, Ruth First, Samora Machel, Mahmood Mamdani, Thandika 
Mkandawire, Dani Nabudere, Kwame Nkrumah, Julius Nyerere, Oginga Odinga, 
Bade Onimode, Walter Rodney, Thomas Sankara, Issa Shivji and others. As 
Rodney put it in 1973, 'In order to understand present economic conditions 
in Africa, one needs to know why it is that Africa has realised so little of 
its natural potential, and one also needs to know why so much of its present 
wealth goes to non-Africans who reside for the most part outside of the 
continent.' (original emphasis)



3. More recently, the broader process of wealth extraction through 'new 
imperial' relations has been captured by what David Harvey terms 
'accumulation by dispossession': 'the commodification and privatisation of 
land and the forceful expulsion of peasant populations; conversion of 
various forms of property rights (common, collective, state, etc.) into 
exclusive private property rights; suppression of rights to the commons; 
commodification of labour power and the suppression of alternative 
(indigenous) forms of production and consumption; colonial, neocolonial and 
imperial processes of appropriation of assets (including natural resources); 
monetisation of exchange and taxation (particularly of land); slave trade; 
and usury, the national debt and ultimately the credit system as radical 
means of primitive accumulation.'



4. The analysis that follows bears this history and context in mind, and 
tackles two major tasks: explaining structural causes and policy shortfalls 
responsible for South-North (and Africa-South Africa-North) flows of 
resources (Sections 2 and 3) ; and identifying policy proposals that would 
secure greater sovereignty over and value for African resources and for 
their use within the continent (Section 4).



5. While the resource drain from Africa dates back many centuries - to the 
point 'unequal exchange' began with unfair terms of trade, soon to be 
amplified by slavery, colonialism and neocolonialism - the more proximate 
causes in recent years can be identified within the framework of neoliberal 
(free market) policies adopted nearly universally across the world. The 
intellectual foundations can be found in the post-war 'modernisation' 
project, leaving classical debates over development theory still relevant, 
as Section Two suggests.



6. It is in the empirical measurement of Africa's wealth and income outflows 
in Section 3 that the paper offers updated, synthesised information. Four 
components of capital accumulation and class formation - trade, finance, 
direct investment and internal class relations - remain central to Africa's 
ongoing underdevelopment. The mainstream impression - e.g., Tony Blair's 
Africa Commission - is mistaken when citing what appears as a vast inflow of 
aid, for 'phantom aid' should be taken into consideration. And rather than 
foreign direct investment in Africa rising steadily since the late 1990s, 
there are special circumstances in just three recipient countries. Instead 
of a sustainable level of debt service payments, Africa's net financial 
accounts went negative during the 1990s. And although remittances from the 
Diaspora now fund development and even a limited amount of capital 
accumulation, capital flight is far greater. At more than $10 billion/year 
since the early 1970s, collectively, the citizens of Nigeria, the Ivory 
Coast, the DRC, Angola and Zambia have been especially vulnerable to the 
overseas drain of their national wealth. A major factor during the late 
1990s was the relisting of the primary share-issuing residence of the 
largest South African firms, from Johannesburg to London.



7. Many of these are policy-lubricated outflows, now dramatically higher due 
to financial, trade and investment liberalisation. Even the World Bank 
concedes problems stemming from the demise of exchange controls and other 
financial regulations: 'Most African countries have introduced market-based 
reforms in their financial sectors. But post-liberalisation problems still 
need to be addressed.' Nevertheless, the South African government is pushing 
a continent-wide 'fast-track financial market integration'. Likewise, trade 
liberalisation has, according to one study, cost sub-Saharan Africa US$272 
billion since the early 1980s. Trade is especially difficult to rely upon 
for growth, given that agricultural subsidies accruing to Northern farmers 
rose from the late 1980s to 2004 by 15%, to $279 billion, mainly benefiting 
large agrocorporate producers.



8. Non-financial investment flows are driven less by policy - although 
liberalisation has also been important - and more by accumulation 
opportunities. Foreign Direct Investment (FDI) to sub-Saharan began rising 
in the late 1990s after two decades of stagnation. But the vast bulk of 
investments were accounted for in two major processes: South African capital's 
changed domicile, and resurgent oil investments in Angola and Namibia. In 
the latter cases, the World Bank's Where is the Wealth of Nations? report 
acknowledges stagnant and net negative 'genuine savings' in countries with 
high resource dependence and low capital accumulation. These include 
Nigeria, Zambia, Mauritania, Gabon, Congo, Algeria and South Africa. Worst 
of all, Gabon's people lost $2,241 each in 2000 due to oil company depletion 
of the country's tangible wealth, followed by the Republic of the Congo 
(-$727), Nigeria (-$210), Cameroon (-$152), Mauritania (-$147) and Cote d'Ivoire 
(-$100). A few countries do benefit from the larger definition of wealth, 
including the Seychelles, Botswana and Namibia, but the vast majority of 
African countries saw their wealth depleted. South Africa lost $2 drop per 
capita wealth in 2000 and the genuine savings rate was reduced to just 6.9% 
of national income once a variety of other natural capital factors are 
included. Moreover, much of Africa - including South Africa - has been 
victimised by privatisation-related FDI. Transparency International's 
Lawrence Cockcroft concluded, 'The privatisation process has proved a 
disappointment in many African countries' in part because of corruption. 
Other FDI-related corruption comes in many forms of tax fraud and transfer 
pricing.



9. Ecological debt that the North owes the South, especially Africa, is also 
vast. Joan Martinez-Alier and UN climate change commissioner Jyoti Parikh 
surmise that a total annual subsidy of $75 billion is provided merely in the 
form of the 'carbon sink' function. Moreover, in another reflection of 
non-market exploitation, women are the main victims of neoliberalism, 
whether in productive circuits of capital (increasingly subject to sweatshop 
conditions) or in the sphere of reproduction, where much primitive 
accumulation occurs through unequal gender power relations. This is 
especially evident in the case of migrant labour flows, largely because 
rural women have roles in childrearing, healthcare and eldercare that 
maintain an artificially inexpensive supply of labour.



10. In identifying policies that might reverse these flows, we must enquire 
as to whether African countries have gone 'off track', as the IMF argues 
unconvincingly in explaining the continent's residual failures. Instead, 
according to Frantz Fanon and Amilcar Cabral, a post-independence cadreship 
of petit-bourgeois leaders were amenable to Northern objectives, followed 
during the 1980s-90s by the establishment of a formal neoliberal 
'technocratic' corps within Ministries of Finance, central banks and bureaux 
with oversight mandate for privatisation and commercialization. At a time 
when the World Bank has also begun to highlight the idea of 'leadership' in 
Africa, vehicles such as the New Partnership for Africa's Development Africa 
Peer Review Mechanism, for example, will be given higher status than African 
civil society yet contemplates, even if, as the South African finance 
minister put it in 2004, 'it was shameful that a year after the African 
peer-review mechanism was launched, less than half of African countries had 
signed up to be independently reviewed' because they had 'misbehaving 
governments'. That means civil society activists may now be in a position to 
take the citizenries' basic skepticism about African elites (the Bank notes 
that 'about 75% of the respondents agree that African governments are doing 
too little for people trapped in poverty') and establish not only 
alternative conceptions of their problems, but also a different approach to 
public policy.



11. Given the weaknesses in 2005 global-elite and African-elite policy 
proposals aimed at reversing the continent's socio-economic collapse, other 
policy options should be developed that are more amenable to society and 
nature, options that emerge from the bottom-up, through activism and 
critiques that emanate from Africans themselves. It may be that some or all 
of the ten options below would emerge as the policy menu for these 
progressive forces:



·         Under the slogan 'Don't Owe Won't Pay', the obvious policy 
implication of overindebtedness is systemic Third World default, a policy 
successfully carried out in earlier periods en masse, but also hinted at by 
Argentina's contemporary example.

·         As for uneven private sector capital flows in Africa, there are 
also well-tested strategies - such as prescribed assets - that can force the 
domestic reinvestment of pension and insurance funds as well as other large 
institutional investment reserves.

·         For controlling capital flight, it will be crucial to address 
offshore tax havens through national-scale regulation and even prohibition 
of financial transfers from these sites, as part of a more general 
reestablishment of exchange controls to limit currency convertability, and 
through revitalised state financial regulation.

·         With regard to aid, the simple refusal of tied aid and phantom aid 
might be accompanied by an international 'naming and shaming' exercise, 
which some campaigners have already embarked upon.

·         For trade relations, an inward-oriented development strategy is 
preferable (entailing infant industries and judicious tariff and quota 
policies), given the decay of prices for non-petroleum exports, which in 
turn represent a treadmill to rising physical output and declining revenues.

·         Foreign direct investment should be, in future, carefully measured 
so as to include natural resource depletion and many other costs (such as 
transfer pricing and profit/dividend outflows), not simply benefits - and 
then permission refused if these calculations are not favourable, as was 
successful in South Korea's initial post-war industrialisation drive.

·         Fiscal austerity, monetarism, privatisation, liberalisation and 
other macroeconomic policies should be firmly resisted given their 
maldistributive impacts, while civil society intensifies budget oversight.

·         Finally, deep democratisation of Africa will be required to rid 
the societies of corrupt comprador elements, which in turn implies more 
attention to not only contesting aspects of state power and capital 
accumulation (as so many civil society groups are doing), but also 
ultimately taking power through progressive political parties.

·         A dramatic change in the national balance of forces across Africa, 
following the transitions underway in Latin America, is in turn the 
prerequisite for gaining sufficient political weight to begin installing 
vital global-scale measures such as Tobin Taxes, greenhouse gas mitiation, 
and reparations for ecological debt.

·          While a progressive change in government is a long way away in 
most countries, in the meantime it is feasible to amplify existing activist 
initiatives aimed at controlling the outflow of African resources, and 
ensuring that the redistributive strategies are catalysed and owned at the 
level of households, grassroots communities and shopfloors.







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