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2005

Globalization and structural adjustments in sub-Saharan Africa

Joe L.P. Lugalla University of New Hampshire, [email protected]

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Recommended Citation Lugalla, Joe L.P., "Globalization and structural adjustments in sub-Saharan Africa" (2005). The University Dialogue. 8. https://scholars.unh.edu/discovery_ud/8

This Article is brought to you for free and open access by the Discovery Program at University of New Hampshire Scholars' Repository. It has been accepted for inclusion in The University Dialogue by an authorized administrator of University of New Hampshire Scholars' Repository. For more information, please contact [email protected]. A UNIVERSITY DIALOGUE ON GLOBALIZATION 2005–2006 41 Globalization and Structural Adjustments in sub-Saharan Africa (A New Dimension of Neo-)

JOE L.P.LUGALLA (PH .D.)

P ROFESSOR, DEPARTMENT OF ANTHROPOLOGY, UNIVERSITY OF NEW HAMPSHIRE

Introduction New Features and Trends in Globalization The concept of “globalization” is not more than twenty Although it is evident that globalization is nothing more years old, but the social, economic, political, and than an expansion of capitalist relations of production cultural processes that have been associated with global- at a global scale, there are however significant differ- ization have existed for many years. “Globalization” ences in the way this expansion has taken place through- refers to the increasing movement and exchange of out history. Each period has tended to be unique and capital, commerce, communication, and culture world- has been characterized by specific new features that have wide (Green 2001:2). These social economic processes been instrumental in ushering in new conflicts and are a central phenomenon in today’s world. However, contradictions. Today most people acknowledge that when these processes are reviewed in relation to the there are significant changes under way with important historic past and the plight of countries in general and implications in the organization and functioning of the sub-Saharan Africa in particular, these processes reflect global economy. Although there seems to be a consensus a continuation of the old practice of oppression and on this, there are disagreements as to whether the world exploitation that began via the mercantilist phase of the now has a globalized economy. What we see are new growth of , and later via the expansion of the trends in the that symbolize globaliza- European’s empire to other parts of the world through tion. The trends do not follow a linear path, and some of colonialism. As I shall describe and argue later on in this the claims associated with globalization have not been paper, globalization is not at all a new process. It is sim- attained or are very unlikely to be tenable. ply an expansion of capitalism as a mode of production The new trends in the world economy that symbolize at a global scale. The impetus of this expansion has globalization are as follows: First, there is a tremendous further been enhanced by the collapse of the former increase in integrated global markets in production, communist societies and their system of economics, capital flows and trade. What we are seeing is a situation politics, and social organization of life, thus paving way where the world economy is increasingly becoming one to the penetration and dominance of capitalist social and national markets are being replaced by global mar- relations of production in almost every corner of the kets (Went 2000:8). The global markets are becoming world. Capitalism is now expanding and causing major the natural strategic horizon for major corporations, changes in the structure, cohesion and functioning of investors and speculators (ibid). Second, we are witness- the world economy. ing the fast growth of the weight of multinationals in the In this brief account of different faces of globalization world economy. Joint ventures are mushrooming among in sub-Saharan Africa, I discuss the following four companies. We are seeing not only the emerging of big issues. First, I describe the main features of the contem- global companies but their mergers too. These compa- porary process of globalization. Secondly, I present a nies are busy in producing and distributing their com- historical account of the process of globalization and modities regionally and globally. Third, in terms of colonialism in sub-Saharan Africa. In this section I also development planning, many countries emphasize the discuss the impact as well as the legacy of colonialism in macro-economic policies as if that was the only good societies of sub-Saharan Africa. Thirdly, I discuss how way of instituting successful development objectives and the new forms of globalization/colonialism play out in plans. Fourth, the ideology of has become sub-Saharan Africa through the so-called Structural dominant. Many countries, particularly poor ones, have Adjustment Policies (SAPs), their major consequences, through the dominance of policies of neo-liberalism and who gains and who loses. Finally, I end the discus- liberalized their economies and trade transactions. This sion by highlighting in brief what ought to be done in has been followed with the international- mitigating the negative consequences of globalization. ization of goods and commodities. The and 42 WHERE IN THE WORLD IS UNH?

the are enforcing the same tion of (the concentration of women among neo-liberal policies of structural adjustments in the the poor) has increased at an astonishing rate. This Third World countries and shock therapy policies in trend calls for assessing the impact of globalization countries in transition (former communist countries) as along gender lines and reveals that globalization has if all countries shared common history, held the same not meant the same thing to everyone. destiny, experienced similar problems, and had the same development agenda and priorities. These policies The History of Globalization in assume that all countries are endowed with the same Sub-Saharan Africa resources, social capital, and the same cultural back- The history of globalization in sub-Saharan Africa does ground. not only begin with the history of colonization, but As Went (op. cit) has argued, the programs rather with African’s participation in the global economy in the OECD countries, shock therapy policies imple- via the supply of slave labor. However, the coming mented in transitional countries, and structural of colonialism intensified these relations and affected adjustments programs for the Third World countries Africa even more. all have the same characteristics. They propagate African countries were colonized by European powers -oriented growth, free markets, less state because of the economic contradictions that were sanctioned social , , , created by the rapid growth of capitalism, particularly and free movement of labor. Full employment is not industrial capitalism in Western Europe. Colonialism in the prime motive of these policies but rather fighting sub-Saharan Africa had three main objectives: to meet inflation by stabilizing prices. Probably Teunissen and the high demand for raw materials for Western Euro- Veltman are right when they say that: “In corporate pean industries, to secure areas and territories that headquarters’ corridors these days, they say that the only could function as markets for the European goods that way to really insult an entrepreneur is by wishing him were being produced by capitalism (industrial revolu- luck in creating a lot of jobs…Modern entrepreneurs tion), and to identify and dominate strategic areas/ think globally from this standpoint, the nagging unions territories for future investments. This leaves no doubt who say that higher profits should mean more jobs in that the aims of the expansion of capitalism through your own country sound provincial.” (Went op.cit. colonialism were predominantly economic. However, Page 6). a political process of “colonialism” and the creation of At the same time, all these seemingly “nice” and the colonial state were necessary in order to achieve “attractive” new economic trends are accompanied by economic objectives. the increase in problems of and political Once colonialism was achieved, the colonizers began stability in many countries. Although the cold war setting out a variety of social and economic changes in (which was a war between communist/socialist ideology the conquered societies to make sure that their colonial and capitalist ideology) as we used to know it is over, economic objectives were fulfilled. First was the total to our dismay it has been replaced by an increase in destruction of the local system of social and political organized violence, crime, and brutal forms of organization. In most countries the traditional terrorism. chiefdoms/kingdoms were abolished and became re- The booming wealth and the lavish life styles that placed with the Western European system of political some few individuals enjoy is also accompanied by a rule and governance (the essence of the colonial state). rapid increase in the number of people living in poverty The consolidation of the colonial state was followed around the world. The gap between the rich and the with the introduction of new patterns of social and eco- poor within and between countries has increased nomic organization. Most land of the local population terribly during the last two decades. This has led to was taken and given to settler farmers who used it for polarization of power and social classes. A variety of producing non-food agricultural raw materials that were statistics show that the growth of disproportionate needed by western industries. The introduction of income around the world is alarming, and in Africa, both export crops and a cash economy (money as the there has been a rapid fall in average incomes in many medium of exchange) forced the natives to either pro- countries. As incomes have fallen overall, the feminiza- duce agricultural products that they never consumed or to become proletariats by seeking waged employment in A UNIVERSITY DIALOGUE ON GLOBALIZATION 2005–2006 43

rural based plantations or in the urban areas. This and education became replaced by western systems of marked the beginning of the migrant labor system—a education. Western education was not only aimed at situation that separated most men from their romantic producing skilled Africans who could work in the bu- partners (wives, girlfriends) and family members like reaucracy of the colonial state, but it was also a deliber- children for a longer period of time. Recent studies on ate colonial maneuver of cultural transformation with HIV/AIDS have shown how the legacy of migrant labor the ultimate aim of making sure that the young Africans system has been very instrumental in facilitating the learn how to “Behave Western,” “Think Western,” rapid transmission of HIV/AIDS in most countries, “Believe and Worship Western,” “Eat Western,” particularly in southern Africa. “Dress Western,” and “Dance and Drill Western.” By In trying to make the colonies self-sufficient the the time African countries got their independence in colonial economy introduced direct and indirect late fifties and early sixties, the damage of colonialism policies of forced labor. African labor was recruited became apparent and most of its legacy is still being for work on commercialized plantations or in gold, experienced today. diamond and copper mines. The workers were paid Colonialism marked the beginning of the participa- substandard wages and were required to pay (in money tion of African countries as producers and not only as form) head to the colonial state. The introduction suppliers of labor (slavery) in the global economy (In- of taxation forced most Africans to abandon subsistence ternational Capitalist System). Today, Africans not only farming and become proletariats. In order to facilitate produce commodities that have an exchange as well as economic efficiency in terms of transporting goods and use value, but even their labor has become a commodity linking the hinterland and coastal areas and also in or- whose value and price is determined by the world mar- der to make sure that the movement of labor was swift, ket. What is evident is that these economic processes of the colonial state developed communication infrastruc- global capitalism began through colonialism to shape ture like roads, railway lines, ports and others. The main the socio-cultural systems and conditions of life of purpose of these was to secure natural resources and hu- African natives throughout the sub-continent. All this man labor (Scupin 2000:317). The roads and railway strengthened and helped to build the industrial might of line network system of most African countries that we the West, but at the same time bewildered Africans’ own see today continue to reflect this legacy. initiatives and capacity to develop. In brief, the develop- As Scupin (op cit) has argued, the major conse- ment of the economies of Western Europe triumphed at quences of these colonial processes were the complete the expense of African and other Third World econo- disruption of the indigenous production and exchange mies. One can therefore argue that the “Development” systems. Besides drawing most local people into waged of the West and the “Underdevelopment” of the Third economy, monetary systems based on European coinage World are not isolated processes, but rather two sides of were introduced, thus displacing the former systems of the same coin. Although many people tend to trace the exchange and production. The transformation of agri- origin of globalization in African societies with colo- cultural economies triggered dramatic change in tradi- nialism, some of us think that the process began earlier tional peasant rural communities (ibid). Most of the with the pillage and plunder of African human resources land of the local natives fell into the hands of colonial through slavery and slave labor. As Charles Green has settlers, large landowners, and moneylenders. In many argued, the interface between the black diaspora and cases these changes encouraged absentee landownership globalization began centuries ago as black labor was co- and temporary tenancy (ibid). The usual traditional erced for exportation and later production of raw mate- long-term care of land by the peasantry ended up being rials to various parts of the new world, mainly for the sacrificed for immediate and more short-term profits. benefit of capital (Green 2001:12). These economic This disconnected land, labor, and capital from the practices have had a significant effect on the expansion village kinship structures of reciprocity, redistribution, of the black diaspora by uprooting scores of people exchange, and sharing. The African peasants became from the Third World to migrate outward in search of now key players in the international capitalist system. In work and livelihood for themselves and their families order to facilitate and enhance the ideology of colonial- (ibid.). The preponderance of blacks in some of the least ism, traditional religious practices were discouraged and desirable conditions in urban centers on and outside the were replaced by Western European ways of worship and African homeland enables us to understand that, albeit belief (Christianity). Traditional forms of socialization different in many respects from the system of slavery, 44 WHERE IN THE WORLD IS UNH?

what links economic globalization to that earlier system • Introduction of export processing zones is human exploitation and also its reliance on involun- • Retrenchment of workers in the public sectors of the tary migration (ibid: 13). economy (downsizing) Structural Adjustments and • Abolition of government subsidies in agricultural in- Globalization puts In 1981 the World Bank published the Berg Report on • Democratization through the introduction of multi- the social and economic crisis that most sub-Saharan party politics African countries began experiencing in mid 1970s. The Most of the countries in sub-Saharan Africa were report that engendered a major paradigmatic shift in de- forced to adopt these measures as for , velopment assistance to the region argued that the main loans and grants from not only the IMF and the World factors behind the crisis lay on mismanagement of both Bank, but also from other donor countries and agencies. the economy and natural resources by state bureaucrats, Under structural adjustment, state intervention was to lack of accountability, corruption and poor systems of be reduced to a minimum and the impetus for the political governance. economic growth was to come not as in the past from The social and economic crisis was seen to be charac- the domestic marker but by integrating more African terized by negative trends in the growth of the economy economies into the world economy—the very source of leading to falling Gross Domestic Product (GDP) per their underdevelopment, poverty and misery (sic). capita, declining performance of the agricultural sector Governments were required to withdraw from the and more particularly the export sector leading to to provide better incentives to exporters and for- shortage of foreign exchange, deteriorating internal and eign investors. Public spending, particularly in social external accounts and increasing internal and external services, health, and education, was to be reduced in the borrowing. Due to these economic trends, development interest of balancing the budgets. Policies that advocated defined in terms of social progress came to a halt in protectionism were to be withdrawn and replaced by some countries, reversed in others, and the number of free trade and the politics of liberalization. The estab- people living in abject poverty and squatter settlements lishment of the World Trade Organization (WTO) in increased in most countries. It is in response to this kind 1995 accomplished the creation of the “Trinity” of the of crisis that the politics of the Bretton Woods Institu- advocates of structural adjustments, namely The World tions, namely the World Bank and the International Bank, The International Monetary Fund and The World Monetary Fund, necessitated the introduction of “Struc- Trade Organization. These institutions have been so tural Reforms.” What did this mean? instrumental in not only designing SAPs but also in im- In the eyes and hearts of these financial institutions plementing and defending them worldwide. In recent “Structural Reforms” meant adjusting structurally the years the trios have continued to claim that these struc- economy in order to manage properly the balance of tural reforms represent not merely an agenda for payments, reduce fiscal deficits, increase economic macro-economic stability, but a comprehensive strategy efficiency by encouraging trade liberalization, private for (Watkins 1996:257). sector investments and export oriented production. The Sub-Saharan African countries have been implement- essential commandments to be followed in order to ing these SAPs for about twenty years now. What has achieve the above were: happened in these countries during this period can help • of the local currency to explain what these policies have done for Africa. This experience can help us to understand whether what has • Privatization of the public sector of the economy taken place is “stabilization” or “stagnation” of African • Liberalization of trade by introducing a economies? Whether it is “Poverty Reduction” or system “Poverty Intensification”? The few quotations below • Reduction of government expenditure in social ser- from Watkins (1996:71) can help one make his/her own vices like health and education judgment. • Introduction of user charges or cost sharing policies in social services like health and education A UNIVERSITY DIALOGUE ON GLOBALIZATION 2005–2006 45

“There is only one thing worse than structural adjust- tions as a whole. Globalization is certainly increasing ment; and that is not adjusting.” (Kwafi Akoor, Finance economic opportunities, but unfortunately these oppor- Minister, Ghana) tunities are not distributed equally. The multi-national corporations as well as their home governments are also “ESAP (Zimbabwe’s Enhanced Structural Adjustment so strong that now the politics of development of the Programme) has meant that we can only eat two meals a developing countries is at the mercy of those who wield day. We can no longer afford meat, because prices are too both economic and political power. The G7/G8 coun- high. Everything costs more. I cannot afford to pay the tries play a leading role in shaping the direction of school fees for my son and daughter since they started development of the global economy and its politics. charging. Government said it was because of ESAP. We Dictation and force rather than compromise, discussion can’t even go to the clinic when the children are sick be- and people’s participation is sometimes used in making cause we can’t afford the medicine.” (Zimbabwean sure that the global economy and politics move in line Woman, Har are) with the interest of those who have political and eco- nomic power. That is what globalization has become “I have read that our country is stabilizing. That may be today. These trends have not only polarized nations but true, but we have no jobs. We can’t send our children to also social classes too within and between countries. school. Maybe stabilizing is a good thing for the country’s There is evidence from many countries that the gap we pay debt to, but here life is getting harder.” (Zambian between the rich and the poor both at the level of Woman) nations and among people has increased. The majority of poor continue to be marginalized and suffer at the In general, the impact of SAPs in most sub-Saharan Af- time when the few rich continue to blossom with wealth. rican countries has been as follows: As the Director General of UNICEF has noted, “It is • Cost of living has gone up and thus making life of the widely known that the poor have usually gained least in majority of the people much harder. good times and suffered most in bad times” (Bernstein 1992:77). • Public Institutions have been privatized leading to re- Although behind the wheel of globalization are multi- trenchment of personnel, leading to rapid increase in national corporations and the governments of their unemployment rates. home states, these dynamics have now influenced and • Increase in rates of people who are poor, poor health are currently controlling and determining the modus and rapid spread of HIV/AIDS. operand of international institutions like the World • The widening gap between the poor and rich has in- Bank, the International Monetary Fund and the World creased the scale of organized crime, violence, and Trade Organization. Although these institutions are not political instability. This has in turn led to the in- owned by the G7/G8 countries but have member coun- crease in political and economic refugees, famine and tries throughout the world and therefore are required to hunger, which have in turn increased the rate of both operate democratically, today that is no longer the case. local and international migration. Few countries dictate the policies, and democratic pro- cesses are now a mere illusion in the way these institu- • The social services sector (health and education) has tions function. As we have demonstrated, the policies of collapsed. structural adjustment and the regulations propagated by the WTO have facilitated the pillage and plunder of Conclusion resources from Third World countries rather than Overall, looking at the twenty years experience of SAPs promoting social and economic development. These in sub-Saharan Africa, the optimistic view held by most processes have facilitated the rapid integration of neo-liberalist development planners that structural African and Third World economies into the global adjustments are capable of promoting social and eco- economy where the principles of life articulated in the nomic development and stabilizing economies of the story of the “Animal Farm” predominate. Third World countries must now be doubted. What we To assume that multinational corporations are too see happening in Africa and elsewhere in the developing powerful to be controlled under the current waves of world suggests more pessimism than optimism about globalization and capitalist expansion is to assume too the future development of not only Africa but poor na- much. Development can only be achieved if it is carried 46 WHERE IN THE WORLD IS UNH?

out in a democratic way, if it is voluntary and if it fully Routes: Migration and Globalization), Anthropology involves people’s participation. For development to take 715 (Global Warring), Anthropology 627 (Urbanization place, one must be good at listening to the voices of the in Africa), and Anthropology 614 (Economy, Culture poor and at implementing development priorities that and Society) consider the basic needs of the majority poor. By focus- ing on macro-economic policies without examining References their impact at the micro level we might end up imple- 1. Bernstein, H. (1992). “Agrarian Structures and menting policies that negate the interests of the poor Change: Sub-Saharan Africa.” In Rural Livelihoods: and therefore hurt rather than assist them. This amounts Crises and Response, edited by H. Bernstein et al., to “Draining the pond in order to catch the fish.” There is London: Oxford University Press. no doubt that this is what globalization in the era of structural adjustments is doing to most poor countries 2. Green, C. (2001). Manufacturing Powerlessness in the of the world in general, but particularly sub-Sahara Black Diaspora: Inner- Youth and the New Frontier. Africa. New York: Altamira Press. What I have done in this paper is to highlight in brief what globalization and structural adjustments are doing 3. Scupin, R. (2000). Cultural Anthropology: A Global for sub-Saharan Africa. This paper should be viewed as Perspective. New Jersey: Prentice Hall. a trumpeter for change. If it can inspire, arouse, and invigorate the people of this sub-continent and else- 4. Watkins, K. (1996). The Oxfam Poverty Report, Oxfam, where in the world to achieve a new level of awareness UK & Ireland. and consciousness about the negative consequences of undemocratic and uncontrolled process of globaliza- 5. Went, R. (2000). “Globalization: What Is New About tion, and if it can convince people and pioneers of It?,” In Robert Went, Globalization: Neoliberal Challenge, development to listen to the voices and needs of the Radical Responses, London, Pluto Press. poor, then it will have achieved its ultimate objective. As for the students of the University of New Hampshire, The Department of Anthropology teaches a variety of courses that address in detail most of the things that have been briefly discussed in this paper. These include: Anthropology 411 (Global Perspectives on the Human Condition), Anthropology 500 (People’s and Cultures of sub-Saharan Africa), Anthropology 680 (Globalization, Development and Poverty), Anthropology 780 (Anthro- pology of Globalization), Anthropology 760 (Race in Global Perspectives), Anthropology 720 (Roots and