Commentary: States, Markets and Africa's Crisis
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Review of African Political Economy No.60:147-156 * © ROAPE Publications Ltd., 1994 ISSN 0305-6244; RIX#6001 Commentary: States, Markets and Africa's Crisis Ray Bush & Morris Szeftel With this edition ROAPE moves to publishing four issues a year. It is hoped that this extra issue will be an annual 'review of books', focused on various aspects of African research. In part, this will permit us each year to provide readers with notes and listings of current activities and publications — we are particularly pleased to be able to restore Chris Allen's Current Africana to our pages after far too long an absence. In part, too, it will provide a forum for discussion of current trends and ideas concerning (and of concern to) Africa's political economy and development. As part of such a process, we welcome responses to what is written. While a review of current debates is no substitute for research and theoretical explanation, we hope that it will help to generate argument and further reflection. In the present conjuncture, with the continent in thrall to markets and moneylenders, with Western imperialism enjoying an unrivalled hegemony, and with the socialist project in disarray, the need to re-engage with fundamental ideas and re-examine basic principles is urgent. The collapse of Stalinism and decline of welfare Keynesianism in Europe have called into question many received ideas — especially about relationships between state and economy and between class and party. One consequence has been to marginalise questions about equality, social justice, class struggle, and the role of state from the agenda of much intellectual debate and even to treat issues of growth and democracy as independent of them. In contrast, we would insist that no such separation is possible or meaningful, that there can be no growth or democratization which does not reduce exploitation and injustice or increase equality and empowerment. State ownership and the single party no longer appeal as the mechanisms of liberation and we should not be too upset about that! But exploitation, famine, brutality and oppression still constitute the ways in which millions experience the global capitalist order and international imperialism. There is a need to join in a search for alternatives, one that will become all the more pressing as the euphoria generated by 'the end of communism' gives way to the perception that capitalism isn't working either. Decades Of Development Crisis Nothing illustrates the urgency of renewed debate about alternatives more than the continuing crises of development in Africa. In particular, debt has enabled Africa's creditors (or 'donors' as they are often called) to take control of its affairs and impose their own wishes and strategies. After two decades of this, little success has been forthcoming. A mighty army of NGOs and 'aid workers', consuming a large proportion of the 'aid' donated, rushes about the continent giving orders with varying degrees of insensitivity and, sometimes, stupidity. Meanwhile the structures of many states deteriorate and crumble, predators impose their will through corruption, 148 Review of African Political Economy authoritarianism and violence, and efforts at growth and democratization remain fragile. A cursory survey of the work published in ROAPE over the last six years quickly establishes how enduring this malaise has become despite all the official optimism expressed in the name of market dogma. Africa's history since 1945 has been marked by such waves of optimism about economic and political development which, in turn, have been repeatedly interrupted by periods of deep pessimism. The most optimistic current came shortly after postwar reconstruction in Europe, in response to the help given by many African colonies in the struggle against fascism and as a result of emerging nationalist movements. The achievement of independence encouraged hopes that control over (in Nkrumah's phrase) the 'political kingdom' would permit rapid — because sovereign — development. Nkrumah was wrong. The optimism of the late 1950s led to increased recognition that even with political independence, economic growth was slow or marginal even at a time when core capitalist economies boomed in the fastest and most sustained period of growth ever experienced by capitalism. This provoked a new pessimism, signalled by Nasser's argument, at the first meeting of the non- aligned movement in Belgrade in 1961, that it was the economic kingdom that needed to be won. Nkrumah, too, came to emphasise the problems of 'neo-colonialism' — reflected in his negotiations with Kaiser Reynolds over the VALCO hydroelectric dam and his attempt to promote an integrated aluminium industry. The emphasis given to economic sovereignty, first by Nasser and then by Nkrumah, produced a new wave of optimism not only in Africa but throughout the 'third world'. The often maligned Non-aligned Movement provided a political umbrella under which alternative strategies for development were discussed, by pan Arabists and Africanists, among others, who argued for an alternative to the development strategies urged upon them by the superpowers. Underdevelopment and dependency limited any scope for autonomous policy formation but the Cold War did, nevertheless, provide some room for manoeuvre and some space to use US - Soviet competition to wrest concessions for 'third world' countries. Nasser, for instance, proved to be a consummate politician in this regard, despite Egypt's dependence on the US for food imports. Yet again this renewed optimism foundered on the overwhelming reality confronting Africa: the need to promote the improvement of peoples' livelihoods had to be undertaken from an inadequate economic base. Five centuries of struggle over the continent's resources and the distorted pattern of development which had proceeded from it proved beyond the immediate capacities of post-colonial regimes to confront effectively. Unable to generate rapid change or legitimate democratic government, many states collapsed into varying degrees of authoritarianism, spoils politics, corruption and brutality. The 'political kingdom' became a resource to be looted rather than a weapon to lead the process of transformation. Probably the most over-riding consequence of Africa's past has been the persistence of trade regimes which locked the continent into static models of comparative advantage in which national economies throughout the continent have been subjected to international market fluctuations and, invariably, experienced a loss of value added in the sale of finished goods in the industrial core. The set back experienced by attempts at economic nationalism produced new efforts to reform such trade regimes in the 1970s. In 1974, the Non-aligned Movement called for a new international economic order. In the same year, pressure within UNCTAD led to calls for commodity agreements, buffer stocks to ensure stabilisation of crops and commodi- Commentary: States, Markets & Africa's Crisis 149 ties which fluctuated due to environmental changes and control of global markets. Unfortunately, such calls came when the bargaining position of the 'third world' was rapidly deteriorating through crisis and debt. In response, West Germany, Japan and the US stressed the importance of market solutions to global issues and resisted calls for reform. By the 1980s, once the debt crisis had locked African states into servitude or peonage, such debates were replaced by the rigours of debt servicing, stabilisation and conditionality. The Dimensions Of Debt Servitude A generation after the formal end of colonialism most of sub-Saharan Africa had succumbed to economic and political crisis. Economic growth in many countries has ceased and debt is the single most important cause of Africa's present inability to develop. The debt crisis has (since the rescheduling crisis of 1982) developed beyond a transitory crisis into a system of international economic relations (Szeftel, 1987). The servicing —rather than the repayment — of debts has become the encompassing preoccupation of governments and their creditors. One World Bank official, considering the prospects of 17 particularly hard-hit countries, concluded that 'the financial crisis is so deep, the debt burden so heavy that they will not make it' (Barratt Brown & Tiffen, 1992:17). A few indicators might suffice to illustrate the dimensions of Africa's crisis today. Of the 51 states defined by the World Bank in 1992 as being low income countries (having a per capita GNP of $610 or less) 32 are in sub-Saharan Africa (including 16 of the 20 poorest) and most are classified as 'severely indebted' (World Development Report, 1992). Moreover, as the Bank indicated, not only has there been an enormous growth of indebtedness over the two decades to 1990, but there was little sign of improvement: the 1992 report estimated that Africa had 17.51% of the world's poor (people living below the poverty level) in 1985; it expected this to grow to 27.46% by 2000. The Bank expected Africa to have an absolute as well as a relative increase in poverty over this period. Finally, growth in the 1980s was about a third of the rate attained in the nine years up to the oil price crisis of 1973. By 1991 'third world' debt as a whole was about US$1.2 trillion (a trillion=l,000 billion) which resulted in a net transfer to developed countries of approximately US$50bn. Africa's projected debt for the end of 1993 was US$199 billion in comparison with a Latin American debt in the same year of US$390 billion. On the face of it, Africa's debt seems quite modest — only slightly larger than the national debts of Brazil ($127bn) or Mexico ($112bn). But, although African indebtedness is less than a quarter of the total for the developing world, it constitutes roughly 90% of the continent's GNP. Sub-Saharan Africa paid out $11.3 billion in debt servicing in 1993, four times as much as public spending on health and education.