With apartheid-like race/class practices in New Orleans so recently unveiled, Washington’s self-congratulatory rhetoric about sub-Saharan Africa at last weekend’s IMF/World Bank annual general meeting was not just sickening but also counterintuitive.
I thought of Walter Rodney’s 1973 book, How Europe Underdeveloped Africa (Tanzania Publishing House), where he expresses concern that North-South ‘dependencies had always been prolonging the life of capitalism by taking the edge off the internal contradictions and conflicts which were a part of the capitalist system.’
We’re now entering a new and more dangerous phase, even as pleasing rhetoric of debt relief and corporate responsibility dulls the senses of those who should know better.
Consider the outgoing chair of the Development Committee (one of two crucial Bank/IMF standing bodies), South African finance minister Trevor Manuel. Having failed for four years to get even partial democratisation of the Bretton Woods Institutions onto the agenda, last week Manuel gloried in the return of G8 attention to Africa: ‘Right now, the macroeconomic conditions in Africa have never been better. You have growth across the continent at 4.7%. You have inflation in single digits. The bulk of countries have very strong fiscal balances as well.’
These statements are true only if we take misleadingly narrow economic statistics seriously. Fortunately we don’t need to because even the Bank is occasionally compelled to confess how Africa is drained of ‘genuine savings’through depletion of minerals and forests, and other eco-social factors which ostrich-like economists invariably ignore.
Manuel’s riff sounds impressive. Indeed, because of structural adjustment austerity, African states reduced their early-1990s deficit rates of around 6% of annual output, to just under 4% today. However, the fastest growing economies actually increased their deficits by a full percentage point over the last decade, suggesting that Keynesianism still works as well for venal African elites as it does for George Bush.
Meanwhile, monetary policy was tightened, interest rates soared and African central banks – typically run by IMF or ex-IMF staff – were discouraged from printing money (which sometimes fuels inflation). Price increases were reduced from double-digit rates prior to 2004 to an average of 9% this year.However, that level is far too low for a developmental trajectory, former Bank chief economist Joseph Stiglitz argued in his ‘Post-Washington’critique of economic orthodoxy.
Last Saturday, as more than a hundred thousand anti-war protesters marched past the Bank/IMF annual meeting at 17th and H Sts, a good deal of education was done about struggles against fiscal fascism and sadomonetarism in Africa, especially by the Mobilization for Global Justice (http://www.globalizethis.org). Appeals were made by South African activists Virginia Setshedi and Dennis Brutus to help the South-led ‘International Financial Institutions-Out! Campaign’ dismantle the Bank and IMF. That campaign meets in Havana this week to ratchet up the pressure.
In contrast, some NGOs apparently prefer to serve as World Bank baubles. A leader of the Johannesburg-based Civicus network was captured in a Bank propaganda snap last Thursday, conveniently smiling at Manuel, Paul Wolfowitz and Rodrigo de Rato:http://siteresources.worldbank.org/NEWS/Images/092205_CSOTownhall_SM_004.jpg ).
With that sort of cover, Wolfowitz was in a sporting mood at Sunday’s Development Committee press conference: ‘The path has been cleared to complete debt relief, and at the risk of a dangerous metaphor, I think Trevor has given us the ball right in front of the goal, and the goalie has tripped, and all we have to do now is kick it in.’
A dangerous move indeed, for Manuel warned of at least one more hurdle, ‘a legal challenge because countries may feel that some have been favoured against others. My understanding is that both Rodrigo and Paul will go before their boards, sort out what the equality of treatment principle would be in each of the instances, and ensure that there is equality of treatment.’
It seems the InterAmerican Development Bank and Asian Development Bank won’t participate in the debt relief pantomime. So 14 wretched African countries favoured by the G8 – and four others in Asia and Latin America – will get a few crumbs of relief, costing the G8 less than $2 billion per year to service (on $40 billion in outstanding debt).
But because their leaders have ceased putting up a fuss, the debt of these 18 is reduced: not to nothing, but to levels where the Bank and IMF retain macroeconomic control, so that capital flight and ultra-cheap commodities can continue their outward flow.
None of the trade reforms proposed for the Hong Kong WTO meeting in December will alter the basic calculus of long-term decline for their (non-oil) primary commodity prices. Christian Aid recently estimated the damage done to African countries by trade liberalisation at $272 billion since 1980.
Even in the face of those ‘internal contradictions and conflicts’ – including vast overcapacity, wars, real estate bubbles, hurricane repairs, debt crises and balance of payments problems – men like Wolfowitz can afford to make small concessions. After all, Third World repayments of $340 billion each year flow northwards to service the $2.2 trillion debt. This is more than five times the G8′s development aid budget (and ten times the level of Northern donations once we subtract the ‘phantom aid’ which never reaches the masses).
As Brussels-based debt campaigner Eric Toussaint concludes, ‘Since 1980, over 50 Marshall Plans worth over $4.6 trillion have been sent by the peoples of the Periphery to their creditors in the Centre’.
Consider, as well, the South as ecological creditor. According to the brilliant Spanish ecologist Joan Martinez-Alier, ‘The notion of an ecological debt is not particularly radical. Think of the environmental liabilities incurred by firms under the United States Superfund legislation.Although it is not possible to make an exact accounting, it is necessary to establish orders of magnitude in order to stimulate discussion.’
Taking just C02 emissions, reckon Martinez-Alier and Jyoti Parikh of the UN International Panel on Climate Change, an estimated annual subsidy of $75 billion flows South to North. Africans are most exploited because their non-industrialised economies have not begun to utilise more than a small fraction of what should be due under any fair framework of global resource allocation. The amounts involved would easily cover financial debt repayments.
Details have not surfaced yet about last weekend’s debt deal revisions at the Bank and IMF, but the original G8 Gleneagles scam keeps poor countries down in several ways.
According to Jubilee South: ‘The multilateral debt cancellation being proposed is still clearly tied to compliance with conditionalities which exacerbate poverty, open our countries further for exploitation and plunder, and perpetuate the domination of the South. Even if the debt cancellation were without conditionalities, the proposal falls far too short in terms of coverage and amounts to demonstrate a bold step towards justice by any standard.’
Added Demba Moussa Dembele of Dakar-based Forum for African Alternatives , ‘Caution is necessary also because the “creditor” countries are longtime masters of the arts of duplicity, manipulation, and concealment.’
As mentioned at the outset, though, almost by accident another Bank document began to do the rounds just prior to the Annual Meetings: ‘Where is the Wealth of Nations?’ Here at least, environmental staff recognise that foreign investors may diminish overall wealth and savings, once resource depletion and pollution are factored in.
To be sure, the Bank adopts a minimalist definition based upon current pricing – not potential future values when scarcity becomes a more crucial factor, especially in the oil sector. Nor do Bank economists yet deign to calculate the damage done to local environments, to workers’ health/safety, and especially to women and vulnerable people in communities around mines.(Unpaid household and community work is still left out of national statistical accounts, reducing women’s labour to a nil value.)
What investments are most important, then? Dating to the mid-1990s, foreign direct investment has flowed mainly into oil rigs in the West African Gulf of Guinea and Angola’s offshore Cabinda field, aside from an ill-fated South African privatisation spree in 1997.
Meanwhile, corrupt host regimes waged war against their people, not only in Angola (where formal conflict ended after a rightwing Unita guerrilla movement faded following Jonas Savimbi’s death). In addition, as Amnesty International pointed out earlier this month, the Bank was meant to finance the multi-billion dollar Chad-Cameroon pipeline to add human rights sensitivity, but deepening repression is the actual result.
Other Africans suffering oil depletion under dictatorial or militarised conditions include citizens of the Republic of the Congo, Equatorial Guinea, Gabon, Nigeria and Sudan. In the latter country, the US competes with China for influence, thus ignoring the suffering of Darfur in spite of valiant appeals by Africa Action lobbyists (http://www.africaaction.org).
South Africans are also implicated in a kind of subimperial looting. At the country’s annual Political Science Association conference in KwaZulu-Natal last week, senior government researcher John Daniel shifted from claiming in 2003 that ‘non-hegemonic co-operation has in fact, been the option embraced by the post-apartheid South African state.’
After reviewing the record of the African National Congress (ANC) in the continent’s energy sector, especially Sudan and Equatorial Guinea, he conceded, ‘The ANC government has abandoned any regard to those ethical and human rights principles which it once proclaimed would form the basis of its foreign policy.’
Amongst South Africa’s many merits is freedom for academics and state officials to say such cheeky things (because of our irrelevance). unlike, say, in mineral-rich Botswana, where political scientist Kenneth Good – 72 years old, with 15 years’ service at the university – was tossed out (and given ‘prohibited immigrant’ status) a few weeks ago, because of mild-mannered criticism of Gabarone’s malgovernance.
Big Oil is presently celebrating this state of power relations at the World Petroleum Congress in Johannesburg. Opponents have also come together, invited by the excellent NGO groundWork. The Ogoni people, for example, demanded reparations not only for the thorough destruction of their Delta habitat, but also for the depletion of what economists call ‘natural capital’.
How much natural capital value is removed from Africa? In South Africa, the value of minerals in the soil fell from $112 billion in 1960 to $55 billion in 2000, according to the UN, while Africa as a whole suffers negative net annual savings.
Adding not just oil-related depletion but other subsoil assets, timber resources, nontimber forest resources, protected areas, cropland and pastureland, the Bank calculates that Gabon’s citizens lost $2,241 each in 2000, followed by people in the Republic of the Congo (-$727), Nigeria (-$210), Cameroon (-$152), Mauritania (-$147) and Cote d’Ivoire (-$100).
In addition to mineral depletion worth 1% of national income each year, the Bank acknowledges that South Africans lose forests worth 0.3%; suffer pollution (‘particulate matter’); damage of 0.2%; and emit C02 that causes another 1.6% of damage. In total, adding a few other factors, the actual ‘genuine savings’ of South Africa is reduced from the official 15.7% to just 6.9% of national income.
These analyses, documents and calculations are new and fresh, and should shame those who claim international integration can enrich Africa. The opposite is more true.
Unlike Trevor Manuel, African justice activists like those who met at groundWork’s conference know it. On Saturday, they wrote to officials of the World Petroleum Congress: ‘At every point in the fossil fuel production chain where your members “add value” and make profit, ordinary people, workers and their environments are assaulted and impoverished. Where oil is drilled, pumped, processed and used, in Africa as elsewhere, ecological systems have been trashed, peoples’ livelihoods have been destroyed and their democratic aspirations and their rights and cultures trampled.’
The letter concluded, ‘Your energy future is modeled on the interests of over-consuming, energy-intensive, fossil-fuel-burning wealthy classes whose reckless and selfish lifestyles not only impoverish others but threaten the global environment, imposing on all of us the chaos and uncertainty of climate change and the violence and destruction of war. Another energy future in necessary: yours has failed!’
(Further details are available in a paper I’ve prepared for the Harare health NGO Equinet and the Jo’burg Southern African Centre for EconomicJustice: [email protected])