In view of topics in my last two posts, AGRA & Monsanto & Gates, Green Washing & Poor Washing and African Bloggers At The G20, there are a couple of articles at Pambazuka that have a lot to say.
Yash Tandon writes about the crisis of the global North in relation to the global South:
Western civilisation has been going through a deepening crisis over the last 120 years – to be precise since around mid-1880s when serious colonisation began of the African continent as a desperate attempt to get out of the crisis created by the limits to growth within Europe. The present systemic crisis – whose most recent manifestations are the global financial crisis and the ecological crisis – is only its latest manifestation. Western civilisation’s crisis is deeper than most people realise or willing to acknowledge.
… The ruling political and corporate elites in the West are losing control both in their own countries and over much of the South. Judging by the attempts made by them in recent months, it is evident that they have no clue about how to get out of the dual political-economic and ecological crises. They have serious problems of resource depletion and global warming which compound to create a situation not unlike what they experienced in the 1880s when they faced limits to growth in Europe.
The re-colonisation option does not look promising for the future, because although they are presently attempting to neo-colonise the South, this will meet with stiff resistance not only from the South but also from progressive peoples in the North.
It must be recognised that much of the South is still in the phase of consolidating the gains of national struggles. The vilification of these efforts as ‘failed states’ or as ‘terrorist states’ is misguided and dangerous. We must not fall into that trap.
Tandon provides a great deal more detail describing the historical problem and suggesting approaches to work towards solutions. Read the whole article: Political, economic and climatic crises of Western civilisation – Dangers and opportunities.
Another essay with a lot to think about is The global financial crisis: Lessons and responses from Africa by Demba Moussa Dembele. As the article summary describes:
The crisis provides fundamental lessons, says Dembele, the first being that markets do not have self-correcting mechanisms, and that market failures are not less costly than state failures. Secondly, “the collapse of the neoliberal dogma is a major blow to the international financial institutions. What is even more devastating to them is the reversal of most of the policies they had advocated for decades in Africa and in other ‘poor’ countries under the now discredited SAPs (structural adjustment programmes). The IMF and the World Bank are supporting fiscal stimulus – expansionary fiscal policies – in the United States, Europe and Asia.”
Thirdly, its clear that the state remains a central player in solving crises caused by markets, and is not the sole cause of economic and social problems in Africa that neoliberal policy has categorised it as.
One major lesson for Africa is that they should no longer trust the IMF and World Bank and for that reason they should not listen to their ‘advice’ anymore. This is why it is incomprehensible and even a shame to see African countries hold a meeting with the IMF in Tanzania with the aim of building ‘a new partnership’. In the statement issued after that meeting, African countries are calling on the IMF to extend its ‘experience and expertise’ as if African leaders and policy makers had not learned enough lessons from the experience of nearly 30 years of ruinous IMF policies from SAPs to PRSPs (poverty reduction strategy papers).
Another major illustration of the crisis of legitimacy of the neoliberal system is the strong recognition that the state is a central player in solving the crises brought about by unfettered markets, and it will remain a key actor in the development process, whether in developed or developing countries. Some may recall former US President Ronald Reagan’s assertion in the 1980s that the state was ‘part of the problem, not of the solution’. This signalled the era of massive deregulation and the assault on the state and public service and ownership. It opened the door to some of the most sweeping and devastating structural adjustment policies in Africa. African states came under vicious attacks as ‘predatory’, ‘wasteful’, ‘rent-seeking’, ‘corrupt’ and ‘inept’.
All these qualifications were intended to discredit the state as an agent of economic and social development and the experience of state-led development that took place in the post-independence period up to the late 1970s. Despite the remarkable achievements of that period, the IMF and World Bank used every possible negative example to blame the state for all Africa’s crises. They told African leaders that the state was the main, if not the unique, cause of the economic and social crisis in Africa Accordingly, the solutions they advocated included withering away the state by eliminating or limiting its intervention in the economic sphere. Hence the imposition of fiscal austerity programs, the downsizing of the civil service and the dismantling of the public sector with the privatisation of state-owned companies.
But the financial and food crises show that the state is an indispensable and indisputable agent of development and part of the solution to the current global crises. It is deregulation and market fundamentalism that are part of the problem.
Still in the name of ‘comparative advantage’, African countries were forced to give priority to cash crops at the expense of food production. The food crisis and Africa’s great dependence on food imports illustrate once again that the IFIs have misled African countries into adopting policies that are detrimental to their fundamental interests. The IMF and World Bank, which bear a great responsibility in the food crisis in Africa, are now all too happy to ‘assist’ African countries in proposing them ‘emergency loans’ to buy food from Western countries.
The same IFIs are behind the attacks against the state that translated into the destruction of the public sector to the benefit of foreign capital.
… privatisation translated into massive job losses and social exclusion. It may be argued that there is some correlation between the aggravation of poverty and the growing foreign control of resources and assets, because this control is associated with repatriation of huge profits and tax evasion. In a sense, privatisation can be assimilated to a robbery of national patrimony – including strategic sectors – through the transfer to foreign control of assets built throughout years of sacrifices by the people.
Therefore, reversing privatisation is necessary in order to restore people’s sovereignty over a nation’s resources. It is time for African countries to put back into public and collective hands the control of key sectors and natural resources. No genuine endogenous development is possible without control of a nation’s wealth. So Africa should learn from the lessons being given by capitalist countries, including the United States, which are nationalising their banks and financial institutions. But more importantly, African countries should learn from the examples of other southern countries, like those of South America and Asia, where governments are taking back what was sold off to multinational corporations.
There is much more detail, discussion, and documentation, read the whole article, The global financial crisis: Lessons and responses from Africa
I cringe when I hear about the G20 stimulus package using the IMF and the World Bank. Supposedly it is intended to help Africa get out of current problems caused by the collapse of global financial capitalism. So long as the IMF and World Bank continue their traditional practices, they will bring disaster. I think Naomi Klein offers some targeted advice to the US and specifically to the US Congress:
It should first of all demand an independent review of the role the IMF played in creating and deepening the crisis (for instance, by requiring that loan recipients deregulate their financial sectors and eliminate capital controls, as the IMF did during the Asian Economic Crisis). And it should demand that the IMF never require recipients of this loan money to make deep cuts to social spending (on health, education and pensions…) or to lay off public sector workers in the midst of the crisis. This is crucial because the IMF has been requiring exactly these types of budget cuts and layoffs in exchange for loans in Latvia and elsewhere in Eastern Europe, causing massive unrest. Further, if governments decide that in order to meet the crisis, they need to do things like subsidize farmers (the major demand in the Greece protests, for instance), they must retain the flexibility to do that.
The reasoning is simple: Obama is on record demanding that other G20 countries spend money on economic stimulus. The trillion dollar G20 pledge was presented to us as a global economic stimulus package. But the IMF is well known for demanding the exact opposite from its loan recipients: deep budgetary austerity, tax increases, and bans on subsidies. That means that unless there are clear conditions attached to the new IMF money, the extra trillion dollars could actually lead to deep economic contractions, with the new money just going to useless financial sector bailouts in countries around the world, rather than into real economy investments. It’s also worth noting that some of the money is going to the World Bank so it’s an opportunity to make demands that the World Bank invest in green energy and infrastructure, as opposed to dirty energy, a bad habit of the bank.