Transcript Why the World Bank and IMF should be nixed (not fixed)

‘Is the New Partnership for Africa’s
Development Already Passé?’
Presented to
University of Pretoria
Centre for International Political Studies
Africa Dialogue Series
15 February 2005
By Patrick Bond
director, Centre for Civil Society
University of KwaZulu-Natal, Durban
(http://www.ukzn.ac.za/ccs)
• Cartoons by Zapiro – Sowetan, Sunday Times, Mail & Guardian
Abolishing – or instead polishing –
global apartheid's chains?
• 1) What is 'global apartheid'?
Worsening inequality plus economic slow-down
• 2) Abolishing global apartheid?
Elite-reformist venues, power relations,
alliances and strategies/tactics
• 3) Is NEPAD a breakthrough or continuation?
• 4) Is there an alternative approach based upon
'deglobalisation' and 'decommodification'?
1. What is 'global apartheid'?
Populist politics? Or theory of global domination?
Thabo Mbeki, opening the Johannesburg World Summit on
Sustainable Development (August 2002):
• 'We have converged at the Cradle of Humanity to
confront the social behaviour that has pity neither for
beautiful nature nor for living human beings. This
social behaviour has produced and entrenches a
global system of apartheid. The suffering of the billions
who are the victims of this system calls for the same
response that drew the peoples of the world into the
struggle for the defeat of apartheid in this country.'
A definition of global apartheid:
• systemic underdevelopment, segregation and
exclusion of the oppressed majority…
• through a structured regime of economic, political,
'developmental', environmental, medical and cultural
practices, policies and laws…
• aimed at the commodification of everything…
• largely organised or codified by Washington-Geneva
politicians and bureaucrats (and supported by
subimperial elites in the Third World)…
• but which serves the economic, patriarchal interests of
the wealthy (mainly white male) minority, and of local
and global capital.
Like racial apartheid, class
apartheid is male-biased
• patriarchal modes of surplus extraction include residual,
worsening sex discrimination at the point of production
and disturbing sites of labour reproduction:
• 'mainstream economic policymaking fails to recognize the
contributions of women's unpaid labour - in the home, in
the fields, or in the informal market where the majority of
working people in African societies function… these biases
have affected the perception of economic activities and
have affected economic policies in ways that perpetuate
women's subordination.'
– Dzodzi Tskikata and Joanna Kerr, Demanding Dignity: Women
Confronting Economic Reforms in Africa, Ottawa: The North-South
Institute and Accra: Third World Network-Africa, 2002.
The ‘impeccable’ logic
of global apartheid
DATE: December 12, 1991
TO: Distribution
FR: Lawrence H. Summers
'Dirty' Industries: Just between you and me, shouldn't the World Bank be encouraging
MORE migration of the dirty industries to the LDCs? I can think of three reasons:
1) The measurements of the costs of health impairing pollution depends on the
foregone earnings from increased morbidity and mortality. From this point of view a
given amount of health impairing pollution should be done in the country with the
lowest cost, which will be the country with the lowest wages. I think the
economic logic behind dumping a load of toxic waste in the lowest
wage country is impeccable and we should face up to that.
2) The costs of pollution are likely to be non-linear as the initial increments of
pollution probably have very low cost. I've
always thought that underpopulated countries in Africa are vastly UNDER-polluted, their air
quality is probably vastly inefficiently low compared to Los Angeles or Mexico City...
Full memo at: http://www.whirledbank.org
In the context of a longer
economic slowdown
Neoliberalism via trade/debt
exacerbates uneven development
• Dramatic
differences in
annual %
change of per
capita GDP
(constant 1995$)
Source: Alan Freeman, Greenwich Univ.
GDP per capita in 1995 dollars, 1982-2000
Rest of the World
Advanced or Advancing Countries
1982
2000
1,457
1,116
15,383 26,134
Annual percent growth in GDP per capita over the given period
10%
5%
1970-1980
1980-2000
0%
-5%
-10%
-15%
Major industrial countries
Other advanced economies
Developing
Countries in Transition
2. Abolishing global apartheid?
Venues, power relations, alliances, strategies and tactics
• In context of apparent semiperipheral coordination:
– India-Brazil-South Africa (IBSA)
trilateralism, July 2003
– new Indian government
– G20 in Cancun, September 2003
– China factor
• Is Pretoria a transmission belt
for White House interests?
• Are NEPAD, UN ECA and other
African elites implicated?
Bush's other African allies:
.
Obasanjo, Kagame, Kuofor and Wade
An observation by
Business Day (July 2003)
'abiding impression
is of a growing, if
not intimate trust
between [Bush] and
Mbeki. The amount
of public touching,
hugging and
backpatting they
went through was
well beyond the call
of even friendly
diplomatic duty.'
Abolishing global apartheid?
Pretoria: 'punching above our weight'
• From 1994 – 2001, SA leaders presided over:
– board of governors of the IMF and World Bank,
– Non-Aligned Movement,
– UN Conference on Trade and Development,
– Commonwealth,
– Organisation of African Unity,
– Southern African Development Community,
– World Commission on Dams, and
– many other international and continental bodies.
SA had another dozen major opportunities, 2001-04…
Reforming global apartheid
(2001-02):
What was actually accomplished?
• 1) at WCAR (9/01), Mbeki rejected NGO and African leaders'
demands for slavery/colonialism/apartheid reparations;
• 2) NEPAD (10/01) merely 'homegrown' Washington Consensus;
• 3) at Doha WTO (11/01), Alec Erwin split African delegation to
prevent consensus-denial by trade ministers (as at Seattle, '99);
• 4) in Monterrey UN FFD (2/02), Trevor Manuel was summit cochair and legitimised ongoing IMF/WB strategies;
• 5) from Kananaskis G8 (6/02), Mbeki departed with nothing—yet
declared that the meeting 'signifies the end of the epoch of
colonialism and neo-colonialism';
• 6) at WSSD (8/02), Mbeki undermined UN democratic procedure,
facilitated the privatisation of nature, and did nothing to address
the plight of the world's poor majority;
Reforming global apartheid
(2003-04):
what actually happened?
• 7) in Iraq (3/03), no prevention or even delay of war
(Mbeki sold $250 mn in weapons to Bush/Blair!);
• 8) from Evian G8 (6/03), Mbeki returned with nothing;
• 9) for hosting a leg of Bush's Africa trip (7/03), Mbeki
became the US' 'point man' on Zimbabwe;
• 10) Cancun WTO Ministerial Summit (9/03) collapse
caused Erwin 'disappointment';
• 11) at Dubai IMF/WB meeting (9/03), with Manuel
chairing Development Committee, no BWI debt relief,
democratisation, or Post-Washington policy reform;
• 12) Mbeki gets nothing from G8 in Sea Island (6/04).
G8 in Sea Island:
Mbeki claims victory again
3. Where does NEPAD fit?
Mbeki as viewed by The Economist
A deconstruction of the
New Partnership for Africa's Development
• textual analysis – resisting marginalisation?;
NEPAD is 'philosophically spot on':
Walter Kansteiner, US State Dep't, 2003
• at least it will bring better African
governance?
Codesria and Third World Network-Africa
Declaration on Africa's development challenges, 26/4/02
The most fundamental flaws of Nepad, which reproduce the central
elements of the World Bank's Can Africa Claim the 21st Century?
and the ECA's Compact for African Recovery, include:
– (a) the neo-liberal economic policy framework at the heart of the
plan, which repeats the structural adjustment policy packages of
the preceding two decades and overlooks the disastrous effects of
those policies;
– (b) the fact that in spite of its proclaimed recognition of the
central role of the African people to the plan, the African people
have not played any part in the conception, design and formulation
of Nepad;
– (c) notwithstanding its stated concerns for social and gender
equity, it adopts the social and economic measures that have
contributed to the marginalisation of women;
Codesria and Third World Network-Africa
Declaration on Africa's development challenges, 26/4/02
– (d) that in spite of claims of African origins, its main targets
are foreign donors, particularly in the G8;
– (e) its vision of democracy is defined by the needs of
creating a functional market;
– (f) it under-emphasises the external conditions fundamental
to Africa's developmental crisis, and thereby does not
promote any meaningful measure to manage and restrict the
effects of this environment on Africa development efforts. On
the contrary, the engagement that it seeks with institutions
and processes like the World Bank, the IMF, the WTO, the
United States Africa Growth and Opportunity Act, the
Cotonou Agreement, will further lock Africa's economies
disadvantageously into this environment
Content analysis:
NEPAD's 'critique' of neoliberalism
• '24. The structural adjustment
programmes of the 1980s provided
only a partial solution. They
promoted reforms that tended to
remove serious price distortions,
but gave inadequate attention to the
provision of social services.'
Neoliberalism as
a 'partial solution'?
• But what if structural adjustment
programmes (SAPs) represented not 'a
partial solution' -- but instead, reflecting
local and global power shifts, a profound
defeat for genuine African nationalists,
workers, peasants, women, children and
the environment?
The power shift behind
structural adjustment
• What if SAPs were the result not of Africans
searching honestly for 'solutions' -- but instead
mainly reflected the shift in power relations at
both global scale (where financial and
commercial circuits of capital were ascendant)
and within individual African states:
– away from lobbies favouring somewhat pro-poor social
policies, rural development and (at least half-hearted)
industrialisation,
– towards cliques whose strategies served the interests of
acquisitive local elites, Washington financiers, and
transnational corporations?
'Promoting reforms' and
removing 'price distortions'?
• What if 'promoting reforms' really amounted to
the IMF/WB imposing neoliberal policies on
desperately disempowered African societies-without any reference to democratic processes,
resistance or diverse local conditions?
• And if 'removal of price distortions' meant:
– repeal of exchange controls (hence allowing massive
capital flight),
– subsidy cuts (hence pushing masses of people below the
poverty line), and
– lowered import tariffs (hence generating massive
deindustrialisation)?
'Inadequate attention
to social services'?
• What if 'inadequate attention to the provision of
social services' in reality meant the opposite:
excessive attention to applying neoliberalism not
just to the macroeconomy, but also to health,
education, water and other services?
• And what if the form of IMF/Bank attention
included greater cost recovery, higher user-fees,
lower budgetary allocations, privatisation, and
even the disconnection of supplies to poor
people?
Does Africa need rapid
global economic integration?
• '52. … If Africa’s enormous natural and
human resources are properly harnessed and
utilised, it could lead to equitable and
sustainable growth of the continent as well
as enhance its rapid integration into the
world economy.'
• But all evidence thus far is that 'equitable
and sustainable growth of the continent' and
'rapid integration into the world economy' are
mutually exclusive.
Africa's minerals and cash crop output
declined in value from early 1970s
Falling prices of cash crops
and mineral exports
Africa's rapidly-falling
terms of trade
Rapid trade-related
integration causes social
inequality
Rapid trade-related integration
causes social inequality
• According even to World Bank econometrician
Branco Milanovic,
'at very low average income level, it is
the rich who benefit from openness...
It seems that openness makes income
distribution worse...'
'Can we Discern the Effect of Globalisation on Income Distribution?,
Evidence from Household Budget Surveys,' WB Policy Research
Working Paper 2876, April 2002.
Rapid integration includes
ongoing debt repayments
• NEPAD: '149. ... Countries would engage with existing
debt relief mechanisms – the HIPC and the Paris Club –
before seeking recourse through NEPAD.'
• NEPAD refuses to question the moral legitimacy of
debt repayment, although the Jubilee campaign has
raised it to an unprecedented level of African and
world consciousness;
• even Columbia University economist Jeffrey Sachs
endorses African debt repudiation (African elites and
ECA too complicit in process to agree).
Africa's debt crisis worsened
during the era of globalisation...
• From 1980-2000,
Sub-Saharan
Africa's total
foreign debt rose
from from $60 bn to
$206 bn, and the
ratio of debt to GDP
rose from 23% to
66%.
(Source: World Bank)
US$
billion
total foreign debt
debt/GDP
250
debt/
GDP
as %
70
60
200
50
150
40
100
30
20
50
10
0
0
1980
1990
2000
…to the extent that Africa now
repays more than it receives
• From 1980-2000,
Sub-Saharan
Africa's annual
debt repayments
rose substantially,
and new loan
inflows slowed
(Source: World Bank)
US$
billion
annual debt repayments
net debt flows to Africa
12
10
8
6
4
2
0
-2
-4
-6
-8
1980
1990
2000
Historical record of sovereign bankruptcy:
Percentage of countries in default, 1820-1999
 During debt crises
of the 1830s, 1880s
and 1930s, response
was default;
 During crises of
1980s-90s, response
was 'restructuring'
(IMF/WB bailouts
plus structural
adjustment)
 Key variable:
centralised creditor
power.
Source: World Bank (2000), Global Finance
Tables 2000, Appendix G, Washington.
NEPAD suggests privatisation of
infrastructure and social services
• '106. ... Promote PPPs as a promising vehicle
for attracting private investors'…
• '154. ... The next priority is the
implementation of a Public- Private sector
partnership (PPP) capacity-building
programme through the African Development
Bank and other regional development
institutions, to assist national and subnational governments in structuring and
regulating transactions in the provision of
infrastructural and social services.'
Isn't NEPAD at least useful for
good governance in Africa?
• '79. … With NEPAD, Africa undertakes to respect
the global standards of democracy, which core
components include political pluralism, allowing
for the existence of several political parties and
workers' unions, fair, open, free and democratic
elections periodically organised to enable the
populace to choose their leaders freely.'
What was civil society's input
into NEPAD?
• Until April 2002, no trade union, civil society, church,
women's, youth, political-party, parliamentary, or
other potentially democratic or progressive forces in
Africa were consulted;
• hence, virtually every major African civil society
network and organisation that analysed NEPAD
attacked the plan's process, form and content (see
Bond, P. [ed][2005], Fanon's Warning: A Civil Society Reader on the
New Partnership for Africa's Development, Africa World Press and
AIDC).
Owned by the African peoples?
• Claim: '51. NEPAD will be
successful only if it is owned
by the African peoples united
in their diversity.'
• Reality: 'It is significant that in
a sense the first formal
briefing on the progress in
developing this programme is
taking place at the World
Economic Forum meeting!' -Mbeki's speech to the World Economic
Forum, Davos, Januar 2001
A passing fad?
2003 WEF in Davos:
• 'Africa didn't really shine here. There is a complete
dearth of panels on Africa.'
-- SA finance minister Trevor Manuel
• 'Among the many snubs Africa received here was
the decision by former US president Bill Clinton to
cancel his presence at a press conference on Africa
today to discuss the New Partnership for Africa's
Development. Forum officials said Clinton did not
give reasons for not attending.'--Interpress Service, 28
January 2003.
4. Another world (and Africa) is possible!
Decommodification and deglobalisation
• SA activists are at cutting edge of several ongoing struggles to
turn basic needs into human rights:
– thorough-going land reform;
– free antiretroviral medicines to fight AIDS;
– free water (50-60 liters/person/day);
– free electricity (at least 1 kiloWatt hour/person/day);
– free basic education;
– Renationalisation of Telkom for lifeline telephone services;
– prohibition on services disconnections and evictions; and
even
– a 'Basic Income Grant' .
• All such services should be universal, and financed partly by
penalizing luxury consumption.
SA decommodification struggles:
electricity, education, water, etc…
Another world is possible!:
Decommodification and deglobalisation
• Walden Bello: ‘I am not talking about
withdrawing from the international
economy. I am speaking about reorienting
our economies from production for export
to production for the local market.’-Deglobalization, Zed Press, 2002.
• Samir Amin: ‘Delinking is not synonymous
with autarky, but rather with the
subordination of external relations to the
logic of internal development.’ -- Delinking, Zed
Press, 1985.
Deglobalisation according to Keynes:
merits of inward-oriented economics
• ‘I sympathise with those who would minimise, rather than with
those who would maximise, economic entanglement among
nations. Ideas, knowledge, science, hospitality, travel--these are
the things which should of their nature be international. But let
goods be homespun whenever it is reasonably and conveniently
possible and, above all, let finance be primarily national.’-J.M.Keynes, (1933) ‘National Self-Sufficiency,’ Yale Review, 22, 4, p.769.
• Similar to GLOBAL JUSTICE MOVEMENTS’
campaign for globalisation of people, not capital
• Choice – even for economists - is to work with Mbeki, ECA,
etc, to (fruitlessly) reform global apartheid, or to join the
Africa Social Forum in opposition to NEPAD, WTO, WB/IMF
• i.e. to either polish or break the chains of global apartheid.
Deglobalisation: success against TRIPS
patent rights on anti-retroviral medicines
Deglobalisation: defunding IMF/WB
The choice is to BREAK or to POLISH
the chains of global apartheid