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ECONOMY-AFRICA: Deny Neoliberal Consensus

Christi van der Westhuizen interviews PATRICK BOND, professor and activist

CAPE TOWN, Jun 25 2009 (IPS) - Africa should ‘‘deny consensus” at multilateral level to ensure that the region’s interests are taken seriously, says Professor Patrick Bond speaking on how Africa should approach this week’s high-level United Nations’ meeting on the global economic crisis.

'No change in IMF policies towards the South can be discerned,' says Bond. Credit:  Downside World News

'No change in IMF policies towards the South can be discerned,' says Bond. Credit: Downside World News

Bond, who directs the Centre for Civil Society at the University of KwaZulu-Natal in Durban, South Africa, urges the adoption of a new logic for the world economy: ecologically-sustainable, labour-intensive, moving economies to a post-carbon future.

He warns that instead, the same institutions that previously damaged Africa’s economy and social supports are being called on to rescue the world economy, and African elites are not ready to ‘‘break with Washington” and chart an alternative course.

IPS: The financial and economic crisis has had a disproportionate impact on African countries, given that it was not of our making and we don’t have much of a say over how the global economy is run. What should African countries be demanding at the high-level U.N. summit on the crisis this week? Patrick Bond: First and foremost would be to demand – and just take – a great deal more policy space than they now have.

The awful irony is that the main financial force that impoverished Africa and destroyed manufacturing and social policy during the past three decades, the International Monetary Fund (IMF), has just received a vast G20 bailout sum of at least 500 billion dollars.

That institution was near dead at the last annual meetings in October 2008. Thanks partly to South Africa’s former finance minister Trevor Manuel, who led a high-powered commission just prior to the G20 London meeting in April, the IMF is now re-legitimised and recapitalised.

This was done for the trivial cost of acknowledging that the next managing director doesn’t necessarily have to come from Europe, a petty reform given the availability of men like Manuel from the South who reliably do the North’s bidding.

Meantime, no change in IMF policies towards the South can be discerned. Here in South Africa, the last Article Four consultation statement called on Manuel to halt deficit spending, raise interest rates, continue financial and trade liberalisation and remove workers’ wage-indexing protections. Absolutely vicious.

In Tanzania, the IMF told the government to cut the budget deficit by 0.6 percent (to -3.1 percent) in March while its managing director Dominique Strauss-Kahn was visiting, pretending to be Africa’s friend.

IPS: Given the lacklustre policy response from African governments to the crisis, are they ready to push Africa’s interests aggressively? PB: No, with one exception – Robert Mugabe – the African national leaders are obviously not willing to break with Washington, notwithstanding the excellent recent examples in Latin America. The progressive social forces in Africa have not yet grown sufficiently strong to raise post-neoliberal politicians to state power, as they did in Latin America.

The exception that proves the rule is Mugabe, who spouts anti-imperialist slogans but who in 2005 was so desperate to bring the IMF back that he emptied the entire country’s coffer of foreign exchange to repay the IMF 200 million dollars – but got nothing in return. Mugabe’s policies are no model for progressives.

Instead, the genuine African leadership required to survive and exit the crisis comes from civil society, who have launched brave initiatives to de-globalise financial relations and decommodify goods and services – especially AIDS medicines and water.

History shows that when African nationalist parties turn neoliberal, only coalitions of social movements, labour, churches, women’s and youth groups serve as an effective counterweight.

IPS: Many of those very participants at the U.N. summit are responsible for the crisis. PB: Yes, and they are blocking any genuine discussion, according to Miguel D’Escoto Brockmann, the Nicaraguan diplomat who is the most progressive U.N. president in history.

Last Friday at the NGO parallel conference on the financial crisis, he openly complained that the Northern countries ‘‘increasingly resist reforms of the IMF and the World Bank, hoping that things will return to business as usual. And they have also made it very clear that they do not want a serious global conversation to take place at the United Nations”.

IPS: Given the weakening of the U.N. system since the 1960s, can the U.N. still be a useful forum for developing regions such as Africa, given the power wielded by the G8, WTO and IFIs? PB: The last useful globally-responsive initiative I can think of from the U.N. was the 1996 Montreal Protocol banning CFCs to protect the ozone layer and, before that, treaties against toxics. In contrast to some who think the U.N. stands against the institutions you mention, recent evidence suggests that it generally goes with the flow of power.

Witness how the U.N. Development Programme joined the water privatisation bandwagon in spite of all the warnings, or how the Kyoto Protocol (1997) endorsed ineffective and unfair carbon trading gimmicks. The World Summit on Sustainable Development (2002) laid a red carpet for corporate green-washing.

The U.N. invariably sucks in well-meaning people – for example, activists who wear white headbands to advance Millennium Development Goals – but at the same time fundamentally corrupts their intentions by routing economic matters through the WTO, IMF and World Bank, as we saw with the Monterrey Financing for Development process.

Only once we can add more progressive countries to the small group from Latin America, then it might be time to return to multilateral advocacy. Until then, better to just let the neolibs and neocons do the kind of battle that gets them into Doha Agenda paralysis.

That sort of grid-lock is better for the world’s majority than revived international institutions, given the present adverse balance of forces.

IPS: As you’ve mentioned and judged by the economic partnership agreement (EPA) talks and the neoliberal rhetoric still emanating from the WTO and others, the dominant global forces are pushing for business as usual in developing regions. What can African states do differently at multilateral level to claim the domestic policy space that the U.S. and EU enjoy? PB: It’s very simple: deny consensus. They did this at Seattle in 1999 and Cancun in 2003. Because of Tony Blair’s financial blackmail and manoeuvres by South African trade minister Alec Erwin at Doha, African elites were forced to sign onto the Doha Agenda in 2001 and have regretted it ever since, given the devastation caused by free trade.

But we’re seeing a much different South African strategy emerging from the new trade minister, Rob Davies, a South African Communist Party member, and that’s one of the most encouraging signs that labour’s power here is translating into a shift away from the purely sub-imperialist strategies that characterised Thabo Mbeki’s rule.

Right now, the EU’s EPAs are devastating Africa’s regional economic blocs through divide-and-conquer, reversing the resistance we saw from African countries a year ago. It shows how desperate these elites are for continuing aid flows that so obviously corrupt African public policy and undo decades of hard work building regionalism.

IPS: Clearly the world should be undertaking more far-reaching interventions to address the crisis than seen so far. PB: The main policy step needed is the replacement of market logic with socio-environmental logic and that can be done in every single public policy available for reform, at any scale, if the balance of forces is favourable.

The highest priorities, in my view, are those where eco-social activists have already begun mobilising. The WSF and its affiliates have generally put forth profound critiques and radical alternatives. Still to be accomplished, of course, is ‘‘connecting the dots”, which we thought the WSF would facilitate.

Most civil society groups remain too locked within our silos of specialisations, doing great transnational work but generally segregated within issue areas. The ability to link economic justice to all the other activist campaigns seems just beyond our grasp.

IPS: Linked to the last two questions, what can African states do policy-wise to buffer their populations against the crisis? PB: Several immediate lessons from Latin America and Asian could be learned, such as defaulting on foreign debt, imposing exchange controls and nationalising or reregulating banks; and dramatically increasing state funding for social programmes, especially those benefiting women, but as much as possible aiming at spurring production so as not to generate inflation.

Also, turning to an ecologically-sustainable, labour-intensive system of production which creates genuine Green Jobs and moves economies to a post-carbon future. Most important, community and labour organisers should be making demands on the elites, otherwise there’s no buffer, just a crisis transmission belt.

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