The African Dilemma: Hunger & Poverty Reduction Through Economic ‘Growth’; The Paradox of The Market System.
By Alasana Njie, London, UK.
"Twenty percent of Africa's children will die before the age of five"
‘Every year, six million children in Africa die from malnutrition before their fifth birthday’.
‘More than 800 million people go to bed hungry every day and of these, 300 million are children. Of these 300 million children, only eight percent are victims of famine or other emergency situations. More than 90 percent are suffering long-term malnourishment and micronutrient deficiency’.
The United Nations’ Millennium Development Goals (MDGs), which attempts to guide, not determine, the economic development agenda of developing countries for the medium term, and which should serve as the foundation for long term development, encompassed the following:
-To eradicate ‘extreme poverty and hunger’.
-Achieve universal primary education
-Promote gender equality and empowerment of women
-Reduce child mortality
-Improve maternal health
-Combat aids/ malaria and other preventable diseases.
-Ensure environmental sustainability
-Build a Global Partnership for development.
Development partners, which include amongst others the International Monetary Fund, the World Bank, African Development Bank and other donor agencies have agreed to have a greater degree of coordination and collaboration, to make sure aid and assistance are more targeted and effective, to achieve the set goals above. The general consensus is that a focus on ‘sustainable growth’ rather than ‘redistribution’ will provide the ‘alchemy’ for reducing extreme poverty in Africa and thus provide the platform to achieving the other MDGs. Sustainable growth is perceived to be best achieved by embracing free market policies and a meaningful, if measured, degree of economic and financial liberalisation. To this end, there has been a shift from traditional IMF conditionalities, which used to dictate what economic policies and reforms recipient countries should adopt and within what time frame, to ‘ownership’ through the ‘Poverty Reduction Strategy Papers, which are designed and determined by participating countries in consultation with IMF and donor agencies. The essence here is that there has been a shift from ‘conditionalities’ to ‘consultation/ partnership’ in designing the development strategies of participating countries, which are guided to achieve the MDGs. In other words, instead of prescriptive policies, a broader framework has been adopted within which countries can manoeuvre and formulate their own strategies for development, but to a certain degree, within the confines of this framework towards markets systems and greater integration into the global economy. This, it’s believed, will help promote the efficient use of resources but also growth and the benefits of such growth will trickle down to the grass roots to help alleviate poverty and its related problems. It is believed that markets will provide and drive such growth initiatives and government policies should be designed to support such and also effect the integration of our economies into the global economic and financial system (globalisation). What is undisputable is how the world economic and financial systems are interdependent. Take for example, the international financial markets. Financial sector liberalisation means that global corporations and economies have become financially very closely linked. A speech by Ben Bernanke of the US Federal Reserve has the potential to move world financial markets within seconds following interpretation of his references to future growth and inflation. A set of economic data releases such as CPI or Non-farm payroll in the US takes seconds, to affect bonds and equities prices on the FTSE 100 (London) or the XETRA DAX Index (Germany). One will only appreciate this impact if you are sitting in front of a trading screen /platform/ladder. The fallout from the sub-prime mortgage market in the US has put a dampener on all major industries, not just financial services companies, around the world. From Northern Rock in the UK, BNP Paribas in France to UBS in Switzerland to world food prices. The rapid growth rate of China and her need for more raw materials and energy is driving world oil prices, which has hit an all time high of $135 and is expected to rise even further. Her unprecedented construction boom has affected such raw material as prices building rods, which is felt in remote countries like The Gambia. Every major economic development in any of the key players on the global economic scene will have a direct impact on even the least economically insignificant country in the world.
Doubtless to say, globalisation, particularly viewed from an economic perspective, has presented the International economic and financial system with continuously evolving challenges, which include a greater degree of contagion volatility and instability in the global economic and financial system. But it has also presented unprecedented opportunities for growth and development for those countries that positioned themselves and their economies to effectively benefit from it. Those countries or economic blocs that have been able to successfully realign, restructure or even undergo a fundamental transformation to withstand these challenges and take advantages of the opportunities that came with globalisation and the market system, have generally enjoyed steady economic growth, even if volatile and with it, a fair degree of success towards poverty alleviation. The Asia Tiger economies are perfect examples of this phenomenon. The export-led economic reforms undertaken by these countries in the 1980s and 1990s enabled them to take full advantage of the possibilities of an expansive global market place. Today, China, a country with a deeply entrenched history of communism (an extreme opposite of markets and globalisation), is one of the most successful to have taken this path. And let us remember, African countries in general, attained independence well before most of these Asian countries but their record of growth is incomparable to African countries in general. The Chinese for example never believed in markets, as a communist state. It was only in the 1980’s that it started introducing some market reforms, partly due to pressure from the IMF and US. Example in April 1999, when Chinese Premier Zhu Rongji went to the US partly to finish off negotiations for China’s admission to the World Trade Organisation. As part of this process, the US Treasury insisted on faster liberalisation of China’s financial markets. It is true that China never adhered to the pacing of the reforms insisted on by the IMF and the US but it has slowly but surely reformed it markets, restructured and transformed its economy into the export-orientated giant it has become. The difference is, China took the initiative and done so at its own pace and in its own time. In other words, most Asian countries ‘owned’ their development programmes as opposed to being dictated to. They initiated most of their development and reform requirement and determined the pacing of these reforms, to meet their needs and circumstances of the times. They did not structure their economies to serve the intrinsic interest of the west. Instead, on a mutual relationship, where control or initiative is not granted to the former. China today is breaking all growth statistics, enjoying double-digit growth and with it, spreading its global influence especially, in Africa, where it gets most of its resources to sustain this unprecedented growth rate. United States has been the economic benchmark of the world for centuries precisely because it has made markets work for its economy. If a deeply communist country like China can undergo such transformation to markets and make it work for themselves, why not Africa, with its richly dynamic human resources, raw materials and mineral resources, fertile and expansive arable lands and without the deep rooted baggage of communism / socialism should be fairly able to make the transformation and make it work, with the right approach. One thing glaringly missing from Africa’s resources mentioned above is a ‘ vibrant, efficient and functional capital market’. This is technically different from a banking system.
‘The African Dilemma and the paradox of the market system’ are: almost a decade after the ‘ownership’ of our development and reform initiatives through the ‘Poverty Reduction Strategy Papers’ promoting market system;
Our one-dimensional dependency on the West for aid and assistance has never been higher. Extreme poverty, hunger and destitution on the continent are increasing.
Child mortality and maternal health are in the main developing for the worse. Between 12 and 14 million African children have been orphaned by HIV/AIDS. (Source: World Bank/UNICEF)
Improvement Gender equality and empowerment of women is painfully slow and where prevalent, are mainly symbolic and at worst cosmetic.
The prevalence of preventable diseases such as HIV Aids is ravaging the continent to pieces.
Environmental degradation and desertification through global warming is ravaging Sub-Saharan Africa at unprecedented rates, further made worse by deforestation.
More Africans are fleeing into exile due to economic hardship and persecution from the very governments that swore to protect them.
Governance and developments in protection of human and people’s rights are increasing developing for the worse in many parts of Africa.
All these developments are at a time when we can technically claim ‘ownership’ of our development policies through the PRSPs and at a time when we are embracing markets across the continent to achieve these. Why, when others with who we are in similar situations are embracing and benefiting from it but we are moving backwards doing the same. What a dilemma; what a paradox?
The problem fellow citizens, is not the system, but we as Africans. It is absolutely a failure of leadership over generations that has fashioned our present state and unless we are willing to accept this and stop blaming it on the west, we will always try to find an excuse for our failures.
Cynics and opponents of globalisation and market systems, particularly those with
Socialist mindsets, would argue or would like to argue that globalisation has not really delivered the promises of reducing poverty especially in the third world countries but has actually made them worse. They would blame it on unfair trade policies and unfair terms of trade as reasons why we are loosing out. They can point out to data on growth, poverty, disease etc as prove. What we have to understand is that the market system, upon which economic and financial sector globalisations are based, is a model. This model’s functionality is based on certain conditions and its applicators have to create these conditions to make it work. Even if all trade tariffs and subsidies across the globe were to be eliminated, we will still fail at it because we don’t have the systems to take advantage of this and cannot seem to come of with a system that will adapts to current circumstances A fundamentally important such conditions is ‘ownership’. Ownership not so much as a technical requirement but determining our own direction and destiny in the global economy. But the fact is, we the so called third world countries, particularly African nations, has never really taken our own initiatives to allow us to take full advantage of the promises of globalisation. In as much as the ‘Poverty Reduction Strategy Papers’ approach is a small step towards ‘ownership’ it is not technically our ideas. It being linked to the Millennium Development Goals means that the agenda is still being set for us. It was a way of compensating for the unpopularity of ‘descriptive conditionalities’. Our leaders just seem to be big on vision, but totally lack substance and therefore the West have to hold and guide their thinking and actions. They just don’t have the mindset to independent thinking, to come up with novel ideas of dealing with the challenges we face as a continent. Even if they are given a step-by-step manual on how to alleviate poverty, they will still request ‘ technical assistance’ to implement this. What a dilemma. We have the mental mindset that the West has to help us take the initiatives and sustain any possible gains that may ensue. Even though geographical colonialism in most parts of Africa ended more than half a century ago, we are still colonised with a form (economic colonialism) that is equally, if not worse than both slave trade and colonialism. This is because it enables the West to design the systems and we participate in that system, rather than being partners in developing the systems upon which our world functions. This keeps us dependent on the West not only for our short-term livelihood, but more worryingly our long-term development and survival. We never have any independent coherent development that would be geared towards our emancipation and eliminate our one-dimensional dependency on them. They don’t have to be present on our soils to determine the direction, level and extent of our socio-economic and political development or even our foreign policy. This enabled the West to continue ruling us without being physically present on our soils and it is up to Africans and Africans only to change this status quo. Colonialism and slave trade will always be a scar / a legacy on the African continent and will always be part of our history, but we have used them to create a victim culture, that we use as an excuse for everything that is gone wrong in the continent and almost resigned to the fact that it also meant we have no future as a continent and as a people. Our leaders use this victim mentality as an excuse for their failures of the continent. Africa is seen as a continent ‘that might have been’ but ‘never will be’. Africa ‘should have been’ a major player in international socio-economic and geo-politics but personally ‘I don’t believe ‘it will never be’, but this can only be effected by Africans and Africans only, by owning and sustaining development initiatives that are directed at our long-term economic liberation.
I am talking about Africa as a continent because I subscribe to the concept of Pan Africanism like our great ambassadors such as Kwame Nkrumah, Sekou Toure, Sheik Anta Diop etc, but unlike them, I don’t believe socialism can bring about the socio-economic liberation of Africans. This is because our concept of ‘redistribution means autocracy, dictatorship and this provides a fertile breeding ground for corruption The only way we can eradicate poverty and its associated ailments is to develop independent thinking and ‘ownership’, to embrace markets well, shift our focus from redistribution, which creates a fertile ground for corruption, to growth. We have to completely move away from trickle-down economics and target resources straight at the grass roots to ‘able’ them to carve our a sustainable independent source of livelihood. We have to create a culture of individual responsibility, opportunity, risk taking and rewards. We have to eradicate the culture that the only way out of poverty is to get some education and get a job; we have to create an entrepreneurial culture supported by the right media, for people to take risks and explore opportunities. Create a society where one’s social background and gender, tribal or religious affiliation should have no bearing on his / her ability to access resources for opportunity and personal development. A culture, where hard work and hard work only, productivity and greed to get rich legitimately can lead to one’s social emancipation. This is what will reduce poverty and this is what I call ‘empowering’ people. This is because along with poverty comes powerlessness and voicelessness and always the subject of political manipulation and international power play. Such empowerment is the only way to improve democracy and governance in Africa, because African politics and politicians breed on this powerlessness induced by poverty. Our governments fear the citizenry being economically less dependent on their politically motivated petty projects. They want to maintain a situation where the poor see them as their only saviour, that without us you will die of hunger and disease. This culture is the worst disease that is killing Africa on its feet, not the West. Unless the masses become capitalist minded, greedy to be rich legitimately and be independent, the poverty will never end and African politics will remain to be a politics of exploitation, repression and mental slavery, while politicians are using public property to enrich themselves and their cronies all at the expense of the desperately hard working and suffering masses.
‘Truly independent people are a free people, and with freedom, comes power. There is no one more powerful than an economically ‘independent’ people. This is the only scenario in which we can hold our governments accountable, where we don’t depend on their bribery and handouts for survival. Where poverty would not tempt us to be part of the endless corruption that has become synonymous with the word Africa. Independence in this context means you don’t rely on handouts before you make meaningful economic decisions. It is the only way our voices can be heard as a continent and occupy our rightful position in the global community. It is also the only way we can force a level playing field in the international economic terrain and be able to fully benefit from the promises of globalisation.
Fellow Africans and our leaders in particular let us remember: 300 million of our children go to bed hungry everyday. What a dilemma.
May God bless Africa and African.
The author can be contacted at: alasananjie@hotmail.co.uk.