Looting Africa

The Economics of Exploitation

Patrick Bond

• Publisher: Zed Books
• Year: 2013
• Print ISBN: 9781842778128
• eBook ISBN: 9781848137288
• Edition: 1
• Topic: Economics
• Subtopic: Political Economy
• Index: Economics

Despite the rhetoric, the people of Sub-Saharan Africa are become poorer. From Tony Blair's Africa Commission and the Make Poverty History campaign to the Hong Kong WTO meeting, Africa's gains have been mainly limited to public relations. The central problems remain exploitative debt and financial relationships with the North, phantom aid, unfair trade, distorted investment and the continent's brain/skills drain. Moreover, capitalism in most African countries has witnessed the emergence of excessively powerful ruling elites with incomes derived from financial-parasitical accumulation. Without overstressing the 'mistakes' of such elites, this book contextualises Africa's wealth outflow within a stagnant but volatile world economy.

1

Poor Africa

Two views

Africa is poor, ultimately, because its economy has not grown. The public and private sectors need to work together to create a climate which unleashes the entrepreneurship of the peoples of Africa, generates employment and encourages individuals and firms, domestic and foreign, to invest. Changes in governance are needed to make the investment climate stronger. The developed world must support the African Union’s New Partnership for Africa’s Development (NEPAD) programme to build public/private partnerships in order to create a stronger climate for growth, investment and jobs.¹

These sentences – from the report presented in March 2005 by Tony Blair’s Commission for Africa – distil the misperceptions of conventional wisdom regarding the continent’s underdevelopment. In the same year Blair hosted the G8 and the European Union leaders’ summits, and his Chancellor of the Exchequer Gordon Brown advanced several initiatives on debt, aid and trade, deploying ‘Marshall Plan for Africa’ rhetoric. Below, we consider the way the Africa Commission coopted key African elites into a modified neoliberal – free-market – project. But to set the tone on this first page, it would be more logical to reverse all of the above admonitions, and reconstruct the paragraph as follows.

Africa is poor, ultimately, because its economy and society have been ravaged by international capital as well as by local elites who are often propped up by foreign powers. The public and private sectors have worked together to drain the continent of resources which otherwise – if harnessed and shared fairly – should meet the needs of the peoples of Africa. Changes in ‘governance’ – revolutions, for example – are desperately needed for social progress, and these entail not only the empowerment of ‘civil society’ but also the strengthening of those agencies within African states which can deliver welfare and basic infrastructure. The rich world must decide whether to support the African Union’s NEPAD programme, which will worsen the resource drain because of its pro-corporate orientation, or instead to give Africa space for societies to build public/people partnerships in order to satisfy unmet basic needs.

One reason to make this argument forcefully at the outset is to remind ourselves of the historical legacy of a continent looted: trade by force dating back centuries; slavery that uprooted and dispossessed around 12 million Africans; land grabs; vicious taxation schemes; precious metals spirited away; the appropriation of antiquities to the British Museum and other trophy rooms; the nineteenth-century emergence of racist ideologies to justify colonialism; the 1884–5 carve-up of Africa, in a Berlin negotiating room, into dysfunctional territories; the construction of settler-colonial and extractive-colonial systems – of which apartheid, the German occupation of Namibia, the Portuguese colonies and King Leopold’s Belgian Congo were perhaps only the most blatant – often based upon tearing black migrant workers from rural areas (leaving women with vastly increased responsibilities as a consequence); Cold War battlegrounds – proxies for US/USSR conflicts – filled with millions of corpses; other wars catalysed by mineral searches and offshoot violence such as witnessed in blood diamonds and coltan (colombo-tantelite, a crucial component of cell phones and computer chips); poacher-stripped swathes of East, Central and Southern Africa now devoid of rhinos and elephants whose ivory became ornamental material or aphrodisiac in the Middle East and East Asia; societies used as guinea pigs in the latest corporate pharmaceutical test … and the list could continue.

Today, Africa is still getting progressively poorer, with per capita incomes in many countries below those of the 1950s–60s era of independence. If we consider even the most banal measure of poverty, most sub-Saharan African countries suffered an increase in the percentage of people with income of less than US$1/day during the 1980s and 1990s, the World Bank itself concedes.² Later we consider even more worrying evidence (also from the Bank) regarding the depletion of Africa’s raw materials, and the implications for the continent’s declining net national income and savings.

Yet the worsening statistics led to different kinds of spin. Emblematic of the power-elite view (even if published in the ostensibly progressive US magazine The Nation), was Andrew Rice’s review of new books on Africa by Martin Meredith, Robert Guest and Jeffrey Sachs:

How can one continent be so out of step with humankind’s march of progress? Everyone agrees that Africans are desperately poor and typically endure governments that are, to varying degrees, corrupt and capricious. The dispute is about causes and consequences. One group – call it the poverty-first camp – believes African governments are so lousy precisely because their countries are so poor. The other group – the governance-first camp – holds that Africans are impoverished because their rulers keep them that way.³

Sachs isn’t actually so crude, since ‘Little surpasses the Western world in the cruelty and depredations that it has long imposed on Africa.’ But he presumes that the critique of corrupt dictators is a ‘political story line’ of the ‘right’, instead of giving credence to progressive, organic African anti-corruption campaigning. From there, Sachs proceeds to rehearse well-known accounts of malaria, AIDS, landlocked countries and other forms of geographically determinist analysis, and then reconciles these explanations with garden-variety policy advice: adopting good governance plus ‘implementing traditional market reforms, especially regarding export promotion’. For Sachs, virtually none of the critical structural analyses in this book are worthy of more than a paragraph’s lip service.⁴

There will be time later to question the supposed ‘march of progress’ (in Chapter 2), and the merits of ‘traditional market reforms’ (in Chapters 3–4). But another view entirely – namely, that African rulers keep their people poor because they are tied into a system of global power, accumulation and class struggle – is what seems to have gone missing, especially when well-meaning NGOs and charity proponents seek yet more African integration into imperial circuits of trade, aid, finance and investment, citing state corruption as the major impediment to this cure-all.⁵ Northern academics provide a more sophisticated version of the argument, known as the theory of African patrimonialism, namely rule through personal patronage rather than ideology or law, based upon relationships of loyalty and dependence with a blurred distinction between private and public interests.⁶

In fact, the deeper global power relations that keep Africa down (and, simultaneously, African elites buoyed up) should have been obvious to the world in 2005, a year during which numerous events were lined up ostensibly to help liberate Africa from poverty and powerlessness:

• the mobilization of NGO-driven citizens’ campaigns like Britain’s Make Poverty History and the Johannesburg-based Global Call to Action against Poverty (throughout 2005);

• Tony Blair’s Commission for Africa (February);

• the main creditor countries’ debt relief proposal (June);

• a tour of Africa by the new World Bank president Paul Wolfowitz (June);

• the G8 Gleneagles debt and aid commitments (July);

• the Live 8 consciouness-raising concerts (July);

• the UN Millennium Development Goals review (September);

• the return to Nigeria of monies looted by Sani Abacha and deposited in Swiss bank accounts (September);

• the IMF/World Bank annual meeting addressing debt and Third World ‘voice’ (September);

• a large debt relief package for Nigeria (October); and

• the deal done at the World Trade Organization’s ministerial summit in Hong Kong (December).

There are many different dynamics associated with these mainly top-down processes, and in retrospect it is appropriate to ask the question: what was really accomplished? This book argues that for those seeking genuine information about Africa’s situation, the events above were useful mainly in so far as they revealed global-elite hypocrisy and power relations that remained impervious to advocacy, solidarity and democratization. The events also revealed the limits of strategies aimed at intra-elite persuasion rather than pressure. Tragically, the actual conditions faced by most people on the continent continued to deteriorate.

But this is not the impression that world elites and African rulers would like to leave. In September 2005, the outgoing chair of the IMF and World Bank Development Committee (one of two crucial standing bodies of the Bretton Woods institutions), South African Finance Minister Trevor Manuel, bragged: ‘Right now, the macroeconomic conditions in Africa have never been better. You have growth across the continent at 4.7 per cent. You have inflation in single digits. The bulk of countries have very strong fiscal balances as well.’⁷ As for Gleneagles, Live 8 organizer Bob Geldof was ecstatic: ‘On aid, 10 out of 10. On debt, eight out of 10. On trade … it is quite clear that this summit, uniquely, decided that enforced liberalization must no longer take place. That is a serious, excellent result on trade.’⁸

Upon closer examination, Geldof appears to have been profoundly and dangerously misguided (as many of his NGO allies warned...

Table of contents

• Cover
• About the Author
• Title
• Copyright
• Contents
• List of Figures and Tables
• Preface and Acknowledgements
• 1 Poor Africa: Two views
• 2 Uneven and Combined Development: Neoliberalism stagnation and financial volatility
• 3 Financial Inflows and Outflows: Phantom aid debt peonage capital flight
• 4 Unequal Exchange Revisited: Trade, investment, wealth depletion
• 5 Global Apartheid’s African Agents: Home-grown neoliberalism, repression, failed reform
• 6 Militarism and Looming Subimperialism in Africa: Washington, London, Pretoria
• 7 Civil Society Resistance: Two views
• Notes
• Index