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Al-Ahram Weekly On-line 28 Sep. - 4 Oct. 2000 Issue No. 501 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly On-line 28 Sep. - 4 Oct. 2000 Issue No. 501
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Elections Region International Economy Opinion Culture Special Travel Living Sports Profile People Time Out Chronicles Cartoons Letters The global myth
By Gamal Nkrumah
Greenbacks, computerisation and cybernetics feed on the greedy cosmopolitan consumerism that has become the hallmark of contemporary success stories. The most tangible consequence of globalisation forces is that the so-called global economy is coalescing geographically in and around wealthy districts of cities in -- and yes, it has to be said -- the United States.
The world's newly rich, wired, apolitical and elitist "haves" are converging on conurbations like New York's Wall Street and Los Angeles' Hollywood, as well as California's fabled Silicon Valley. To the casual visitor, Silicon Valley easily approximates a boundless suburban utopia, but those with sharper vision and more discerning eyes can clearly see the grim evidence of how the bottom fifth of Silicon Valley's population, who have witnessed a continuous decline in their incomes in the last decade, survive. The sad truth about the US economic boom is that the resulting benefits have failed to filter down to the vast majority of Americans; which is to say that the already wealthy top 20 per cent seem to be the only ones being enriched.
The story of America's and Silicon Valley's poor, however, is not the subject of this article. The third millennium burst into being as an unabashedly American-steered era. Washington -- or Wall Street, Hollywood and Silicon Valley, to be more precise -- are the rule-makers. As for the rest of mankind (the losers, to use American terminology), they are under intense pressure to Americanise or risk being irrevocably denied the "American dream."
Europe has come closest to the American ideal. Ignoring for the moment the birth pangs of the euro, the European Union is inching progressively closer to monetary and political union. Asia, or at least large chunks of it, is also steadily going the American way -- and more so than ever after the humiliating initiation rites of the Asian financial crisis that wreaked havoc on the region a couple of years ago.
But Africa appears to be lagging a little. Two gatherings, one international and the other regional, are destined to impact Africa this week. The first, and by far the bigger, is the International Monetary Fund and World Bank meetings in the Czech capital Prague. The other is an impromptu summit meeting of 10 African leaders in the Togolese capital Lomé for discussions on the political future of the Ivory Coast.
Debt and poverty are the two topics that Africans hope will dominate discussions in Prague, for they are seen as the immediate cause of social unrest and political instability in Africa today. The case of the Ivory Coast is indicative. The West African country is the third largest economy in Africa south of the Sahara and was long considered to be a bastion of political stability and economic success. Commodity prices were soaring in the 1970s, but with the collapse of prices in the mid-1980s, the Ivorian economy soon lay in ruin and social and political upheaval ensued. The list of Ivory Coast's wares is prodigious: it is the world's largest cocoa producer; the largest coffee producer in Africa (it ranks third worldwide after Brazil and Columbia); and is a major rubber, palm oil, cotton and peanut producer; and yet export crops now sell for peanuts.
The Ivorian economic miracle ultimately floundered because it was based on the export of agricultural commodities, whose prices fluctuate wildly on world markets. But the IMF has also had a hand in the Ivorian economic malaise. The Ivory Coast embodies the vicious cycle of poverty and indebtedness, social unrest and political instability. IMF-engineered structural adjustment programmes fuelled social and political unrest; thousands of workers were laid off and migrant labour from poorer neighbouring countries were targetted for retribution. It became crucial to ascertain Ivorian nationals from foreign-born citizens, who were threatened with deportation to their countries of origin.
Matters came to a head with the military coup that ousted the democratically-elected government of ex-president Henri Konan-Bedie and brought in the military administration of General Robert Guei. Like his civilian predecessor, Guei lost little time in accusing the most popular opposition figure, Alassane Ouattara, of having "foreign roots." Ouattara, the leader of the Rally of Republicans (RDR) was promptly disqualified from the 22 October presidential elections according to rules introduced in a July referendum. On 7 October, Ivorians will finally know the Supreme Court ruling on the matter.
In the meantime, the political climate in the country is tense after Guei narrowly escaped an assassination attempt last week. The Lomé summit was thus convened under the auspices of the current chairman of the Organisation of African Unity (OAU), Togolese President Gnassingbe Eyadema. The presidents of Algeria, Bourkina Faso, Senegal, Mali and Djibouti were all in attendance; Ghana and Gabon were represented by their foreign ministers. Ibrahim Fall, the United Nations assistant to the secretary-general for political affairs, also attended. In an interesting twist, Ivorian Prime Minister Seydou Diarra arrived unexpectedly in Lomé, but he was refused admittance to the summit. New democratically-elected governments of Africa are no longer tolerating representatives of military regimes in their midst -- and, after all, ousted Ivorian President Konan-Bedie lives in exile in Lomé.
It is against this background of economic decline, collapsing commodity markets, spiralling foreign debt, poverty and ethnic strife that African ministers of finance who flew to Prague were remonstrating the continent's predicament, despite blatant strides forward. Zambia has brought inflation down from 170 per cent in 1990 to 20 per cent at the end of 1999. Chad's inflation has come down from 34 per cent to 2 per cent.
But the social costs of administering the medicine prescribed by the IMF are horrendous. Indeed, many would say that IMF prescriptions are poison. "Third World countries must withdraw their participation in the IMF and World Bank and set up a bank for the Third World. They are imposing harsh conditions on how we feed our children," said the Libyan leader Muammar Gaddafi recently.
The African representatives in Prague were incensed that rich nations can concede that there are grave problems in the region, and yet they do not want to take up radical solutions that will ultimately cost them very little. Perched at the apex of the global pyramid, the rich may regret their insularity, since the misery of the poor will no doubt rebound on the rich. Do we not live in a global village?
Indeed, as scholar and activist Susan George's latest work Debt Boomerang so articulately argues, taxpayers in rich nations pay heavily for poor countries' debts through government subsidies to banks, fewer trading opportunities, lost jobs, narcotics imports and global environmental degredation.
Today, tariff levels applied to poor country exports by rich nations are four times as high as those applied to other rich nations. Western spending on aid has dropped from over $60 billion to less than $55 billion a year in the last decade. The high tariffs have resulted in an estimated loss of $700 billion a year for poor nations. Worse, the cost of borrowing is becoming prohibitively more expensive. Loan charges are exorbitant and the loans themselves have become conditional and based on outlandish technical requirements that make it impossible for poor countries to benefit from them.
The IMF lending conditions are the main cause of the hardships of the poor in the Third World. The galloping cost of the so-called safeguard policies protecting creditors make it virtually impossible for poor countries to even overcome the first hurdles in the race against poverty. Small wonder that 15,000 demonstrators vociferously protested against the Bretton Woods annual meeting in Prague.
