Why are the countries of sub-Saharan Africa the poorest in the world? One reason is the set of ill-designed development strategies that the IMF and the World Bank have implemented in the region for nearly half a century. But the centuries-old culture of leadership that is ingrained in many African societies has played an equally disastrous role.
Indeed, the overwhelming majority of African rulers regard their countries as their personal possessions, to be used as they see fit. This conception of power led in past centuries to kings handing over their subjects to slave traders. Nowadays, leaders squander their countries' resources and revenues, leaving the majority of their populations mired in poverty, disease, hunger, war and hopelessness.
The current oil rush in West Africa is a perfect illustration of the problem. Instead of being an asset, oil has become a liability that generates poverty, corruption, ethnic conflict and ecological disaster.
It need not be this way. Venezuelan President Hugo Chavez, for example, is using his country's oil revenues to provide free literacy training and health care, to help alleviate the debts of his Argentinean and Ecuadorian neighbors, to forge energy alliances in Latin America and the Caribbean, and to propose a strategic rapprochement with the Andean countries. He has revived pan-Americanism, and Venezuela has become a member of Mercosur, the regional grouping whose other members include Argentina, Brazil, Chile, Uruguay and Paraguay.
But, if a dysfunctional culture of leadership has put a similar agenda of unity and social progress out of reach for sub-Saharan Africa, so have the IMF and the World Bank. When sub-Saharan African countries gained independence in the late 1950s and early 1960s, their leaders inherited bankrupt states with no access to international capital markets. As a result, newly established African leaders had no alternative but to sub-contract economic development to the IMF and World Bank and the Western countries that control them.
Economic liberalization, deregulation of capital movements, suppression of subsidies, privatization of valuable public assets (liquidation would be a more appropriate word), fiscal austerity, high interest rates and repressed demand became the order of the day. Structural adjustment programs demanded by the IMF and the World Bank ended up transforming these countries into dumping grounds for over-subsidized Western agricultural surpluses and over-priced and obsolete manufactured goods.
It was obvious from the outset that the IMF/World Bank strategy was doomed to fail. Their loans were designed to perpetuate Africa's role as a supplier of raw materials, while entangling the continent in an inextricable web of debts and dependency on the "aid industry." The IMF can cut off not only its own credit, but also most loans from the larger World Bank, other multilateral lenders, rich country governments and even much of the private sector.
But consider Argentina, which suffered a deep four-year depression, beginning in 1998. Rejecting IMF demands for higher interest rates, utility price increases, budget tightening and maintenance of the peso's unsustainable link to the US dollar, President Nestor Kirchner's government was able to chart its own economic course. Despite repeated threats from the IMF, Argentina took a hard line with foreign creditors, who were owed US$100 billion. In September 2003, Argentina did the unthinkable: A temporary default to the IMF itself. The Fund eventually backed down, leading to a rapid and robust economic recovery.
Similarly, sub-Saharan Africa's development cannot not be delegated to others. Fortunately, there is hope that the region can resist the West's destructive neo-liberal agenda. According to the US Energy Department, the US' annual oil imports from Africa will soon reach 770 millions barrels, bringing an estimated US$200 billion to the continent over the next decade. If oil prices remain high -- likely in the foreseeable future, given strong demand from the US, Japan, China and India -- oil revenues could reach US$400 to US$600 billion.
To reap the benefits, sub-Saharan Africa must form an oil-based confederation under the tutelage of thoroughly reformed regional groupings aimed at encouraging economic integration and political union. This would provide the region with the muscle to pursue a development strategy similar to that adopted in the past by the US, the EU's member states and the East Asian countries.All of these countries imposed capital controls and regulated inward foreign investment in the early stages of their development.
Sub-Saharan Africa is no different. The focus must be put on diversifying the economy and enhancing the productive capacity of domestic suppliers. This will mean designing foreign partnerships with a view to ensuring that local businesses benefit from technology transfer and training, thereby generating higher value-added in domestic production and exports. It also implies subsidizing and protecting domestic production, just as all developed nations once did -- and still do whenever it suits them.
The first step towards implementing such policies, however, must be to reinvent and reinvigorate a pan-African identity. Europe, Asia and, increasingly, Latin America, are showing that regional integration provides the healthiest path to development. In Africa, this will not be possible until a new breed of genuinely public-spirited leaders emerges. Reducing sub-Saharan Africa's dependence on the IMF and the World Bank might bring that day closer.
Sanou Mbaye is a former member of the African Development Bank's management team.
Copyright: Project Syndicate
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
If you had a vision of the future where China did not dominate the global car industry, you can kiss those dreams goodbye. That is because US President Donald Trump’s promised 25 percent tariff on auto imports takes an ax to the only bits of the emerging electric vehicle (EV) supply chain that are not already dominated by Beijing. The biggest losers when the levies take effect this week would be Japan and South Korea. They account for one-third of the cars imported into the US, and as much as two-thirds of those imported from outside North America. (Mexico and Canada, while
I have heard people equate the government’s stance on resisting forced unification with China or the conditional reinstatement of the military court system with the rise of the Nazis before World War II. The comparison is absurd. There is no meaningful parallel between the government and Nazi Germany, nor does such a mindset exist within the general public in Taiwan. It is important to remember that the German public bore some responsibility for the horrors of the Holocaust. Post-World War II Germany’s transitional justice efforts were rooted in a national reckoning and introspection. Many Jews were sent to concentration camps not
RSS