The article looks at the recent African development debacle. In particular, it focuses on the external factors which the author takes as the primarily cause of the problem. Without denying the impact of some internal factors such as corruption and mismanagement, the author argues that it is the continued subordination of Africa to serve western interests which prevented any hope towards a genuine transformation of the continent. This is guaranteed through a host of policies imposed and spearheaded by a number of international organisations currently led by the IBRD and the IMF. The article concludes by calling on the African leaders to move towards a complete decolonisation of Africa and implement their own development strategies which have been consistently rejected by the outside world. Only through this can Africa hope for a true transformation which will benefit its own people.
The African experience with western contacts over the last 500 years could not have been more unfortunate. Four hundred years of slavery had robbed Africa of 70 millions of its people. The genocide was highly selective. It included the most able bodied and thus the most productive work-force in the continent, not to mention the leadership which was lost through the process. The destruction and the dislocation of cultures during slavery is beyond description. This legacy of slavery implanted a deep sense of inferiority among the Africans which is hard to part with (see Rodney 1972).
Slavery in Africa was followed by 100 years of colonialism. This period was marked by institutionalised subjugation of African countries to serve the interests of their colonising empires. It entailed economic, political and cultural restructuring of the continent. The mission was put into effect through a combination of legislation, ideological dissemination, military force and flagrant destruction of indigenous industries and cultures. Again the psychological impact of colonialism in Africa is still taking its toll.
The economic changes instituted in colonial Africa are of relevance here. African economies were to be restructured to serve their metropolitan centres. Thus, the production of cocoa, cotton, copper, jute, etc. and other raw materials were to form the backbone of African economies. The articulation of African economies into the western economies through the international division of labour still forms the hallmark of modern economic thinking in the West. According to this model, countries are to concentrate on the production of those commodities in which they have a comparative advantage. Despite the historical falsification of this assumption, this model remains imposed on Africa to date. Thus, Africa is to confine itself to the production of raw materials, while the West is to focus on manufactured goods. The preparation of Africa to play this role in the international economy has been one of the most impressive achievements of colonialism. Part of the mission was, however, the creation of a class of elite to act as a buffer and an intermediary between the African masses and the West. It is this new class of compradors who spearheaded the flag of liberation movements in Africa. Not surprisingly, no "granting" of independence to any African countries has ever led to any radical transformation of the new nations.
The subordination of African countries to the interests of the West after independence has been entrusted to several multilateral organisations. Spearheading these organisations are the WBRD and the IMF. Behind them are others: Group of Seven, Paris Club, London Club, etc., and a host of giant banks and multinational companies. Ironically, this is a reinforcement of the view that the development of the African countries, and indeed all Third World nations, can only be induced through the expertise and assistance of western experts. In a sense, this is an extension of the same paradigm of development which underlines the colonial legacy of civilising the savages, albeit in a cheaper way. Thus, it is the experts from Washington aided by a fleet of part-time consultants from other western countries who are entrusted with the job.
Underlining the seemingly sophisticated nature of conventional economics are simple erroneous assumptions that stand little scrutiny. This is elegantly summarised by Lappe and Collins(1986) in the following statement:
Didn't all of us learn in the junior high school how natural it is that Pedro's family in South America can grow coffee for us, while we in turn can export industrial goods his country needs, and that in a world of unhampered free trade we all win?
The division of labour is sacred that Pedro's family is destined to forgo any dream of placing added value on its produce. Thus, they must stick to exporting raw coffee beans; no roasting nor processing, for these are forbidden by the almost biblical logic of sound world division of labour. Mounting tariffs on processed or semi-processed beans are one of the mechanisms which ensures respect for this rule. Simplistic as it may be, this is what governs the international dictum of international division of labour, and all thanks to the wisdom generated by the theory of comparative advantage. When Ricardo referred to the natural advantage England had for expanding its sheep industry in comparison to Portugal which had/has the weather for producing wine, the theory did make sense but only within that context (see Brown 1993:41). Nonetheless, the theory has precipitated an erroneous but useful belief on nature's role in the process. Thus, it is nature which placed potatoes in the USA and Russia. The assumption is neither verified by history, nor proved by present day world production. Indeed the world division of labour itself is a conscious creation of human actions, rather than a natural predisposition. Carlo Cippolo cynically reminded the English of their good fortune that, being no Indian Ricardo arose to advise them to remain shepherds and continue importing the then superior Indian textiles (Hayter 1990:51). The interests of the British empire however dictated otherwise. The Indian textile industry had to be destroyed to make room for the development of the Lancashire textile industry; a mission which took hardly 60 years to accomplish (Brown 1993:158). The destruction of the Egyptian textile industry however took much less. Credit goes to Lord Cromer who governed Egypt from 1883 to 1907. In line with the new economic discovery, he declared that "since Egypt is by her nature an agricultural country, it follows logically that industrial training could lead only to neglect of agriculture while diverting Egyptians from land" (Hayter 1990:49). One may add that Egypt was not entirely agricultural, it was industrial as well and that England was an agricultural country prior to its industrial age. However, a few years later, Cromer reflected on his accomplishment:
The difference is apparent to any man whose recollections go back some ten or fifteen years. Some quarters [of Cairo] that formerly used to be veritable centres of varied industries - spinning, weaving, ribbon making, dyeing, tent making, embroidery, shoemaking, jewelry making, spice grinding, copper work, the manufacture of bottles out of animal skins, saddlery, sieve making, locksmithing in wood and metal, etc. - have shrunk considerably or vanished. Now there are coffee houses and European novelty shops where once there were prosperous workshops (Hayter 1990:49).
The other component of the theory of comparative advantage, free trade, is even more mythical. Virtually no country on earth developed through free trade. The history of recent world development is a history of concerted protectionism. With regard to the British empire, it was only after it achieved supremacy in several economic sectors around the 18th century that the phrase "free trade" became a catch term. Prior to that, England protected its trade and its trade routes through both diplomatic and military means. Laws which dictated that no foreign goods, except when owned by a British citizen, were allowed to dock at ports of the British Islands, were rigorously implemented until supremacy was achieved. Soon British scientists, like Adam Smith, Ricardo and their neo-classical successors were quick to provide the ideological support under the merits of free trade. But is there any free trade despite its rhetoric? No. In fact, wealthy countries continued subsidising their national traders, and will continue to do so, despite the myth widely perpetuated by GATT proponents. In his last visit to Japan shortly before his demise, US ex-president Bush was hailed to have been looking for fair trade rather than free trade. Indeed free trade as an overall desirable rule applies only to the poor countries whereas western subscription to free trade is restricted to areas where it has achieved dominance. Sectors in which western powers have no substantial edge can be exempted from rigorous free trade rules. Others can be contentious issues for removal of all tariffs. Neo-classical quackery about the damage of EC subsidies to agriculture should not be allowed to obscure the fact that the present unprecedented level of production is a product of state support in the first place. A few decades ago, Britain was regarded as "a weekend country in terms of food production - it could only produce enough to feed its population for the weekend" (Adedeji 1993:12). Now it has to endure the cost of agricultural surplus disposal.
Nowhere did the pursuit of the world division of labour prove so damaging to African countries than in food self-sufficiency. In order to excel in their international role as producers of raw materials, poor countries spared no efforts in increasing the export crops needed by the West. The problem with these crops is that they take resources (capital, labour and land) away from local food crops. Decline in food self-sufficiency has been a feature of modern African economies. At the moment, one in five Africans is fed on imported food. The diversion of agricultural labour to export crops now stands at 78% for Kenya, 60% for Sudan and 55% for Senegal, to mention but a few examples. But, are the farmers benefiting from their produce? The answer is far from pleasing. It is estimated that for every dollar paid in the West for such produce, only 15 to 25% remains with the producers. The rest goes to western packers, transporters and processors, distributors and retailers. The problem is further accentuated by the declining terms of trade. During the period 1981 to 1987, African export earning losses are estimated to amount to $54.3 billion, with $16 billion for the single year 1985/1986 (Onimode 1992:39, 140). Almost every country in Africa has a story to tell. In 1988/1989 Ghana doubled its cocoa production but its cocoa export revenue fell by 50% (ibi64). While the nominal cost of Ghanian cocoa increased by six-fold between 1974 and 1980, its real price declined by 50% (Haynes et al 1987:352). Zambia, a country which depends on copper for 80% of its export earnings endured a 60% decline in the real price of its copper for the period 1974-1984 (CIIR 1985; see also CIIR 1987). The turbulence of world-market mechanisms often causes the African farmers to run at a total loss:
Erietrea ended its war against colonialism in 1991, with one crop to offer. Sesame seeds... while this crop was ripening in 1991, the "world price" of the commodity markets forecasts £850 per unit. When it had ripened, the price was down to £550, lower than the cost of delivering it (Davidson 1993:25).
Yet, Africa is advised to double its efforts and produce more. It does not take an intelligent economist to speculate on what will happen if the Africans increase their production in a market which is already saturated. At most, Africans will be running fast to stand still. At worst, extra production will simply outstrip demand and hence suppress prices. As Adedeji puts it; "To insist that African economies must be based on producing the same commodities for which the demand is highly inelastic, is to ask Africa to commit suicide" (Adedeji 1993:11). For those who are still in doubt, let me remind them that world demand has already been exceeded in cotton, copper, tea, bananas, sugar, cocoa, rubber, etc. The list is indeed longer and is gradually expanding. It is not hard however to single out the beneficiaries from increasing the production of these traditional export products. Not surprisingly, the terms of trade have been among the major issues raised by African countries in almost every OAU report in the last few decades. Some commentators take the terms of trade as so central that had prices remained at their 1970s level, there would have been no debt problems in Africa.
Africa now suffers from a debt of over $290 billion. The debt is estimated to be growing at a rate of 23% annually (Onimode 1992:26). Having the highest proportion of debt of over 55% of GNP and over 200% of export earnings, Africa is trapped in a constant drain of capital to the wealthy countries with an annual debt service ratio of over 60% (Campbell 1991:28). Over $20 billion flows annually out of Africa. The IMF and WB, themselves instrumental in creating the debt through their semi-compulsory advice, and in the continuation of debt repayment receive a net flow of over $1 billion annually (Onimode 1992: 26, 138). Sub-Saharan Africa, the poorest zone on earth, had to undergo a net transference of $4.7 billion to the IMF and WB for the period 1986-90 (Turok 1991:7). Compliments of IMF's help to Uganda with its Structural Adjustment Programme (SAP), the Ugandan people went along to subsidies, their repression as evident for the government budget plan for 1988:
Debt service |
50 |
Import of petroleum products |
20 |
Military spending |
20 |
Simple reproduction and administration |
5 |
Services |
2 |
Agriculture |
2 |
Miscellaneous |
1 |
Total expenditure |
100 |
Source: Campbell 1991:29.
The debt of the continent was also accentuated by the rising rate of interest in the West. It was estimated at one point that a rise of 1% interest in western banks costs Africa $2.5 billion. In the mid-1980s, the OAU estimated that Africa had to pay $20.4 billion in rising interests charges for the period 1986-90 (Onimode 1992:27). Despite continuous calls for cancellation of African debts, at least for the poorest countries, the flow of capital continues unabated. This despite the fact these debts have already been paid several times over through various mechanisms. Moreover, a substantial amount of these debts were the result of policies endorsed on the continent, and that some of it was paid to corrupt leaders whose records could not - in anyway - justify the deals or the repayment. Several proposals have been made with regard to the debt problem. In general, they consist of the following: a) outright repudiation, b) conciliatory default, i.e. stop payment but promise to pay later, c) debt swapping, and d) rescheduling (see George 1989:67-73). While the author prefers the first option, the fact remains that no course is of any use without removing the very conditions which precipitated the debt in the first place. At the moment, Africa is demanding reparations for 400 years of slavery and 100 years of colonialism. The demand was tabled internationally in 1990 (Onimode 1992:40-41).
The continuation of the present developmental approach by African countries is a result of concerted efforts from western countries, primarily through their overseers, the IMF and the WB. The evidence for this lies in the number of alternative policies proposed by African countries over the last few decades, which were successfully replaced by other policy packages engineered by the two mighty organisations. Conventional development paradigm is still dominated by the widely accepted mythical conviction that the leaders of the multilateral organisations, the WB and the IMF, have the expertise and the willingness to advise the poor countries on the management of their economies; that they know - better than local people - what is best for them and that resistance to their medicine reflects nothing but ignorance, immaturity and lack of discipline. Accordingly, each African country is allocated a handful of "briefcase" experts, occasionally supplemented by resident representatives for the purpose of their development. Failure to comply with the expert advice of WB/IMF Representatives is enough to relegate the country to the status of an international outcast. This implies loss of funds but equally deregulation of the relations between those countries and the outside world. The question is: do these organisations have anything to offer? Can they be trusted with managing African economies to the best of their knowledge, and to the benefit of the African people? Judging from past experience, the answer is simple: apparently, no! This is based on a number of points which will be made clear in the following paragraphs.
Both the International Bank of Reconstruction and Development (IBRD), better known as the World Bank (WB) and the International Monetary Fund (IMF) were formed after World War II (1944) to regulate finance and trade relations between Europe and the USA. It was only in the last three decades that they became heavily involved in the affairs of the Third World countries, primarily due to the need to incorporate these economies into the western spectrum (Harris 1989; Hussein 1992; Nitsch 1991). By their structure, these organisations have come to be controlled by the western powers, because voting within them is determined in relation to the weight of the contributions of each member. For example, the US controls 23% (down from 36% in the 1940s) of voting power within the IMF, while class one decisions require more than 80% of the total votes (Sen 1989:1060). The US, together with Canada, UK, France and Germany score the absolute majority in the Institution (George 1976:236). Thus, over 100 Third World countries, joined together, cannot effectively pass any decision deemed to be important without the approval of the USA. The twin organisations were therefore born undemocratic, and thus incapable of becoming forums for any meaningful global dialogue.
Although unwritten, a conventional rule is adopted according to which the President/Managing Director of the World Bank is always American, while that of IMF is European. The deputy of the latter institution must also be an American. Commenting on the control over the WB, Adams indicates that the US has arrogated to itself the power of appointing the president of the WB despite the fact that WB charter requires the post to be filled according to the wishes of the Executive Board. Moreover, it was early established that the President of the WB would have a free hand in running the Bank unrestrained by the Executive Board (Adams 1993:31). The power of the US over the WB is further reinforced by its ability to render the Bank financially impotent, if it so wishes (Payer 1982:40). The managing directors and the deputies of the two institutions are carefully vetted by their respective countries with no consultation with the majority of the countries in the world.
Behind the impressive and colourful graphs and equations of the economic dogmas presented by the WB and the IMF is a simple, primitive guru economics, which hardly stands up to any common sense, let alone scientific scrutiny. Though traditionally cloaked in secrecy, the economics of these organisations is no longer the preserve of "briefcase" experts and their counterpart bureaucrats. Neither is it monopolised by Third World academics and their provos in the First World. Rather, discussion and condemnation of the policies of these organisations can now be heard across the board in most Third World countries. They are discussed by women in the markets of West Africa and condemned by demonstrators from shanty towns in Sudan, Egypt and Kenya. Others however, opt to emphasise the paternalistic and albeit unjust aspects of the policy measures typical to these organisations. In Jamaica, IMF provided a new proverb for the local people. An offended person shouts at his/her opponent: "What do you think you are? The IMF?". Women of Peru in the 1970s used the IMF to frighten their misbehaved babies:
At the time of Peru's torment, one analyst reportedly insisted that at the mere mention of the name of the Fund staff member concerned, little children from the slums would run to their mothers, crying and disorientated `as if they have just seen the devil incarnate or heard his voice' (Budhoo 1990:50).
The fear of these Peruvian babies is not a result of a culture ridden by magic and witchcraft. It is well justified, given the suggestion that the policy measures introduced by these institutions have resulted in death, misery and desperation of 3,000 million children in the Third World (ibid).
Despite the image which these organisations have managed to retain in the West, they remain a hated menace in Africa, in a way that is difficult for the average westerner to comprehend. As mentioned elsewhere: "In Africa, mention the Bank and the Fund and tempers rise, faces harden, voices are raised. They are the twin faces of an evil empire" (Dowden 1993:16). Indeed many African intellectuals find it stigmatic to be associated with either of the two organisations. The reputation is based on experience although this is nowadays reinforced by intellectual rigour as well.
Until the 1970s, the WB and the IMF worked separately with little coordination between them. Their work is now well coordinated through their regular senior joint staff meeting and manifested in their Structural Adjustment Programmes (SAP). The SAP stemmed from the original mandate of the two institutions, later adapted to somehow supposedly suit the poor countries. In one of his recent writings, Onimode identifies four major IMF-WB programmes in Africa:
(i) anti-poverty programmes; (ii) growth-oriented programmes including infrastructural development; (iii) balance of payments stabilisation programmes; (iv) structural adjustment programmes (SAP) or economic recovery programmes (ERP) (Onimode 1989: 26).
So far the programmes sound impressive, that is until one realises that they are contingent on a certain set of dogmatic principles. Based on the bogus theory of comparative advantage (see above/below) and garnished with the doctrine of the orthodox world division of labour, the twin institutions have evolved some eugenic methods which have wrought havoc in the Third World. Excluding costly anti-poverty measures effected by the WB in the last few decades, consisting of dams, roads, electrification which in effect increased both poverty and unpayable debts in Africa, the continent has now awoken to the problem of conditionality. Countries experiencing liquidity problems, and in particular in meeting debt obligations, are forced to turn to the IMF-WB cartel. Failure to swallow conditionality pills does not only deprive the countries of access to loans from the two organisations, but equally blocks all foreign flow of capital and disrupts their normal dealings with their western trade partners. Recently, even countries close to the Third World like Saudi Arabia have also joined the conditionality club, thus further tightening the grip over the poor countries and increased their domination by the rich countries. In effect, the debt owed by African countries to the West has given the "creditors club" an immense power exercised on their behalf by the twin institutions; a power which a few decades ago could have only been achieved though military means (see George 1988:34). Conditions imposed by these organisations have taken a standard SAP form with little regard to individual variations among credit-seeking countries. Most important of SAP conditionality measures are:
Over the last two decades, the twin organisations seems to have developed an acute obsession with devaluation which "has always been the major, and perhaps the most damaging, policy component of all economic packages implemented under the auspices of the IMF" (Ali 1985:20). Countries forced into SAP have to undergo a substantial devaluation of their currencies, sometimes several times during a specified period. Devaluation is a prescription necessitated by the diagnosis that, it is the overvalued currency, which leads to much consumption of imported goods and at the same time retards export production (mostly agricultural raw materials), by making it costly and thus less competitive abroad. Devaluation is also thought of as an anti-inflationary measure, although there are other policies which are more central to this issue. The effect of devaluation here, is seen as one way of curbing rising purchasing power, which is thought to be distorting to the market and hence the entire economy (see Hussein 1992).
A careful examination of the effect of inflation reveals the hidden agenda disguised behind the WB/IMF club. Despite the fact that the absolute majority of the Africans are subsisting at or below the poverty line, the policy presupposes a prevalence of over-consumption due to inflated currency. Moreover, devaluation reduces an already suppressed access to foreign goods, while rendering export products almost free for the western countries, companies and citizens.
The assumption that devaluation will boost the export sector is yet another myth. Due to the relatively high external inputs into the export economy, eg. machinery, fertilizers, fuel, etc., devaluation is a monstrous handicap which offsets any benefits gained through the process. It is common sense that devaluation can be an effective tool for redressing balance of payment problems, and thus boost production only if external demand for export goods and internal demand for imported goods are sufficiently elastic. That is not the case in the context of most African countries (see Adams 1992:164-167). Nonetheless, devaluation has been the pillar of the IMF in handling of the exchange rate in Africa. The Tanzanian shilling has been devalued by over 500 per cent. The Nigerian Naira by over 600 per cent. All to no avail.
Drastic reduction of the public expenditure through staff retrenchment has also become a standard part of SAP. The rationale for that is to balance the budget, increase efficiency and avoid unaffordable expenditure. The policy is a part of the anti-government mentality, so characteristic of the twin institutions. Retrenchment is however more than a surgical operation aimed at cutting the fat. It eats through the bones as well. Twenty per cent is the round and magical figure which rarely fails to appear at the end of the twin's scientific calculations. This is exactly what Ghana, a WB most obedient follower and a source of Pride, (?) discovered in 1983. It was told that 20% of its work-force in the public sector was underemployed. Initially, 31,700 employees were to be redeployed; 5,500 in the civil service, 26,200 in state enterprises and 20,000 in the Coca Marketing Board (CMB). It was the latter (CMB), however, which was able to comply fully with the draconian prescription. By 1987, it was able to shed - thanks to the wise briefcase experts - 28,897 (38.86%) of its overall staff power (Jonah 1989:142). Zaire, home to one of the most impoverished people in Africa, had also seen the magic figure. Acting in accordance with the scientific and divine advice of the IMF, dictator Mobutu sacked 46,000 teachers which may be translated as 20% of their total number. Higher education which is already earmarked for dismantling by the WB, not only in Zaire, but in the whole of Africa lost 30% of its personnel during the same exercise. Money could not have been a problem considering the fact that the WB channeled more than $1 billion into Zaire between 1984 and 1986 alone, an amount sufficient to pay an estimated 290,000 teachers for 20l years (Gorge 1989: 107, 109, 115). The exercise becomes even more bizarre when we consider that Zaire had a rate of literacy of around 15%, not to mention that 80% of its population live in absolute poverty (ibi106). While the principle of reducing excess labour in the public sector is accepted, its application across the board, including sectors which cater for basic needs, and in such astronomical proportions, cannot be justified. That is indeed the case if the economy is be rectified for the benefit of its own people, according to the guru economists of the WB.
The WB/IMF diagnoses of the sickness of African governments, points to certain symptoms which are hampering recovery. These are mainly excessive deficit financing, over-expansion of credit and inflation. In addition to devaluation discussed earlier, the one-for-all medicine prescribed across the board consists of certain demand management policies: harsh budgetary and credit squeeze, removal of subsidies, increase in interest rate, deregulation of prices and higher charges for public utilities (Onimode 1992:54). While some of these measures may often produce positive short-term results, their long-term effects have proven to be catastrophic. In a sense, the fallacy of the theoretical bases of the thinking, centres around prescribing a short-term solution for a long-term problem. Perhaps the most damaging aspect of such policies is their impact on the development of human resources, an essential component for any development prospects. In the context of the Third World, the policies drastically reduced access to the basic essentials including education, training, health, food, etc. The increase in the interest rate, coupled with the credit squeeze, conspire to reduce investment and hence, thwart any possibility of production expansion. The deregulation of prices, while reducing access to essential goods and services, has a bias towards patterns of consumption incompatible with development. Indeed the problem facing these countries is not of excess demand, as perceived by the WB/IMF cartel, rather than supply shortage. The policies prescribed seem to do exactly the opposite. Rather than curb demand and thus suppress inflation, they prove to be successful only in wiping out the productive base, especially that of industry in the victim countries (ibid).
Recently, the anti-government mentality has become central to WB/IMF alliance. The push for market forces at the expense of government has been stretched to the limit. It is here that the bases of the prescribed policies can easily be traced back to western politics, rather than economics as a science. A long-lasting intellectual legitimacy has been conferred on this mode of thinking by the accession of the ultra right to power in the west, in the last 1970s and early 1980s. Both Reganomic and Thatcherite thinking seems to have given a new impetus to this element of the WB/IMF agenda. The revelation has surprisingly remained intact within the philosophy of WB/IMF cartel, despite the embarrassing failure of both of its prophets in USA and UK (Adams 1993:147:148). Privatisation has become the catchword in all the new policies imposed on African government. While it is acceptable to see the merits of privatisation and the reduction of excessive government intervention, it is the dogmatic adherence to such polices which blind planners from its selective application. In such a case, already weak governments, are completely emaciated to the point far beyond where they could play any constructive role in the development process.
The raising of rates of interest, as part of the standard package, has become an accepted policy built into SAP. The philosophy behind this is that inflation is distortive for the economy, or rather the market, and a hindrance to an incoming flow of capital. That low rate of interest suppresses saving and encourages borrowing, and thus boosts unrealistic consumption. While working towards low inflation is a desirable goal, taking it as an overriding goal has proved to be detrimental to weaker economies. High interest rates, up to 50% in some cases, as enforced by the WB/IMF model have a tendency to thwart any possibility of productive investment, in as far as borrowing becomes prohibitive. At last, the WB/IMF economics has been overtaken by European experience. Obsession with curbing inflation has now given way to lower rates of interest as the primary way of dealing with ailing economies. Most African countries however do not subscribe to a single low interest rate, neither do they call for an overall high interest rate, as suggested by the WB/IMF. It is the balance as determined by the priority areas for each economy which is needed. But this is too time-consuming to work out for the WB/IMF experts.
The WB and the IMF have indeed demonstrated their failure in the Third World. Talking in this respect, George says that had the Bank's officials been Corporate managers, they would have been sacked by their shareholders. But only if their success is measured against their stated objectives. The failure of the WB in the Third World has been so stark that the Bank has been consistently challenged to point to even a single success story. In Africa, the Bank pointed to Kenya at one time, only to stop doing so. The same thing was also done with the Ivory Coast, Zambia and Mauritius. Recently the Bank settled for Ghana as its success story, only to be challenged by nobody other than the President of Ghana himself, who insisted that the Bank's policies were a disaster. This is despite the fact that the Bank had effectively been in Ghana since the collapse of Nukruma's regime in 1964, and it is still adjusting (Onimode 1992:53,124). Ghana, the pride of the WB, is indeed an embarrassing case for the Bank, not a success story. Paradoxically as it has been described, Ghana is doing all the "right things" at an immense political cost, yet failing conspicuously to succeed (Haynes et. al 1987:356). To add insult to indignity of the WB/IMF "briefcase" experts in Accra, and their high priests in Washington: "Ghana has recently achieved the dubious distinction of being proposed by the UN Committee for Development Planning for inclusion among the least developed countries" (Adams 1993:173 also 166). If Ghana was doing the "right things", a pertinent question would arise here: the right things for whom? Doubling the production of cocoa in one year and getting 50% less revenue for it is certainly bad for Ghana. It could hardly be so for the western chocolate industry and the western undiminished appetite for its favourite snack. After all, Ghana was advised to boost its cocoa production at a time when the growth of the world supply of the product was outstripping its consumption growth by 4-5% (computed from Adams 1993:166). It does take an expert from Washington to come with such dubious advice! Does it?
Over the decade of the 1980s, 34 African countries went through the Bank's and the IMF's Structural Adjustment Programmes (SAP). The outcome was simply disastrous. African performance records show that for the period 1980-1988, per capita income declined by 2.6% annually while total employment shrank by 16%. The problem with the twin organisations is that they seem to conspicuously defy learning from experience; their own included. Rather than improving their level of realising of their aims, they seem to get worse. As Dowden reports:
[a] recent report by a task force on the Bank's lending policy noted that the number of projects with "major problem" leapt from 11 per cent to 20 per cent in 1991; projects unsatisfactory at completion rose from 15 per cent to 37 per cent; and cancellations rose by 50 per cent in the last three years (Dowden 1993:16).
There is, of course, no denial that certain changes in the WB/IMF have taken place, and these institutions have been subject to a certain degree of evolution. Certain slogans typify landmarks in their evolution: the trickle-down effects have long been substituted by so-called poverty-oriented programmes, departments catering for environment, women, democracy, human right violations and even tribal groups have been established and provisions were also made to cushion the negative impacts of SAP/SAL on the poor. Nonetheless, the basic thinking and hence functions played by these institutions remained the same. While accepting the inevitability of evolution, neither of the two institutions ever accepted responsibility for its own mistakes thus defying any notion of accountability. In the 1970s, African countries borrowed and invested according to the advice of the cartel. Nonetheless, these victim countries remained solely responsible for repaying their debts, with detrimental effects on their populations. What is even more surprising is that not a single country ever defaulted to the WB, nor did the latter ever attempt to forgo its debts which are made upon its own misadvice.
The twin institutions are often portrayed as honest dealers who are willing to listen and accommodate if not absorb their critiques. A close scrutiny of their response to pressure, however, indicates otherwise. This is nowhere more evident than in the acrimonious resignation of the Grenadian economist Davidson Budhoo, who stormed out of the IMF where he worked as a senior official for 12 years, and as IMF's Resident Representative in Guyana. His letter of resignation - or rather a 100-page book - was taken with a pinch of salt, despite threats directed against him in the event of him going ahead with what he had to say. Numerous charges are acrimoniously brought about by the author. The charges were later investigated and subsequently confirmed by an independent committee. The letter was so revealing as regards the arrogant and unimaginative way in which the Fund deals with the Third World. Scores of countries with varying circumstances are dosed with the same prescription:
Self defeating and unethical as may seem what we have done and are doing in Trinidad and Tobago is being repeated in scores of countries. ... Sometimes we operate with great restraint, sometimes with less, but the process and the result are always the same: a standard, pompous recital of doctrinaire Fund "advice" given uncompromisingly and often contemptuously and in utter disregard to local conditions and concerns and susceptibilities. It is the norm rather than the exception, that when our "one-for-all and all-for-one" Fund cap does not fit the head for which it is intended, we cut and shave and mangle the head so as to give a semblance of a fit (Budhoo 1990:5).
The arrogant method of imposing the Fund's destructive policies is further expose
Yes, yes Mr. Camdessus [Fund's President]... in scores of developing countries ...We do our own "tainted" evaluation of economic and financial performance (and evaluation that is subsequently accepted as Bible Truth by our Executive Board and by the international community); we write our own Letter of Intent under the name of the Minister of Finance and present it to him for signature;... The whole process of determining... whether or not we did see fit to create yet another "outcast country or "leprosy case", is determined.... in most instances by a single staff member acting on your behalf and with your authority. Such a staff member would hold, for all intents and purposes, the economic fate of the country concerned, and of its peoples, in his hand;... The Third world, in accepting our absolute power and our absolute corruption, is also instrumental in writing its own obituary (ibi7-8).
Budhoo further presents evidence which shows that the Fund, willfully, went through statistical misdeeds and fraud (ibi15-28) in order to push forward detrimental policies which are at the core of the Fund's hidden agenda. The letter challenges Mr. Camdessus to that effect:
Analyse critically our "program" for Trinidad and Tobago - even if you can ignore all the lies and the cheating we had to do there to put "substance" in that program... Analyse them [it] carefully, Mr. Camdessus, and come back and tell me with a straight face that what we are doing in the Third World is not total farce that turns all economic logic on its head... that the mess we are making of the Third World is not motivated by considerations that are alien to the needs and realities and aspirations of the countries concerned (ibi47). ...In other words, Pax Atlantic demanded that everything done by the Fund in the Third World be reduced to a common denominator of maintaining and increasing welfare in the First World; all else was incidental (ibi46). Everybody's somebody fool, you know, and while the World Bank is our fool, we are the fool of the commercial banks (ibi110).
The most salient message we get from the above quotation(s), is that the Fund, and for that matter the WB, operate under two diametrically opposed sets of agenda; a positive one for the First World and negative one for the Third World, said to "have caused death, misery and desperation of 3,000 million people" (ibid). Such a role cannot be played without an ideology which is heavily tainted by racism and complete disregard for the people of the poor countries:
On "internal" matters you are asked to take a close look at the implications of the rampant and multifaceted racism that is now an extremely operative factor in Fund staff operations; .... Indeed racism makes itself felt in a wide range of organisational practice, some of which are eminently inexcusable, given our international nature. Among these is the classification of South Africa as a "European country" administered by our highly segregated, virtually "white staff only can work here" European Department (ibi 7; for WB pay see below).
While austerity has become a catchword so central to the polices of the twin institutions, it is a help-yourself pay plan which is their dominant feature. World Bank employees still operate under a tax-free pay, courtesy of USA where they are based and their respective countries if they are not Americans. While the Fund may look like a demon for others, it is a real paradise for its employees, and thus making it worthwhile to remain in line. Back to Budhoo and him addressing Mr. Camdessus:
My annual package, much less than that of a big family man in Washington, or on assignment overseas, is more than the annual budgeted salary of almost every Head of State in the world; it is anything from five to ten times more than what virtually every President or Prime Minster of the Third World would get on the basic pay check. The big family man with my identical basic pay but on assignment in the Third World even as his five kids learn Social Graces in Geneva, compliments of Our Honeypot, would receive more than the basic pay of every head of state in the world, including the President of the United States and the President or Chancellor or Prime Minister of every West European country (Budhoo 1990:54; WB pay on average only 5% lower, see Irwin 1990:3).
The reader is urged to reflect on the source of the money involved in this lucrative pay package, not to mention its implications on those who contemplate decent.
To dispel any temptation of dismissing Budhoo's allegations as mere demagoguery of a frustrated employee, let me move back to the Committee which investigated his grievances:
The report by an investigating team appointed by the Cabinet of the Government of Traindiad and Tobago (which team was headed by Professor Compton Bourne of the Faculty of Economics, University of the West Indies) state
(i) The Committee concludes that there have been serious statistical irregularities and technical deficiencies in the IMF's economic analysis and reporting on Trinidad and Tobago.
(ii) The likely consequences of these are:
(a) Unwarranted adverse judgment of the country's economic performance and national economic management;
(b) Inappropriate policy recommendations by the IMF and those agencies influenced by its economic analyses;
c) International credit problems for Trindad and Tobago.
(iii) The IMF behaved irresponsibly in not disseminating the revised statistical series and in not revising its economic assessment when the earlier ones were known to be erroneous. Professional ethics, if nothing else, should have dictated that the corrected series be given the same prominence as was afforded the erroneous data (Mc Leod 1990).
To my knowledge, the Fund was not able to challenge the findings of this report. Neither did the "heaven" for unaccountable experts what would have been done by any responsible institution in similar context: (i) sacking its "unprofessional" and "unethical" staff of the Trinidad and Togabo office; (ii) apologising for the error; (iii) offering fair compensation for the victim countries and their people; and (iv) instituting the necessary changes to prevent a repeat of the scenario.
Like the IMF, the WB also has its dissenters. Excluding those who rebel, but only after taking their lucrative retirement pensions, Irwin is perhaps the most outspoken. He left the Bank in disgust after working as a Director of the World Bank Health Department and Acting Vice President for Personnel:
....on 30th March 1990, I resigned because I felt that the institution's - [WB's] - activities were not really helping the many impoverished people in the developing world, and also I was very concerned about its bloated, overpaid bureaucracy, its wasteful practices, its generally poor management and its unjustified arrogance ... Regarding the size of the organisation, a Vice President said to his senior staff on 4th May 1989 that the Bank "could do twice as much with its present staff - [thank God they didn't] - or only needed half the staff for the present work load" (Irwin 1990:1-2; bracketed text mine).
Like all gigantic institutions, homeostatic tendencies which defy change evolve within them. Noting that flying the Bank staff business class instead of first class alone, would have saved the bank $12.5 million - yes twelve point five million - Mr. Irwin innocently volunteered to do his bit:
on a trip to East Africa, I gave up my first class entitlement and, by flying in "business class", saved $1,900. This resulted in a considerable internal criticism - from the staff association. One Senior Vice President and many individuals. One wrote to my Vice President, saying that "my family and I will not feel safe again until Mr. Irwin is replaced by someone who really cares". Another, a physician, wrote that there might be a modest increase of post mission travel induced strokes among our more elderly frequent travellers (Irwin 1990:4).
Wasteful as it may be, lucrative pay is important for pre-empting rebellion, safe from those who have high level of integrity:
Because of these excellent salaries and benefits, it is no wonder, as one personnel consultant to the Bank (who himself once received $3,000 a day) said at a senior personnel managers' meeting on 27 January 1989 that "No body leaves - many staff are too comfortable" (ibi 1990:3; also Dowden 1993).
For those who are not enticed by money, other methods including harassment, intimidation and incrimination may be employed. This is the case and was so even during the presidency of MacNamara, reputed to have been able to both humanise the WB and transform it into an intellectual pillar of the age. In the late 1970s a group of scholars, alienated by the world development process, decided to undertake a comprehensive study of WB operations in one Third World country. Their choice was the Philippines which was literally a World Bank colony, referred to by the Institution itself as a "country of concentration". The penetration of the WB, regarded as one of the most secretive financial institutions, was in short, spectacular. The cracking of the thick walls of the WB was, of course, made possible only by the Bank employees, who felt that their esteemed institution was betraying the cause of the poor in the Third Worl
By 1980, the network was spiriting out an average of one document a week. The controversial 400-page "Report on Poverty" was smuggled out in first-draft form while Bank management was still editing it. The "Acher Memorandum" on the political prospects of the Marcus regime was leaked in November 1980, two weeks before a highly secret staff meeting that acted on its recommendations (Bello et al. 1982:10)
Of course the umpire hit back. Nothing was/is more offending to the World Bank than exposing its secrets, and there is a lot to hide:
Before his resignation in June 1981, Bank President MacNamara launched a manhunt for the whistle-blowers. Dozens of staff members were grilled, a secretary was forced to hire a lawyer to fend off harassment, and a key officer in the Philippines division was threatened with a lie detector test then abruptly transferred to another division. The FBI was quietly brought to investigate links between Bank people and "anti-Marcus elements", according to some staff members. "They've even instituted random waste basket checks," groaned one official. "I guess they think we search trash cans for confidential drafts." Mail was opened and building security was tightened.... President Clausen [MacNamara's successor] is also said to have instituted a system of "anonymous mail drops" designed to encourage Bank staff members to spy on their peers and report suspicious or undesirable behaviour to superiors (Bello et al. 1982:11).
I must have been daft to have been lured by the western media into believing that MacNamara has succeeded in re-channeling the energy of the WB to the benefit of the poor in the Third World. After all, he moved into the Bank with a credit of several million Vietnamese and other South East Asians who were massacred during the Vietnam War when MacNamara was the US State Secretary for Defence.
It is tempting to think that the World Bank has since changed. In one of its policy directives issued in January 1987, the Bank called for openness about its own activities and new ways of explaining its work to a wider audience (Irwin 1990:6). Nonetheless, that is no more than another rhetorical exercise destined for public consumption. Confidentiality stamps remain a prime feature of the Bank's routine work. The following quotation highlights the Bank's persistent obsession with secrecy, despite its claim of "transparency" policies:
Staff, according to a March 1989 instruction, "should use burn bags to dispose of all classified records, including drafts, one-time-use carbon paper, notes, etc. Burn bags containing classified records should be stored in locked file cabinets until they'll have been collected" by the security division. And "certain classified records of Controller's and Personnel.... requires shredding before disposal" (ibi7).
The quotation gives an image of an espionage office rather than an international institution with legitimate pursuits.
Like the World Bank, the IMF also suffers from this confidentiality paranoia syndrome, and its subsequent witch-hunts. Talking about his rebellion within the IMF, Budhoo says in his letter of resignation:
Over and over again I have been told by people whose judgment I respect, that the Fund will do everything in its power to decimate me as an individual, and to destroy me as a professional economist, in the wake of this letter. The overwhelming advice of those with my interests at heart is that I had better resist all dictates of conscience and keep my mouth shut (Budhoo 1990:14).
Given the history of the IMF and its sister institution, the WB, Budhoo's friends' worry cannot be seen as unwarranted. The twin institutions have come a long way since their establishment, and have grown far beyond the reach of countries, let alone individuals. The recent history of Nicaragua, Chile, Peru, Cuba, Egypt, Vietnam and many others in the former Eastern Block stand as testimony in this regard. The might of these organisations is often wasted on trivial cock fights:
Arrogance is a word often applied to the World Bank. Sometimes this can be petty - such as the Bank's attempt to suppress an article in Readers Digest in June 1989 entitled "The Alarming Truth about the World Bank", or to block in August 1989 the production of a new Board game simply called "World Bank" (Irwin 1990:3).
Rather than being an advantage, the overgrowth of these institutions is seen by many developmentalists as a handicap. Among others it has led to arrogance, self delusion and inability to listen to alternative views. These features, are in short, incompatible with development. De Silva raises this issue with the regard to the Bank:
The Bank's resources with a staff of 2,500 professionals and a budget of over $500 million obtained from its own profits, stand way beyond the resources available to any other UN agency.... The Bank there has the financial resources to build up an intellectual base for its own ideology which cannot easily be challenged by other development agencies with very little resources at their disposal, particularly for country studies. This is a worrying feature in a system of multilateralism which has to be more pronouncedly plural in development philosophy (de Silva 1985:51).
But the vampire is still growing. More recent estimates put the full-time staff number at over 6,000 backed by an administrative budget which is close to $1 billion (Irwin 1990:1; see also Dowden 1993:16). Far from being a credit, overgrowth of the mighty WB and - the other side of the coin - the IMF, presents a formidable problem for world development, and particularly for the Third World. Considering the failure of these institutions to "REFORM" themselves from within, the overgrowth makes it difficult to effect any externally induced changes on their roles and structures. Moreover, their growth has led to their monopolisation of the world development process; a feature which can only have negative ramifications on the entire world.
The collapse of communism in the former Soviet Union and its satellites, had triggered new hopes for a better world. It was regarded by many as a triumph for what the WB/IMF stand for and in which they had - supposedly - built a substantial experience. Nevertheless, the major role for reconstructing these countries was not given to WB/IMF. Rather, a separate Bank, European Bank for Reconstruction and Development (EBRD), was established for the purpose. The new Bank turned out to be yet another Trojan horse, unable to work for the good of all, and equally enmeshed in mismanagement, favourtism and wastefulness (The Economist 1993:69). Relegating the WB and the IMF to the back seat in dealing with Europe, comes as no surprise to many and indeed presents a second blow for the WB and its role in Europe. The first was the Marshall plan, in which both the WB and IMF had to be bypassed for several reasons. For example, 80% of the US disbursement to Europe came in the form of free grants and was thus channelled on direct bilateral terms. Second, the grants were used to create alliance and prevent moves towards the rival communist block. The dictates of that meant economic rationality often became of secondary importance. Thirdly, both the WB and the IMF were at their infancy and were thus too weak and inexperienced to enforce the adoption of their recommendations. Indeed, the Allies, led by Britain, continued to veto conditionality intended to be attached to the dealings of the WB and the IMF up until 1952. Thus, throughout the European reconstruction period, WB and IMF recommendations remained optional policy guidelines for Europe, despite the myth perpetuated afterwards regarding the grand success of these institutions in post-war Europe (see Adams 1993:159).
The collapse of communism led to a wave of optimism regarding the role of multilateral organisations including the WB and IMF. Among others, development organisations are thought to have been freed from the negative influence of communist threat paranoia factor. It is this factor which was presumed to have justified the neglect of the fundamentals of development in WB/IMF dealings, and the subsequent entertainment of cosy relationship with several heads of states renowned for total lack of regard for their own people, e.g. Marcus of the Philippines and Mobotu of Zaire. The same factor has also led to the penalisation of many countries: e.g. Egypt, Tanzania, Jamaica, Peru, Nicaragua and Vietnam. The new hope that commitment to development, and in particular to the poor of the Third World, would then prevail in the WB/IMF policies is no more than wishful thinking. This is at least what one gets form a WB internal memo, which leaked out as late as December 1992. The document was authored by no other than Lawrence Summers, the WB's Chief Economist. The memo contained certain lines which are said to have caused some fuss in the World Bank. In his memo, "their", or rather "our" chief economist, says to his juniors:
*Just between me and you, shouldn't the World Bank be encouraging more migration of dirty industries to the LCDs? I can think of three reasons:
(1) The measurement of the costs of health-impairing pollution depends on the forgone earnings from increased morbidity and mortality. From this point of view a given amount of health-impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic [perhaps the WB's] behind dumping a load of toxic waste in the lowest-wage country is impeccable and we should face to that.
(2) The costs of pollution are likely to be non-linear as the initial increments of pollution probably have very low cost. I've always thought that under-populated countries in Africa are vastly under-polluted; their air quality is probably vastly inefficiently low "sic" compared to Los Angeles or Mexico City. Only the lamentable facts that so much pollution is generated by non-tradable industries (transport, electrical generation) and that the unit transport costs of solid waste are so high to prevent world-welfare-enhancing [better read western-welfare-enhancing] trade in air pollution and waste.
(3) The demand for a clean environment for aesthetic reasons is likely to have very high income-elasticity. The concern over an agent that causes a one-in-a-million change in the odds of prostate cancer is obviously going to be much higher in a country where people survive to get prostate cancer than in a country where under-5 mortality is 200 per thousand. Also much of the concern over industrial atmospheric discharge is about visibility-impairing particulate. These discharges may have very little direct health impact. Clearly trade in goods that embody aesthetic pollution concerns could be welfare-enhancing. While production is mobile the consumption of pretty air is a non-tradable.
The problem with the arguments against all of these proposals for more pollution in LDCs (intrinsic rights to certain goods, moral reasons, social concerns, lack of adequate markets, etc.) could be turned around and used more or less effectively against every Bank proposal for liberalisation (Economist 1992:66).
Overlooking the messy language aptly described by the WB as "crass" (ibid), the memorandum affords us a stunning insight into the WB's commitment to the poor in the Third World. A senior World Bank employee defended his Chief Economist by saying, "the document is no more than a memo and that the man was only thinking" (personal communication). What is shocking and thus hard to take is that Mr. Summers is not only thinking, he is also encouraging others in the Bank to think along a specific line. Moreover, what is even more incriminating is that, the document sets in motion an attempt to provide a scientific justification for polluting the Third World. In effect, Summers's call is no more than an effort to formalise a policy which many Third World observers think is already taking place. The important question is how justified is the view in concern. Judged in economic terms, does it really make sense?
Summers's first point states that the costs of sickness and death due to pollution can be quantified by simple computation of foregone earning. The implication of the grand discovery is that human worth can be measured by how much one earns or loses. Accordingly millions and millions of poor people in the Third World, babies and children who are non-earners and housewives who do not produce, in the WB's sense of the term, are condemned to utter worthlessness. Their worth approaches zero if not equal to it. The other side of the argument is that the First World, wealthy people and high earners - like our Chief Economist - are on the top of the scale, and thus enjoy health and lives which it would make no sense to damage. The conclusion is obvious: move health and life-impairing industries - which Summers treats as a necessary evil - to where human beings are worthless. In short to the Third World. This is obscene economics.
The second point raised by Mr. Summers dictates that the cost of pollution increments increases with the increase in the level of pollution in a given locality. It is to be understood that Mr. Summers found it redundant, and thus did not add, that the cost of each increment in equally polluted localities also increases in tandem with the increase in the wealth of respective populations. This is due to the fact that Summers has already established that health and lives of poor populations are less costly than that of their comparatively wealthier counterparts. The argument eventually leads to the same conclusion arrived at in the previous paragraph. In order to justify this point, Mr. Summers resorted to absurd use of language like referring to LDCs as "UNDER-POLLUTED". It is as though what is natural and/or normal - and hence desirable - for the air is to be polluted. The abnormality obtains when the air is under-polluted! Mr. Summers's obsession with earnings, tradability and marginalisation of human worth led him into a yet meaningless sentence which I am still struggling to make sense of. He described the air quality under a lower level of pollution as vastly inefficently low compared to the heavily polluted air of Los Angeles and Mexico City!! One would have thought that the reverse is true, as that in a cleaner air people get a better deal in relation to their morbidity and mortality. But hang on again; the air efficiency for Mr. Summers depends on how much earnings one, or rather a few, get out of it or forgo. Of course the costs of the casualties have to be considered, and in the Third World, people are bound to be hopelessly cheap, according to the World Bank think-tank.
After dubiously underrating "non-tradable" industries (transport?) which still remain high in the World Bank agenda, Mr. Summers lamented the high unit transport cost of solid waste which prevents the disposal of toxic waste in the Third World. Another absurd jargon used in Summers's second point is his reference to "trade" in toxic waste as "world welfare-enhancing trade". Ignoring the fact that it is not trade in the first place, the jargon glamorises the transference of toxic waste to the Third World, and thus disguises its essence. The jargon is also inspiring as it is revealing to where Summers's heart lies. The world for Mr. Summers seems to be the West, because this kind of "trade" can't be regarded in anyway as "welfare-enhancing" for those at the receiving end, including the victims. Mr. Summers's source of inspiration for using this term cannot be that far away. After all, his Institution is referred to as "the World Bank", despite the fact that neither its control, nor its performance, justifies the name.
In his third point, Summers proposes that the richer the people are, the more concerned they will be about aesthetic and health impacts of dirty industries. He further moves into a pathetic attempt to down play the damage of pollution, declaring that most of it is visibility, rather than health impairing. First, the seemingly less resistance to health- impairing industries among poorer communities, can be attributed to power rather than to demand differentials. Yet, crusades of the poor against pollution, often violent, have become a common feature of Third World struggle. Those who are in doubt are referred to the recent history of Brazil, Philippines and many other countries. While visibility- impairing particulates may accompany health-damaging pollution, it is the latter which attracts more concern both among the rich and the poor. After all, mist, fog and rain all come with visibility-impairing agents that attract no complaints. On the other hand, many toxic agents like radiation have little impact on visibility and yet, resistance to it is always forthcoming.
Summers suggests that the people of the Third World are less concerned about pollution because they do not survive to contract prostate cancer, presumably due to low life expectancy. This is a conclusion based on a fraudulent reading of demographic statistics, as high infant morality does not mean people do not survive to old age. While high infant mortality suppresses life expectancy, those who survive their early years have a chance to survive to an age which is only marginally shorter than people in the First World. Rather than thinking about high mortality and taking it as his duty to curb, Summers takes it as natural and thus proceeds from it. This is not surprising because if he had done otherwise, he would have come to an embarrassing conclusion; namely, that the high mortality is a result of specific development structure in which the World Bank is a major player.
Summers further reminds the people of the Third World that they cannot trade their clean air but can count on the mobility of pollution-producing industries. In other sense, they can trade their health and lives instead! Trade for the sake of trade seems to be the theme of the article. This is the same ethos which justifies trade on kidneys, blood, brain tissues and other body parts, often form impoverished live victims in the Third World.
In defending their policies, the WB/IMF and their supporters often argue that there are no alternatives offered from the Third World countries (Budhoo 1990:67; Onimode, et al. 1990:42,56-58). The challenge is more than absurd as the very disagreements, obstinate negotiations between countries and the WB/IMF presuppose the existence of other models. As such, one could say that there are as many alternatives to the WB/IMF models as there are resenting and/or dissenting governments in the Third World. In addition to its failure, rigid and dogmatic imposition of WB/IMF bogus models has resulted in aborting countless numbers of other initiatives from the Third World. While the credibility of many of these alternatives may be questioned, blanket suppression of all deprives humanity of the possibility of developing new models, which could be of use for all humankind.
Africa as a Continent serves as a good example of the WB/IMF sabotage of alternative initiatives. The first confrontation between the Africa as a Continent and the WB/IMF cartel was at the launching of Lagos Plan of Action (LPA), 1980. The document was simply a contribution from concerned Africans and other experts in the eve of the massive failure of the WB/IMF programmes. The Plan made use of assistance, views and endorsement of many respectable organisations. Adedeji, the man who chaired the work says:
The Lagos Plan of Action was the result of tremendous research effort at ECA, in collaboration with the organs and organisations of the UN system, plus and intergovernmental sectoral meetings. The industry chapter was the product of the Conference of African Ministers of Industry; the agriculture chapter came out of the ECA's collaboration with the FAO with final approval by the Ministers of Agriculture (Adedeji 1993:10).
Without any claim to perfection, the LPA was a serious work which should not have been destroyed. At least, one would have expected the WB/IMF cartel to examine it and discuss it first and before deciding on its fate. The mentality which is so rampant in the WB/IMF, namely that nothing good comes from Africa and all good things must come from Washington, dictates otherwise. Unfortunately, this pattern of thinking is entrenched into Eurocentrism. Think of the "myth that the great walls of Zimbabwe must have been built by a lost white race, ... by anyone in fact but Africans" (Brown 1993:19). It is, however, possible to think about this matter differently. Because some might have contemplated that the WB/IMF knew that anything which is good for Africa must be counter to their own hidden agenda. Thus, the knowledge that an African alternative plan was in progress, was enough to trigger an alternative model from the WB. It was an alternative to both, previous WB failed plans and LPA. It was not difficult to guess which one was to prevail afterwards. Describing this scenario, Adedeji, ECA's Chairperson says:
As soon as the Plan (LPA) was published, the Bank sent Professor Burke (...) to inform me that they too are preparing a strategic plan for Africa.... The Bank went ahead with its own agenda for Africa which turned out to be the very antithesis of the Lagos Plan of Action. And we quarreled. The quarrel was such that the World Bank sent the largest team ever to present its agenda to ECA Conference in Tripoli. It became the ECA Plan versus the World Bank Agenda (Adedeji 1990: 10).
Eventually, it was the WB Agenda, which dominated the Continent throughout the 1980s. The WB Report, otherwise known as Berg Report, appeared under the title: "Towards Accelerated Development in Sub-Saharan Africa, 1981". As predicted by many outside WB circles the adoption of the Berg Report created an even greater mess in Africa. I will discuss the major differences between the WB/IMF line and the LPA later in the text (for LPA see Sawyer 1990; Onimode et al. 1990, 1992). The decade of the 1980s, i.e. of the WB Berg Report is indeed a lost decade. Only a fool would say otherwise. Surprisingly or not, this is precisely the position of the WB and its alliance. In its joint Report with UNDP entitled, "Adjustment and Growth in the African Countries", the WB argued that "African countries have been growing in the 1980s and the adjustment programmes have been succeeding". IFAA, which is to spearhead the design of alternative approaches to Africa afterwards, challenged the WB, and was supported in its stand by Oxfam. In fact, the WB's claims to success of its programmes in Africa was embarrassingly untenable. This is so with regard to balance of payments, exchange rate, export production level, debt repayments and living standard of most African people (see Onimode et al. 1990:47-48). Time, however, has settled the debate. No WB official can subscribe to that stand any more.
Frustrated about the African performance in the 1980s, a new African initiative was prepared at the end of the decade. Under request and influence of OAU, ECA produced the document which appeared under the title, "African Alternative Framework to Structural Adjustment Programmes for Socio-economic Recovery and Transformation" (AAF-SAP; Onimode et al. 1990:41). The document was subsequently adopted by African ministers of planning and then African ministers of finance and finally by the OAU prior to its official launching. The ratification of the document was completed by its adoption by the General Assembly of the UN on 17 November 1989. The vote was 137 for and only one, - guess who? - the USA, against. There was no abstention (ibi42). Given the rhetoric of the WB, it must have been hard for them to decide which horse to back! The USA or the whole world? But, would it be possible for the Trojan horse to disobey those inside it? Apparently not and that was the decision of the WB. The WB subsequently accused ECA of wanting to play a negative role in Africa by producing this document, and opposing the Bank! (ibi 91). The sabotage of the second African initiative was finally accomplished by the WB launching its own alternative in the same month (November 1989). It came under the title: "Sub-Saharan Africa: From Crisis to Sustainable Development; A Long Term Perspective Study", better known as LTP. LTP ran counter to AAF-SAP, and was eventually forced on the African governments.
The two African documents, LPA and AAF-SAP differ from the WB's documents, Berg Report and LTP in several principal issues. As the documents are too comprehensive for a short summary, I will restrict myself to what I perceive as their salient principles:
The primary problem facing the African Continent is political rather than economic. Solutions devised must be effected accordingly.
Africa must address its inherited colonial structure and orient its economies towards serving its own people.
The present export-led economy is an obstacle to an effective transformation of the African economies. Thus shifting towards a structure that is geared towards local basic needs, e.g. health, education, food, etc. is the only way out.
The present dependency on the outside which characterises African economies must be replaced by a structure which is based on self-reliance.
Policies aiming at integrating individual countries into the wider world economies must be substituted by others which prioritise regional integration.
Africa must depart from the SAP which emphasize short-term adjustment to a comprehensive policy which aims at long-term growth as an overriding principle.
Dogmatic principles calling for free trade, removal of subsidies, high interest rates, devaluation must be avoided in favour of a more selective approach in which the government, and not the market, plays a central role.
Adoption of a joint approach towards issues of a global nature, such as debts, terms of trade, and commodity prices.
Adoption of an open approach to socio-economic and political decisions in a way which engenders democratic and popular participation.
The paper is an attempt to assess the involvement of the WB/IMF in Africa and their potential for the development of the Continent. It is understood that the stated objectives of these institutions are: (i) to offer neutral technical advice based on their reading of the subject countries, (ii) adjust disequilibria in their balance of payments through policies and loans, (iii) help in fighting poverty and improve standards of living, and (iv) advise on ways of handling debts, overcoming problems which hamper economic progress (see Onimode 1989a:25). Measured against these objectives, the WB/IMF performance in Africa, over the last few decades, has been nothing but a total failure.
The WB/IMF can only operate under the mandate and within the policy guidelines which are defined by those who control them. As such, it is the interests of the western corporations and their countries which dominate their priorities. Benefits accruing to the Third World from the involvement of these institutions can only be incidental and only when in total harmony with western interests. As long as the twin institutions retain their present structure and mandates, the less they do in Africa, the better. It is time to realise that Africa can only be developed by its own people, not by the experts from Washington. To argue otherwise, is to defy learning from history and to perpetuate the untenable myth of the superiority of western people, which justified the exploitation of African people for several centuries.
The focus of the article on the external forces which hamper the development of the African Continent should not make us loose sight of the internal obstacles like accountability problems, mismanagement, lack of democracy and bad governance. Whether most or all of these factors are themselves reflections of external relations is matter for debate. Nonetheless, the fact remains that they too can best be addressed and the outcome sustained by the African people.
Africa does not wish to isolate itself from the rest of the world, including the West. That is neither possible nor desirable. Not only that Africa still needs western expertise in many fields. Nonetheless, it is the African agenda, not the outsider's, which should dominate. Until that is guaranteed, the prospect of the development of the African Continent will remain bleak.
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