Thoughts on the G20 naked emperors & the age of possibility*
I have found that the best way for me to think about the issues raised by the G20 Summit is to look at how the West G8/G20 have responded to Africa historically, what opportunities Africa has for entering into a period of radical change including the nature of it’s relationship with the West and with emerging countries such as China, India Brazil and so on.
I start with two very important premises: First as Walden Bello has argued, there are serious questions on the legitimacy of the G20/G8 to discuss things that will affect global politics. The correct space for this is the UN.
Secondly, the West does not nor has it ever had the interest of Africa or Africans in any of it’s policies. This is proved by the last 500 years of history. But now to use Demba Moussa Dembele’s phrase “The emperor has no clothes anymore”. He is naked and vulnerable and Africans need to seize the moment. There may not be another chance. If we don’t learn from the lessons of the collapse of the global financial markets and the “collapse of laissez faire economics and market fundamentalism” we could very well find ourselves slaves for evermore. My understanding is that of a lay person, an ordinary citizen with no expertise in economics and how on earth the global financial markets work. What I do know and understand is how the events of the last year affect me and the communities I live in ; the continued unequal and unjust relationship in all areas between Africa and the West; the opportunities available to Africa at this moment in time.
In a couple of weeks, US$4 trillion was made available to deal with the financial crisis in the West — nationalising banks, bailing out companies and financial institutions . This amounts to 45 times the total US and EU aid budget to Africa in 2007.
The West and the IFI continue to refuse to cancel the illegitimate debt of Africa countries estimated at US$300 billion.
African countries are loosing US$160 billion annually as a direct result of tax avoidance and exemptions by foreign companies and multinationals.
In 2007 remittances to Africa were estimated at US$27.8 billion (between 2% and 30% of GDP for respective countries). Note that already there have been significant drops in the sums being sent home as a direct result of the financial crisis in the West.
700,000 African children will die in 2009 as a direct result of the financial crisis created by the Western governments and their financial institutions.
Thousands of jobs in mining, tourism and manufacturing have already been lost in Africa and there are more to come.
The estimated capital flight (leaders such as Abacha stolen and transferred particularly huge sums of money to the west but others are also guilty) from 40 Sub-Saharan countries (SSC) between 1970 and 2004 is estimated at US$420 billion (in 2004 dollars!) During the same period the external debt of these countries was US$227 billion.
The EU cajoled / forced in signing 18 new (interim) Economic Partnership Agreements (EPAs) in 2007 with threats of trade withdrawal. EPAs allow for “free trade” in goods but as Patrick Bond (PB) points out (see reference below) other conditions were made ….
investment protection (so future policies dont hamper corporate profits), competition policy (to break local large firms up), and government procurement (to end programmes like South Africa’s affirmative action).
Climate Change – The impact on Africa is not yet fully known but PB suggests carbon taxes will impact on Africa’s already unequal trading due to their distance from Western markets. And possible reductions in agricultural yield. Further increased cash crops and interference by biotech multinationals is already having an impact on local farmers and fishing artisans.
So what options are available to African countries? What should we be demanding from the West? Firstly the cancellation of the illegitimate debts. The argument for cancellation becomes even more legitimate and carries even more weight given the recent $trillion bail outs in G8 countries whilst Africa is beginning to suffer for the West’s greed and mess. Immediate cancellation of EPA’s which are another word for enslavement of African people.
Reparations for slavery, colonialism and the overall plunder of Africa for the past 500 years and continuing as I write! Reparations for South Africa for monies earned from Apartheid. Supporting the various legal redress cases taking place now and in the future against the exploitation and abuse of local communities by multinationals such as Shell and Chevron in Nigeria and the mining multinationals operating in the Great Lakes regions. Stop selling arms to African governments who use them against their own people and to protect multinational corporations who are destroying our environments and killing people. Stop locking up African men & women asylum seekers in Guantanamo style deportation centers and then deporting them back to the war and conflict zones where they were raped and subjected to physical and emotional violence.
What should we demand from our African leaders? Overall, a future that does not depend on further integration into the world economy and continuing with the policies imposed by the IMF/World Bank. This has been done in parts of Latin America eg Venezuela, Bolivia, Ecuador. Within that, an end to corruption and collaboration by African leaders and elites with Western and IFI policies that compromise Africa – Stop selling out our people and our resources for your own personal gain and because you dont have the backbone to stand up to bullies. An end to privatization of utilities such as water and sanitation;
An end to capital flight and Western countries should put into place legislation which prevents such sums being deposited in their banks; tightening up their tax systems so foreign companies cannot continue to avoid paying their taxes; tightening up their tax systems so local businesses cannot avoid paying tax and depositing huge sums in foreign banks instead of national banks;
An end to human rights violations against women, children, the LGBTI community, the landless and poor across the continent, the displaced and citizenless, all of whom continuously face daily ferocious attacks by states.
An end to cash crops for the West at the expense of food for Africans. Africa cannot continue to finance European consumption. Demba Moussa Dembele goes further and suggests a new set of Africa driven development policies which include creating strong effective states; (weak states enable avoidance of following environmental laws, tax avoidance and corruption) nationalisation and reversing privatization – multinationals like Shell, Chevron, those involved in mining and extraction industries …
privatisation translated into massive job losses and social exclusion. It may be argued that there is some correlation between the aggravation of poverty and the growing foreign control of resources and assets, because this control is associated with repatriation of huge profits and tax evasion. In a sense, privatisation can be assimilated to a robbery of national patrimony — including strategic sectors — through the transfer to foreign control of assets built throughout years of sacrifices by the people.
Therefore, reversing privatisation is necessary in order to restore people’s sovereignty over a nation’s resources. It is time for African countries to put back into public and collective hands the control of key sectors and natural resources. No genuine endogenous development is possible without control of a nation’s wealth. So Africa should learn from the lessons being given by capitalist countries, including the United States, which are nationalising their banks and financial institutions. But more importantly, African countries should learn from the examples of other southern countries, like those of South America and Asia, where governments are taking back what was sold off to multinational corporations.
Other suggestions are a more formal application of remittances by integrating them into the overall development policy; building “south-south” alliances in terms of financing, investment and trade which favour parties equally;
The bottom line is that Africa and the rest of the global south countries will gain nothing whatsoever from this Summit. The agenda is to increase protectionism and measures towards this have already started – one example are the EPA’s mentioned earlier. So since Africa and the countries in the South are not to benefit is it not time that they organised a Bandung II (to include Latin America) to plan out how we help each other out of the crisis by agreements between developing countries, and put two fingers up to the G20? And if our leaders are not prepared to start to act in the interest of Africa and Africans then it is up to us – activists, trade unions, academics, social movements to organise and push for change and put two fingers up to our leaders if they wish to maintain the status quo!
The global financial crisis: Lessons and responses from Africa by Demba Moussa Dembele
African Resistance to global finance, free trade and coproate profit-taking by Patrick Bond (unpublished document due for publication later this year)
Various articles in Pambazuka News and ZNet.