African Economic Development
African Economic Development
THE ROLE OF GLOBAL FINANCIAL FORCES
RACISM AND ECONOMIC DEVELOPMENT
Globalization, race, and African economic development intersect in deep, intricate, complicated ways that can only be understood if a long view is taken on the nature of globalization. Further, the connections are best contextualized as an inquiry into Africa’s place in the world system. As Filomina Steady points out, many factors are involved, including the institutionalization of “economic domination through corporate globalization,” which has generated a reproduction of colonization and, consequently, impoverishment. Other factors include “protracted recession, the debt burden, Structural Adjustment Programmes, externally controlled privatization, … an emphasis on exports, … a cultural crisis of major proportions, … the destruction of many African economies, social dislocations and civil strife,” all “compounded by the erosion of the life-supporting capacities of many African ecosystems. Authoritarian regimes and gender-based discrimination complete the picture” (Steady 2002).
THE ROOTS OF GLOBALIZATION
Most analysis on globalization focuses on the contemporary era. A few scholars take the long view, however, dating globalization back into the distant past. This perspective considers it an imperialistic process, inclusive of “the age of exploration,” the period of the transatlantic slave trade, the “legitimate trade,” so named to signal its purveyors’ noninvolvement in the slave trade, in spite of the use of slave labor to plant, harvest, and/or gather commodities that were used in the factories during Europe’s industrial revolution. The trade was undertaken in the period immediately following the end of the transatlantic slave trade, and lasted from the late eighteenth to the nineteenth century colonization, and the postcolonial era. This immediately puts “race” front and center in discussions of the connections between globalization, race, and African economic development. European imperialism created a paradoxical relationship between Africa and Europe that included both a centralized and marginalized position for Africa in global political and economic systems. Africa was central to the extent that it was plundered, raped, and exploited for its human and material resources. It was marginal because it did not have any power in the emerging global system, where Western dominance was built upon Africa’s plundered resources. It was also marginal because the West’s dominance was predicated upon Africans’ presumed racial, cultural, and physiological inferiority to Europeans, a belief that was proclaimed by many of the most distinguished Western intellectuals.
From the fifteenth century to the 1930s, samples of “exotic” peoples, including Africans, were acquired and displayed—for “education” and entertainment—in the homes of the wealthiest Europeans and in public exhibits at zoos and regional and world fairs. Upon this foundation was built racist and essentialist consensus of the early twenty-first century: that Africa is a basket case of impoverished, diseased, and crisis-ridden countries led by inept and kleptocratic leaders, and that its marginality to global political, social, and economic affairs is therefore well earned.
THE ROLE OF GLOBAL FINANCIAL FORCES
A better way to understand Africa’s predicament is to focus on how the conjunctures between structural inequities and failing markets generate underdevelopment. The consequences of these conjunctures in the black community in the United States include being underserved in education, health care, and housing security, while also being overcharged and offered less credit than others. White monopolies are also entrenched in the job market and many career ladders. Blacks bear the spillover costs when whites flee to the suburbs, which leads to smaller tax rolls to maintain public services and provide requisite infrastructure in cities. The cycle continues when black neighborhoods are replaced and appropriated through gentrification and white return to urban centers.
This is similar to conditions in Africa, whose people and land were enslaved, underdeveloped, and overexploited to guarantee capitalist development in Europe. As Walter Rodney observes, “Racism, violence and brutality were the concomitants of the capitalist system when it extended itself abroad in the early centuries of international trade” (Rodney 1973). Consider, as Timothy Shaw has done, the relationship between the political-existential condition of the continent and the analytical-epistemological inquiry of its historical and contemporary experiences. Existentially and politically, Africa stands in the gap between nominal or flag independence and the legacy of underdevelopment bestowed on it by its encounters with imperialism and globalization (which dates as far back as the fifteenth century). Epistemologically, scholars have tried to explain why Africa is so embattled. As Shaw notes, those who do more successful analysis take a historical and critical perspective.
ASPECTS OF GLOBALIZATION
Globalization is best conceived as a process of inexorable worldwide integration that applies to all spheres of life. Historically, it is a process that encompasses the internationalization of trade, manufacturing, and business enterprises. As it relates to Africa, the transatlantic slave trade, “legitimate trade,” and the activities of the Royally Chartered Companies from various European countries were part of the early markers of globalization and the precursors of current foreign direct investment. Race, racism, and gender affect social conditions and economic development initiatives in Africa in a myriad of ways. Globalization cannot be understood outside the context of how neo-liberal economic ideology has saturated the scholarly and popular imagination worldwide.
Historically, the idea that Africans belong to an inferior race has been pervasive in European and American thought. The concept of “race”—the socially constructed categorization of humans based on external appearance, stereotypes, and myths about physical, mental and psychological capacity; cultural difference; and the capacity to be civilized or uncivilized—has been deployed to support a hierarchy in which Europeans are categorized as superior and Africans the most debased. From the earliest Christian exegesis to Shakespeare and his heirs in Western literature and on to theories of scientific racism, black has been predominantly characterized as evil, while white has been seen as good and pure. Consequently, social discrimination, economic exclusion, and racial segregation have marginalized peoples of African descent from global political, social, and economic systems. Moving from the margins to the center in these systems has proved to be challenging and, in some cases, elusive. A historical scholarly analysis, meanwhile, takes African marginalization as a timeless reality generated by characteristics that are argued to be essential to Africans.
The presumption of an intrinsic and immutable African racial inferiority has generated a self-fulfilling prophecy in Africa’s marginality. This has led to a conflation of presumed racial inferiority, economic impoverishment, and lack of political power. This “reality” is so disheartening, and African educational systems are so mired in the reproduction of colonial ideological “Otherizing” of Africans, that many Africans embrace a marginalized social, political, and economic characterization as emerging out of something deep in their nature.
There is overwhelming evidence of the depth of social privations in the African continent. The debate on the future is defined as being between Afro-pessimistic and Afro-optimistic perspectives. The Afro-pessimists, observing that anomie, disillusionment, and alienation have become pervasive among the impoverished majority (a condition made even more difficult by the flamboyant gestures of the noveau riche), see no hope for positive, autonomous development. In particular, they see the problems faced by the continent as driven by domestic stimuli, including the failure of leadership exemplified by a kleptocratic “politics of the belly,” through which criminalized states sponsor “economies of plunder.” The Afro-optimists do not dispute that the age of globalization has also coincided with the rending of the social fabric in the African continent, but they are hopeful that an African renaissance will emerge out of the detritus of the continent’s historical experiences. For them, the sources of Africa’s marginalization are external, derived from the exploitation of the age of exploration and colonization. Even independence and postcolonial relations have brought new kinds of economic dependency and the persistence of colonization in other forms. Yet while the imposition of changes that have benefited external forces has rendered African communities weaker in many respects, it has also made them stronger in others, because a few people have become extremely wealthy, and new forms of communal organization for self help have been instituted to provide services that the state is no longer willing or able to offer. It is out of the stronger elements of African resilience that its renaissance is expected to spring. Pervasive and enduring social inequalities will only be defeated with dogged and relentless planning and an optimistic belief in African agency.
RACISM AND ECONOMIC DEVELOPMENT
Race and racism have profound effects on economic development initiatives. What constitutes good investment, where those investments should be directed, and who should be consulted in the process are all influenced by prior beliefs on who is considered an expert, and on established agendas. Elmer E. Schattschneider has identified a “mobilization of bias,” a very essential element of power that legitimizes some issues as worthwhile and some agents as best able to tackle the issues, thus ignoring alternative issues, methods, and ideas because they are considered important by those who are marginal to the decision-making process, or considered incapable of participating because they have no expertise. The hegemonic dominance of European and North American ideas has given them priority in the consideration of alternatives. Thus, most of the investments made tend to be concentrated in sectors located in the extractive industries such as mining and logging, or in labor-intensive industries such as plantation agriculture or global sweatshop production. Yet even these options are only available to a few select countries that compete with countries in Asia and other regions believed to be more investor-friendly in a race to the bottom. Thus, while one cannot necessarily make a causative argument on the linkage between racial discrimination and inadequate, inappropriate, and irrelevant investment in Africa, there is a definite correlation between these investment patterns and Africa’s lack of economic development.
Most foreign direct investment (FDI) by multinational and transnational corporations is made in Europe and the United States, and Africa lags woefully behind. This is in part because of the infrastructural, bureaucratic, and labor difficulties that confront potential investors, and largely because Africa’s historical marginalization virtually ensures such difficulties. Thus, a self-fulfilling prophecy is created, where Africa is not considered a worthwhile arena for FDI because of its marginalization, while its not being considered for FDI ensures further marginalization. The economic development initiatives made available to Africa are, by and large, not those likely to yield either tremendous growth or appreciable increases in social well-being. Instead, the opportunities that exist in the contemporary global economy steer Africa toward a concentration on the production of raw materials.
Gender is socially constructed, and thus takes differing forms in different locales and historical eras. Gender is also embedded in social relations and permeates all social structures, relations, norms, values, and processes. Labor markets, households, political systems, and economic institutions and processes are also gendered in a manner that privileges males over females. Most analysts rightly observe that there is a great deal of gender-based discrimination in Africa. Yet most of them inaccurately attribute the sources of such discrimination solely to African traditions and culture. A historically sound analysis would emphasize the extent to which the conceptualization and deployment of tradition is affected by relations of power, and by the jockeying to maintain and extend power in society. Race plays a part in this political process, not only for the obvious cases of countries where there are divisions between whites and blacks (e.g., Zimbabwe, Kenya, South Africa), or even for the countries where these divisions are along the lines of Arab-black struggles for resources and power (e.g., Mauritania, Sudan), but also for the rest of the continent, where the experience of colonialism led to the insertion of white supremacist ideology into the social and political consciousness and the economic sphere.
In the process of colonization, old, fluid relations that may well have privileged men but also allowed for the complementarity of men and women in society, and the institutionalized inclusion of women in public positions of power as formal office holders in certain locales, got solidified and concretized ideologically into the ubiquitous invention of African women as powerless, and politically into the absence of African women in positions of power. Whereas there is historical evidence of African women’s participation in the precolonial economy as producers, the refusal to acknowledge such contributions presents a distorted picture of the economy and marginalizes women. Colonization congealed and rigidified these relations such that rules and laws that had previously been subject to negotiation and multiple interpretation were
presented as uncompromising, fixed, and often written documents that could not be challenged.
Given these antecedents, it is no wonder that gender politics affects social conditions in a manner that denigrates women and discriminates against them. Decisions are made within the confines of male-dominant structures that privilege males over females in policymaking and the allocation of resources. This reinforces the structural inequalities that are intrinsic to the construction and exercise of power. In most African countries, women are treated as jural minors, and they are kept away from the commanding heights of political and social affairs. Although vestiges of the old social and political powers of women exist in languages, social practices, and customs in much of Africa, there is a need to excavate the fundamental bases of women’s power that have been buried by the combined forces of imperialism, colonialism and postcoloniality. Some success is observable in the rise to prominent political positions of women such as Ellen Johnson-Sirleaf, who was elected president of Liberia in 2005. In Rwanda, women currently make up 49 percent of the national parliament, while in Mozambique and South Africa this figure is 30 percent. In many other African countries, women average 15 percent representation in national parliaments. This is, surprisingly, much better than the accomplishment of women in the Northern Hemisphere (Mutume 2004).
DEVELOPMENT ISSUES
There is a North-South divide in development, with the countries of the Northern Hemisphere more economically buoyant and stable than the countries of the South. However, Africa lags behind other regions in the Southern Hemisphere in assessments of economic development. This is obvious in comparisons of social and economic indicators, which reveal that—in contrast with the rest of the world, which grew at a rate of approximately 2 percent from the 1960s to 2000—Africa experienced negative growth rates from 1974 to the 1990s. From 1990 to 1994, the growth rates dropped as low as –1.5 percent. Africa experienced an 11 percent decline in gross domestic product (GDP) between the 1970s and 2004. While one in every ten poor persons in the world was African in 1970, one in every two poor persons was African in 2000. This represented 140 million people in 1975 and 360 million in 2000, according to the National Bureau of Economic Research. Compared with the rest of the world, Africa has also experienced a profound lack of investment. While investment in East Asia has grown an average of 30 percent since 1975, African countries experienced a decline of 8.5 percent, despite World Bank and International Monetary Fund (IMF) directed economic reforms, with most of the minuscule investment directed toward the public sector.
Education and health are generally regarded as the two critical variables that shape human capital, and Africa also performs worse in these areas than East Asia. Compared with East Asian countries, where primary school enrollment rate was almost 100 percent in the 1960s, Africa averaged only 42 percent enrollment, according to the National Bureau of Economic Research. This grew to 60 percent between 1996 and 2004 in sub-Saharan Africa, compared with 74 percent in the Middle East and North Africa, 79 percent in South Asia, 93 percent in Latin America and the Caribbean, and 96 percent in East Asia. Life expectancy is also low in Africa. It stood at a little more than forty years in 1960, compared with sixty-two in East Asia. From 2002 to 2004, sub-Saharan Africa experienced an increase in life expectancy, but only to forty-six years, while East Asia and the Pacific region experienced an increase to seventy years. Latin America, meanwhile, had a life expectancy of seventy-one in 2004, while in the Middle East and North Africa it was a little more than sixty-nine years.
According to the IMF, the World Bank, and renowned economists such as Alassane D. Ouattara and Joseph Stiglitz, there is nothing intrinsically positive or negative about globalization. This is similar to the contention that the phenomenon produces antinomies that generate economic growth, improvements in health, and advances in telecommunications technology in some countries, regions, and sectors, while also producing the opposite phenomena in other places. Ouattara claims that African countries do not benefit from globalization because they refuse to open up their economies, persist in the implementation of flawed policies, have weak institutions, and lack transparency, thus causing external investors to mistrust and avoid them. Stiglitz, in contrast, places the blame squarely on the IMF and the World Bank, due to their erroneous ideological commitment to the market-driven policies that they recommend to jump-start economic development in countries where poor institutions, incomplete markets, and imperfect information coexist, as is the case in Africa.
Critics of globalization believe that trade liberalization creates an environment that destroys domestic industries. They hold that the liberalization of capital markets favors wealthier and more efficient foreign financial interests and banks, and that privatization of state-owned enterprises favors the emergence of a small, predatory, capital-owning class that dominates an economy, particularly where there are few legal restraints on their activities. Compounding the problem, the IMF’s commitment to market fundamentalism and the interests of lenders and the rich ensures the implementation of policies endorsed by the neoliberal Washington Consensus. The destructive consequences of such policies are exemplified by the economic collapse of the “East Asian Tigers” (South Korea, Taiwan, Hong Kong, and Singapore) in the 1990s. Many argue for more democracy and increased transparency in multilateral institutions, which will help give voice to the developing countries that are being impacted by these policies.
Because it rewards market-oriented policies to the exclusion of all else, contemporary globalization is often held responsible for the dismal state of African economies. A pro-market bias generates the antinomies observed, where some sectors, countries, and world regions thrive and others deteriorate. The debacle faced by African countries must also be blamed on the decision makers who ignore the general good in favor of sectional, and sometimes personal, interests.
SEE ALSO Capitalism; Pan-Africanism; South African Racial Formations; Transnationalism.
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Mojúbàolú Olúfunké Okome