Fekadu Bekele (Ph D)
- 08. 2019
Human dignity is offended when persons are denied the opportunity to participate in their own development, when development “takes place over their heads” (Yuengert M. Andrew, What is “Sustainable Prosperity for all” in the Catholic Social Tradition? in: The True Wealth of Nations- Catholic Social Thought and Economic life. Oxford, 2010, p.42)
The Production of economic goods is not an end in itself, but only a means to an end. It takes place with a view to satisfying human needs. This is the ultimate goal of all productive activity in the economic field. (Pesch, Heinrich, Textbook of National Economics, Freiburg, 1923, p. 3)
Over the past 50 years, many sub-Saharan African countries have implemented economic policies that came from the West or were mandated by the so-called international community under the auspices of the IMF and the World Bank. More than a trillion dollars flowed into Africa in the form of development aid. All economic policy practices bear the name market economy, without specifying whether such a market economy should be built on the foundations of science and technology or manufacturing or not. Nor is it clear from the outset whether or not such a market economy can contribute to the development of a coherent social structure based on broader division of labor. Many African countries that have become politically independent since the early 1960s and have followed the recommendations of the IMF and the World Bank have hoped that they would create jobs for millions of Africans and thus develop a stable society that encompasses all the elements of a market economy. After 50 years of market economy practices with different names but with the same content, the structural crises of many African countries have rather deepened. Not a single African country has succeeded in establishing a healthy economy and manageable social structures. Many African countries are still dependent on the export of raw materials. Increasing trade deficits and indebtedness are the downside of dependence on raw material exports. Moreover, many African countries that have implemented the structural adjustment program are characterized by ecological, cultural, social, psychological crises and political instability.
Although the neoliberal economic policies of the IMF and the World Bank have failed miserably, these two institutions, which mainly represent the interests of finance capital, are still key players in the formulation of the economic policies of many sub-Saharan African countries. The military, economic and political order that has emerged after the Second World War, reflecting much more the American interests, led these two institutions to aggressively assert the ideology of the American capital worldwide.
In addition to this, for more than three years the Federal Republic of Germany and the EU have been making efforts primarily to counter China’s advance on the African continent. The wave of refugees from Africa has also forced many Western governments, especially Germany, to change their “strategies“. Under the motto “Fighting the causes of flight”, various ministries of the Federal Republic of Germany have developed “strategies” to stop the flow of refugees. The Ministry of Finance has drawn up a plan with the World Bank, the IMF and the African Development Bank called “Compact with Africa”, while the Ministry for Economic Cooperation presenting its own plan called, “Marshall Plan for Africa”. In addition to these plans, the Ministry of Foreign Affairs has presented its own version of economic plan that bears the name, “Pro-Africa“. Although all these programs have different names, there are hardly any differences in content. All three ministries pursue the same goal, namely to counter China’s advance in Africa and to stop the flow of refugees. As if these different plans were not enough, Dr. Müller, the Minister for Economic Cooperation, recently proposed duty-free treatment for agricultural products that come from Africa. Whether all these plans will achieve the desired goals and put the African economy on the right path to employment and secure incomes for the masses of the African population will have to be assessed on the basis of the plans presented. However economic plans that do not conform to the socio-economic and political realities of many African countries would stop the flow of refugees are very doubtful.
Therefore, with regard to the experiences of the last 50 years, it must be scientifically analyzed whether these plans meet the needs of African society. The extent to which the plans differ from the previous neo-liberal economic policies of the IMF and the World Bank is also the subject of this article. Since all African countries have different cultures, history, experiences and socio-economic formations, it needs to be examined whether such economic plans are applicable to all African countries and yield the desire result. In addition, the effectiveness and impact of such economic plans in changing the material conditions and political institutions of various African countries, which are essential for the full construction of a society as a nation-state, must be analyzed. First of all, I would like to show why the previous market economy practices have failed.
The Failure of Modernization policy!
In the 1950s and early 1960s, the so-called modernization policy was practiced without first studying the basic conditions or problems of African society. The modernization policy was based on the simple idea that many African countries are characterized by traditional structures. It is therefore sufficient to establish a kind of Growth Pol in certain areas, which can ultimately cover all the areas of a given African country through a trickle-down effect. To materialize the plan the so-called import substitution industrialization was introduced, which was not in line with the needs of the broad mass of the population in every African country. The production of consumer goods was intended for a certain class in order to spread American consumption culture in all African countries and thereby gain political and cultural influence. The satisfaction of basic needs was neglected from the outset, such as the treatment of clean water, housing and urban development for the mass of the population, the construction of polyclinics and schools, the production of food to supply the population with vitamins, minerals and proteins, and also the production of energy to facilitate the work of many housewives. This type of modernization policy was financed through the sale of raw materials. The favorable world market prices for raw materials after the Second World War prompted many African countries to implement market-economy elements without hesitation. After the end of the boom period, i.e. at the end of the 1960s, the world market prices for raw materials fell drastically, that restricted the scope of many African governments. They were no longer able to drive economic development forward as in the 1950s and early 1960s. This was exacerbated by the rise in oil prices in the early 1970s.
It is therefore no wonder that the modernization policy based on the basic ideas of the neoclassical economy failed. It was not in the interest of the neoclassical economists to change a society in a comprehensive, sustainable and systematic way in order to simultaneously develop the consciousness of the masses of the population as conscious and proud citizens. For neoclassical economists, it is only decisive to change the consumption behavior of a certain class. Only in this way can a given society be gradually changed. From the point of view of the representatives of neoliberal economists, it is irrelevant to change or develop a society on all sides and sustainably through systematic education, cultural promotion and the promotion of urban culture. Science and technology are also not important from the point of view of neoliberal or neoclassical economists. According to the neoclassical economists, it is not production that is based on broader manufacturing activities that is the driving force to transform a given society, but rather trade is the engine of social transformation. Therefore, the invisible hand of á la Adam Smith ensures that the market economy becomes reality. The state does not have to intervene in economic activities through a conscious economic and social policy. African states must not follow the tried and tested path as they were practiced in Europe in the 18th and 19th centuries, in Japan during the Meiji Dynasty and in South Korea after the Korean War in the 1960s. They must submit to the dictates of the international community, the IMF and the World Bank. Only in this way they can be developed successfully and economically.
This kind of thinking and the promotion of modernization policy, which was formulated in accordance with American foreign policy and also adopted by the other capitalist states, produced sociologically seen a political, economic and military elite in every African country, which rather represents the interests of the capitalist West. As John Galtung, the best-known Swedish sociologist, noted, this kind of penetration of the state apparatuses of the individual African country has led to a kind of structural violence. The political elite unconsciously prevented the emergence of an enlightened class by building an apparatus of oppression. At the same time it also blocks the development of democratic processes, which would be indispensable for the development of the capitalist economy on the basis of manufacturing, science and technology. The political elite, including the military and secret service, could therefore not develop any social, economic, cultural, ecological or historical consciousness. It implemented economic plans that had been formulated somewhere in Washington and in the rest of Western European metropolises. Since the political and economic elite could not understand the ideological foundations of such a neoliberal economy, it simply accepted and enforced the dictates of the IMF and the World Bank. It is therefore no wonder that no accumulation regimes were able to emerge that would ensure the uniform development of the African society at all levels. Instead, incoherent economic structures have emerged here and there that confuse the spirit of the masses. Since the technological basis of this kind of scattered economic activities is very low, and since its productivity is very negligible, the mass of the population could not earn a secure income to lead a dignified life. As a result, the state was not able to earn enough revenue that would enable it to finance other socially relevant projects. Therefore the modernization policy of the 50s and 60s that was based on empiricist science could not transform the African society to develop on the basis of science and technology on all spheres of the social and economic system of each African country.
The cultural and economic history of Europe, however, contradicts this simple ideology or view of neoclassical or neoliberal economists. Through the Renaissance, Reformation and Enlightenment, the consciousness of the rulers and the newly aspiring middle classes could be increased. In addition to this, the disputes in the field of natural sciences could break the monopoly of the Catholic Church. This caused the feudal system and its ideology to be shaken. This did not remain without consequences for the functioning of the “state apparatus”. The monarchs, who felt challenged or pressured, had to bring about material changes. From the 17th century onwards, some Western European countries such as Great Britain, France and, from the 19th century onwards, Germany pursued a mercantilist economic policy. The industrial revolution in England could trigger a dynamic process that becomes an example for other European countries. Countries such as France and Germany later followed England’s example to build a coherent market structure based on vast division of labor and manufacturing activities. At the same time, they had erected a customs wall to protect the domestic industries (infant industries) from competition from foreign goods. In particular, economists such as Friedrich List had stressed the need to develop manufacturing, and at the same time had insisted the need of constructing a customs wall in order first to build a strong home market. According to Friedrich List, countries that specialize in raw materials and agricultural products remain backward and vulnerable to foreign attacks in many ways. They could not also develop culturally because the specialization in agricultural production and raw materials has a very limited dynamic. On the other hand, the manufacturing Revolution would have an inner dynamic and would unfold if additional factors are introduced. Only in this way could the development of manufacturing and mechanical engineering enable a country to develop at all levels. Nevertheless, the enlightened intellectuals in Europe would have to fight bitterly against disruptive and rigid feudal structures in order to liberalize the whole system. Only in this way could Europe be freed from the shackles of feudalism and the ideology of the Catholic Church and see the light of freedom.
To build a strong domestic market economy and society, towns, villages, roads and railway lines were built. The mass of the population was mobilized for these purposes. Cities like Paris, Vienna and Salzburg and other Western European cities could only be built by mobilizing the masses. To claim that the driving force behind all these developments is the invisible hand is a distortion of the facts. Since market-economy activities can only take place in orderly spaces, the monarchs had consciously or unconsciously promoted the construction of cities, canal systems, bridges and roads. Only in this way could they assert themselves as nation-states and societies. There were also more intense debates on social and economic policy issues, which gradually shaped the consciousness of the masses. In particular, philosophers and intellectuals of various fields from Germany in 19th century had shown the limitation of pure market economy practices that were propagated by the English classical economists. The German intellectuals of the 19th century had argued that state intervention was necessary to correct social and economic anomalies that could not be tackled by a pure market economy policy. The development and widespread of such kinds of various ideas and social awareness could have its own impacts on policy makers. It was therefore much easier for Western Europe to implement an internally oriented economic policy based on manufacturing and broad social division of labor. Only in this way can a society be developed on all sides.
However, this developmental path of Western Europe which I have described does not contain the full truth. Capitalist development in Europe was not independent. The slave trade and slave labor, colonialism and the introduction of the so-called international division of labor, which forced the colonies to cultivate only those products that were destined for Western Europe, and the downright destruction of the already existing division of labor and the deliberate prevention of certain technologies in the colonies favored capitalist accumulation in Western Europe. This exploitation continues to this day, and the various forms of market-economy ideologies are nothing more than the continuation of the old division of labor and exploitation by other means. Adam Smith does not mention this aspect of capitalist development in Europe in his book, the Wealth of Nations. (Brown, 2010) Likewise, this fact is not mentioned in neoclassical textbooks. According to both classical and neoclassical economists, the invisible hand or market economy is the engine of such colossal developments in all capitalist countries, including the United States.
But this path of capitalist development in Europe was denied to African countries. African countries were degraded to raw material suppliers. States that wanted to take a different and more independent path were fought. They should be destabilized from the inside. After political independence, at least 60 coup attempts were made to overthrow disagreeable heads of government such as Dr. Kwame Nkrumah, Dr. Milton Obote and Thomas Sankara. Such charismatic figures were replaced by dictators like Idi Amin, who were responsible for the murder of thousands of intellectuals and democratically-minded personalities. The positive and independent economic development in Uganda, Ghana and Burkina Faso was a thorn in the side of the old colonial masters. That is why they had accepted the murder of many intellectuals and the destabilization of these countries.
After the failure of the modernization policy, there were various conferences to “help” Africa and other developing countries. The Millennium Development Goals 2015 (MDGs) and the Agenda 2030 of “Sustainable Development” with 17 goals formulated by the UN and signed by 169 member countries had to be doomed to failure from the outset. In order to achieve the two goals, no paradigm shift was carried out, but the same methods were used to try to master the structural crises that existed in many African countries. It is not possible to achieve the Millennium Development Goals without bringing about political and institutional reforms. It is well known that many African states and the political system are not capable of implementing such a plan. Resources, including land, are not controlled by the mass of the population, but by the political and economic elite and foreign corporations. Nor are the existing rudimentary technologies suitable for achieving the Millennium Development Goal and sustainable development. Moreover, the program does not require the participation of the masses in such a plan. The Millennium Goals are no different than a technocratic measure designed to prevent meaningful and holistic economic and social planning from the outset. Likewise, the Agenda 2030 misses reality. From the outset, the question was not raised as to why the various programs that the international community and international institutions, such as the IMF and the World Bank, continue to practice do not work. If such issues and the problems that exist on the ground are not addressed, no economic program for Africa can be developed.
It has been shown that such conferences are purely diversions from the existing problems and to prolong poverty and underdevelopment in Africa and other developing countries. Only in this way can the economic and political elite be confused again and again. It is known that an actual development can only be consciously organized and induced from within. Economic policy measures organized and adopted as programs by international institutions such as the IMF, the World Bank, the G20 or G7 and UN-related organizations exacerbate the economic and social problems of many African countries. As these institutions continue to prescribe and administer the same drug based on neoliberal doctrine, the profound economic and social problems in Africa cannot be solved.
The structural adjustment program and its impact!
The structural adjustment program is the result of the changed political and economic conditions of the 1970s. The oil crisis at the beginning of the 1970s, and the end of the boom phase in all capitalist states in the same year, and the end of Keynesianism or state intervention brought about a change also in the economic policies of many capitalist countries. Especially Keynesianism was blamed for the economic crisis that arose at that time, although it was clear that after the Second World War state intervention was essential to rebuild the broken economy, the bombed-out cities, the bridges and factories, and so on. It would have been impossible to rebuild such a destroyed social order by the invisible hand alone to guarantee bread and four walls for the mass of the population in many capitalist countries that were affected by the war. Especially Germany was heavily bombarded by the Americans and the British. It was therefore practically impossible to rebuild the broken cities by free market policies alone. Neoliberal economists that interpret each society from the perspective of a pure market economy rather than reading the objective realities that exist in each society transformed their market economy principles to a pure ideology.
The neoliberal economists, that repeatedly misunderstand what a society is, and that do not understand the process of capitalist development that passes different stages to take the present form and complexity, reduce every society to an arena in which only economic activities will take place. According to neoclassical economists, each individual has a single goal that is to maximize its utility. This kind of utilitarian thinking and a pure market ideology is responsible for today’s misery not only in many capitalist societies, but also in all other societies across the globe. The disorder in many parts of the world and the irresponsibility of the rulers in many parts of the world, the greed for power and money, the increasing ecological degradation caused by overexploitation, and the armed conflicts that cost the lives of innocent people, as well as the emergence of terrorism, are parts of this kind of aggressive actions of neoliberal economists against other cultures and nature.
Nature is understood as an object of pure exploitation. In order to accumulate more wealth and profits, nature and social order must be sacrificed. By pursuing a one-sided economic policy that is contrary to the laws of nature and society, the international community must pursue a single goal, namely to implement a market economy across the globe. No society should be cultivated and maintained according to certain orders and principles, but everything must be left to the market. People must not act consciously by asking about the meaning of life, but must follow the laws of the market economy. This kind of thinking is understood as Western culture and sold worldwide. Although the greatest philosophers and theologians have taught different things from antiquity until the 19th century, societies have been reduced to one ideology, i.e. the market economy. According to this interpretation, a choice must be made between a market economy and socialism. The propagators of a pure market economy ideology by committing themselves from the outset to a certain ideology, other alternatives have been excluded. However, I do not mean that market-based processes are not necessary. The market economy and state intervention must be coordinated in such a way that the basic problems of a given society can be solved. Science and technology are essential to make this effective and to solve existing problems effectively. After all, there is no real economic development without science and technology.
This ideology of the free market economy, which all societies must accept without ifs and buts, was proclaimed in 1979 by Prime Minister Thatcher and President Reagan. The specific program that was intended for Africa and formulated by the Chicago School of Economists is known as the Washington Consensus. This program, in turn, is described by critical economists and social critics as a shock doctrine (Klein, 2007). This means that the brain or spirit of the people in Africa and other developing countries must be free of all elements that prevent the implementation of a free market economy from being established. The spirit of the African masses should look like a kind of a tabula rasa, so that only the ideology of the free market economy can be implanted in it. Shock therapy must shake people`s mind so that they finally arrive in the world of the free market economy. In this sense, African governments must accept the dictates of the IMF and the World Bank. Only in this way can they be entitled to commercial loans. They must accept the rules of the world government i.e. that is the western capitalist countries. Only under this condition can any country experience market economy miracles and fit itself to the needs of the global capitalist system that is dominated by some capitalist countries. Although there is talk of the implementation of the market economy in every country, adaptation cannot take place internally but only externally in order to meet the needs of the capitalist economy. This means that the old division of labor must be continued with other programs and signs in order to prevent systematic industrialization in every African country. At the same time, the accumulation conditions for the West must be maintained or improved through various methods such as debt mechanisms, deterioration of the terms of trade and the promotion of a one-sided economic policy, such as plantation economy and resource exploitation.
In fact, the structural adjustment program is not designed to create a coherent economic order based on manufacturing, science and technology. On the contrary, the program has an inherent mechanism to make given social structures even more chaotic and to make people disoriented. Because the experts of the structural adjustment program do not understand social developments as processes and evolutionary, which must be cultivated and well organized, they prescribe economic policy measures that do not fit into other social systems.
When the structural adjustment program was announced, many African countries suffered from enormous trade deficits and increasing debt. Many African countries were no longer able to complete their old projects and plan and finance new ones. Therefore, they needed cash injections to cover their budget deficits. In order to take out loans, however, they must accept the conditions of the IMF and the World Bank. The formulas are simple, but have devastating effects when implemented. Countries that fall under the regime of structural adjustment programs must completely deregulate their economies. 1. The currency must be devalued in each country in relation to the dollar. According to the economic logic of the IMF and the World Bank, the country devaluing its currency can sell many more commodities on the world market. This will improve the trade balance. 2. The economy must be liberalized both internally and externally. These measures exempt the market economy from the constraints of the State. The allocation of resources will follow the price signal. In addition, foreign investors will be willing to invest. How, where and in what areas they invest doesn’t matter. African governments should not prescribe rules that enhance an in-ward looking strategy. Otherwise, state control contradicts the rules of the free market economy. 3. State-owned industries and services must be privatized. This stimulates competition and creates jobs. 4. In order to manage their budget deficits, expenditure on social purposes such as health, schools and food subsidies must be significantly reduced. 5. The public service must be streamlined in order to reduce budget deficits and expenditure. In other words, some of the state employees must be expelled. By this kind of simple formulas many African countries believed that they would experience a market economy miracle.
The neoliberal economic policy of the IMF and the World Bank could not function, as hoped for and according to the conviction of the experts. Instead, the indebtedness of many African countries has increased sharply. Many African countries that have fallen under the dictates of the IMF and the World Bank have not been able to reduce their trade deficits. Trade deficits have tended to increase. The structural adjustment program has deepened the existing structural crisis and not alleviated it. Privatization has not paved the way for competition and innovation. Instead, a certain class could benefit from the privatization of industries and the service sector. The structural adjustment program has considerably widened the income gap between the rich and the poor. The new rich class has not become innovative. Instead, it has significantly changed its consumption patterns. The introduction of luxury cars and other luxury items such as smartphones, the construction of skyscrapers and hotels took away a larger share of the foreign exchange needed for strategic investments. A plantation economy such as the cultivation of flowers, sugar cane and others has also emerged. In the name of liberalization, Land Grabbing was run on a grand scale. In short, the structural adjustment program has created unsolvable problems in many African countries. The economic and social crisis has increased rather than been resolved.
The economic growth that some African countries have experienced is not based on broader manufacturing activities, technology and science, but rather on the service sector, such as the construction of hotels and not significant economic activities, such as the opening of Internet cafes. There was no systematic division of labor capable of absorbing unemployment. On the other hand, slums developed as a result of the implementation of the structural adjustment programs, and the so-called informal sector grew disproportionately. In order to build hotels for tourists and experts as well as skyscrapers for shops, the undesirable and poor sections of the population were forcibly evicted from their properties and huts. In addition, many African capital cities have been degraded to rubbish dumps for highly toxic consumer goods such as electronic waste coming from West European metropolises. Children seeking and collecting electronic parts at scrap yards in major cities, such as Accra, are caught by lung and liver diseases.
Politically, the structural adjustment program cemented the already existing power relations. In the name of fighting terrorism, the state apparatus in many African states is brutally structured. Intelligence service has been refined to undermine democratic rights. Under the regime of neoliberal economic policy, no rule of law could be developed and unfolded. In many African countries, state structures and politics are regarded as private property of presidents and their families. This in turn favors the emergence of a predatory state. These kinds of states, which exist in many African countries and also in Latin and Central America, favor and pave the way for the plundering of Africa’s resources by other states. The main actors are Western multinational companies and the Chinese that specialize in the exploitation of raw materials. The raw materials are being exported to China and capitalist countries without processing or manufacturing as end products. The environment and the social damage caused by multinational companies from the “civilized West” are enormous. The representatives of the multinational corporations that are active in Africa live in special places, equipped with all modern facilities, whereby the working population lives under slave-like conditions. The company representatives do not behave like civilized people, but like masters, as if they possess special qualities and come from another planet. They receive support and privileges for their behavior and lawless actions against the working population. It is therefore easy to understand why armed conflicts are taking place in many African countries. The wars that are being waged under the pretext of religion and ethnic conflicts are nothing more than proxy wars. This is the main cause of migration and the mother of all the social, economic and cultural crises that exist in many African countries. In view of this confused and complicated situation, the mass of the population in Africa is powerless. Apart from some journalists, such as Tim Burgis, who systematically analyses the situation in his book “The Looting Machine” (2016), most Western journalists are not inclined to tell the truth. All reports and analyses presented outside the mainstream media are disqualified as conspiracy theories.
The Structural Adjustment Program will be examined in more detail to understand why it is unable to resolve the social and economic crises that exist in many African countries. IMF and World Bank experts see the problems that exist in many African countries when they recommend such programs as isolated and disconnected. Secondly, they start from false premises in order to “solve” the economic crises of many African countries. Thirdly, when they talk about structural crises, they mean manifestations, such as trade balance and budget deficits, rather than poverty and chaos that exist in many African countries. Fourthly, the experts from the IMF and the World Bank do not ask themselves why their economic policies repeatedly produce and reproduce slums and poverty on a larger scale. Fifth, they do not want to understand at all that they operate with a false model that is hardly suitable for solving complex social problems. Sixth, they do not regard African countries as societies that must be well organized and cultivated so that they can be transferred from one generation to the other. In the eyes of the neoliberal economists, there are only individuals in every country and not a society that acts together. Seventh, in the eyes of the experts, only 5% of the population counts and the rest is superfluous (redundant). Therefore, the program will tend not to eradicate poverty but to create favorable conditions for the transfer of resources of all kinds to industrialized countries. The structural adjustment program, which is derived and formulated from unbalanced situations, creates itself even more imbalances and injustices at all levels in any society that has applied the program. Instead of a structured economy that can generate more wealth and prosperity, a country’s resources are wasted. Neither the labor force nor the scarce resources available in each country are systematically used to eradicate poverty and hunger.
The assumptions made by the IMF and the World Bank are not in themselves structural crises, but rather expressions of the political, social and economic structures that exist in numerous African countries. Many African countries have no functioning economies. 1. The manufacturing sector is underdeveloped. 2. In many countries there is no machine industry that is indispensable for the development of a coherent economy. 3. The service sector is disproportionately widespread. 4. Agriculture is cultivated under archaic conditions. 5. The informal sector and subsistence economy are the main bases of reproduction of the masses of the population. 6. The mass of the population is not wage dependent and therefore has no regular income. 7. The banking sector is underdeveloped. Therefore, the velocity of money is very slow. 8. There are no systematic linkages among the different sectors. 9. Therefore, no macroeconomic structure exists in many African countries. A functioning economy requires the existence of competitive small and medium-size industries. 10. The division of labor is the least developed. Value-added can only be created under the condition of economies based on the division of labor. 11. Most industries are located in few cities. 12. Towns and villages are not built systematically and are not well-planned. 13. There are no network rail way systems. Cities are in a state of chaos. 14. Clean water is scarce. 15. The sewage systems are not functioning properly. 16. In no African country do exist extensive modern institutions at the country levels that take the concerns of the population into account. About 80% of the population in every African country cannot protect itself. Neither government institutions give adequate protections for their people. It is therefore easier for the so-called foreign investors to plunder the resources of the respective African country. 17. There are hardly any consciously organized civil movements and party systems that can control ill-planned government economic policies.
If we accept the macroeconomic policies of the IMF and the World Bank, macroeconomic parameters can only exist under these conditions. With regard to these aspects, it is not clear what the IMF and the World Bank understand by macroeconomic imbalances. The main problem is that the experts at the IMF and the World Bank do not correctly read the socio-economic formations and economic structures of many African countries. Their method is not scientific, and therefore they misinterpret the realities on the ground. That is why the neoliberal economic policies of the IMF and the World Bank do not work. The empiricist worldview they represent and propagate worldwide blinds the political and economic elite in sub-Saharan Africa countries. In the eyes of the experts, who advance a neoliberal view, the mass of the population in Africa is not a thinking being. Therefore it does not have feelings and no dreams. This inhumane view of the IMF and the World Bank, which does not see human being as the main actors and does not want to know that every country should be built consciously and in all directions so that it can thrive and survive as a society, constantly causes social chaos, not simply solvable ecological and cultural crises. The thinking and practices adopted by African governments that they have learned from the international actors are the main cause of emigration to the capitalist west. When people see no prospects in their respective homelands and are constantly terrorized by government forces, they are forced to leave their homelands.
Therefore if we want to understand the crisis in Africa, we have to take a different analytical approach than we have so far. As Professor Schulmeister stated in his book “The Way to Prosperity”(2018), neoclassical and neo-liberal views are pure ideologies. Likewise, Professor Yanis Varoufakis, the former Greek Finance Minister, has stated that neoliberalism is not an economic policy. Normally, an economic policy, combined with science and technology, should enable any country to build a dynamic social system. If the economy is understood as a science, problems that are to be seen can easily be solved or eliminated. Unfortunately, neo-liberal economic policy can only shift wealth from the poorer stratum of the population to the richer, and at the same time create new social crises. It is therefore against the Enlightenment and, as in the Middle Ages, against scientific and technological developments. It is against a cultural revolution, which is indispensable to sharpen people’s cognitive power. In we study the cultural history of Western Europe, true social transformation can only come about if the mind is nurtured and formed by the right knowledge. Only in this way can every human being think and act rationally and change his living conditions. Therefore, the neoclassical or neoliberal view is not suitable for building a healthy society on the foundations of science and technology. In order to see the impacts of the neo-liberal economic policy, let’s look at the economic situation of Ethiopia that was seen by many Experts as a “model country of rapid economic growth over the last 15 or more years”. Over the last 28 years the EPRDF government has been applying the so-called structural adjustment program as prescribed by the IMF and the World Bank.
Case study Ethiopia: – The impact of the structural adjustment program!
During the war between Italy and Ethiopia, in the year 1935-1940, Italy had built many industries, constructed some cities, railway lines, radio stations and others, hoping to stay in Ethiopia as a colonial power for a long time. But the Ethiopians had fought with a very strong patriotic feeling and after five years of bitter war the Italians were expelled. Although the British were not on the side of the patriotic forces and did everything possible to prevent Ethiopia from winning the war, they came together with Emperor Haile Selassie as his protector. The British exploited Ethiopia’s weakness and dismantled all industries, railway lines, radio stations and other facilities. The industries and the radio station were transported to India and other places. This deliberate and intriguing attitude of the British has thrown Ethiopia back into the middle Ages. By exploiting the weakness of the country, the British deliberately destroyed the foundations for the emergence of a middle class, and hence systematic industrialization of Ethiopia. Therefore Emperor Haile Selassie had to start from the scratch to build his country. At the same time, he reintroduced feudalism, which had disappeared during the war. Thus the emperor made the biggest mistake and laid the foundations for social and ethnic conflicts.
Since the beginning of the 1950s, i.e. during the Emperor period, the then government of Emperor Haile Selassie, advised by the international institutions, had introduced the so-called import substitution industrialization. However, this type of industrialization did not drive the country’s development forward. The emperor could not really modernize the country by introducing institutional reforms throughout the country. He relied on the old feudal structure, and the timid industrialization policy to rule Ethiopia rather than reforming the entire system so that real economic and social development on the basis of science and technology would be possible. The tiny policy that he had introduced rather cemented the feudal structures. The hunger catastrophe of 1973, which cost the lives of about half a million people, was an expression of the feudal structures, the system of rule and the selectively introduced modernization policy, which was mainly based on import substitution industrialization.
Therefore the demand for land reforms and democracy was an expression of the dissatisfaction of the young generation at that time. The 1974 revolution was not planned, but showed the weakness of the regime, which was unwilling to provide an adequate response to the burning social crises by democratic means. During the Revolution there were unnecessary bloody conflicts that cost the lives of thousands of intellectuals and young people. Domestic and foreign forces were involved to prevent the reform. The reforms were misinterpreted as socialist revolution by foreign commentators and by those forces who had never understood the positive impacts of the reforms. Therefore the military regime had to be removed from power by all means. The military government was deliberately involved in the armed conflict so that it lost control of itself. Indeed, the military government was brutal in its approach, partly fascistic. This is because almost 100% of the army up to the generals were “products” of the American military academy and had no socialist orientation. They had not emancipated themselves from the feudal and patriarchal way of thinking. Their brutality can only be explained by considering the feudal structures, feudal education and this form of military training that was imported from America. In short, they were not enlightened and did not represent liberal conveyance. This kind of fascistic mentality, which is an expression of a non-liberated mind and the existence of deep-rooted irrationality, can be compared with that in Latin and Central American countries, which was common in the 70s and 80s. Individuals with bad educational backgrounds were so trained and manipulated to equate every democratic demand and reform with communism. On the other side the Ethiopian case is different. At the beginning most of the officers were motivated by patriotic feelings to bring radical measures to transform Ethiopia from feudalism to a dynamic system that could raise the living standard of the masses. It is therefore wrong to claim that one can detach oneself from the old way of thinking and think socialistically within a few weeks and months of reading progressive books. However, this kind of deliberate misinterpretation of the of the reforms that were introduced by the Military government compelled those foreign forces to wipeout the gain of the revolution and install another regime that can be suite to the so-called international order.
According to the reading of the international community, and especially according to the IMF and the World Bank, the then military government in Ethiopia, which ruled the country from 1974-1991, had practiced a socialist planned economy. The socialist planned economy is therefore responsible for the famine and economic crisis that have hit the country so far. This type of “planned economy” contradicts the laws of the market economy and therefore it must be combated by all means. The neoliberal economists are convinced that the introduction of the neoliberal market economic policy will bring happiness to the masses of the population. This is the prerequisite for the seizure of power by Meles Zenawi, the Prime Minister of Ethiopia, presented by the international community under the auspices of Britain and the United States. Only in this way could the invisible hands of the market economy be freed from the constraints of the state.
As prescribed, the new “Civil Government” under Meles Zenawi has pushed ahead with deregulation. The currency of the country was devalued in October 1992 in relation to the dollar in the first phase from 2.05 Ethiopian birr for one dollar to five Ethiopian birr in relation to the dollar. Ethiopia can now sell its agricultural products such as coffee, sesame and other products much more on the world market than before. The government must also privatize the state-owned enterprises and liberalize the economy as a whole. This attracts foreign investors to come to Ethiopia and invest. Indeed, this type of market liberalization has stimulated the service sector. However, the devaluation of the Ethiopian currency could not prevent the import of foreign goods. Instead, the country imported much more goods than it could export. Intensive activity in the service sector and the construction of hotels led to more growth. The much-vaunted economic growth is based on the service sector, the construction of hotels and increasing trade activities, which take place only in a few cities, especially in the capital. Foreign companies preferred growing flowers, strawberries and other agricultural products for the foreign market. Thus, foreign investments could not contribute to placing the domestic internal market on a technological footing and extending it to the whole country. In short, the much-vaunted economic growth has not provided more innovation and competition. Under these conditions, even youth unemployment could not be reduced. The beneficiaries of economic growth are few people close to the government and businessmen specializing in export and import activities. Over the past 20 years, the concentration of wealth in a few hands has greatly increased. A handful of people could control many more properties than they were able to use. Because of this kind of market economy, the state has turned itself into a predatory state. In certain regions in the south of the country, Land Grabbing is run on a grand scale. Because the farmers are harassed and feel threatened, they have to leave their properties and flee somewhere. A kind of plantation economy developed in these areas. Grains of all varieties that grow in these areas are being exported to Saudi Arabia, China and India, whereas sugar, sesame and linseed are being exported unprocessed to the West. In order to show the negative impacts of land grabbing on the people and on the environment, a film called “The Green Gold” was made by Joakim Demmer from Sweden. On the other hand, the government imports grains and oil from Thailand and Indonesia by allocating millions of dollars. Due to the poor quality of the imported oil, many Ethiopians suffer from kidney problems and other diseases that are being the products of poor quality foods that are being imported from abroad.
In the capital, residents of certain districts were evicted from their land. Because the displaced people had no housing and could not find shelter, some were eaten by hyenas during the night. These are facts, not propaganda. Hotels and luxury villas were mostly built on these plots, and several thousand hectares of land were simply left unused. The current mayor of the Addis Ababa confiscates the unused land. It is therefore no wonder that since the introduction of the structural adjustment program slums have sprung up like mushrooms – in contrast to the two previous governments. In other words, the economic policies of the IMF and the World Bank could not make the country beautiful and the people rich. Instead, the Ethiopian society become more chaotic than it used to be. Market economy activities could not be conducted in a transparent and orderly manner. The fact that used goods are imported has led to chaotic conditions in the cities.
On closer examination, as the IMF, the World Bank and the Financial Times claim, Ethiopia has not experienced economic growth that would have made it independent. Over the past 27 years, trade deficits have tended to increase. The current trade deficit is about 13.7 billion dollars, with the country’s debt at more than 29.5 billion dollars. At the same time, the government has received about 30-60 billion of dollars in development aid from the USA, the EU and individual European states for its friendly market economy policy and ethnic policy, which has made the country much more unstable. The former Prime Minister, Meles Zenawi, was praised as a friend of the West and a respected statesman even though his regime was more repressive, imprisoned thousands of people and murdered many.
It is amazing to read and hear how some people who call themselves scientists try to capture Ethiopia’s ethnic composition as a percentage rather than analyzing it as social classes or income groups. The capitalist penetration of Ethiopian society, manifested in the so-called modernization policy, has in some ways enabled the emergence of income classes among all nationalities. Therefore, a working population emerged from every ethnic group – farmers, office workers, civil servants, managers, entrepreneurs and traders, etc. Therefore the income classes are not ethnically detectable, because they work together in a mixed way. Accordingly, the elite and the different income classes do not identify themselves primarily with their ethnicity, but with their colleagues and friends, who have more or less the same consumption pattern and the same way of thinking. As far as food culture is concerned, most people eat the same kind of food regardless of their ethnic origin, with regional differences and differences in income classes. When one hears the melodies of all ethnic groups, there are hardly any differences between the different ethnic groups. Therefore, the Ethiopian society cannot be broken down into ethnic units in order to experience the number of different ethnic groups. Since there has been a strong mixture within the Ethiopian society over the past 500 years, it is very difficult to know the number of nationalities that exist in Ethiopia. Language in itself cannot be a sufficient criterion to characterize one group as Oromo and the other as Amharas. Again, many words and pronunciations of the Oromo language are integrated into the Amharic language. The history of Ethiopia shows that many Oromos were integrated into the ruling aristocracy and some were feudal lords. There are also many Amharas who speak the Oromo language fluently, and vice versa.
It is therefore sociologically and politically wrong and scientifically inadmissible to measure the number of different ethnic groups as a percentage. This is not the task of the experts that are specialized in demographic studies. Their main task is to study demographic changes in any society. Only people who are politically motivated and have something else in mind try to write about it by being on the side of some groups who call themselves Oromo. This has been the case for the last 60 years. By standing exclusively on the side of the Oromos rather than spreading brotherhood and love as a message of Jesus Christ, some Protestants and development agencies have systematically exploited existing differences to create ethnic conflicts. On closer inspection, ethnic conflicts that exist in every society are manifestations of false economic and social policies. The unequal development, which is the result of modernization policies that are unable to create national wealth, expands and deepens the existing ethnic conflicts. The wrong economic policy rather discriminates against all ethnic groups that could not ascend to the upper hierarchy of the ruling system. On the other hand, there are wealthy people from different ethnic groups. Some Oromo elites, although they are the beneficiaries of the system, make every effort to misinterpret Ethiopian social and cultural history. Such confused elites can be manipulated by politically motivated foreign groups to destabilize the Ethiopian society from within.
Despite poverty and social conflicts, Ethiopia is a very beautiful country with different climate zones. There are numerous mountains, rivers and animals of special kind. In Ethiopia, all kinds of cereals grow that otherwise cannot be cultivated in somewhere. Fruits of all kinds grow in the land. There is also plenty of coffee and tea. But this beauty must not be confused with the very bad social and economic situations, which are mainly expressions of the political system. In other words, as is claimed, the economic policies of the IMF and the World Bank have not reduced poverty or worked miracles. Because of the structural adjustment programs that the government was forced to practice, many contradictory things have arisen. Inflation has risen significantly due to the depreciation of the national currency. Domestic entrepreneurs importing spare parts and machinery from abroad had to significantly reduce production capacity because they could not afford to provide so many millions of Ethiopian birr under the new exchange rate conditions. This led to the dismissal of several thousand workers. During the first phases of privatization, some 50 000 workers were made redundant. In particular, the privatization policy and the devaluation of the local currency have hit the poorer strata of the population hard. Because the government and some rich people are building hotels and skyscrapers without proper studies, such facilities require a lot of water and energy. Therefore, clean water is scarce in the capital. The inhabitants of the capital often have to drink dirty water. Since the electricity often breaks down, the inhabitants of Addis Ababa feel this. Many people in the cities have no regular income, and therefore most of them have to live below the subsistence level. There’s a hidden hunger in the country that can’t be seen. In particular, older people are affected because they do not receive a pension. There are no social benefits for the weaker classes of the population as in the West. Due to increasing poverty, many thousands of people have to look for food in the mountains of rubbish. As the mountains of rubbish in the capital have grown so much, people living near the mountains of rubbish have been hit by the sliding rubbish, and more than a hundred people have lost their lives. Therefore, poverty in Ethiopia is actual and widespread in the capital city. Unfortunately some beautiful hotels, bars and skyscrapers hide the real situation in the capital. If this and the social and cultural damages as well as the increasing air and water pollution (externalities), the ecological degradation and the deforestation of the trees are added to this economic growth, the result is negative growth.
On closer examination, the cultural damage of the structural adjustment program is enormous, so that no government is in a position to remedy it. Mafia-like structures have emerged in the last 28 years, and the government of Meles Zenawi is jointly responsible for this development. Dr. Abiy’s current government gets to feel this and it seems that the government does not know how to deal with this cancer that destroys the social fabric of the Ethiopian society. Furthermore, child prostitution and organ sales have increased considerably because many children and young people have no money to live on. As drug addiction is widespread, coexistence between older and younger people has become much more difficult. It is also a deliberate strategy by the proponents of neo-liberal economic policy to make a society like Ethiopia ungovernable. It is like a kind of opium war that is being waged against Ethiopia, so that confusion and disorientation arise.
If, in turn, the economic growth that was so highlighted by the Economist, the International Monetary Fund and the World Bank, and some other News Papers, like the Handel Blatt of Germany, is scrutinized, there are considerable differences between the individual regions. Blossoming cities like Jimma and Agaro have decayed in the last 27 years. In these and other capitals of the different regions, electricity and water are scarce. The roads are so broken that it’s hard to drive. Current reports and analyses confirm this. There are hardly any economic activities in these and other cities that are able to create jobs for millions of people.
It is therefore scientifically wrong to draw an overall picture from the few situations and to claim that real modernization is underway throughout the country. Sociological and political aspects are lacking in this very inadequate approach. The political and state conditions, which have become increasingly repressive, are not taken into account by many journalists and those who call themselves scientists. Sociologically, the beneficiaries of the structural adjustment program are not the masses of the population, but a handful of people. Accordingly, the consumption behavior of this stratum has grown enormously. One sees on the streets in the capital how these few people drive luxury cars that one rarely sees here in the European metropolises. Increasing poverty and a shift of wealth into the hands of individual people are two sides of the same coin. It is therefore wrong to write that Ethiopia “has been transformed from being a land of hunger to being a bearer of hope” (Kaps et al. 2018). This kind of empiricist view confuses the adolescent generation and leads it to accept this kind of reporting as true, which currently prevails in Ethiopia. One is tempted to confuse this kind of deformed growth with genuine growth based on science and technology. Genuine economic growth is organic by nature and has an internal dynamism; if it is handled properly it encompasses a given country. It opens the way to more creative activities and self-realization. If we continue to report as before, the elite and the young generation will not be forced to think beyond this situation.
It is therefore hard for the current regime of Prime Minister of Dr. Abiy to change the image of the country. Though many have hoped at the beginning that Dr. Abiy could pursue another economic policy to eradicate poverty and hunger it is now clear that he pursues the same old neo-liberal economic policy. Although the prime minister pretends to be a liberal in actual fact he undermines civil liberties and harasses political activists. Therefore Dr. Abiy is involved in many contradictions. It is still not clear which economic policy course he would like to pursue. The regime continues to claim that it is implementing a state-led economic model (developmental state) as in South Korea, although the opposite is true, namely a neoliberal model prevails. Politically, Dr Abiy Ahmed could not emancipate himself from the old Guards. He is surrounded by very ruthless and retarded people who are by no means willing to change. At the same time, the international community is endeavoring to integrate him within the world hierarchal system so that he can play the old role. The Saudis and the Americans try to free Ethiopia from the influences of the Chinese. But the West doesn’t want to offer anything better than the Chinese. It is also not in the interest of the West to see a fully developed and self-confident Ethiopia with an emerging middle class. This old credo, that another Japan, South Korea or China must not develop on the African continent, is deeply rooted in the minds of the American and British political elites.
The Chinese therefore fill the gap and try to act themselves by building roads and participating in or investing in the so-called industrial parks in order to pursue a neo-colonial policy of modern coinage. Therefore the government of Dr. Abiy Ahmed is in a very big dilemma. Although the country can develop independently, many are not aware of how to mobilize the country’s resources. I am deeply convinced that a foreign investment that is uncontrolled and not intellectually supported, theoretically and scientifically unverifiable, will harm the country rather than benefit it. Foreign investment cannot be able to build a home market based on science and technology. Foreign involvement cannot be enlightening; instead, it suppresses the energy and creativity of the population. The last 40 years of direct investment (FDI), which has been practiced in many Latin American and some Asian countries, has not been able to fully develop all these countries. Foreign direct investment, which is part of the globalization of the capitalist mode of production that is hunting resources and cheap labor, has made all these countries more chaotic and ungovernable. In Brazil and Mexico, in particular, mafia-like structures were developed that have become more repressive and brutal and are being integrated within the state structures of these societies. The state structures in many Latin and Central American countries are dysfunctional. Since foreign direct investment is only carried out under the aspects of cheap labor, minimal social standards and a lack of consideration of ecological aspects, it tends to create economic and social crises in the countries. Nor does it create real wealth and linkages that are essential for the development of the internal market. No research and development will be carried out where direct investment takes place. In addition, hidden profits are transferred abroad in the form of transfer prices. In other words, no systematic investment is made. In short, foreign direct investment prevents the all-round development of a country. Useful crops and ethics, cultivation methods and crops that have been passed down from generation to generation will be destroyed by foreign direct investment and their aggressive behavior. This in turn endangers diversity and world peace.
The only promising way is to free oneself from the constraints of the international community. This and another government must not once again practice a neo-liberal economic policy on Ethiopian soil that destroys resources, creates chaotic conditions so that the masses of the population live disoriented. In short, this government must rely on the power of reason and the people’s confidence to establish a harmonious and beautiful society. Like every African country, Ethiopia has the potential and strength to build a self-sustaining economy based on a broader division of labor, science and technology. It is a matter of time that the Ethiopians find the right way. It is like a law of nature that countries that currently exercise hegemony in many areas lose it at some point and are replaced by other countries. Under the current global conditions, it is not possible to continue with what has been practiced in the last 40 or more years. Fatigue is inevitable and such colossal developments, which do not take into account people´s health and natural resources, will reach their limits. This kind of injustice, imbalance and increasing exploitation of resources and people is not a permanent condition. Against this background, I am trying to analyze the programs that have been drawn up by the various ministries to help Africa, in order to see whether the programs are capable of solving the complex problems of African society.
Well-intentioned, but not feasible!
It has become a ritual to discuss about Africa and its economic crises at every major summit. The same experts and states that are mainly responsible for the continent’s economic and social crises are once again the main actors to discuss about Africa. The plans and promises that are repeatedly announced have not yet changed or eliminated the basic crisis of the African society. Because the actors and the method are one and the same, it could not work. Instead, the continent’s economic and social crises have worsened.
The economic program called “Compact with Africa”, which was drawn up at the G20 Conference on behalf of the G20 Finance Ministers of the IMF, the World Bank and the African Development Bank in cooperation with the Ministry of Finance of the Federal Republic of Germany, is nothing other than a new neo-liberal concept. How and what is tackled is not entirely clear. In my English publication of 04.09.2017 I took a detailed position on the unsuitability of the program. The program contains only three aspects that have been identified as problems or causes of the continent, namely, 1. Macroeconomic framework, 2. Business framework, 3. Financing framework. What this has to do with the development of a society is not entirely clear. In my analysis, I merely showed that the plan does not start from the basic problems of the African social structure and its manifestations, like poverty, unemployment problem, problem of housing, lack of clean water, problem of education, lack of proper nutrition, etc., but provides a framework for foreign investors. The spatial aspect, i.e. ordered cities with appropriate building structures, which are indispensable for investment and business activities, is not the subject of such a program, which claims to finally tackle the problem in Africa. The burning problems of African society, such as the fulfilment of basic needs, are not even beginning to appear in the program. What is invested, how and for whom is not determined by the African population or by the governments themselves, but by the so-called foreign investors. This kind of investment does not pass through the different stages of investments that are required for societal change and technological transformation. Since it is detached from research and development it is practically impossible to develop new technologies in each African country. It is simply an investment that is being invested by passing the needs of the society. Its main strategy is to extract the maximum profit and transfer it to the capitalist countries. It therefore blocks the development of a home market or an integrated market across a given country. The plan also overlooks the need to establish a systematic division of labor at the national level, which is needed to change a society both materially and spiritually. In short, the plan does not foresee the need for systematic industrialization of Africa on the basis of manufacturing, science and technology. The Compact with Africa program is based on non-existent parameters, such as macroeconomic parameters, which do not exist in many African countries. Please see the critical discussion above in this text. In addition to these the program overlooks the existing repressive state structures and lack of democratic rights that do exist in many African countries. By in large the plan is not compatible with the African social and political conditions and as such it is not an African program.
If you look at all the plans, such as the Marshall Plan for Africa and the Pro-Africa Plan, the basic ideas are the same. If one compares the Marshall Plan for Africa with the Marshall Plan in Germany, after the Second World War, the Marshal Plan for Africa diametrically opposes the Marshal Plan for Europe, or Germany. With the Marshall Plan for Europe, the destroyed cities, roads, bridges, apartments, etc. were completely rebuilt within only 15 years. The systematic reconstruction of Germany in particular made the country one of the world’s leading nations, and Germany is now the world’s leading exporter of high quality machines, cars of different types, electronic appliances, and many other products. At that time, state intervention in the economy played a decisive role in creating an orderly social structure. Without state intervention and without the creation of a credit institute for the reconstruction of the country (Kreditanstalt für den Wiederaufbau), Germany would not have been able to build a viable and dynamic economy. The mobilization of all forces that were able to work played a decisive role in the reconstruction of Germany. Therefore, efforts were made at that time to solve the most important problems of the people, such as lack of housing, lack of clean water, heating possibilities and electricity as well as sufficient food. Once a country has met these conditions, it can move on to the next stages. However, all these aspects are not part of the Marshall Plan for Africa.
In any case, the three plans were not drawn up by African governments in consultation with African intellectuals and the population. Although the plans mention the need for development and peacekeeping as their main objective, both the causes of the non-development of African society and the many wars that are fought in Africa have not been addressed. In this respect, the causes for the underdevelopment of African society and the armed conflicts have not been addressed or recognized in any way, and therefore no suitable plan can be drawn up. Nor was any attempt made to question the previous economic policy practices of the IMF and the World Bank and to find out why both the so-called modernization plan and the structural adjustment program failed. It is therefore impossible to draw up an effective plan. Moreover, it is not explicitly clear which scientific methods or theories were used to design the various programs. It is well known that there can be no practice without sufficient theory and scientific methodology. However, it can be deduced from the plans that the programs are nothing more than a continuation of the neoliberal economic policy that the IMF and the World Bank have repeatedly recommending and prescribing to African governments. In short, there is no paradigm shift to solve the African crisis and fundamentally change the society.
In my opinion, the social problems in the various African countries can only be solved holistically. Whether this path leads to a market economy is of secondary importance. It is important that first and foremost the social, economic, cultural and psychological crises in each country should be systematically resolved in order to build a functioning society. The satisfaction of basic needs plays a central role here. Without vitamins, minerals and protein-containing foods, the human body and mind cannot function efficiently. It is also well-known that in modern times, aspects such as housing, medical care and education must be at the forefront in order to build a sustainable society. Unfortunately, these factors, which are important for all people, regardless of race, religion or ethnicity, are not addressed in the slightest. If the basic needs are ignored, Africa cannot be supported.
Free trade policy or duty-free cannot stop migration!
It is strange to propose a “solution” without having dealt with the causes of the flight. There is repeated talk of combating the causes of flight without also naming the causes, which force young Africans to leave their homeland. If the causes are not named and identified, it is problematic to present an appropriate solution. It is therefore questionable whether the flight from Africa can be stopped with free trade or duty-free. It is known that almost all African countries can offer only agricultural products, which are also partly cultivated in Greece, Spain, Italy and Portugal. Many tropical products are also exported from Latin and Central America to Europe. The question is how many tones of agricultural products African countries should sell on the European market to get enough foreign exchange in order to modernize their economies and create jobs for millions of young Africans to keep the refugees there.
If we start from the terminology free trade – apart from a few corrections or agreements – this means nothing more than keeping a country’s market free for foreign goods without custom duties. As I pointed out in my book “African Predicaments and the Method of Solving them Effectively”, today’s capitalist countries, including South Korea, Japan and China, have modernized and technologically developed their economies and societies by practicing quasi-mercantilist economic policies. After they had successfully built up their respective countries, they were slowly able to open up their markets. China did the same. After 30 years of inward-looking economic policy, it joined the WTO in 2005. It is therefore not advisable for African countries to enter into a free trade agreement with Europe or the USA. Although some African countries, such as Namibia, Botswana, Swaziland and Lesotho, have already reached an agreement with the EU, this agreement does not help to reduce poverty, injustice and dependence on a few export goods. The agreement even reinforces and cements poverty and existing power structures, which are mainly the causes of these manifestations. The agreement has no educational and civilizing mission in itself and forces African farmers to grow the same products again and again. Free trade has no transformative effect. In other words, if a backward country has signed a free trade agreement with a capitalist country or organization, there will be no social modernization at all levels. The lifestyles and working methods of African farmers remain unchanged for several generations. Under certain circumstances, only those forces can profit that are specialized in the export of tropical products. In other words, the agreement is more destructive than contributing to the economies of these countries on the basis of manufacturing, science and technology.
This agreement and the exemption from customs duties discussed by Dr. Müller, the Federal Minister for Economic Cooperation, cannot solve the complex problems of African society. They divert political decision-makers in Africa from the burning issues that do exist in many African countries. As such free trade is not an issue for the masses in Africa. It is simply a technocratic approach that cements the existing international division of labor. African countries will be condemned to remain as exporters of raw materials and few agricultural products. As experiences over the last 40 or more years show economic agreements with the EU did not contribute for the development of the African economics and social systems. African governments are repeatedly forced to liberalize their markets; otherwise they receive no loans or development aid. The case of Ghana shows that this kind of leverage can destroy the existence of small poultry farmers. Ghana had to import meat products that cannot be sold on the market here in Europe. The EU’s fisheries policy is once again a prime example of how the existence of fishermen in Senegal and the rest of the West African coast is being destroyed. This means that these fishermen are coming to Europe to seek a better future.
It is therefore cynical to talk about free trade or duty-free while the existence of the farmers or fishermen is destroyed at the same time. It is also known that many francophone countries, although they had long since achieved political independence, do not have the freedom to build their society and economy independently without influence and pressure. Former colonies of France are not allowed to formulate their own economic policies. France still acts as colonial power, and many countries had to deposit their currencies and gold in the French central bank. Since the currencies of these countries used to be pegged to the franc, now to the euro, they could not pursue independent monetary and economic policies.
By in large in so far as the numerous problems of the world economy and the role of international institutions such as the IMF and the World Bank in the destructing of the African economy are not discussed the causes of flight cannot be tackled. In short, unless the global economic, military and political structure that was established since the end of the Second World War is not undermined, the power politics that is refined since the 1980s and the increasing militarization of the state apparatus of many black African countries is not minimized the crises in many African countries will remain over many decades.
The new policy that is formulated to fight terrorism forced many African countries to spend considerably more money on arming and strengthening the security apparatus than on meaningful projects capable of creating thousands of jobs for youth. After China emerged as a competing power, the destabilization of Africa has intensified. It is therefore very important to keep asking ourselves whether such a policy will ultimately benefit Europe and the rest of the world. With today’s technological possibilities, the world’s resources are sufficient for the whole of mankind.
The problem is that capitalist accumulation and consumer culture, which has been increasingly developed over the last 50 years, is forcing some countries and corporations to control the resources of Africa and other countries. Other countries like China and India are trying to follow the same strategy. Increasing industrialization, which is not spread worldwide in harmony with nature and the social needs, inevitably leads to overexploitation. By wanting to do the same thing without thinking about the environment and future generations, competition and social conflicts arise. The needs of the so-called middle class must be permanently met with tropical products such as bananas, mangoes, coffee, tea and cocoa as well as other resources so that no social conflicts arise. This kind of consumption habit that has become common in many countries of the world, and is becoming intense, is a great burden to nature and many societies. This will have negative impacts on the spiritual development of many societies. By reducing the meaning of life to earning money and increasing consumption, aggressiveness and social conflicts occur. It is therefore important to seek new development paths that are conceived and practiced in harmony with nature and social needs.
Africa doesn’t need help, what Africa needs is peace!
It is known that Africa is the richest continent on earth. Africa has been deliberately made poor. Despite the so-called development aid that has been flowing to Africa since the 1950s, the continent has not been able to build an independent economy on the basis of manufacturing. Paradoxically, the help is causing a misery. The aid is like a cancer that systematically eats African society. From the outset, it was not intended to enable African countries to slowly but surely build a functioning economy so that the people of Africa could exist as people, think and creatively create something new. Instead, development aid robs people of their ability to think for themselves and create something. So far, the international community has not succeeded in building a single African country on the foundations of science and technology with development aid. Instead of true development, development aid cements the existing structures. John Abbink shows in his book “A Decade of Ethiopia: Politics, Economy, and Society 2004-2016” (2018) that the main beneficiaries of development aid are the political elite. Most helpers sent to Africa by their respective governments, as well as non-governmental organizations (NGOs) working as aid workers in various African countries, do not have a sound knowledge of sociology, philosophy, or theoretical and scientific knowledge of how to lead a country into modernity. In his book “Economic Hit Man” (2004) John Perkins showed how the so-called helpers mislead the political and economic elite. The so-called development aid workers or experts feel like feudal lords in the respective African countries. Other aid workers who work for development aid organizations and charities close to the UN are virtually functionless and therefore useless. Development aid in itself has no civilizing and transformative mission; instead it cements the existing social structures. Countries such as Japan, South Korea, Singapore and China, which are not dependent on development aid, were able to build a society on stable foundations. Where they are today is known to everyone. Therefore development aid in this form is poison for Africa. Africa does not need development aid in itself, since Africa is exporting resources in various forms to Europe, America and Canada. The outflow of natural resources, capital flight and other things plunder the continent. In addition, part of the revenue from sales of raw materials, such as oil and other minerals, remains abroad. Multinational corporations that exploit raw materials hardly pay taxes by raising investment costs. Instead of development aid and free trade, it is therefore possible to conclude a bilateral agreement with individual countries that have the will and the inner conviction to actually transfer technology and know-how to Africa. African governments and intellectuals should be given the opportunity to create framework in which area any European country can invest.
As far as debt is concerned, Africa itself does not need debt. Debt is a kind of servitude that forces debtor countries to fall into debt traps again and again. Debts have a destructive effect with devastating effects on a society. They create a negative impact on the political, economic, social and cultural conditions of a country. The debt of Latin America in the 1980s, which affected countries such as Mexico, Brazil and Argentina, destroyed the social fabric in these countries. These countries have not yet been able to recover. These societies have become more brutal. The governments and politicians who systematically destroyed their respective countries persecute and shoot citizens as if ordinary people were responsible for this misery.
Therefore, debts have several functions for the international financial capital. Indebted countries must repeatedly transfer resources in the form of interest and compound interest to Europe and America. Indebted countries are also forced to implement an austerity policy that distorts economic activities and over through the masses to poverty. This leads to social problems and conflicts that are not easy to solve. Countries that are forced to devalue their currencies fall into an inflation trap. Inflation makes the living conditions of ordinary people more difficult. In addition, debt is a means of domination, forcing indebted countries time and again to pursue a wrong and resource-wasting economic policy. Therefore, highly indebted countries are being blackmailed unless they are willing to bow to the dictates of the IMF and financial capital.
One is at a loss as to why African countries like Nigeria and Angola get into debt even though they earn enormous revenues from their export products such as oil and diamonds. It has become like a culture that you cannot finance projects without debt from the West. The fact that the dollar and the euro have become international means of payment and reserve currencies does not mean that a country cannot be built without debt. Before there was an international medium such as the dollar or the euro as a means of payment, many countries made history. They have created advanced civilizations and thus proved that they can transform natural resources through thinking. They built colossal buildings that still exist today. All scientific discoveries and the entire creative process are products of intellectual effort. Money, in whatever form, is the product of the division of labor. But with the emergence of capitalism and the capture of the globe in its radius, many countries could no longer comprehend the logic of social developments. They believe and think that without the dollar and the euro they cannot bring about economic development.
The history of economic development in Europe and America proves, however, that one can build one’s country with one’s own currency through a clever credit policy. In this sense, all African countries have the capacity to build their country without debt or development aid. What African governments need is to think independently and discard the advices from the west. They have to implement an independent economic policy that serves the interests of their people. On the other hand, there must be a paradigm shift within the political and economic area. The political elite must also change its lifestyle. Elites in resource-rich countries such as Nigeria and Angola spend enormous amounts of money on their wasteful lifestyles that could be used for productive purposes. This contradiction, between unnecessary indebtedness on the one hand and a wasteful lifestyle on the other, paralyses economic development in many African countries. To bring about meaningful economic and social development, African countries must be left alone. Many African countries have been under permanent observation for fifty years. They are urged to practice the same economic policy time and again in the name of the market economy, which is the same in content but has different names. The neo-liberal economic policy that many African countries repeatedly implement has led to a situation in which no functioning economy emerges in the respective African countries. African countries are also being urged to spend a lot of money on defense and security under the pretext of combating terrorism. To the extent that this pressure is maintained and the interference of foreign forces in internal African affairs is not eliminated, there can be no meaningful economic and social development. Social developments need care like plants. Accordingly, African societies do not need external pressure either. A stressed society under constant observation cannot develop and live in peace.
The author is a development economist and a political analyst. He has written over several hundred articles in Amharic, English and German, and has published a book entitled, African Predicaments and the method of solving them effectively. He can be reached at: email@example.com
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