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Trade officials from the Southern and Eastern Africa
met in Arusha, Tanzania, between 2 and 5 April
2003 to discuss their participation in the global trading
system. The discussions were contextualised within the broader
geopolitical landscape that was unfolding at the time, namely
the illegal invasion of Iraq. The workshop aimed to address
both the specific challenges facing African countries in the
upcoming Cancun Ministerial Conference in September, Mexico
and the broader political agenda of Africa. The Workshop pointed
out that without a wider perspective on events, it was not
possible to understand the immediate concerns of Africa and
this would make it difficult to articulate positions for Africa’s
concerns at the Cancun Ministerial conference.
The North is in crises. It is experiencing a crises of
profitability and this compels the institutions of the North
to pry open the markets of the developing countries in order
to seek better returns on investments. The North is also trying
to turn public goods like water and access to health services
into private goods so that its over-accumulated capital, most
of which has no relation to physical goods/services, can find
investment opportunities with the possibility of a healthy
return.
In
order to feed the insatiable consumers of the North and the
exponential growth of their capital stocks seeking returns,
the US and Britain – as principal Northern actors - are obliged
to secure access and total domination over the resources of
the South. Against this background, it is not sufficient to
understand the Iraqi conflict in purely humanistic terms,
or to label George Bush, Tony Blair and Saddam Hussein as
“crazy”.
It is not simply a matter of controlling resources, it
is also about the US dollar as a currency, the reserve currency
through which oil is quoted and traded. Oil is the lifeblood
of the US economy and the denomination of the oil price in
US dollars helps maintain the strength of the US economy.
For the US it is very important to maintain the centrality
of the US dollar as the measure of value of commodities and
as a medium of control over the global credit system. This
fact was recognised by Saddam Hussein who converted the stock
of Iraq’s reserves into Euro based denominations in November
2000. Effectively this threatened to reduce the demand for
the dollar in the longer term. Hussein had also granted lucrative
oil drilling contracts to the Germans, French and Russians
to the exclusion of the US and British companies who therefore
became the most vociferous supporters of the devastating sanctions
against Iraq. This exclusion increased the incidence of a
war, which could secure US and UK access to the oil and restoration
of the US dollar as a prime international reserve currency.
The agenda of regime change, through the bloodiest means
possible, by the coalition of the United States and Britain
together with their compliant allies occurs at a time when
the power configuration in the world is in need of re-alignment.
In the olden days, the Soviet Union and the
European Union fought their proxy wars in the continent of
Africa. Now the proxy war is being fought in Iraq with many
other states such as Syria, Iran and North Korea in tow. The old colonial boundaries imposed by world powers in 1914 no
longer suit the interests of the powerful and they will seek
to alter these so that the interests of the North are better
served. The US now exists as the sole superpower in the world with
the power and will to change the political landscape.
This is the most dangerous period in our age. Every time
the balance of power changes, there is re-configuration of
the world. The crisis of profitability which is affecting
the developed countries will have serious repercussions for
Africa’s development. There have been sustained efforts to
force Africa to liberalise on basic services (health, housing,
education, water) and also its financial markets. Africa’s
marginalisation, under development and decreasing participation
in international trade are regularly blamed on Africans’ inability
to foster development. This is despite African countries having
the most integrated and open economies after having followed
the prescriptions of the World Bank, International Monetary
Fund and the World Trade Organisation. The results of these
economic experiments have been spectacular failures with disastrous
consequences for the poor.
The WTO 5th Ministerial meeting in Cancun,
Mexico in September this year cannot be discussed in isolation
of these forces. The question must be asked: What are the
larger forces that create overall conditions of trade? Africa
is not just negotiating at the WTO global level. She is also
negotiating the Cotonou Agreement with Europe as well as the
African Growth and Opportunities Act with the US. AGOA and
Cotonou are presented as opportunities for Africa. They are presented as reciprocal, but in this
reciprocity who gets what? What is evident is that the US
and EU are now scrambling for Africa. This scramble is not
geographical like in 1884, they are scrambling for markets
and investments. They are fighting for opportunities in our
countries. It is the crisis of profitability that is promoting
this scramble. Banks are in crisis of diminishing returns.
Big corporations are affected by declining profits. This leads
the corporate world to promote the opening up of all sectors
in our countries. Misguided in our naïve belief that all trade
is good we are in the process of opening up everything believing
that this will spearhead growth.
How
does big business solve the crisis of profitability? They
apply more machinery to production, they do it through mergers
and acquisitions which throw out of employment thousands of
desperate people. Above all they push their costs to weaker
sections of the community – women, children. They withdraw
social benefits by placing them above the costs of the ordinary
persons. In recent years, big business has been taking away
billions of dollars from pension funds and corporatising the
money through demutualisation, as with the Old Mutual in our
region.
So in every aspect of the global trading system the South
is denied the policy flexibility to determine for itself what
is suitable for its development. No policy flexibility means
that the South is effectively disarmed and has very little
power to assert any of its demands for more equitable treatment
or for the pursuit of policies that will promote genuine growth
and development.
Ultimately it must be realised that sustainable development
does not come from foreign direct investments, but from domestic
resources. Sustainable development is when a nation can provide
for all its basic needs (food, water, shelter, healthcare
etc) no matter what happens in the outside world.
*
Tayob Coordinates the SEATINI(Southern and Eastern African
Trade Information Negotiations Institute) programmes in South
Africa while Makombe is a Programme Officer with SEATINI. |
