In reality, most independent witnesses and accounts will testify to the fact that the conditions of our people are today worse than when we gained independence. Even the few industries Africa had built in the first two decades of independence are facing ruin. We are witnessing de-industrialisation, but now also de-agriculturalisation, and a threat to the livelihood of our rural populations.

Why is this so? Because globalisation and liberalisation are not as what mainstream economists present it. It is one of the principal means for the powerful nations to get themselves out of their own recurrent cyclical crises, and to bale out their corporations faced with ceaseless pressure on their rate of profitability. The principal reasons for this depressant pressure on profits is the demand by their own workers for higher wages, and competition from third world countries such as China that can organise production on a massive scale based on cheap labour (in wage-cost terms). To counter this, Western corporations seek to replace labour with capital (to reduce the unit cost of production), but this has a two-fold effect. The first is that it throws millions of people out of employment. The second is that since capital forms larger and larger proportion of production in relation to labour, there is further downward pressure on profits per unit of capital.

At the global level, the corporations, aided by their states, seek to counter this tendency by taking a number of measures, some of which are in their own countries (such as “downscaling” workers, improving the technology of production, and mergers and acquisitions). But a very large part of the “corrective” actions against declining rate of profits are taken in relation to the countries of the South. ( When African negotiators met with the US Trade Representative, R. Zoellich in the WTO ministerial in Cancun, for example, they were met with the demand from the USTR: “What I really need of you is market access”). The dominant trading nations (US, Europe, Japan) use their control of global production and marketing to pry open the markets of the South in order for them to conquer those markets for their own goods and services. They also pry open for the global market sectors that are traditionally regarded as public, strategic or domestic..

To succeed in this they use their power of rule-making in bodies such as the IMF and the WTO. They also use these agencies to liberalise capital markets so that their capital can move freely unhindered by restrictions that the countries of the South might want to put in order to generate domestic growth.

This is what the battle is all about in the WTO and in the World Bank and the IMF. It is for markets for goods, services and the free flow of investment capital. In this process, the dominant corporations, the dominant states, and the multilateral agencies of rule-making and rule-enforcement seek to limit the freedom of the countries of the South, and constrain their policy options. In this battle of big economic and political interests, Africa seeks for an opening to secure a minimal of political space under these rules. Even this minimal policy space is denied on the grounds that it is a disincentive to foreign capital. Capital is scarce, they argue, and there are many countries competing for it. Therefore, they say, it should be allowed to come and go as it pleases. This, in essence, is the rationale behind three of the four Singapore issues – investment policy, competition policy, and transparency in government procurement. That is why the developing countries have consistently opposed these ever since they were put on the agenda of the WTO in Singapore in 1996. These measures will foreclose policy options for the South for their own development.

The fact of the matter is that Reality is presented in an upside-down manner. The comparable example in international relations is the thinly disguised cover of democracy to “justify” the invasion of Iraq. When the weapons of mass destruction could not be found, the invasion was “justified” by the Anglo-American alliance as if it was “in the interest of the people of Iraq.” Thinking people are no longer deceived by this argument.

When it comes to economic liberalisation and the movement of capital, however, the elusive lure of capital continues to deceive most policy makers in the South. These matters are still presented as if they are “in the interest of” the developing countries. In reality, as explained above, these are measures demanded by Western corporations to bale them out of their own state of perpetual crisis. Hence their states push them through such agencies as the IMF, the WTO, the World Bank and the Cotonou Agreement.

Often the matter is presented as if, in the words of the former British Prime Minister, Margaret Thatcher, “There Is No Alternative” (TINA) for the countries of the South. This is not so. We do have alternatives as shown in another Briefing paper of SEATINI.