In Africa, the Hypocrisy of the Obama Administration is Inexcusable

The United States fears Africa is becoming a place of increasing competition from China mostly, but also Brazil, Russia, and the European Union. African countries like Angola or Zimbabwe who were once forced to depend on the patronage of the IMF and World Bank are less dependent on America's hegemonic financial institutions than anytime in the last 20 years. The growing complexity of actors has opened the possibility of greater independence in national economic and social policy-making in African countries from the dictates of Washington D.C. With the threat of increased competition and the level of oil imports from Africa going up as much 20 percent, the U.S. is engaging in its most extensive imperial quests in Africa since the end of the Cold War.Ironically, this assault is advancing under the leadership of one of Africa's own "sons", U.S. President Barack Obama.

Hiding behind the rhetoric of limited government and individual liberties, the United States is protecting some of the most repressive regimes in the world. The Obama administration is intensifying President Bush's plan to militarily support anti-democratic regimes throughout the continent. These regimes are responsible for grave human rights violations and widespread persecution of political and national minorities according to prominent Western human rights organizations like Amnesty International and Human Rights Watch.

The ridiculous level of hypocrisy in U.S. foreign policy proves that the Obama administration is concerned neither with human rights or participatory democracy but stability against any actor that could potentially threaten their perceived political and economic interests. Eritrea, a small East African nation that shares a contentious border with Ethiopia, has refused to support a U.S. war in the Horn of Africa and reportedly rejected a demand from the U.S. military to host a U.S. base in the Red Sea port of Assab off its coast. Eritrea's intransigence earned it a spot on the U.S. terrorist list. The Obama administration froze existing ties with Eritrea and claimed that the "government acted as a principal source and conduit for arms to antigovernment, extremist, and insurgent groups in Somalia." The Eritrean government vehemently denies supporting such groups. Meanwhile, the same Obama administration has increased military funding by more than 300 per cent for African countries that support its foreign policy aims including Chad, the Democratic Republic of Congo (DRC), Djibouti, Ethiopia, Equitorial Guinea, Algeria and Nigeria. Each of these governments are infamously known for exceptional corruption and state repression against political opponents.

The hypocrisy of the Obama administration does not end with military intervention. The administration has also teamed up with billionaires Bill and Melinda Gates to extend U.S. influence and guarantee multinational corporate access to African agricultural markets. Their strategy is to maintain leverage in African affairs by creating new systems of aid dependency for U.S. technical and financial support in the area of food production. In this way the administration approaches aid as an issue of national security. The interests of the U.S. military, multinational corporations and aid NGO's intersect as the three groups meet to share talking points and communication strategies. Their latest gimmick is $408 million for a World Bank fund to encourage "good" farming practices in the developing world. However, as Mukoma Wa Ngugi of Pambazuka news points out, the reason why so many African's go hungry in a global economy of abundance is not for a lack of "free" markets or U.S. aid but the existing neo-colonial models of political economy in African countries that maintain unequal social relations.

"Hunger in Africa is mostly a political and economic disparity problem. To end hunger, political stability, proper distribution of food and land within nations, and less emphasis on cash-crop farming and more on food- crop farming will be more effective, friendlier to the environment and less costly than the super-seeds that will require tons of pesticides - and eventually, cost a lot of money."

With Barack Obama as the chief spokesman, the U.S. government is in the midst of a major public relations campaign to re-brand themselves as a partner of African countries rather than an imperial power. This shift is mostly in response to the failures of the World Bank and IMF's unpopular structural adjustment programs that imposed ruthless neo-liberal conditions on the re-payment of loans and led to a backlash in the form of renewed calls for national sovereignty. However, this new American re-branding effort should not be confused with a genuine attempt to re-start U.S.-Africa relations on equal terms. The conditions of U.S. bilateral partnership in the form of technical and financial assistance are not limited to specific development projects but amount to a sophisticated form of blackmail with the U.S. interfering in the way government's run their internal politics and manage their economies.

The most notorious example of this form of blackmail is no where more obvious than through a bilateral development fund known as the Millennium Challenge Account. The completely biased conditions for financial support from the account include "economic freedom" and "civil liberties" as defined by far right-wing think tanks like the U.S. Heritage Foundation. Smaller, cash-strapped African countries like Senegal, are particularly vulnerable to this scheme being forced to 'behave' in a manner that is acceptable to conservatives in the U.S. in exchange for aid.

In the final analysis, U.S. strategists fear that the further waning of their exclusive post-Cold War influence will impinge on long-term economic and political "interests" in Africa, which include unlimited access to natural resources and markets for U.S. goods. Therefore, the Obama administration is determined to put more financial resources into promoting a balance of power more favorable to its interests with proxy military initiatives and Trojan Horse development aid designed to promote dependency on the U.S. At the same time, the administration is deceptively using the rhetoric of partnership and mutuality to provide cover for African elites allied with the interests of the U.S. military, foreign investors and multinational corporations. There is no amount of Kenyan heritage that should absolve Barack Obama and his administration of responsibility for intensifying the scourge of U.S. imperialism in Africa. For a man who is quick to preach personal responsibility in front of large audiences of black Americans and continental Africans, Obama should hold himself accountable for the actions of his administration under his watch.

Bolivia's Bold Experiment

Today, Bolivia is a powerful alternative example for other underdeveloped countries facing mass illiteracy, poverty and inequality in the way that revolutionary Cuba once was during the Cold War. But before Bolivia becomes the Cuba of the 21st century it will have to survive a series of so far unyielding challenges.

Evo Morales' emancipatory project for the poor and marginalized groups of Bolivia represents an independent model of economic development in a region traditionally dominated by U.S. economic interests. Since his election in 2005, Morales' brand of revolutionary social democracy and anti-capitalism has vexed American and European economic experts who favor neoliberal approaches to development---a model they have from time to time been prepared to defend through the barrel of a gun.

President Morales expelled the International Monetary Fund and nationalized significant industries upon his election in the face of Western opposition. But despite their fears, Morales and his party Movement Toward Socialism (MAS) have led Bolivia to what is expected to be the fastest economic growth rate in the Latin American region this year.

At home Evo Morales is the front-runner in a December election that will widely be a referendum on the economic policies of his first term. So far, public opinion polls indicate that Evo is regarded favorably in Bolivia, especially compared to this right-wing opponents. Even in Santa Cruz and Tarija, districts where the opposition is most vocal, President Morales gained about 57 and 56 percent respectively. If elected, Morales has promised to continue historic social spending on health care, housing, and education.

The first indigenous President of the America's has also promised to increase even more the role of the state in the Bolivian economy---a key source of antagonism among conservatives. The end result has been overwhelmingly positive. The billions of dollars in additional revenue from the now publicly-owned industries have allowed the government greater resources to spend on badly needed social programs. Public investment increased from 6.3 percent of GDP in 2005 to 10.5 percent for 2009. Higher earnings for exports and a fairer government imposed tax rate also created a budget surplus after years of large deficits.

Government revenues can only be expected to increase as President Morales invests in new lithium production facilities. Bolivia has 50 to 70 percent of the world's lithium reserves and foreign corporations are poised to rake in lucrative profits. But Morales is instead looking toward endogenous control of the reserves. Some are calling Bolivia, "the Saudi Arabia of Lithium" and the mineral resource if managed well could make South America's poorest country a global player in the technology industry.

The economic rebellion in Bolivia is a victory for yet another Latin American leader who launched an ambitious experiment in statist political economy 50 years ago. Cuba's former president, Fidel Castro is without question a primary source of inspiration for MAS' left-wing nationalism and he frequently celebrates President Morales in his widely read Reflections. Today, Bolivia is a powerful alternative example for other underdeveloped countries facing mass illiteracy, poverty and inequality in the way that revolutionary Cuba once was. But before Bolivia becomes the Cuba of the 21st century it will have to survive a series of so far unyielding challenges.

Bolivia still faces relative dependency on energy reserves for export, widespread corruption in regional government and entrenched political instability. In the 1990's privatization and austerity measures promoted by the IMF in Bolivia led to increased unemployment and break downs in social services. State capacity for industry regulation and service delivery have been historically weak and despite obvious improvements, the government still faces difficulties in reaching the most remote pockets of the country with their programs.

Unlike Cuba's one-party system, MAS is seeking radical transformation through the channels of liberal democracy. In this way political economic reforms have to be won by consensus with interest groups that are existentially opposed to the Morales' agenda. The European-descended elite of Bolivia who make up the opposition to Morales, historically controlled the government and remain the primary beneficiaries of the countries mineral wealth. The efforts by the President to redistribute political and economic power among indigenous groups have been met with vehement resistance.

The opposition-led senate for instance has opposed most of MAS' proposals to overcome internal obstacles to development including corruption. In 2008, opposition leaders led violent protestors in attacking MAS supporters resulting in public condemnation from outside Bolivia among Latin American allies. President Evo Morales' ambitious agenda for reform is more broadly complicated by the calculus of electoral politics inside Bolivia. MAS its self is essentially an alliance of social movements bound together less by political ideology than their support for Evo Morales. Even if Morales wins re-election in December, long-term objectives could be easily reversed if interests within MAS splinter in the years ahead.

Though a tiny country in South America, Bolivia's political economy of development hold significant implications for other democratic developing countries around the world. Unlike their Asian counter-parts who have pursued authoritarian state-directed efforts to attract foreign direct investment for economic growth, Bolivia is attempting to grow endogenously and democratically launching a dynamic social and economic empowerment strategy for the poor.

The road ahead for President Evo Morales and his supporters is sure to be paved with even greater difficulties than in previous years. If they can win, Evo Morales will have achieved a progressive vision of state-directed development that other underdeveloped countries have so far been unable to sustain in recent years. The implications of a successful experiment will ultimately reach well beyond their immediate borders and have a significant impact on global debates in other continents.

Still Confused About the Economic Crisis? Economists Are Too

As the economic crisis reaches its one year anniversary, mixed messages continue coming from the economic "experts" about what exactly is happening in the global economy and for how much longer. Dominique Strauss Kahn, Managing Director of the IMF, claimed recently in a Italian newspaper that economic recovery could come a full quarter earlier than expected.

"For the (global) economy, we have been saying for a year that the recovery will come in the first half of 2010. It might even be a quarter ahead and that would be a good thing,"

UNCTAD on the other hand has warned recovery is not around the corner and called for the creation of a an alternative world reserve system that would replace the supremacy of the US dollar with several currencies. UNCTAD also called for tighter controls on global financial flows.

''Tumbling profits in the real economy, previous over-investment in real estate and rising unemployment will continue to constrain private consumption and investment for the foreseeable future,''

What accounts for the two very different diagnostics on the global economic crisis? There is little consensus among economists on the health of the global economy, namely because they can't agree on any complete diagnosis of the disease. How international economists forecast our economic future depends on whether or not they believe the global recession is primarily financial in nature or a much deeper structural crisis in production, and consumption of goods and services.

Governments are being asked to choose between two significantly differing views about how the global economy is functioning and therefore what sets of policies to implement to navigate the storm. Though economists love to claim complete empirical objectivity when providing policy advice, the two alternative paradigms on the "Great Recession" highlights the all important role that politics and ideology play in shaping macroeconomic change. Paul Krugman's recent analysis on the forecasting of macroeconomists is on point. The crisis in the economics profession may be just as great if not greater than the crisis in the real or financial economy---depending on your point-of-view.

Import Substitution in Modern China

I have been fascinated the last few days with a timely IMF working paper that argues rebalancing economic development in China will mean rapidly stimulating domestic demand and entering new non-tradable industries, even requiring some degree import- substitution. The paper is an ironic testament of these desperate economic times, considering the pervasive but wrong assertion among liberal economists that import-substitution failed in the 20th century. Besides ignoring the near complete decimation of important sectors within several developing national economies, the apologists for unfettered external export continue to pretend countries pursuing variations of import-substitution performed horribly. They didn't.

A blog post by Harvard economist, Dani Rodrik could not make this point much clearer. ISI "had a more-than-respectable productivity record" in the middle of the 20th century. So what are the prospects of the industrialization strategy making a comeback in the 21st? They could be greater than many care to admit.

Neoliberalism on Trial in Zambia

The former president of Zambia, Frederick Chiluba was regrettably acquitted on charges of corruption and stealing public money from the country. The press today has run a series of articles presenting criticism of the decision and the lack of justice for corrupt African heads of state in general. The cruel irony is that the BBC, New York Times and other media outlets conveniently neglect to mention that it was neoliberal policies imposed by western technocrats that facilitated the secrecy and corruption in Zambia during the Chiluba presidency.

I first learned about Frederick Chiluba writing a college research thesis about the development of opposition to privatization amongst civil society organisations, particularly trade unions in Southern Africa from 1991-2001. Chiluba won presidential elections in 1991, unseating socialist president Kenneth Kaunda who had held power since independence from British colonial rule in 1964. Chiluba's victory was heralded as a triumph for multi-party democracy and anti-statism but eventually his administration plunged the country deeper into socio-economic crisis and political corruption.

Like in other African countries, western financial institutions sought to exert their influence on public policy in Zambia by extending liquidity on the grounds that the state adopt anti-social external conditionalities. Chiluba egotistically accepted the Structural Adjustment Programs (SAPs) of the World Bank and IMF cutting price controls, ending public subsidies to various sectors of the economy, and most importantly privatizing public-owned assets like the strategically important mining industry. With the backing of international financial institutions and under the rhetoric of liberal democracy, President Chiluba purposefully ignored the human consequences of his policies on mineworkers, their families and other poor communities---not to mention trampling over basic civil liberties when opposed.

Today, the adverse impacts of neoliberalism in Zambia have made it politically unpopular to ignore the terrible human consequences and economic shortcomings of such policy prescriptions. Despite this fact, other African governments continue to routinely accept unjust external conditionalities on the cash that they receive from foreign investors. Frederick Chiluba may have escaped justice for his crimes against the Zambian people, but the neoliberal prescriptions that facilitated his downfall and ruined the economy should not.

After the Storm: Why the World Bank and IMF Must Change

"I have concluded that it is the best interests of those whom this institution serves for that mission to be carried forward under new leadership."

- Paul Wolfowitz

The World Bank is no stranger to controversy and stories of corruption. But the recent fire storm surrounding Paul Wolfowitz and his alleged favoritism has invited a larger conversation about the distribution of power with in the World Bank and its sister the International Monetary Fund. The World Bank president has traditionally been appointed by the US government, while the Europeans have chosen the head of the IMF. Developing nations and organizations are calling for a more fair and open process in deciding the leadership of the world’s preeminent financial institutions asking for, "transparency of process, and competence of prospective leadership without regard to national origin".

The calls for a non- U.S. or European dominated structure have resonated for years now as the economic emergence of countries like China and India have challenged the very nature of the current economic world-system. The National Intelligence Council, a U.S. government think tank, predicts that by 2025, China and India will have the world's second- and fourth-largest economies. This growth is opening the way for a multi-polar era in world politics. This tectonic shift will pose a challenge to the U.S.-dominated global institutions that have been firmly in place since the 1940s. Votes in the World Bank are said to reflect the size of a countries economy and not its’ population, however Europe still maintains an over-represented position on the bank’s board as compared to the China and India who are underrepresented.

In light of the Wolfowitz scandal and beyond voices will continue to push for the World Bank and IMF’s leadership to begin reflecting the people and world views of the poor nations they claim to serve. Even more importantly as non-western nations begin to take more substantial roles in the world-system it remains to be seen if the current distribution of world economic authority will remain in the benefit of the global north.