Among partygoers in progressive circles, discussions of globalization’s adverse and despicable effects on the human population can often be over-heard. Claims that globalization is feeding the money-hungry fat cats of the world while leaving most other people to struggle and die in poverty is usually the premise for the argument against globalization. It is a common analysis and popular opinion in these circles that what John Akokpari (2001:189) has labeled the “new economic orthodoxy” has created great disparities between the rich and poor not only between blocks of countries, but also within state borders. However, when compelled to identify the underpinnings of these popular arguments, i.e. to substantiate the argument, one might find that the multiple meanings of globalization, the unending list of acronyms and economic and political jargon poses a challenging explanation that may exhaust a new acquaintance and leave at least one partygoer tongue-tied (a note on the frivolity of this party scenario follows this paper). To avoid such a conundrum, this short paper aims to revisit the basics in an attempt to unravel seemingly complex world events in recent globalization and its disparity effects on Third World African countries.
First is the matter of resolving what we mean when we employ the term globalization. Seen as a “fashionable new buzzword” by Akokpari, he recognizes that it has different meanings for different people: “While for some globalization denotes a purely economic phenomenon, for others it also involves the diffusion of political and cultural ideologies” (189). The ideas of a political, cultural and economic globalization are not mutually exclusive. When characterized by the ability to find a McDonald’s fast-food restaurant in South Africa, The United States and Germany, globalization can be seen to operate within all three dimensions; politically, economically and culturally. Since globalization could be argued separately with regard to these three realms, or equally among them, we must contextualize the respect in which we use the term. That said, in the context of this short response paper, I will be using the term to refer primarily to economic globalization and its subsequent social effects on African states.
Another important aspect of globalization, which is often forgotten or undermined, is that the phenomenon did not pop up out of nowhere yesterday. Quoting Jameson, Kwame A. Ninsin says globalization can be described as late capitalism to underscore the fundamental continuity between earlier capitalisms and the present (2000:3, his emphasis). Furthermore, quoting Samir Amin, Ninsin says “the current transformations in the capitalist economy are not new: capitalism has simply entered a new phase of worldwide expansion” (3). Akokpari agrees when he says, “rhetoric about free trade, comparative advantage and the diminished role of the state, which underlie contemporary orthodoxy, are all old modernization assumptions” (2001:190). Thus globalization is an old capitalist concept that has morphed in appearance and application from its beginnings in Christian universalism some 500 years ago (Nabudere, 2000:14).
Economic globalization carries with it a doctrine of neo-liberal policies that are based on a free market. At the helm of the free market agenda are the International Monetary Fund and the World Bank institutions, which have pushed this policy from the 1970s on. During the period after decolonization when developing African countries were forced to turn to external international institutions for aid, the World Bank and IMF – Washington-based institutions, offered African states an irrefutable deal through Structural Adjustment Programs (SAPS). In the shortest terms possible the trade was money for ideological values. At a time when many new African states were premised on Marxist and socialist ideologies that were unfavorable to aforementioned Washington institutions, the trade-off came to pass that new states would have to adopt Western-style democracy and practices or risk losing external aid, in other words, “Western investments or total isolation” (Akokpari 2001:191).
In addition to this take it or break it offer, there has also been a proliferation of international agreements which obligate developing countries to “dance to the rhythm of the new orthodoxy” (Akokpari 2001:191). Among these agreements is the Multilateral Agreement on Investments (MAI). Founded and negotiated among the Organization for Economic Cooperation and Development (OECD) countries, MAI essentially opens up all sectors of the national economy to foreign investors and increases the freedom of choice of the latter about where and when to invest (192). Sold on the foundation that such an agreement will appeal to international investors and thereby incorporate the African state into broader globalized markets, MAI and other agreements ultimately undermines developmental efforts in Africa (192). Specifically, they undermine progress in what Ninsin has labeled the African’s state’s investment in “human capital formation” (2000:17).
These two projects; international loans from the IMF and World Bank, coupled with international agreements, promised developing African countries competitiveness and therefore foreign investment. However, these liberalization projects in Africa amount to a sizeable contradiction. Infrastructure, social amenities and good communication networks are key to attracting foreign investment but the African state’s obligation to the IMF and World Bank require that subsidies on these projects be withdrawn. “This contradiction is underscored by the realism that the conditions of roads, and access to water supply have seen sharp deterioration since African governments were obligated to de-subsidize social services” (Akokpari 2001:193). How can the state attract investors when the funds for sustainable development or human capital formations are not allotted? It seems that in this instance, the hands of the African state were tied together at the mercy of the “global villagers” (because no party conversation is complete without a bad pun). Ninsin highlights the devastating effects of this contradiction:
Contrary to the extravagant claims in the North that reforming Africa’s economies would redress the prevailing structural imbalances and generate economic growth, the effect of SAP has been one of deepening economic crisis, widening social inequality, rising unemployment and increasing poverty (2000:8).
That said, because states were no longer able to subsidize social programs such as health and education, these industries became privatized and thus commoditized. Not only is the privatization of social programs linked directly to disparities between rich and poor, but it is also linked to Africa’s lagging development [1]and general poverty among other things. Privatization has meant that healthcare and education costs have been transferred to the family. Ideally, families have the means to cover pertinent costs such as these, but when set against the backdrop of widespread unemployment in Africa due to SAPs, how is it that African homes acquire the means for such costs? Akokpari says, “The experience of Africa under SAPs shows that liberalization synonymised death warrants for most local industries” (2001:197). Because Africa’s industries were/are being out-done by international companies with access to new technology and thus increased exports at lower costs, many local companies were made redundant, hiking Africa’s unemployment rate to 35% since the early 1990s (Akokpari 2001:198).
Ninsin says that market reforms made by the SAPs deals and their subsequent effects on employment, have not just affected the working class, rather, “market reforms have affected the economic position of all classes as a result of the restructuring of opportunities for generating income and wealth” (2000:19). “Existing social structures have been undergoing tremendous change: they have been disorganized (decomposed) and reconstituted as a result of the losses in real income and wealth that has affected them, either as self-employed or salaried workers” (Ninsin, 2000:19). Ultimately, retrenchment affects all social classes.
This analysis of SAPs and Africa’s subsequent integration in the global economy seems to create a cycle whereby African industries lag on a global level in terms of export production due almost primarily to lack of access to technological advances. However, because African states have not been able to produce sustainable developments in either their human resource sectors or infrastructures, there is not money to invest in neither technology advancements nor the work force to operate them without resorting to more external borrowing. Coming full circle, external borrowing from Western institutions only further entrenches the African state into privatization programs and free markets. Ultimately, what I am trying to address here are the underlying reasons for global disparity and disparity within the state itself. What I have described so far is the narrative of ideas and events that have lead to the widespread proliferation of capitalism as orchestrated by developed countries. As Ninsin points out,
The heart of the matter is that capitalist development is intrinsically unequal: it ‘tends to promote a Social Darwinist reconfiguration of priorities, policies and outcomes’ (Gill, 1995:71) resulting in what Tehranian calls global apartheid in which Africa is not just at the periphery but the bottom of the heap (2000:9).
Capitalism on a national and international scale has promoted inequalities within the state and between states respectively. In popular discourses on the matter, the “West” or the “global North” have been identified as taking the upper hand of the capitalism scheme. However, Akokpari warns that these polarizations have lost validity in recent times, adding: “Today, the central dichotomy is between the winners and losers in the international economy; between the regions, which enjoy the gains and those, which suffer the pains of globalization” (Akokpari 2001:194).
Thus, I return to the party scenario described in the introduction paragraph. When paired with a 35% unemployment statistic in Africa as well as widespread poverty, the party scenario seems disastrously inane. However, the point of it is simply to highlight that many people discuss world poverty in terms that are unspecific and often misunderstood – particularly, as I have found, in the United States. It is important to know what we are talking about when stating an opinion if for nothing more than to shed light on common misperceptions of the Third World in the First.
[1] Ninsin recognizes that development is generally viewed as a modernization project with euro-centric underpinnings. He notes that he defines it as “the process by which people create and recreate themselves and their life circumstances to realize higher levels of civilization in accordance with their own choices and values” (2000:7).
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