Mixed Fortunes of Globalization in Africa

Published on 5th December 2006

Globalization is a buzz word that is gaining increasing importance all over the world. Today the world appears radically altered. A new age of freedom has harnessed new technologies that have transformed production and communication. A very significant feature of the global economy is the integration of the emerging economies in world markets. More countries are now integrated into a global economic system in which trade and capital flow across borders with unprecedented energy. In fact, the weight of global economic activity is gradually shifting to these emerging economies that now account for more than two-fifths of world exports, compared to a fifth 25 years ago. The age of freedom is also the age of economic growth.


Globalization has spurred inequality--both in the wealthiest countries as well as the developing world. China and India compete globally, and yet only a fraction of their citizens prosper. Increasing inequality between rural and urban populations and between coastal and interior areas in China could have disastrous consequences in the event of political transition. Forty of the poorest nations, many in Africa, have had zero growth during the past twenty years. Their governments followed advice from wealthy nations and World Bank consultants on issues ranging from privatization to development, but millions of people suffer from poverty. Ironically, the wealthiest people benefit from the source of cheap labor. Policies of the West reinforce a growing divide between the rich and poor.


The achievements of globalization should not blind Africa to the new anxieties that it has brought in its wake. Globalization is yet to touch Africa. It has not removed personal and regional income disparities. In many countries of Africa, growth is bypassing the rural areas. In the face of stagnation in real pay, working classes in industrialized countries are becoming fearful of the opening of markets. This, coupled with the inability of the public sector to provide adequate and quality services in health and education, and cater to the needs of the poor, is causing resentment and alienation.


Nearly two-thirds of the population of Africa lives in rural areas contrasted with less than ten per cent in the developed world. Globalization has driven the block between social classes in the rich countries, while in the poor world; the main divide is between countries: those that adjusted to globalization and, in many areas, prospered and those that adjusted badly and, in many cases, collapsed.


The Third World was never a bloc the way that the first and second worlds were. It was united by its opposition to colonialism and dislike for being used as a battlefield of the two then-dominant ideologies. As the Second World collapsed and globalization took off, the latter rationale evaporated and a few countries, notably India and China, accelerated their growth rates significantly, enjoying the fruits of freer trade and larger capital flows. Although the two countries adapted well to globalization, there is little doubt that their newfound relative prosperity opened many new fissure lines. Inequality between coastal and inland provinces, as well as between urban and rural areas, skyrocketed in China. So did, inequality between Southern Indian states, where the hub cities of Mumbai, Hyderabad, Chennai and Bangalore are located, and the slow-growing Northeast. For China, which still may face political transition to democracy, widening inequality between different parts of the country could have disastrous consequences.


Another large group of Third World countries in Latin America, Africa, and former Communist countries, experienced a quarter century of decline or stagnation punctuated by civil wars, international conflicts and the plight of AIDS. While the rich countries grew on average by almost 2 percent per capita annually (1980-2002); the poorest forty countries in the world had a combined growth rate of zero. For large swaths of Africa, the income level today is less than 1 dollar per a day.


For these countries, the promised benefits of globalization never arrived. Social services were often taken over by foreigners. Western experts, technocrats arrived by jets, stayed in luxury hotels and hailed obvious worsening of economic and social conditions as a step toward better lives and international integration. Indeed, for many people in Latin America and Africa, globalization appeared as a new, more attractive label put on the old imperialism, or worse as a form of re-colonization. The left-wing reaction sweeping Latin America, from Mexico to Argentina, is a direct consequence of the fault lines opened by policies designed to benefit Wall Street, not the people in the streets of Asmara or Kampala.


Other Third World states--particularly those at the frontline of the battle between communism and capitalism--exploded in civil wars and social animosities. That part of the world associates globalization with disappointment, resentment, poverty, disease and war. In several sub-Saharan African countries, life expectancy at the turn of the twenty-first century is not only where it was in Europe almost two centuries ago, but is getting worse. In Zimbabwe, between 1995 and 2003, life expectancy declined by eleven years to thirty-nine years.


Ideologies which proposed some economic betterment and offered self-respect to many people in Africa have given way to self-serving oligarchies that justified their policies, not by calling on their own citizens, but by publishing excerpts from reports written by the World Bank and the International Monetary Fund.


The desperate African masses, that want to flee their own countries, leave not only because incomes are low and prospects bleak, but also because of lack of confidence that either they or their governments, no matter who is in power, can change life for the better.


An interesting coincidence of interests emerges between the desperate masses and the rich in advanced countries. The latter, educated and with considerable property “interests,” are economically, often in favor of greater Third World competitiveness and migration since, either as investors abroad or consumers of cheap labor services at home, they benefit from low-wage labor. This unlikely coincidence of interest lends some superficial justification to the claims of George Bush and Tony Blair that the opponents of free-trade pacts work against the interests of the poor. The problem that the duo fail to acknowledge, or realize, is that many of the policies urged by their governments on poor countries have indeed brought people to their current point of desperation.


Sandwiched between this unlikely “coalition” of the global top and the global bottom are globalization’s losers: the lower and middle classes in the West, and those in the “failed” states, not yet sufficiently desperate to board the boats to Europe or cross the U.S. border at night. They too are lost in terms of their national sovereignty and personal income. They may not gladly accept that they are morally inferior. They do not seem likely to derail globalization. Yet in a more interdependent world with an easy access to deadly weapons, politics of global resentment, may find many followers.


To convince Africans about the benefits of globalization, we must take a more enlightened view of liberalizing trade, services and labor intensive manufacturing in which African countries are competitive. Trade is not only a means to prosperity, but also a means of peace building. We need to devise an enlightened approach in approaching negotiations over the reduction of harmful gas emissions, intellectual property rights, life saving drugs and transfer of technologies that help to combat poverty.

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