The ugly face of capitalism in Africa

Neoliberalism and neo-fascism are two sides of the same coin. In the case of South Africa and Namibia they clearly mean neo-apartheid, crudely disguised as ‘free-market economy’. A better description would however be: ‘the same old colonial status quo from 1946 remains in place in 2010 and beyond, which is predatory, feeding on structured poverty that is destroying the black majority’. This is indeed an economic genocide.

Professor Patrick Bond from the University of KwaZulu/Natal in Durban, comments in his book, ‘The Elite Transition: From Apartheid to Neo-liberalism in South Africa’, ‘ … the regime (government in Tshwane/Pretoria) now seeks to incorporate the black elites, a measure which, at this late hour, and in the manner of its conception and execution, more resembles a strategy of counter-insurgency than a commitment to fundamental reform.’

Towards the end of 1996, Black Economic Empowerment (BEE), or as it is described today, Broad-Based Black Economic Empowerment (B-BBEE), was accepted as an opportunistic hoax to divide and re-conquer. Professor Bond described such ‘board room strategising’, ‘If there ever was a case that white South African elites (this writer would include their global network of foreign interests) laid a neo-liberal ambush for their successors, BEE (B-BBEE) is it.’

The aforementioned structures and ‘globalisation’ (centralisation of all economies, industries and financial structures) pose a serious challenge to any head-of-state, his government and the ruling party, to accept the responsibility of power. However, it is also a threat.

This needs to be explained. Bond documents, ‘Across the Third World, Structural Adjustment Programmes imposed by the IMF and World Bank to obtain the repayment of foreign debt have led to famine, environmental destruction and the dismantling of health, education, infrastructural and social welfare programmes. These programmes nearly always include the same set of measures: currency devaluation, decontrol of exchange rates, higher interest rates, financial deregulation, trade liberalization, privatization, wage cuts, reduction in the public service through budget cuts and massive retrenchments as well as labour market deregulation.’

The above-mentioned is always borne by the majority of the population, which also happens to be victims of structured, chronic poverty. This majority eventually becomes restless and would be exploited by a host of covert interests of destabilisation. The state needs to manage it.

‘Structural Adjustment Programmes have also made small economies (such as Mozambique, Zambia and Zimbabwe, as cases in point - the writer) vulnerable to transnational corporations that exploit cheap labour (often imprisoned in union-free export processing zones devoid of health and safety regulations, with wages that sink to USD1 per day) and dump toxic wastes and poisons produced in the rich industrialized countries (of the First World – the writer).’

‘According to the United Nations, developing countries paid USD1,662 trillion in debt servicing between 1980 and 1992. This amount is three times the original amount owed in 1980. Yet, in spite of the above transfers the total Third World Debt still stands at over USD2 trillion. It is not commonly known that the Third World has repaid almost a trillion Dollars of principle over and above USD771 billion in interest,’ Bond observes.

It would be a real challenge for South Africa’s president Jacob Zuma, his cabinet and government and the ruling ANC – possibly with the assistance of Brazil, India, China, and the Federal Republics of Russia – to close the offices of the World Bank in Johannesburg and let their economists compete for jobs in the private sector.

Any form of dependence on international financial institutions would undermine the power of the state and undermine national self-sufficiency, which would lead to instability.

A case in point in the Third World is Haiti. In the October 2010 edition of the pan-African magazine, ‘New African’, author Ifa Kamau Cush, highlights the history of that country and the consequences it has to suffer to this day. She referred to Dr Hilary Beckles of the University of the West Indies, who is a known historian on slavery from Africa.

Haiti’s Revolution of 1805 under its leader, Jean-Jacques Dessalines, created a protective freedom for enslaved Africans in North, Central and South America, the Bahamas and Jamaica.

Haiti had become the geographic location for African refugees from Christian civilized enslavement, torture, mutilation and certain death.

But, by 1825 Haiti was bankrupted and isolated. The French stepped in and dictated to Haiti’s government that: ‘they were willing to recognise the country as a sovereign nation. But, it would have to pay compensation and reparations in exchange’, Cush documented.

‘The French valued “their” assets at 150 million gold francs, which the Haitians were compelled to pay in exchange for recognition. Final payment was not made until 1947 – a full 120 years later,’ Cush writes in ‘New African’.

Cush writes on, ‘The present-day value of Haiti’s extortionate payments to France is USD22 billion! In 2004, the now exiled Haitian president, Jean-Bertrand Aristide, demanded that money from the French government. Because of his demand, ‘French soldiers, with the military help of the United States and Canada’ overthrew Aristide and forced him into exile. Aristide now lives in South Africa.’

South Africa is part of the SADC, a member of the AU and the UN. It is part of the ‘global village’. It is also part of the G-20 and serves on the UN Security Council. This gives little room for maneuver. Its economy remains hostile, as it identifies itself with its perceived kith-and-kin, the self-proclaimed international West, led by the US and the UK, backed by Canada, Australia, New Zealand, the EU and Israel, and not with its host and the continent, where it benefits handsomely from the immense wealth of resources.

Economists compared the American economy, which is similar to South Africa’s, to the former Soviet Union’s economic structures. They arrived at a conclusion that these economies are all steered from a privately owned ‘central command system’.

Given the above framework and in the context of the ‘global economic meltdown’, brought about by an American bank, ‘Lehman Brothers’, it will be a challenge for any government to redistribute wealth, retain national stability and generate economic growth.

The founding father of the American Revolution, Benjamin Franklin stated: ‘The refusal of King George III of Britain to allow the colonies to operate an honest money system, which freed the ordinary man from the clutches of the money manipulators was the prime cause of the (American) revolution.’

If the persistent strategy of a modern-day enslavement through debt is not controlled and banks not rigorously reigned in, national, regional, continental and finally, global stability would be under serious threat.

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* Udo W. Froese is a journalist based in South Africa.
* Patrick Bond’s ‘The Elite Transition: From Apartheid to Neo-liberalism in South Africa is published by Pluto Press ISBN-10: 0745310249.
* Please send comments to [email protected] or comment online at Pambazuka News.