|DAY II of Scholars' seminar global financial crisis & Africa: Transforming Africa’s economic structure|
|Written by Kwesi W. Obeng|
|Wednesday, 23 March 2011 10:23|
Day two of the ongoing seminar on the global financial crisis and Africa kicked off with two presentations on the Lessons from the Global South and Strategies for Africa’s Transformation and Structural Issues for Agrarian transformation in a Primary Commodity Export Economy.
Africa has failed to resolve the fundamental agrarian questions – distribution issue, questions around productivity and value addition. According to Prof. Sam Moyo, the distribution question is not just simply an issue of equity and social but a structural question which is further reinforced by the significant enclaves of ownership of land and other factors of production.
The emerging phenomenon of land grabbing or dispossession is not only driven by the externally driven financialisation process but is also internally driven by the logic that the African agrarian question cannot be resolved without dispossession.
Moyo noted that there has been significant decline in productivity in Africa over the last two decades in terms of per capita albeit not in yields, with very few exceptions. “The productivity decline is a major disaster for the continent”.
A very high emphasis on trade for trade sake has undermined value addition and severely narrowed any possibilities of local accumulation in most African countries. This is visible in the shift from food sufficiency to a nation of food security based on the market with major consequences for Africa. A big chunk of Africa’s consumption is based on food imports. The continent is thus the most vulnerable to global price and supply shocks. For example, Botswana monopolised and displaced pastoralists and peasants to produce beef for the international market.
However, the Green Revolution Model is not an option as it fails to address Africa’s agrarian question. The Green Revolution Model which fundamental targets middle to upper small-scale farmers is “not a sustainable model”, said Moyo. Defending the land rights of peasants as part and parcel of agrarian transformation is an important component of the way forward.
In a presentation on the “Lessons from the Global South & Strategies for Africa’s Transformation”, Martin Khor, Executive Director of the South Centre, said African nations need to reduce their dependence on foreign finance and flows, promote domestic savings and channel resources to productive sectors, improve macroeconomic policy amongst others to own their production and value addition chain.
Khor also recommended a mixture of foreign and local companies as applied by Asian countries such as Malaysia and Singapore. Again, in Africa, the regional element is essential not least because of the economies of scale. On this the various sub-regions, Khor suggested could set up their own shipping lines and similar companies to provide such services.
The debt crisis in Africa and Latin America in the 1980s and the establishment of the World Trade Organisation much later gave the World Bank and other IFIs a new lease of life. The orthodoxy promoted by these institutions claim that poor countries such as found in Africa do not have sound capitalists (local capitalists where they exist are cronies), these countries do not have the markets and their farmers are primitive.
Yao Graham in a presentation on “Minerals and Development: Beyond the Enclave”, said the high growth in Africa between 2002 and early 2008 was based on a very traditional model –the colonial model – which was refurbished by the Structural Adjustment Programmes of the 1980s and 1990s.
Other issues thrown up about the African economy by the crisis, said Graham include the myths around Botswana’s mono export economy, one of the worst hit countries but once held up as model for the continent. Botswana is a major exporter of diamonds and in the collapse of commodities, diamonds and copper recorded the worst slump. The crisis has also exacerbated the price volatility of key exports of African economies especially mineral commodities as well as highlighted African governments’ inability to manage the mining sectors which they opened up under very liberal terms.
The African Mining Vision (AMV) at the very least offer a political opportunity to transform the mining sector to benefit these African countries. The African Mining Vision is captured as a strategy of industrialisation.
Prior to the boom, the African mining sector was predicated on a strategy of rent and a lesson emerging out of this boom is that such a strategy is both insufficient and even flawed.
Starkly, Graham said the new institutions created in many African countries to regulate and monitor the mining industry genuinely believe that the current model is the best and that’s not because they are corrupt.
There is also renewed scramble for Africa and this finds expression in various forms. The EU Minerals Initiative which cuts across diplomacy to trade regime is part of this intensified scramble for Africa’s raw materials.
There are constraints to this reform agenda. Some areas of mining involve proprietary technology. Regional approaches are unavoidable because mineral resources cut across national boundaries. Another challenge of the reform agenda, Graham said is how to win communities whose experience with mining companies has been largely negative.
Day three presentations also focus on strategies for transformation; socio-political aspects of growth and transformation in Africa; comparative regional strategies responses to global crisis and comparative regional responses to global crisis: the case of Asia.
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