New African Resistance to Global Finance

Linked with Patrick Bond – South Africa, and with School of Development Studies.

Published on MRzine, by Patrick Bond, Oct. 25, 2008.

… Africa has always suffered a disproportionate share of pressure from the world economy, especially in the sphere of debt and financial outflows.  But, for those African countries which made themselves excessively vulnerable to global financial flows during the neoliberal era, the meltdown had a severe, adverse impact.

In Africa’s largest national economy, for example, South African finance minister Trevor Manuel had presided over steady erosion of exchange controls (with 26 consecutive relaxations from 1995-2008, according to the Reserve Bank) and the emergence of a massive current account deficit: -9% in 2008, second worst in the world …

… The IMF’s September 2006 Global Financial Stability Report, after all, claimed that world finance showed “exceptionally low market volatility.”  Moreover, global economic growth “continued to become more balanced, providing a broad underpinning for financial markets” …

… Activists should contemplate whether to “Seattle” the event; African social movements and a few patriotic African trade ministers were, after all, not only present but instrumental in preventing the World Trade Organization’s Seattle summit from proceeding nine years earlier.

A serious danger for civil society would be to settle for a UN-sponsored event full of reformist reforms.  Enormous damage to Southern finances was caused by the UN’s 2002 Financing for Development conference in Monterrey, Mexico, which had as key advisors Michel Camdessus (former IMF managing director) and Trevor Manuel.  The latter is under consideration for a top IMF job now.

Moreover, much more forthright national action can be taken against global finance, spurred by far-seeing civil society activists, such as those who demand reparations for apartheid, colonialism, slavery, and “ecological debt” owed by the North to the South.  Africa needs to reimpose national exchange controls and import controls (especially on luxury goods for the elites), as installed successfully by Malaysia, Chile, and Venezuela in recent years.

As commodity prices plunge from their 2002-07 speculation-driven bubble prices (such as a 70% drop in mining shares since May), as trade deals with the North are unveiled as clearly disadvantageous, as trade finance becomes difficult as a result of bank mistrust of counterparty debt, and as hot money portfolio flows dry up and new sources open for hard currency, the argument for what Africa’s greatest political economist, Samir Amin, calls “delinking” becomes all the more compelling.

It is already beginning to happen, in no small part thanks to civil society advocacy. (full long text).

(Patrick Bond directs the Centre for Civil Society in Durban, South Africa. This was originally a ZNet commentary).

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