***************************Document profile.************************
Geographical Area: All AFRICA
Human Rights area(s): ALL
Author: PATRICK BOND
Document origin: AIDC (ALTERNATIVE INFORMATION FOR DEVELOPMENT CENTRE)
Date written: aPRIL 24, 2002
Topic: :NEPAD annotated critique from South Africa
Summary and Comment:
Excerpts from presentation by Patrick Bond based on a 37,000 word
critique of most sections of the NEPAD document, as presented to a
seminar in Joburg, including cabinet ministers and many civil society
groups.. (the full document available from The critique consistently shows the narrowness of assumptions and the
limited world of international finance and government, their lack of
consultation with civil society, and the many internal contradictions
within the document itself.
Many notes begin with the phrase "what if..." and go on to suggest
other assumptions, and interpretations that are not even considered
by NEPAD.
JK
********************************************************************
Hi all,
We've finally put together a 37,000-word draft AIDC critique of Nepad
(virtually every paragraph gets a rebuttal). We'd love some comradely
critique. It debuted yesterday at Cosatu House following the government's
quite low-key presentations (by Alec Erwin, Wiseman Nkuhlu and Joel
Netshitenzhe)
Here were some of the points from my overhead slides (unless otherwise
cited, the material in quotes " " comes from Nepad). If you want the full
report (800kb), let me know off-list...
Patrick Bond. Wits U.
*************************************************************************
NEPAD: AN ANNOTATED CRITIQUE
Notes to Cosatu CEC, 24 April 2002
o This critique consists of rebuttals to most Nepad provisions. It was
compiled from January-April 2002 by critical intellectuals associated with
the Alternative Information and Development Centre. It mainly seeks to
educate other progressives in the rest of Africa, and across the world,
about contradictions, controversies and even hypocrisies associated with
Nepad's host (secretariat) country and catalyst leader, so South African
issues are given perhaps excessive attention.
o Although the authors agree that top-down improvements in Africa's dire
situation are welcome, this critique takes the viewpoint that genuine
solutions to the major problems affecting Africa will really only come from
the bottom up.
***
CONSULTATION?
"51. The New Partnership for Africa's Development will be successful only if
it is owned by the African peoples united in their diversity."
"It is significant that in a sense the first formal briefing on the progress
in developing this programme is taking place at the World Economic Forum
meeting. The success of its implementation would require the buy in from
members of this exciting and vibrant forum!"
Mbeki's prepared speech to the World Economic Forum, Davos, January 2001
o Who wrote Nepad, and what inputs were important?
o During the formulation of Nepad, no trade union, other civil society,
church, political-party, parliamentary, or other potentially democratic or
progressive forces were consulted.
o In contrast, extensive consultations occurred with the World Bank and IMF
(November 2000 and February 2001), transnational corporations and associated
government leaders (at Davos in January 2001 and New York in February 2002),
the G-8 (in Tokyo in July 2000 and Genoa in July 2001), the European Union
(November 2001) and individual Northern heads of state.
***
PHRASEOLOGY
"1. ... The Programme is anchored on the determination of Africans to
extricate themselves and the continent from the malaise of underdevelopment
and exclusion in a globalising world."
o Nepad begins by framing the problems using phrases such as "exclusion" and
"a globalising world"--instead of the critical language traditionally used
by great African analysts, e.g., "neocolonialism" and "imperialism."
o The automatic presumption is that the "poverty" and "backwardness" of
Africa are as a result of "exclusion" and "marginalisation" from
"globalisation."
o A different presumption, not even considered, is that worsening poverty
for the masses is an intrinsic feature of globalisation, much as it was a
corollary of apartheid in South Africa.
***
LESSONS OF THE PAST?
"27. The New Partnership for Africa's Development seeks to build on and
celebrate the achievements of the past, as well as reflect on the lessons
learned through painful experience, so as to establish a partnership that is
both credible and capable of implementation."
o None of these achievements--especially mass civil-society protests that
threw off the yokes of slavery, colonialism and apartheid--are specifically
mentioned in Nepad.
o Nor are the constructive, solidaristic suggestions made by an earlier
generation of African nationalists in the Lagos Plan of Action mentioned,
much less taken forward--on the contrary, Nepad celebrates the WTO, IMF,
World Bank and transnational corporations.
o To "reflect on lessons learned" would occur in a blinkered way, so as to
avoid a more thorough-going analysis and set of policy options. Thus none of
the anti-imperialist ideas of the most progressive architects and analysts
of 20th century African political and socio-economic liberation--e.g., Ake,
Amin, Biko, Cabral, Cheru, Fanon, First, Kadalie, Lumumba, Machel, Mamdani,
Mkandawire, Nabudere, Nkrumah, Nyerere, Odinga, Onimode, Rodney, Sankara,
Senghor, Shivji--are considered worthy of reference, much less engagement.
***
UNDERSTANDING NEOLIBERALISM
"24. The structural adjustment programmes of the 1980s provided only a
partial solution. They promoted reforms that tended to remove serious price
distortions, but gave inadequate attention to the provision of social
services."
o What if structural adjustment represented not "a partial solution" but
instead, reflecting local and global power shifts, a profound defeat for
genuine African nationalists, workers, peasants, women, children and the
environment?
o What if the structural adjustment programmes of the 1980s-90s were the
result not of independent Africans searching honestly for "solutions," but
instead mainly reflected the dramatic shift in power relations at both
global scale (where financial and commercial circuits of capital were in
ascendance) and within individual African states, away from lobbies
favouring somewhat pro-poor social policies and (at least half-hearted)
industrial development, towards cliques whose strategies served the
interests of acquisitive, overconsumptive local elites, Washington
financiers, and transnational corporations?
o What if "promoting reforms" really amounted to the IMF and World Bank
imposing their cookie-cutter neoliberal policies on desperately disempowered
African societies, without any reference to democratic processes, resistance
or diverse local conditions?
o What if the removal of "serious price distortions" really meant the repeal
of exchange controls (hence allowing massive capital flight), subsidy cuts
(hence pushing masses of people below the poverty line), and lowered import
tariffs (hence generating massive deindustrialisation)?
o What if "inadequate attention to the provision of social services" in
reality meant the opposite: excessive attention to applying neoliberalism
not just to the macroeconomy, but also to health, education, water and other
crucial state services? And what if the form of IMF/Bank attention included
insistence upon greater cost recovery, higher user-fees, lower budgetary
allocations, privatisation, and even the disconnection of supplies to those
too poor to afford them, hence leading to the unnecessary deaths of millions
of people?
***
"RAPID INTEGRATION INTO THE WORLD ECONOMY"
"52. Africa, impoverished by slavery, corruption and economic mismanagement
is taking off in a difficult situation. However, if her enormous natural and
human resources are properly harnessed and utilised, it could lead to
equitable and sustainable growth of the continent as well as enhance its
rapid integration into the world economy."
o All evidence thus far is that "equitable and sustainable growth of the
continent" and "rapid integration into the world economy" are mutually
exclusive.
o Although Africa's share of world trade has declined during the 1980s-90s,
the volume of exports increased. So "marginalisation" has occurred not
because of lack of integration, but because other areas of the
world--especially East Asia--moved to the export of manufactured goods while
Africa's industrial potential declined thanks to excessive deregulation
associated with structural adjustment.
o Likewise, while integrating more rapidly into the world economy through
the 1980s-90s orientation toward "export-led growth," as demanded by
Washington, Africa's ability to grow--either equitably and sustainably, or
even inequitably--actually declined, in comparison to the period prior to
structural adjustment.
***
ILLEGITIMATE DEBT REPAYMENT?
"149. ... Countries would engage with existing debt relief mechanisms - the
HIPC and the Paris Club - before seeking recourse through the New
Partnership for Africa's Development. The Debt Initiative will require
agreed poverty reduction strategies, debt strategies and participation in
the Economic Governance Initiative to ensure that countries are able to
absorb the extra resources."
o Nepad refuses to question the moral legitimacy of debt repayment, even
though the Jubilee campaign has raised this issue to an unprecedented level
of consciousness at the world scale.
o Post-apartheid South Africa is the most notorious of African countries for
denial of its Third World debt crisis. Thabo Mbeki and Trevor Manuel
***
SOUTH AFRICA'S ROLE IN GLOBAL GOVERNANCE?
Since 1994, South African leaders have presided over:
o the board of governors of the IMF and World Bank,
What meaningful reforms are there to show for this?
***
MACROECONOMIC STABILITY
"49. ... African leaders will take joint responsibility for the
following:... Restoring and maintaining macroeconomic stability, especially
by developing appropriate standards and targets for fiscal and monetary
policies, and introducing appropriate institutional frameworks to achieve
these standards..."
o Virtually all structural adjustment programmes in Africa generated
instability (Zimbabwe is one of the most tragic examples).
o South Africa's determined, neoliberal fiscal and monetary
strategies--maintaining the budget-deficit/GDP radio at a target of less
than 3% and imposing high real interest rates to reduce inflation to below
6%--were, along with trade liberalisation, contributing factors to the loss
of more than 10% of formal sector jobs during the first seven years of ANC
rule (the worst ever recorded in an industrialised country outside war and
the Great Depression).
o Financial liberalisation was responsible for two crashes of the currency
of 30% over several weeks (early 1996 and mid-1998) and the 60% crash that
occurred during the 2000-01 period when Nepad was being prepared.
***
PRIVATISING INFRASTRUCTURE AND SOCIAL SERVICES
"106. ... Promote PPPs as a promising vehicle for attracting private
investors, and focus public funding on the pressing needs of the poor, by
building capacity to implement and monitor such agreements;"
"115. ... Establish and nurture PPPs as well as grant concessions towards
the construction, development and maintenance of ports, roads, railways and
maritime transportation;"
"154. ... The next priority is the implementation of a Public- Private
sector partnership (PPP) capacity-building programme through the African
Development Bank and other regional development institutions, to assist
national and sub-national governments in structuring and regulating
transactions in the provision of infrastructural and social services."
***
PPPs IN SOUTH AFRICA: A MODEL FOR NEPAD?
Just some bad examples?:
o water and sanitation, where in 2001 unacceptable problems emerged in key
pilot projects run by the world's biggest water companies (e.g., Nkonkobe
sued to cancel its disadvantageous long-term contract with Suez due to
overpricing and underservicing, including ongoing use of the "bucket system"
of sanitation, Dolphin Coast where Sauer demanded--and won--a renegotiation
of its contract in order to raise tariffs because profits were insufficient,
and Nelspruit where Biwater was sharply criticised for failing to extend
services and cutting off services to low-income residents);
o electricity, where privatisation of generation is being planned, and where
commercialisation of the state utility led to higher tariffs for residential
customers (as cross-subsidies came under attack), a slowdown in the
extension of the electricity grid to low-income rural residents, and to the
disconnection of tens of thousands of households who had fallen into arrears
on inflated bills;
o in transport, toll roads which local residents could not afford, and
private kombi-taxi transport (dangerous due to profit pressures), an
increasingly corporatised rail service (which shut down many unprofitable
but socially useful feeder routes), and air transport (the national
airline's disastrous mismanagement and subsequent need for renationalisation
in November 2001);
o ports, where unsuccessful high-profile attempts were made from 1996-2002
to establish a public-private partnership for construction and management of
a new deep harbour and container terminal at Port Elizabeth's Coega location
(repeatedly delayed by the failure of government to establish a viable
business plan and core tenant);
o other transport such as rails, where following an agreement with the main
Cosatu trade union transport affiliate (Satawu) not to privatise key lines
in 2001 (as one quid pro quo for Satawu accepting 8,000 job cuts), the ANC
government apparently backed out of its side of the deal in April 2002;
o fixed-line telecommunications, where the cost of local phone calls
skyrocketed as cross-subsidisation from long-distance (especially
international) calls was phased out, where hundreds of thousands of
disconnections have occurred due to unaffordability (termed "churning" of
lines), where a second fixed-line operator was first discouraged then
encouraged under pressure from competing commercial interests (ensuring
ongoing confusion as to regulatory intention), and where attempts to cap
fixed-line pricing by the state regulator were rejected by the
Texan/Malaysian partnership through a court challenge and a threat to sell
their 30% share of the telecommunications company;
o cellular telecommunications, where a collusion pact exists between the two
main operators, and where persistent allegations of corruption (of state
officials) stymied the introduction of a third operator.
***
PPPs AND COMPETITION?
"106. With the assistance of sector-specialised agencies, put in place
policy and legislative frameworks to encourage competition."
o Most infrastructure is of a "natural monopoly" type, for which competition
is unsuitable: roads and railroads, telephone land lines (including
optic-fibre), water and sewage reticulation systems, electricity
transmission, ports and the like.
o Nepad cannot make a case for competition in these areas; there is, in
contrast, an extremely strong case, based on "public-good" and "merit-good"
features of infrastructure, for state control and non-profit operation.
o Privatisation of infrastructure usually prevents the cross-subsidisation
required to assure affordability for poor consumers.
***
WAYS FORWARD?
"55. The political leaders of the continent appeal to all the peoples of
Africa, in all their diversity, to become aware of the seriousness of the
situation and the need to mobilise themselves in order to put an end to
further marginalisation of the continent and ensure its development by
bridging the gap with the developed countries."
o Other voices:
"Most participants in the group rejected Nepad and suggested we should come up with alternatives. [It was] recommended [that we] reject neo-liberal
framework in which Nepad was drafted and discuss alternative models for
development."
Africa Social Forum, The Africa Social Forum Report, Bamako, Mali, 9 January
2002
"[We expressed] apprehension over the prominence given to the Nepad... We
oppose any attempt to use it to deepen Africa's external dependence and the
exploitation of its resources."
African Caucus, "Statement by the African Caucus on the 4th PrepCom on
Financing for Development," New York, 25 January 2002
"I sympathise with those who would minimise, rather than with those who
would maximise, economic entanglement among nations. Ideas, knowledge,
science, hospitality, travel--these are the things which should of their
nature be international. But let goods be homespun whenever it is reasonably
and conveniently possible and, above all, let finance be primarily
national."
John Maynard Keynes, (1933), "National Self-Sufficiency," Yale Review, 22,
4, p.769.
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a) agreed to repay the apartheid foreign debt to commercial banks when it
was last rescheduled in October 1993;
b) claimed, repeatedly, that there is no foreign debt owed by the South
African government (by ignoring more than $25 billion parastatal and private
sector debt, for which the South African state inherited repayment and
guarantor responsibilities);
c) negated the possibility of demanding reparations for previous foreign
credits to the apartheid regime; and
d) endorsed, repeatedly, the Highly Indebted Poor Countries initiative of
the G-8, IMF and World Bank, which proved such a distraction from the cause
of debt cancellation.
o the Non-Aligned Movement,
o the United Nations Conference on Trade and Development,
o the Commonwealth,
o the Organisation of African Unity,
o the Southern African Development Community,
o the World Commission on Dams, and
o a host of other international and continental bodies.