Crisis Governance
Since autumn 2007 and the collapse of the US sub-prime loans market, most of the centres of global capitalism have suffered a sharp economic slowdown. The contours of this crisis are as complex as the labyrinthine secondary markets that allowed professional financial speculators to dissemble, gamble and secure multi-million dollar incomes for themselves. However, there is no denying that global capitalism is undergoing a historically significant period of recession and turbulence, ‘the sharpest and most synchronised global downturn for generations’, if the UK Chancellor of the Exchequer is to be believed (Darling 2009). The recession has evoked references to the Great Crash of 1929/1930 and encouraged public intellectuals to make bold diagnoses and prognoses. It is clear, too, that the prognoses being mooted are relatively radical: it is no longer heresy to speak of re-regulation, nationalisation or capital controls; and it is certainly the case that the former orthodoxy of laissez-faire has been attenuated by a bundle of policy recommendations which consistently locate the state at the centre of proposed strategies for recovery. But while this might constitute evidence of the demolition of neo-liberal dogmas (Toussaint and Millet 2009), it offers little reassurance that neo-liberalism will be ‘revolutionarily transformed’ as a consequence, or that any resulting reconfiguration would not empower the political and financial classes, ‘the people who got us into this mess’ (Harvey 2009).
Crisis management, not liberalisation, is the real art of contemporary governance in the West. The governance of crisis in the West has thus far hardly excited the aspirations of progressive political movements based in a socialist critique of capitalism. Nor is there much evidence of a social-democratic ‘second movement’ against the marketisation of society as Karl Polanyi outlined. Rather, crisis management has been largely formulated in ways that rescue large private financial institutions and offer only the lightest of regulatory impositions. However, if Western state policy making is predictably faithful to existing structures of wealth and property, it is important to consider crisis management within a global context. After all, it is evident that the ticking time bomb of systemic asset overvaluation and loose lending in the US is affecting all parts of the world.
Global crisis is not simply ‘economic’; it takes place within a capitalist political economy which is, ab initio, structured through a system of nation-states which maintain a kind of formal sovereignty in tension with an extreme material inequality. It is hardly surprising then that ‘crisis’ is politically constructed in different ways, depending on state, region and history. The ‘Lockean heartlands’ of global capitalism rely – as they have done for at least 200 years – on the liberal political economy of a strong state. The strong state is not alien to economic liberalism or political projects of neoliberalism in the post-second world war period. It is constitutive of the emergence of private property, industrial capitalism, empire, commerce, and social stability.
However, these liberal premises of the market order are historically and spatially specific, as David Harvey's (2009) recent description of a US in crisis so clearly demonstrates. A global system of combined and uneven development – embodied in a states system as well as a global market – has constructed and reproduced a geography of spatially-contained and impoverished peoples who endure life under states that cannot ensure any standard of a minimally-tolerable conditions of life. Many states – mainly but not exclusively African – find themselves negotiating a series of unpleasant alternatives: the dispossessions that seem to be the precursor for industrial capitalism; the institutional and material frailty that stymies efforts to ensure the ‘bare life’ of a population; and negotiation with a world economy over which there is little control. Even assuming that there is a social base for socially-progressive development (an issue often emaciated by liberal analysts into a concern with ‘political will’) in some states, the room to manoeuvre in order to construct unorthodox social and economic policy is minimal.
So, what kind of crisis governance might one expect in African states?
Crisis … What Crisis?
Crisis governance has been, to all intents and purposes, the year-on-year experience of African states since the late 1970s. The story is well-rehearsed: global interest rate rises, severe debt overhang, economic contraction, structural adjustment, more severe economic contraction, civil war and social unrest, external intervention in practically all areas of governance (largely uncoordinated and arrogantly pursued), and tight constraints on the use of state power to pursue any development strategy that is not ‘market conforming’.
However, although crisis management is nothing new for most African states, this does not soften the blow of the current recession, whose impacts, initially restricted, look set to intensify as ‘second wave’ effects extend beyond the financial/banking sector. Economic growth rates are predicted to decline (from 5.4 per cent in 2008 to 3.25 per cent in 2009), as commodity prices fall, foreign capital inflows decline, tax revenues and government social spending stagnate, and household economies are subject to even greater stress (IMF 2009, Manuel 2009). A UNESCO report estimates that reduced growth in 2009 will cost the 390 million people in sub-Saharan Africa living in extreme poverty around $18 billion, or $46 per person; it goes on to argue that ‘this projected loss represents 20 per cent of the per capita income of Africa's poor - a figure that dwarfs the losses sustained in the developed world’ (UNESCO 2009). The poorest people are those who have fewest assets to employ for survival, who have the most unstable and onerous labour regimes, who live in the most perilous conditions for health and well-being and who have vulnerable coping strategies with limited individual and household insurance. They are the ones who will often encounter the global economic crisis in their specific situations as life-or-death, rather than a credit crunch. Meanwhile, World Bank operatives speculate publicly about the implications of the crisis for governance and conflicts in contexts where ‘institutions … tend to be so strained that ethnic tensions and confrontational politics can get worse when competition for scarce resources increases’ (see http://africacan.worldbank.org/will-the-economic-crisis-affect-governance-and-conflicts-in-africa).
New World, New Capitalism?1
In light of the fragile nature of most African states and the declared brave new thinking of Western politicians, what do the most powerful states have to say about global crisis management, rather than their own national or regional concerns? The direct answer is: an increasing amount, but very little that is new or imaginative. The Millennium Development Goals have been virtually a fiction for some time now – the Gleneagles 2005 commitments to provide increased aid for social provision have not been respected, even though these commitments were in themselves very conservative. It is extremely unlikely that Western governments will want to talk loudly about their 0.7 per cent GDP aid commitments during this period when capitalist crisis has visited their own territories. Should the reader be in any doubt as to where the political priorities of Western states lie, consider the fact that there is as yet no commitment to the estimated $7 billion needed in increased aid for low income countries to meet key education goals, but $380 billion of public money was injected into Western banking systems in the last quarter of 2008 (Watkins, quoted in Afrol News 2009).
This is a point not lost on Africa's policy makers. Thus Trevor Manuel (South Africa's Minister of Finance) notes both the:
almost daily announcements of additions to fiscal stimulus packages in the rich world … whilst we remain paralysed because of our dependence on the Bretton Woods Institutions for fiscal support'; and how ‘those countries that have had their power enhanced by the economic growth model with its emphasis in financialisation of the past three decades have found the means to try and dig themselves out, whilst we remain trapped in a cycle of poverty. (Manuel, 2009)
However, perhaps there is another trend emerging within the international financial institutions, announced most strongly through a new World Bank report, Moving out of Poverty: Success from the Bottom Up. Rather like the World Development Report of 2000/2001 (but without the internal struggles concerning its messaging), the report boasts a formidable evidence based in 6000 interviews with ‘the poor’.2 The core claim of the report is that the poor can escape poverty through a ‘liberalisation from below’ which will allow the ‘individual hard work and belief in self’ of the poor to translate into ‘ventures simultaneously to survive and get ahead’ (all quotations from Litvinski 2009). This is a form of neoliberal populism which has close affinities to Hernando de Soto's (2001) global vision of successful capitalist development, based in a romantic notion of development which evacuates capitalism of its powerful tendencies towards highly disruptive social change, dispossession, and violence. This form of neoliberal populism (cf. Brass 2000) might be an idea whose time has come – just as the ‘Chicago Boys’ maintained Milton Friedman's faith that their ideals of ‘shock therapy’ would gain their historic opportunity. It portrays poverty as a lack of opportunity that is both a result of poor state action and a lack of market infrastructure; it describes the poor as virtuous proto-entrepreneurs which lends this narrative a progressive garb; and it outlines a prospective of capitalism in African societies that is essentially socially-harmonious and positive-sum. Might this be the ‘new capitalism’ that allows the World Bank, IMF and others to do what they have done many times before: to reinvent and relegitimise their interventions in order to maintain their claim to be the ‘voice of the poor’, as the IMF put it (in Litvinski 2009)?
How else do we explain why, among its more familiar references to ‘creating an export push’, ‘removing governance constraints’, ‘enhancing accountability and transparency’ and ‘fostering public-private partnerships’, the World Bank's (2005) Africa Action Plan, which has at its heart a strategy to facilitate neoliberalism through corrective state action, infrastructure development and greater market expansion and integration, advocates greater inclusion of civil society and citizens in decision-making processes; a broadly shared growth; building the assets of the poor and women; and achieving as many of the MDGs as possible? Or that the IMF laments how the current economic crisis is threatening recent economic and social gains recorded by African economies and limiting the latter's prospects for sustainable future growth, even while cautioning that in their responses, ‘policy makers must walk a tightrope between not aggravating the shock in aggregate demand on the one hand, while protecting hard-won gains in economic fundamentals’ on the other (IMF 2009)? Or, yet still, that gender specialists in the World Bank are concerned that the risks of a short-term response to the crisis will impact particularly badly on women, and would therefore prefer to see priority investment targeting women, who face moderate to high exposure to negative impacts of the crisis (Buvinic 2009)? Could it be that, ‘discredited though they may be, these two institutions are using the international crisis to return to the limelight’ (Toussaint and Millet 2009)? Harvey (2009) has suggested that neoliberalism has been fairly successful as a project for the restoration and consolidation of class power, and that while, as with previous crises, the current one will lead to a reconfiguration of class power, this restructuring will take place almost certainly in the interest of the capitalist/financial class, rather than the working class. For him, as for Trevor Manuel, among others, ‘other’ voices need to be heard to ensure that their interests are also taken into account in the restructuring of the state-finance nexus that is underway. We hope that ROAPE will, in some small way, help to give voice to these interests, while stimulating debate on, and promoting action around, calls for a fairer deal for Africa in this emergent global order.
Crisis and Reconfiguration: Issue 119
This issue carries articles that cover a range of themes organised loosely around notions of crisis and reconfiguration. Theodore Trefon's article reflects upon the presence of the state in the DRC and especially Lubumbashi. He reveals how state authority endures even within institutional contexts of collapse and broader social attitudes that are hostile towards state power. The key import of the article lies in its highlighting of the negotiated and informal nature of official power, a commingling of marketised social relations – the bartering for state services or bribes – and the evocation of cultural norms and attitudes to make claims on the state.
The articles by Agaptus Nwozor and Adekunle Amuwo, both on Nigeria, take us back to Harvey's cautionary note regarding the dynamics of the politics of (post-)crisis restoration: the much older debt crisis rather than current credit crunch in Nwozor's case, and the related long-running crisis of political legitimacy in Amuwo's. The main thrust of Nwozor's article is that the 2005 debt relief package of $US18 billion agreed between the Nigerian Federal Government and members of the Paris Club of creditor nations was represented as the product of a desire on the part of both parties to free Nigeria from debt peonage/bondage, and thereby release funds for sustainable long-term development. In reality it was a transaction designed to reinforce the power/influence of the political/financial elites at the national and international levels, with the Paris club using it to access Nigeria's windfall earnings from high world market crude oil prices, while for the ruling elite in Nigeria, it offered an opportunity to try and perpetuate itself in power. He shows how the Obasanjo regime politicised the transaction, claiming it as a vindication of its stewardship of the country's finances, including its unpopular economic reform programme, the National Economic Empowerment and Development Strategy (NEEDS). It was touted as evidence that the country had, after many long years, regained its sovereignty from the IFIs; it raised expectations of a significantly increased flow in development investment; and, finally, insinuated that this renaissance could be assured only under an Obasanjo presidency, which could be extended, if necessary, by reforming the constitutional requirement which limited a serving president to a maximum of two consecutive terms in office!
For Amuwo, whose main purpose is to explore the interface between economics and politics of elections in the Obasanjo era (1997–2008), this particular elite project was a manifestation, among many others, of the localisation of globalisation, including market reforms, which have ‘weakened nationalistic fractions of the state/political elite, led to the emergence of a largely externally-oriented national bourgeoisie and virtually removed politics from the public sphere’. Amuwo shows how financial and material resources privatised from the public sector during state divestiture programmes under NEEDS end up funding intra-party and inter-party political contests, which become little more than de facto exercises, not only in elite selection, but also the effective disenfranchisement of the majority. No wonder, as Nwozor argues, Obasanjo seemed less concerned with popular opposition to NEEDS, and widespread cynicism regarding the real and potential benefits of the debt relief package to Nigerians, than he appeared to be about the perception of Nigeria's creditworthiness among its international development partners and/or its attractiveness as an investment destination to international capital.
In their different although complementary ways, therefore, and maybe more so than any others in this issue, these two articles reinforce the notion of post-crisis reconfiguration as both fiercely contested and unmistakeably a class project. Further, they also broach the subject of alternatives to the post-colonial, post-adjustment state and seek to open up discussions about the nature and composition of strategic alliances which might be needed to effect a much-needed structural and systemic transformation of Nigeria's political economy.
As civil society, students and labour, among others, will feature prominently in any such alliance, it is appropriate that Leo Zeilig offers a broad-ranging overview of the role of students in social struggle in the next article. Mapping out the historical layering of nationalist, dependentista, and more recently more defensive or populist narratives of struggle, Zeilig provides a range of examples of progressive student politics throughout the continent. Zeilig suggests a broader political economy of impoverishment and hybridisation that is enabling a new set of activisms which open a potential broader solidarity with ‘the poors’ in many countries and especially the cities.
Next, Adrian Flint argues that Economic Partnership Agreements (EPAs) sound the death-knell of a trading regime between Africa and Europe, which was based on models of national development and differential treatment. Conforming vigorously – perhaps excessively – with the WTO's neoliberal legislative framework, EPAs appear to lock in and ratchet up the progress of African economies towards liberalisation.
In our first Debates piece, Bracking and Cliffe discuss the externalised and neoliberal nature of current discussions of a ‘post-crisis’ Zimbabwe. Using Naomi Klein's metaphor of shock, the authors argue that a vulnerable and traumatised state like Zimbabwe offers an open field for external development agencies – a field that affords little space for Zimbabwean popular voices.
Finally, it is the precise role that South African capital and the South African state play in this progression of the continent's economies towards liberalisation, on the nature of South African imperialism, in other words, which Samson seeks to theorise. She argues that existing debates about South Africa's role within the current conjuncture, as exemplified by the opposing interpretations of Ishmael Lesufi and Patrick Bond, fail to fully capture the nuanced dynamics of contemporary imperial processes. In her debates piece, Samson sets out a new approach to theorising this role, a task that takes on added significance in the light of the current global crisis.