The continent’s own elites, together with the West and now China, are still making Africans progressively poorer, thanks to the extraction of raw materials. Reinvestment is negligible and the prices, royalties and taxes paid are inadequate to compensate the wasting-away of Africa’s natural wealth. Anti-extraction campaigns by (un)civil society are the only hope for a reversal of these neocolonial relations.
This essay is part of a strategic dialogue on the IMF. The accompanying essay by Martin S. Edwards is here and his response to Ambrose is here. Martin Edwards’ response is here.
The conventional view of Robert McNamara, who passed away a few days ago, is that after serving as the chief engineer of the disastrous U.S. war in Vietnam, he went on in 1968, to serve as president of the World Bank. In this way, he sought to salve his troubled conscience by delivering development assistance to poor countries.
On the morning of May 27th this year, the staff of the Legal Affairs Office of the World Bank encountered an ugly racial slur scrawled on the wall outside their department. Very shortly, however, the words "N–––, go home!" were erased by order of World Bank management. This was the second such episode in as many weeks.
Last year, as the financial crisis reached global and historic proportions, many commentators identified one institution as the debacle’s great winner: the International Monetary Fund. Just two years ago, the IMF seemed to be on an inexorable downward path: its credibility and effectiveness in question, its portfolio of borrowers severely reduced, its legitimacy and governance structure under challenge, and its own finances in disarray. In fact, the Fund had started “downsizing” its staff as the only way to avoid running one of the deficits that it so strongly advises client countries to steer away from.
The International Development Association (IDA), the arm of the World Bank that makes grants and interest-free, long-term loans to poor countries around the world, lacks effective safeguards against corruption, according to a report by the Bank’s own Independent Evaluation Group (IEG). The report concluded that IDA, which currently lends and grants about $10 billion annually to governments in Africa, Asia, Latin America, and Eastern Europe, doesn’t protect its funds adequately from theft and diversion.
Corruption isn’t an issue that Jacob Zuma, the current president of the African National Congress — South Africa’s liberation party — is particularly enthusiastic about. Until prosecutors dropped charges in early April, Zuma stood accused of 18 counts of corruption, graft, fraud, and racketeering related to a rigged multibillion-dollar arms deal. He was alleged to have accepted 783 payments from French arms multinational Thint via his financial advisor Shabir Sheik, who was later convicted for graft, fraud, and corruption. Sheik has since emerged from prison, serving just 28 months of his 15-year term.
Depending on whose analysis you read, the G20 summit in London was the best or the worst of meetings. To some critics, it was an abysmal failure by a self-appointed illegitimate body. To others (read: Gordon Brown), the world has been saved from the brink of its economic demise by inspired leadership and deft summitry.
The Group of 20 (G20) is making a big show of getting together to come to grips with the global economic crisis. But here’s the problem with the upcoming summit in London on April 2: It’s all show. What the show masks is a very deep worry and fear among the global elite that it really doesn’t know the direction in which the world economy is heading and the measures needed to stabilize it.
The outgoing president appears unable to give up his belief in the “market fundamentalism” that has dominated the U.S. policy agenda for the past 30 years. With strong U.S. backing, institutions such as the World Bank, International Monetary Fund and the World Trade Organization have pushed governments to lift regulations on trade, finance and investment and sell off state enterprises throughout most of the developing world.