The guinea-pig Nation

According to the Australian reporter Prue Clarke, growing poverty in Ghana has tripled the number of children who work the streets as prostitutes, over the past decade. There are now over 20,000 children living on the streets of Ghana.

The IMF likes to claim that it has given well over $160,000,000 to Ghana to help rebuild the economy of Ghana, plus an extra $1.1bn from the World Bank, and how wondrous this is. Now, whilst it is true that a minority of citizens of Ghana have benefited from the IMF liberalisation of the markets of Ghana, most have been displaced by cheap imports that have destroyed their local industry, made them jobless, and then thanks to massive cuts in social spending, they’re simply left to rot. The IMF says it’s wonderful, because growth for the sake of growth is the neoliberal way.

The IMF are a group that are rather dictatorial in their running of an economy. To them, the idea of Nation States, and their sovereignty is meaningless. To the IMF, the IMF control your country. They in affect, make sure the richer countries remain rich, and the poorer countries open up their markets for the richer countries to exploit at will.

The IMF is essentially a bank. They give loans and aid to countries that need it, but they only give that aid, if the countries in question implement right winged economic principles. The idea is “you do it our way, or fuck you“. This ideological vehicle, of course has it’s problems. Not least for Ghana, who the IMF insist they have done an excellent job with.

What they fail to point out, are the findings by Christianaid:

“In the year 2000 alone, sub-Saharan Africa lost nearly US$45 dollars per person thanks to trade liberalisation. Most trade liberalisation in Africa has been part of the conditions attached to foreign aid, loans and debt relief. This looks like a bad deal: in 2000, aid per person in sub-Saharan Africa was less than half the loss from liberalisation – only US$20. Africa is losing much more than it gains if aid comes with policy strings attached. The staggering truth is that the US$272 billion liberalisation has cost sub-Saharan Africa would have wiped clean the debt of every country in the region (estimated at US$204 billion) and still left more than enough money to pay for every child to be vaccinated and go to school.”

The government of Ghana no longer has any control over Ghana. Social policies are tied to economic policies, and the government of Ghana can only implement a social policy, if the IMF agree to it. If a Sub-Saharan African nation needs help, it has to sell it’s soul to the economic devil, for eternity. Who gave the IMF that sort of power over so many lives? I certainly didn’t vote for them? Why is this form of totalitarianism considered legitimate?

According to Waldon Bello, a senior analyst at “Focus on the Global South”, a program of Chulalongkorn University’s Social Research Institute:

“At the time of decolonization in the 1960s, Africa was not just self-sufficient in food but was actually a net food exporter, its exports averaging 1.3 million tons a year between 1966-70. Today, the continent imports 25% of its food, with almost every country being a net food importer. Hunger and famine have become recurrent phenomena, with the last three years alone seeing food emergencies break out in the Horn of Africa, the Sahel, Southern Africa, and Central Africa.

It would seem that the huge problem caused by neoliberalism on economies that just aren’t ready for it at all, is the huge increase in imports and the meagre growth or even decline of exports, which in turn leads to huge rates of unemployment, awful exploitation at the hands of Western business and the bare minimum social protection for the those affected the worst. Markets are incomplete and so the social programs that gave access to land to local farmers, and offered them a degree of protection, were suddenly taken away. People who had no idea how to work in a highly competitive global marketplace, had absolutely no chance of survival. What happens, in areas like chicken farming, which is one of Ghana’s biggest industries, is that with market liberalisation, UK and US excess chicken produce, is imported and sold ridiculously cheap in Ghana, thereby pricing the local farmers out of the markets. It is not “competition”, it is economic imperialism. Ghana is thankfully fighting against it. Unfortunately, they have been in this position once before. In 2003, the Ghanaian government passed legislation that increased import duty on poultry in an attempt to help local poultry farmers keep their livelihoods. The IMF forced them to repeal the legislation a few months later. How very undemocratic of the IMF, given that the Ghanaian government is a fairly elected government of the people. The IMF apparently consider themselves far more important than the Ghanaian people.

With this, came the liberalisation of health in Ghana. Which meant paying for healthcare. The most vulnerable people in Ghana were thus unable to gain access to healthcare. Healthcare from a specialist in Ghana after IMF liberalisation, cost people ten times the average wage of Ghanaians. Primary education, costs Ghanaians money too.

Ghana is not making anything. It’s industrial base is non-existent. According to Christianaid, Ghana’s employment in manufacturing actually fell quite horrendously after liberalisation occured. Which is why its exports are so weak. It’s farmers are forced out of the market by multinational competitors, which works only to benefit the richer nations. According to the United Nations Conference on Trade and Development:

“The more recent evidence from liberalisation episodes in sub-Saharan Africa as well as Latin America suggest that they have often been accompanied by an increase in unemployment. ”

The IMF’s fundamental grasp on markets is interestingly weak. They forced Vietnam to liberalise it’s coffee industry in the 1980s. And it worked. Pretty well too. (In stark contrast to Senegal’s tomato production, which after IMF liberalisation, fell from 74,000 tons to just under 20,000 tons and pretty much killed off the entire trade in Senegal) Vietnam went from producing 50,000 tons, to 400,000 tons of coffee. Which, is a success. The IMF then decided that which works in one Nation, must be true for all. Neoliberalism at it’s oddest. And so it urged Uganda and Kenya to do the same in 1993. Suddenly, with increased coffee exports, the market was over supplied, and a huge economic crises occurred in the major coffee producing nations, causing the World Bank to report:

“coffee prices have declined sharply in recent years because of large increases in coffee production and exports from traditional exporters such as Brazil and new entrants such as Vietnam, Between July 1998 and June 2001, coffee export prices declined by almost 50%.”

In 2008, the World Bank, released a report, beautifully hidden away, and ignored by pretty much all major news institutions, which seems to be a subtle hint, that perhaps neoliberalism isn’t all it’s cracked up to be:

“Structural adjustment in the 1980’s dismantled the elaborate system of public agencies that provided farmers with access to land, credit, insurance inputs, and cooperative organization. The expectation was that removing the state would free the market for private actors to take over these functions—reducing their costs, improving their quality, and eliminating their regressive bias. Too often, that didn’t happen. ”

IMF demand absolutely no trade restrictions from poorer Countries, whilst richer Countries like the US ensure that entry into their markets are as difficult as possible. The US high tech industry would have died horribly, many many years ago, had the Pentagon not kept it going.

Trade liberalisation in a global economy, does work. But only when it is appropriate. Countries like Malaysia explicitly ignored the IMF’s recommendations to liberalise their markets, and Malaysia succeeded. Such strong neoliberal recommendations do not work in the most developed of Nations, so attempting to implement them in the poorest, is always destined to fail. Especially given that a huge cut in import tariffs means a far smaller tax revenue for Nations like Ghana, who then cannot afford to pay their debts back. Even the US and the UK retain protectionist policies, that the IMF have strictly forbidden from the poorer Nations. It seems like the IMF is simply a vehicle for the economic imperialist ideologues who adhere to the theories of neoliberalism, to experiment on poor and struggling Nations. It has created a tyranny of an economic system. Ghana has no choice but to do what the IMF says. Ghana, is a guinea-pig.

3 Responses to The guinea-pig Nation

  1. Black Flag says:

    You know, Futile, when we first tangled a while back – there wasn’t much I saw in your arguments.

    It appears to me – maybe because of “external” offshore influences – you are becoming much more articulate – thoughtful – and convincing.

    That is, we seem to agree far more than we used to disagree. 🙂

    IMF is evil – pure and simple. And worse, it tries to hide the evil under a veil of “doing good”. That traps many good people.

    It is the epitome of “soft” Mercantilism.

  2. […] Futile Democracy: The guinea-pig Nation According to Waldon Bello, a senior analyst at “Focus on the Global South”, a program of Chulalongkorn University’s Social Research Institute: […]

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