Introduction: Making the Crisis Work for Us

2011

2015

2009

The current global economic and financial crisis, just like the history of change of development paradigm informs us, provides for yet another opportunity to revisit the neoliberalism paradigm, which has been operational in Sub-Saharan Africa for almost three decades. The performance of this development framework, with its attendant policies and strategies, leaves much to be desired. The adopted policies and strategies are not only informed by a set of wrong assumptions, but are also coupled with loss of policy space and ownership of the development agenda. The ultimate effects being those of : modest economic growth rates, persistent poverty in SSA and low resilience to crises. These negative outcomes logically activate the "search engine" for alternative development pathways.

Neoliberalism, the doctrine that assumed hegemonic status about 1980, made a bold promise. Liberalizing markets, by unleashing the wealth-enhancing forces of competition and risk-taking entrepreneurship, would produce greater prosperity and well-being for more people than any alternative. But this promise appears today as a chimera to the populations of Western countries who are still struggling to escape the aftershocks of the 2008-2009 global crisis, a crisis rooted in the deregulation and liberalization extolled by neoliberals. The situation in the Global South appears to support a more favorable judgment of neoliberal development doctrine. In the countries of greatest neoliberal influence-in Latin America and sub-Saharan Africa-the neoliberal promise was not kept in the 1980s and 1990s. Yet, following 2002, these countries experienced high growth. Poor people consequently constitute a shrinking share of the populations of many countries while the middle class has expanded. This growth, instigated mainly by a commodity boom and inexpensive credit following the crisis-ridden 1990s, was interrupted by the world economic crisis that affected the Global South in 2009-2010. The extent to which the earlier neoliberal reforms belatedly spurred the growth surge is debatable. i What is clear, however, is the high and continuing costs to society and nature of neoliberal development trajectories. These costs, gleaned from critiques of the mainstream approach, would include some or all of the following. Privatization, cuts in the civil service and trade and capital-account liberalization have often led to the loss of jobs in the formal sector since the 1980s, while precarious employment in the informal sector has expanded. Credible threats by large-scale global corporations to relocate production in lower-cost jurisdictions have driven down wages throughout the world. Globalization has thus generated millions of poor-quality jobs. Market crashes and harsh competition for the available jobs and economic opportunities have fostered widespread economic insecurity. Periodic financial crises in many countries have reduced even middle-class families to at least temporary poverty. The reduction or elimination of agricultural subsidies and tariffs to protect small farmers has driven many into bankruptcy. The privatization of land formerly governed by indigenous or collectivist land-tenure rules has favored wealthy corporations and entrepreneurs seeking land for industrial activities or large-scale agricultural exports. Resurgent commodity speculation periodically drives the prices of basic foodstuffs dramatically higher, undermining food security for the poor in developing countries. User charges for educational and health services and/or the deteriorating quality of public services, together with the rising cost of private provision, confront even middle-class families with unpalatable choices. High and often growing economic inequality means that the gains from growth have been disproportionately appropriated by the wealthy, even while their evasion of income taxes has typically starved the public sector of resources. Inequality has also permitted the wealthy few to gain disproportionate political influence, vitiating democracy. Barely regulated industrial development, forestry, fisheries and export agriculture have despoiled the land, water and air. Growing carbon emissions from unregulated production and consumption propel climate change, evident especially in more frequent droughts and flooding, rising global ocean levels and shortages of fresh water. Individualism, especially the quest for personal material advancement, have weakened the bonds of community reciprocity, while social dislocation, unemployment and the juxtaposition of wealth and poverty have stimulated high rates of urban crime. These trends most adversely affect the poor and near-poor; they are forced off their land, housed in squalid, overcrowded and ill-serviced urban settlements and exploited by employers or the conditions of

Development, 2012

Dzodzi Tsikata explains that debates about development are cyclical and coincide with various economic crises that have punctuated Africa's post-colonial history. While there is no shortage of Africa-generated responses that have also included the voices of African feminists, these have lacked traction. In a new world order where economic liberalization is losing its legitimacy as the most commonsensical approach to development, African states and civil societies have to redouble their efforts to gain policy sovereignty to secure land rights, decent work and sustainable livelihoods for all.

Singapore Journal of Tropical Geography, 2008

I teach an honours class on development economics at the University of North Carolinaat Chapel Hill. The students are bright and motivated. They care about the world, andthey want to make it a better place for everyone to live. For the class they read JeffreySachs (2005) and they say – ‘this is it! This is what we need to do to end poverty,especially for the poorest of the poor – the people who live in deepest Africa’.To encourage them to think more critically about development, I always assignpieces from Jim Ferguson’s (1990) The Anti-Politics Machine. And the students take it veryseriously – but mostly their reaction is one of amazement at how clueless the Canadiansin the book seem. Or they are amazed that at one point in the distant past (which iswhat the early 1990s are to them) anyone could have been so ignorant about devel-opment. They do not automatically think that the work in The Anti-Politics Machine hasanything to do with them or see it as a call to arms, as they do Sachs’ (2005) work.This is ironic because there is perhaps no clearer illustration of what Ferguson hasbeen talking about over the past 15 years than the work that Sachs has done – and isdoing – on Africa. And that is not an innocent irony, one to be left alone, because thereare few people more influential in the contemporary development scene than JeffreySachs.

African Development Review, 2010

The 2009 African Economic Conference was planned against the background of the worst financial and economic crisis in half a century. Whereas Africa was relatively less financially and economically integrated into the world economy as were many other parts of the world, the continent's economic environment was uncertain and required better understanding of the underlying dynamics to guide the search for appropriate responses. Indeed, while the continent largely escaped the banking crisis that hit the advanced economies, the secondary effects were far reaching. As the crisis deepened, global export demand, especially for commodities, collapsed along with plummeting prices. Similar downward trends were soon observed in other sectors; tourism receipts which had become a significant source of government revenue fell to unprecedented levels. Capital flows, especially FDI and remittances, likewise plunged, raising concerns about a possible reversal of Africa's robust growth before the crisis. With these downward trends, it became clear that Africa's social and economic gains of the last decade were seriously at risk (Mafusire et al., 2009). These developments coupled with a cautious donor community facing increasing pressures in their home economies, all pointed to a bleak economic outlook for Africa at the time. Since then, there has been some good news: economies have started recovering, both developed and developing. The May 2010 estimates of the African Economic Outlook (AEO) 1 projects Africa to grow at 4.5 per cent in 2010 and 5.2 per cent in 2011. This is largely due to a recovery of commodity prices resulting from the effects of fiscal stimulus in the developed world, while policy reforms continued to strengthen economic resilience especially in Africa. Furthermore, the growing economic importance of China and India has the potential for diversifying the continent's export markets and sources of development financing. This emerging African economic landscape is turning out to be better than the most optimistic scenarios at the height of the crisis. Although the continent was projected to grow by slightly more than 2 per cent in 2009 (i.e., barely a third of the average 6 per cent growth realized over the period from 2006 to 2008), recovery is taking place at a faster pace than was expected (AfDB et al., 2009). However, the loss in growth momentum not only represented a huge cost on the continent for a crisis of exogenous origins, but it also accounted for the stagnation in average per capita incomes across the continent during the crisis. These general trends masked significant disparities among sub-regions and countries and across sectors (Brixiova et al., 2010). The Southern Africa region was the worst affected, with growth forecast at-1.1 per cent in 2009 compared to 5.4 per cent in 2008 (AfDB et al., 2010). The region's relatively poor performance is linked to its high dependence on mineral exports, whose fall led to close to a nine-fold deterioration in external balances in 2009 while fiscal balances worsened by 40 per cent in the same year relative to 2008. East Africa, which emerged the most resilient on the continent relied less on minerals and more on agriculture, notably, coffee for its export earnings. Overall, coffee prices were the least affected of all major agricultural commodities and have consistently trended upward (Mafusire et al., 2010). However, despite the relative resilience and positive growth in East and North Africa of 5.8 per cent and 3.8 per cent in 2009, respectively, fiscal and external balances deteriorated significantly. The fiscal balance in East Africa deteriorated to-3.3 per cent from-2.6 per cent in 2008 while the corresponding outcomes in North Africa were-4 per cent from a positive 3.8 per cent of GDP. This deterioration in fiscal balances was largely the result of increased public expenditures in the face of declining revenues as activity in major service and export sectors slowed down significantly. Ten countries were also projected to fall into negative real economic growth territory. 2 The collapse in commodity prices and reduced tourist arrivals were reflected at the micro level, with mining, manufacturing and tourism subsectors being the worst affected. Poor performance in these sectors was also reflected in the form of severe jobs losses in Botswana, South Africa, Zambia, the Democratic Republic of Congo and other countries (AfDB, 2009). In spite of the economic slowdown, Africa's response was largely limited to policy and structural reforms as it could not afford the massive bail-out packages similar to those implemented by the advanced economies. The fact that resource flows from multilateral financial institutions could not fully compensate the private capital outflows was once again a demonstration of the continent's vulnerability to external shocks.

This chapter explores attempts by different social forces to interpret the complex global financial and economic crisis as it unfolded from 2006 to the end of 2009. Much mainstream commentary has read the crisis from the viewpoints of capital accumulation rather than social reproduction, the global North rather than the global South, and the best way for states to restore rather than constrain the dominance of market forces. Such commentaries reflect government responses to the crisis, especially in the global North. Executive authorities reacted quickly with emergency measures to safeguard the monetary, banking and credit systems to prevent large banks and firms going bankrupt, and to restore the conditions for capital accumulation. They have been slower to respond to the needs of ‘social reproduction’ in daily, life course, and intergenerational terms; and to take effective action on impending environmental, food and fuel crises. I will explicate these differences in terms of how competing narratives about the crisis framed policy responses, and how structures of economic, political and ideological domination enabled economic and political elites in key power centres to push the risks and costs of crisis-management onto subaltern groups and developing countries. Thus, besides identifying the key responses from the global North, I examine developing countries’ engagement through, for example, the G-20, the so-called Stiglitz Commission established by the President of the 63rd General Assembly of the United Nations and the associated summit (United Nations General Assembly 2008; United Nations 2009a, 2009b), the G-77 and the People’s Republic of China (hereafter China), and efforts at South-South cooperation. I also comment briefly on social movement and activist groups and post-neoliberal futures.

(CODESRIA) is an independent organisation whose principal objectives are to facilitate research, promote research-based publishing and create multiple forums geared towards the exchange of views and information among African researchers. All these are aimed at reducing the fragmentation of research in the continent through the creation of thematic research networks that cut across linguistic and regional boundaries.