cc In an extract from his forthcoming book Food Wars, Walden Bello critiques the orthodox views of economist Paul Collier on the global food price crisis. Collier argues that not enough food was produced to meet increased demand from Asia, thanks to a failure to promote commercial farming in Africa, the European Union ban against GMOs and the diversion of American grain to biofuels production. Bello counters that a globalised system of production has 'created severe strains on the environment', 'marginalised large numbers of people from the market, and contributed to greater poverty and greater income disparities within countries and globally'. Defenders of peasant agriculture, says Bello, blame 'capitalist industrial agriculture, with its wrenching destabilisation and transformation of land, nature, and social relations' for today’s food crises, with 'rates of profit determining where investment will be allocated' rather than the desire to satisfy 'the real needs of the global majority'.

cc The Group of 20 (G20) is making a big show of getting together to come to grips with the global economic crisis, writes Walden Bello. But here's the problem with the upcoming summit in London on April 2: It's all show. What the show masks, says Bello, 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 stabilise it.

Biofuel production is certainly one of the culprits in the current global food crisis. But while the diversion of corn from food to biofuel feedstock has been a factor in food prices shooting up, the more primordial problem has been the conversion of economies that are largely food-self-sufficient into chronic food importers. Here the World Bank, International Monetary Fund (IMF), and the World Trade Organization (WTO) figure as much more important villains.

Whether in Latin America, Asia, or Africa, the story has been the same: the destabilization of peasant producers by a one-two punch of IMF-World Bank structural adjustment programs that gutted government investment in the countryside followed by the massive influx of subsidized U.S. and European Union agricultural imports after the WTO’s Agreement on Agriculture pried open markets.

African agriculture is a case study of how doctrinaire economics serving corporate interests can destroy a whole continent’s productive base.

FROM EXPORTER TO IMPORTER

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.

Agriculture is in deep crisis, and the causes are many, including civil wars and the spread of HIV-AIDS. However, a very important part of the explanation was the phasing out of government controls and support mechanisms under the structural adjustment programs to which most African countries were subjected as the price for getting IMF and World Bank assistance to service their external debt.

Instead of triggering a virtuous spiral of growth and prosperity, structural adjustment saddled Africa with low investment, increased unemployment, reduced social spending, reduced consumption, and low output, all combining to create a vicious cycle of stagnation and decline.

Lifting price controls on fertilizers while simultaneously cutting back on agricultural credit systems simply led to reduced applications, lower yields, and lower investment. One would have expected the non-economist to predict this outcome, which was screened out by the Bank and Fund’s free-market paradigm. Moreover, reality refused to conform to the doctrinal expectation that the withdrawal of the state would pave the way for the market and private sector to dynamize agriculture. Instead, the private sector believed that reducing state expenditures created more risk and failed to step into the breach. In country after country, the predictions of neoliberal doctrine yielded precisely the opposite: the departure of the state “crowded out” rather than “crowded in” private investment. In those instances where private traders did come in to replace the state, an Oxfam report noted, “they have sometimes done so on highly unfavorable terms for poor farmers,” leaving “farmers more food insecure, and governments reliant on unpredictable aid flows.” The usually pro-private sector Economist agreed, admitting that “many of the private firms brought in to replace state researchers turned out to be rent-seeking monopolists.”

What support the government was allowed to muster was channeled by the Bank to export agriculture – to generate the foreign exchange earnings that the state needed to service its debt to the Bank and the Fund. But, as in Ethiopia during the famine of the early 1980s, this led to the dedication of good land to export crops, with food crops forced into more and more unsuitable soil, thus exacerbating food insecurity. Moreover, the Bank’s encouraging several economies undergoing adjustment to focus on export production of the same crops simultaneously often led to overproduction that then triggered a price collapse in international markets. For instance, the very success of Ghana’s program to expand cocoa production triggered a 48% drop in the international price of cocoa between 1986 and 1989, threatening, as one account put it, “to increase the vulnerability of the entire economy to the vagaries of the cocoa market [1]." In 2002-2003, a collapse in coffee prices contributed to another food emergency in Ethiopia.

As in many other regions, structural adjustment in Africa was not simply underinvestment but state divestment. But there was one major difference. In Latin America and Asia, the Bank and Fund confined themselves for the most part to macromanagement, or supervising the dismantling of the state’s economic role from above. These institutions left the dirty details of implementation to the state bureaucracies. In Africa, where they dealt with much weaker governments, the Bank and Fund micromanaged such decisions as how fast subsidies should be phased out, how many civil servants had to be fired, or even, as in the case of Malawi, how much of the country’s grain reserve should be sold and to whom. In other words, Bank and IMF resident proconsuls reached into the very innards of the state’s involvement in the agricultural economy to rip it up.

THE ROLE OF TRADE

Compounding the negative impact of adjustment were unfair trade practices on the part of the EU and the United States. Trade liberalization allowed low-priced subsidized EU beef to enter and drive many West African and South African cattle raisers to ruin. With their subsidies legitimized by the WTO’s Agreement on Agriculture, U.S. cotton growers offloaded their cotton on world markets at 20-55% of the cost of production, bankrupting West African and Central African cotton farmers in the process [2].

These dismal outcomes were not accidental. As then-U.S. Agriculture Secretary John Block put it at the start of the Uruguay Round of trade negotiations in 1986, “the idea that developing countries should feed themselves is an anachronism from a bygone era. They could better ensure their food security by relying on U.S. agricultural products, which are available, in most cases at lower cost [3]."

What Block did not say was that the lower cost of U.S. products stemmed from subsidies that were becoming more massive each year, despite the fact that the WTO was supposed to phase out all forms of subsidy. From $367 billion in 1995, the first year of the WTO, the total amount of agricultural subsidies provided by developed country governments rose to $388 billion in 2004. Subsidies nowaccount for 40% of the value of agricultural production in the European Union (EU) and 25% in the United States.

The social consequences of structural adjustment cum agricultural dumping were predictable. According to Oxfam, the number of Africans living on less than a dollar a day more than doubled to 313 million people between 1981 and 2001 – or 46% of the whole continent. The role of structural adjustment in creating poverty, as well as severely weakening the continent’s agricultural base and consolidating import dependency, was hard to deny. As the World Bank’s chief economist for Africaadmitted, “We did not think that the human costs of these programs could be so great, and the economic gains would be so slow in coming [4]."

That was, however, a rare moment of candor. What was especially disturbing was that, as Oxford University political economist Ngaire Woods pointed out, the “seeming blindness of the Fund and Bank to the failure of their approach to sub-Saharan Africa persisted even as the studies of the IMF and the World Bank themselves failed to elicit positive investment effects [5]."

THE CASE OF MALAWI

This stubbornness led to tragedy in Malawi.

It was a tragedy preceded by success. In 1998 and 1999, the government initiated a program to give each smallholder family a “starter pack” of free fertilizers and seeds. This followed several years of successful experimentation in which the packs were provided only to the poorest families. The result was a national surplus of corn. What came after, however, is a story that will be enshrined as a classic case study in a future book on the 10 greatest blunders of neoliberal economics.

The World Bank and other aid donors forced the drastic scaling down and eventual scrapping of the program, arguing that the subsidy distorted trade. Without the free packs, food output plummeted. In the meantime, the IMF insisted that the government sell off a large portion of its strategic grain reserves to enable the food reserve agency to settle its commercial debts. The government complied. When the crisis in food production turned into a famine in 2001-2002, there were hardly any reserves left to rush to the countryside. About1,500 people perished. The IMF, however, was unrepentant; in fact, it suspended its disbursements on an adjustment program with the government on the grounds that “the parastatal sector will continue to pose risks to the successful implementation of the 2002/03 budget. Government interventions in the food and other agricultural markets…crowd out more productive spending.”

When an even worse food crisis developed in 2005, the government finally had enough of the Bank and IMF’s institutionalized stupidity. A new president reintroduced the fertilizer subsidy program, enabling two million households to buy fertilizer at a third of the retail price and seeds at a discount. The results: bumper harvests for two years in a row, a surplus of one million tons of maize, and the country transformed into a supplier of corn to other countries in Southern Africa.

But the World Bank, like its sister agency, still stubbornly clung to the discredited doctrine. As the Bank’s country director toldthe Toronto Globe and Mail, “All those farmers who begged, borrowed, and stole to buy extra fertilizer last year are now looking at that decision and rethinking it. The lower the maize price, the better for food security but worse for market development.”

FLEEING FAILURE

Malawi’s defiance of the World Bank would probably have been an act of heroic but futile resistance a decade ago. The environment is different today. Owing to the absence of any clear case of success, structural adjustment has been widely discredited throughout Africa. Even some donor governments that once subscribed to it have distanced themselves from the Bank, the most prominent case being the official British aid agency that co-funded the latest subsidized fertilizer program in Malawi. Perhaps the motivation of these institutions is to prevent the further erosion of their diminishing influence in the continent through association with a failed approach and unpopular institutions. At the same time, they are certainly aware that Chinese aid is emerging as an alternative to the conditionalities of the World Bank, IMF, and Western government aid programs.

Beyond Africa, even former supporters of adjustment, like the International Food Policy Research Institute (IFPRI) in Washington and the rabidly neoliberal Economistacknowledged that the state’s abdication from agriculture was a mistake. In a recent commentary on the rise of food prices, for instance, IFPRI asserted that “rural investments have been sorely neglected in recent decades,” and says that it is time for “developing country governments [to] increase their medium- and long-term investments in agricultural research and extension, rural infrastructure, and market access for small farmers.” At the same time, the Bank and IMF’s espousal of free trade came under attack from the heart of the economics establishment itself, with a panel of luminaries headed by Princeton’s Angus Deaton accusing the Bank’s research department of being biased and “selective” in its research and presentation of data. As the old saying goes, success has a thousand parents and failure is an orphan. Unable to deny the obvious, the Bank has finally acknowledged that the whole structural adjustment enterprise was a mistake, though it smuggled this concession into the middle of the 2008 World Development Report, perhaps in the hope that it would not attract too much attention. Nevertheless, it was a damning admission:

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. In some places, the state’s withdrawal was tentative at best, limiting private entry. Elsewhere, the private sector emerged only slowly and partially—mainly serving commercial farmers but leaving smallholders exposed to extensive market failures, high transaction costs and risks, and service gaps. Incomplete markets and institutional gaps impose huge costs in forgone growth and welfare losses for smallholders, threatening their competitiveness and, in many cases, their survival.

In sum, biofuel production did not create but only exacerbated the global food crisis. The crisis had been building up for years, as policies promoted by the World Bank, IMF, and WTO systematically discouraged food self-sufficiency and encouraged food importation by destroying the local productive base of smallholder agriculture. Throughout Africa and the global South, these institutions and the policies they promoted are today thoroughly discredited. But whether the damage they have caused can be undone in time to avert more catastrophic consequences than we are now experiencing remains to be seen.

*Walden Bello is a senior analyst at Focus on the Global South, a program of Chulalongkorn University's Social Research Institute, and a columnist for Foreign Policy In Focus (www.fpif.org) where this article first appeared under the title, "Destroying African Agriculture."

*Please send comments to or comment online at http://www.pambazuka.org/

Notes:

1. Charles Abugre, “Behind Crowded Shelves: as Assessment of Ghana’s Structural Adjustment Experiences, 1983-1991,” (San Francisco: food First, 1993), p. 87.

2. “Trade Talks Round Going Nowhere sans Progress in Farm Reform,” Business World (Phil), Sept. 8, 2003, p. 15

3. Quoted in “Cakes and Caviar: the Dunkel Draft and Third World Agriculture,” Ecologist, Vol. 23, No. 6 (Nov-Dec 1993), p. 220

4. Morris Miller, Debt and the Environment: Converging Crisis (New York: UN, 1991), p. 70.

5. Ngaire Woods, The Globalizers: the IMF, the World Bank, and their Borrowers (Thaca: Cornell University Press, 2006), p. 158.

http://www.pambazuka.org/images/articles/387/49322g8leaders.jpgThe Group of Eight came into being in 1975 as the G7 at a time that the world was embroiled in deep economic crisis, much like today. Its main aim was to coordinate the macroeconomic policies of the rich countries at a time of stagflation as well as to forge a common strategy vis-a-vis the developing world, which had loosened its political and economic dependency on the First World during the heady days of decolonization, national liberation struggles, and the emergence of the Organization of Petroleum Exporting Countries (OPEC) as an economic power.

The G7 were not successful in coordinating their policies, with the US under Ronald Reagan aggressively pursuing a cheap dollar policy that brought on recession in Germany and Japan. They did, however, come together in a united front against the developing countries, putting their weight behind the neoliberal structural adjustment policies imposed by the World Bank and IMF on more than 90 developing and transition (post-socialist) economies. The structural adjustment programs rolled back the economic gains achieved by the South in the 1950’s and 1960’s.

In the 1990’s, the G7 became the main promoters of corporate-driven globalization, for which the road had been paved by the radical deregulation, radical liberalization, and radical privatization that took place in developing countries under structural adjustment. The G7 also provided strong support for the World Trade Organization (WTO) as the main agency for the process global trade and investment liberalization demanded by their corporations.

The late 1990’s, however, brought about, not the increasing prosperity for all promised by neoliberal, pro-market policies but rising absolute poverty, increasing inequality, and the consolidation of economic stagnation in the South. The collapse of the third ministerial of the WTO in Seattle in December 1999 marked the achievement of a critical mass by the forces of opposition created by the contradictions of globalization.

With the realities of globalization exposed, the summits of the G7—now G8 with the incorporation of Russia—became a lightning rod for the rising global opposition. At the G8 Summit in Genoa in June 2001, three hundred thousand people came together under the uncompromising program of “No to the G8.” The battle lines were clearly drawn, with the Italian police or carabineri contributing immensely to polarization by erupting in a riot that took the life of one activist and injured scores of others.

Elements within the G8 realized that the image of being a hegemonic directorate of globalization was not good for the future of the body. Led by the New Labor government of Tony Blair and Gordon Brown in Britain, the G8 underwent a facelift. A new discourse was forged, the key substantive elements of which were debt forgiveness for the poorest countries, the raising of aid levels to 0.7 per cent of the GDP of the G8 countries, a massive aid package for Africa, making trade serve development, and tackling climate change. The new watchwords when it came to process were “partnership,” “consultation,” “global social integration,” and the “millennium development goals.” The battle was for the soul of global civil society. The high point of this new look was the Gleneagles Summit in 2005, which was choreographed by an alliance between the Labor Government, entertainment superstars Bob Geldof and Bono, and influential British NGO’s. Several hundred thousand people who journeyed to Scotland found themselves manipulated into becoming a chorus for the glittering Aid for Africa concerts that were staged simultaneously in different parts of the globe.

By the time 2007 came along, the glitter was gone. The idea of global civil society partnering with the G8 had soured as none of the G8 governments reached the 0.7 of GDP target, aid to Africa fell short of the $20 billion promised at Gleneagles, the “Doha Development Round” had become a big joke, and serious action on climate was nowhere to be seen. Instead, the G8 communique at the Heiligendamm or Rostock Summit emphasized techno-fixes for climate change, lectured developing countries about not restricting investment by transnational corporations, and issued a thinly veiled warning about China getting preferential access to raw materials in Africa. Under the leadership of civil society in Germany, militant denunciation and confrontation of the G8 was the preferred civil society response, with thousands of demonstrators trying to penetrate the site of the leaders’ meeting to shut it down. With the dominant cry being “G8—Get out of the way,” the Heiligendamm protests retrieved the militant tradition of Genoa that had been suppressed at Gleneagles.

So we come to the G8 Summit here in Hokkaido, Japan. We have not only in Bush, Sarkozy, Brown, and Fukuda a group of discredited leaders with very low ratings at the polls in their own countries. We have as well a G8 that is, more than ever, lacking in legitimacy as the typhoon unleashed by the project of globalization that it has promoted is wracking the globe in the form of the simultaneous crises of skyrocketing oil prices, rising food prices, global financial collapse, and worsening climate change. Against this backdrop, Japanese and Asian social movements are faced with the choice of taking either the Road of Genoa or the Road of Gleneagles—that is, to deepen the G8’s crisis of legitimacy or, as in Gleneagles, to salvage the G8 once again. The greatest gift that the Japanese movement can give to global civil society is by leading the struggle to make the Hokkaido Summit the final summit of the G8.

*Walden Bello is president of the Freedom from Debt Coalition and senior analyst of Focus on the Global South. This essay was first given as speech at the opening plenary of the People’s Summit, Sapporo Convention Center, Hokkaido, Japan, July 6, 2008.

*Please send comments to or comment online at http://www.pambazuka.org/

Walden Bello wrestles with the question: Has the WSF become simply a forum of ideas with no agenda for action?

A new stage in the evolution of the global justice movement was reached with the inauguration of the World Social Forum (WSF) in Porto Alegre, Brazil, in January 2001.

The WSF was the brainchild of social movements loosely associated with the Workers' Party (PT) in Brazil. Strong support for the idea was given at an early stage by the ATTAC movement in France, key figures of which were connected with the newspaper Le Monde Diplomatique. In Asia, the Brazilian proposal, floated in June 2000, received the early enthusiastic endorsement of, among others, the research and advocacy institute Focus on the Global South based in Bangkok.

Porto Alegre was meant to be a counterpoint to "Davos," the annual event in a resort town in the Swiss Alps where the world's most powerful business and political figures congregated annually to spot and assess the latest trends in global affairs. Indeed, the highlight of the first WSF was a televised transcontinental debate between George Soros and other figures in Davos with representatives of social movements gathered in Porto Alegre.

The world of Davos was contrasted to the world of Porto Alegre, the world of the global rich with the world of the rest of humanity. It was this contrast that gave rise to the very resonant theme "Another world is possible."

There was another important symbolic dimension: while Seattle was the site of the first major victory of the transnational anti-corporate globalization movement -- the collapse amidst massive street protests of the third ministerial meeting of the World Trade Organization -- Porto Alegre represented the transfer to the South of the center of gravity of that movement. Proclaimed as an "open space," the WSF became a magnet for global networks focused on different issues, from war to globalization to communalism to racism to gender oppression to alternatives. Regional versions of the WSF were spun off, the most important being the European Social Forum and the African Social Forum; and in scores of cities throughout the world, local social fora were held and institutionalized.

THE FUNCTIONS OF THE WSF
Since its establishment, the WSF has performed three critical functions for global civil society:

First, it represents a space -- both physical and temporal -- for this diverse movement to meet, network, and, quite simply, to feel and affirm itself.

Second, it is a retreat during which the movement gathers its energies and charts the directions of its continuing drive to confront and roll back the processes, institutions, and structures of global capitalism. Naomi Klein, author of No Logo, underlined this function when she told a Porto Alegre audience in January 2002 that the need of the moment was "less civil society and more civil disobedience."

Third, the WSF provides a site and space for the movement to elaborate, discuss, and debate the vision, values, and institutions of an alternative world order built on a real community of interests. The WSF is, indeed, a macrocosm of so many smaller but equally significant enterprises carried out throughout the world by millions who have told the reformists, the cynics, and the "realists" to move aside because, indeed, another world is possible…and necessary.

DIRECT DEMOCRACY IN ACTION
The WSF and its many offspring are significant not only as sites of affirmation and debate but also as direct democracy in action. Agenda and meetings are planned with meticulous attention to democratic process. Through a combination of periodic face-to-face meetings and intense email and Internet contact in between, the WSF network was able to pull off events and arrive at consensus decisions. At times, this could be very time-consuming and also frustrating, and when you were part of an organizing effort involving hundreds of organizations, as we at Focus on the Global South were during the organizing of the 2004 WSF in Mumbai, it could be very frustrating indeed.

But this was direct democracy, and direct democracy was at its best at the WSF. One might say, parenthetically, that the direct democratic experiences of Seattle, Prague, Genoa, and the other big mobilizations of the decade were institutionalized in the WSF or Porto Alegre process.

The central principle of the organizing approach of the new movement is that getting to the desired objective is not worth it if the methods violate democratic process, if democratic goals are reached via authoritarian means. Perhaps Subcomandante Marcos of the Zapatistas best expressed the organizing bias of the new movements: "The movement has no future if its future is military. If the EZLN [Zapatistas] perpetuates itself as an armed military structure, it is headed for failure. Failure as an alternative set of ideas, an alternative attitude to the world. The worst that could happen to it apart from that, would be for it to come to power and install itself there as a revolutionary army." The WSF shares this perspective.

What is interesting is that there has hardly been an attempt by any group or network to "take over" the WSF process. Quite a number of "old movement" groups participate in the WSF, including old-line "democratic centralist" parties as well as traditional social democratic parties affiliated with the Socialist International. Yet none of these has put much effort into steering the WSF towards more centralized or hierarchical modes of organizing. At the same time, despite their suspicion of political parties, the "new movements" never sought to exclude the parties and their affiliates from playing a significant role in the Forum. Indeed, the 2004 WSF in Mumbai was organized jointly by an unlikely coalition of social movements and Marxist Leninist parties, a set of actors that are not known for harmonious relations on the domestic front.

Perhaps a compelling reason for the modus vivendi of the old and new movements was the realization that they needed one another in the struggle against global capitalism and that the strength of the fledgling global movement lay in a strategy of decentralized networking that rested not on the doctrinal belief that one class was destined to lead the struggle but on the reality of the common marginalization of practically all subordinate classes, strata, and groups under the reign of global capital.

WHAT CONSTITUTES "OPEN SPACE"
The WSF has, however, not been exempt from criticism, even from its own ranks. One in particular appears to have merit. This is the charge that the WSF as an institution is unanchored in actual global political struggles, and this is turning it into an annual festival with limited social impact.

There is, in my view, a not insignificant truth to this. Many of the founders of the WSF have interpreted the "open space" concept in a liberal fashion, that is, for the WSF not to explicit endorse any political position or particular struggle, though its constituent groups are free to do so.

Others have disagreed, saying the idea of an "open space" should be interpreted in a partisan fashion, as explicitly promoting some views over others and as openly taking sides in key global struggles. In this view, the WSF is under an illusion that it can stand above the fray, and this will lead to its becoming some sort of neutral forum, where discussion will increasingly be isolated from action. The energy of civil society networks derives from their being engaged in political struggles, say proponents of this perspective. The reason that the WSF was so exciting in its early years was because of its affective impact: it provided an opportunity to recreate and reaffirm solidarity against injustice, against war, and for a world that was not subjected to the rule of empire and capital. The WSF's not taking a stand on the Iraq War, on the Palestine issue, and on the WTO is said to be making it less relevant and less inspiring to many of the networks it had brought together.

CARACAS VERSUS NAIROBI
This is why the 6th WSF held in Caracas in January 2006 was so bracing and reinvigorating: it inserted some 50,000 delegates into the storm center of an ongoing struggle against empire, where they mingled with militant Venezuelans, mostly the poor, engaged in a process of social transformation, while observing other Venezuelans, mostly the elite and middle class, engaged in bitter opposition. Caracas was an exhilarating reality check.

This is also the reason why the Seventh WSF held in Nairobi was so disappointing, since its politics was so diluted and big business interests linked to the Kenyan ruling elite were so brazen in commercializing it. Even Petrobras, the Brazilian state corporation that is a leading exploiter of the natural resource wealth of Latin America, was busy trumpeting itself as a friend of the Forum. There was a strong sense of going backward rather than forward in Nairobi.

The WSF is at a crossroads. Hugo Chavez captured the essence of the conjuncture when he warned delegates in January 2006 about the danger of the WSF becoming simply a forum of ideas with no agenda for action. He told participants that they had no choice but to address the question of power: "We must have a strategy of 'counter-power.' We, the social movements and political movements, must be able to move into spaces of power at the local, national, and regional level."

Developing a strategy of counter-power or counter-hegemony need not mean lapsing back into the old hierarchical and centralized modes of organizing characteristic of the old left. Such a strategy can, in fact, be best advanced through the multilevel and horizontal networking that the movements and organizations represented in the WSF have excelled in advancing their particular struggles. Articulating their struggles in action will mean forging a common strategy while drawing strength from and respecting diversity.

After the disappointment that was Nairobi, many long-standing participants in the Forum are asking themselves: Is the WSF still the most appropriate vehicle for the new stage in the struggle of the global justice and peace movement? Or, having fulfilled its historic function of aggregating and linking the diverse counter-movements spawned by global capitalism, is it time for the WSF to fold up its tent and give way to new modes of global organization of resistance and transformation?

* Walden Bello is a senior analyst with Focus on the Global South, the Bangkok-based research and advocacy institute, and professor of sociology at the University of the Philippines. Published by Foreign Policy In Focus (FPIF), a joint project of the International Relations Center (IRC, online at and the Institute for Policy Studies (IPS, online at [email protected] or comment online at www.pambazuka.org

Naomi Klein's The Shock Doctrine: the Rise of Disaster Capitalism (New York: Metropolitan Books, 2007) is very impressive indeed. This is, however, not immediately evident; a sense that is confirmed by Joseph Stiglitz' review of the book. Even before I read it, I was certain that the Nobel laureate would highlight Klein's attempt to make a connection between the electric shock experiments performed by the notorious McGill University psychologist Ewen Cameron who was on contract with the CIA and the economic shock approach developed by Milton Friedman at the University of Chicago.

Not the biggest investor but the most dynamic - Walden Bello discusses China’s investments in Africa and why China is so popular with African governments.

At the Seventh World Social Forum (WSF), held in Nairobi, Kenya, in late January, the most controversial topic was not HIV-AIDS, the US occupation of Iraq, or neoliberalism. There was a rough consensus on these issues. Aside, of course, from the lively internal politics of the WSF, perhaps the topic that generated the most heat was China’s relations with Africa.

At the “The China Question” seminar, organized by the semi-official “China NGO Network for International Exchanges,” the discussion was candid and angry. “First, Europe and America took over our big businesses. Now China is driving our small and medium entrepreneurs to bankruptcy,” Humphrey Pole-Pole of the Tanzanian Social Forum told the Chinese speakers. “You don’t even contribute to employment because you bring in your own labour.” Stung by such remarks from the floor, Cui Jianjun, secretary general of the China NGO Network, lost his diplomatic cool and launched into an emotional defence of Chinese foreign investment, saying that “We Chinese had to make the same hard decision on whether to accept foreign investment many, many years ago. You have to make the right decision or you will lose, lose, lose. You have to decide right, or you will remain poor, poor, poor.” At this point, Dale Wen, a Chinese environmentalist, intervened: “That’s not true. The Chinese people did not decide to accept foreign investment. Deng Hsiao Ping [the late Chinese leader] decided.” An African in the audience added: “You have to treat us with respect.” Great Promise or Great Harm?

The vigorous exchange at this panel and at another organized by the Fahamu Networks for Social Justice and Focus on the Global South was perhaps to be expected, since many Africans view China as having the potential of bringing either great promise or great harm. One sensed that if the African speakers were hard on China, this was because they desperately wanted China to reverse it’s course before it was too late to avoid the path trod by Europe and the United States.

The debate at the WSF took place amidst a marked elevation of Africa’s profile in China’s foreign policy. President Hu Jintao is now on his third trip to Africa in three years, following the success of the Forum on China-Africa Cooperation (FOCAC), which took place on November 4 and 5, 2006. Attended by 48 African delegations, most of them led by heads of state, the event was the largest international summit ever held in Beijing.

At the start of the meeting, Beijing unveiled a glittering trade and aid plan designed to cement its “strategic partnership” with Africa. The key items in the package were raising the volume of trade from US$40 billion in 2005 to $100 billion by 2010; doubling of 2006 assistance by 2009; provision of $3 billion worth of preferential loans and $2 billion worth of export credits; setting up of a China-Africa Development Fund that would be capitalized to the tune of $5 billion to support Chinese companies investing in Africa; and cancellation of all interest-free government loans owed to China by the heavily indebted and poorest African countries that matured at the end of 2005.

If not yet the biggest external player in Africa, China is certainly the most dynamic. It now accounts for 60 per cent of oil exports from Sudan and 35 per cent of those from Angola. Chinese firms mine copper in Zambia and Congo-Brazzaville, cobalt in the Congo, gold in South Africa, and uranium in Zimbabwe. Its ecological footprint is large, says Michelle Chan-Fishel of Friends of the Earth International, consuming as it does 46 per cent of Gabon’s forest exports, 60 per cent of timber exported from Equatorial Guinea, and 11 per cent of timber exports from Cameroon.

China is popular with African governments. “There is something refreshing in China’s approach,” said a Nigerian diplomat who asked not to be identified. “They don’t attach all those conditionalities that accompany Western loans.” Justin Fong, executive director of the Chinese NGO, Moving Mountains adds, “Whether accurate or not, the image Africans have of the Chinese is that they get things done. They don’t waste their time in meetings. They just go ahead and build roads.” An African development specialist working with a western aid organization claimed that Chinese projects are low-cost affairs compared to western projects. “Labour costs are low, they integrate African labour, so some transfer of skills takes place, and the Chinese workers live in the village, and this means living like the villagers, down to competing with them for dog meat!” This characterization of the Chinese impact would be disputed by many observers. However, most NGO’s are nuanced in their assessment of China. They acknowledge that China has a different trajectory in Africa than Europe and the United States.

Whereas the West began by exploiting Africa, China initiated its relations with Africa with “people-to-people” medical and technical assistance missions in the sixties and seventies, the most famous of which was the now fabled building of the Tanzania-Zambia (Tanzam) Railway. But with China’s rise as a modernizing economic superpower after the definitive decision in 1984 to use capitalism as the engine of growth, the old solidarity rationale has been replaced by a dangerously single-minded pursuit of economic interests—in this case, mainly oil and mineral resources to feed a red-hot economy growing at 8-10 per cent a year.

If African governments were accountable to their people, say NGO critics, Chinese aid could play a very positive role, especially compared to World Bank and IMF loans which come with conditions to bring down tariffs, loosen government regulation, and privatize state enterprises. But with non-
accountable, non-transparent governments, such as those in Sudan and Zimbabwe, say the critics, Chinese loan and aid programs instead, contribute to consolidating the rule of non-democratic elites. No conditions, in effect, means intervention on the side of the governing groups.

The Sudan is one country non-accountability and non-transparency is most evident. Using its membership in the United Nations Security Council, China has prevented a multinational peacekeeping force from being constituted that would protect people in Darfur who are being killed or raped by militias backed by the Sudanese government. One African diplomat sympathetic to China asserts, “China’s strong backing for the Sudanese government has discouraged African governments that are trying to push it to accept an African Union solution to the problem.”

China has very substantial interests in Sudan. These are set out in detail in an important collection of studies launched at the WSF entitled “African Perspectives on China in Africa”, edited by Firoze Manji and Stephen Marks. China obtained oil exploration and production rights in 1995 when the China National Petroleum Corporation (CNPC) bought a 40 per cent stake in the Greater Nile Petroleum Operating Company, which is pumping over 300,000 barrels per day. Sinopec, another Chinese firm, is building a 1500-kilometer pipeline to Port Sudan on the Red Sea, where a tanker terminal is being constructed by China’s Petroleum Engineering Construction Company. Chinese investment in oil exploration is estimated by analyst John Rocha to reach $8 billion.

Chinese interests go beyond oil. Its investment in textile mills is estimated at $100 million. It has emerged as one of Sudan’s top arms suppliers, with one deal being a barter arrangement whereby it would supply $400 million worth of weapons in return for cotton. It is active in infrastructure building, with its firms constructing bridges near the Merowe Dam and on two other sites on the River Nile. It is involved in key hydropower projects, the most controversial being the Merowe Dam, which is expected to ultimately cost $1.8 billion.

The construction of the Merowe Dam has involved forced resettlement of the Hambdan people living at or near the site and repression and an armed attack on the Amri people who have been organizing to prevent the authorities’ plan to displace them to the desert. Local police and private agencies now provide 24-hour security to Chinese engineering detachments, but civil society observers say the aim of these groups is less protection of the Chinese than repression of the growing opposition on the ground. As Ali Askouri, director of the London-based Piankhi Research Group, puts it, “The sad truth is, both the Chinese and their elite partners in the Sudan government want to conceal some terrible facts about their partnership. They are joining hands to uproot poor people, expropriate their land, and appropriate their natural resources.”

Chinese and Sudanese officials tend to be dismissive of such criticism, which they often attribute to the machinations of western powers who are alarmed at China’s becoming the top international player in a country that they had long treated as being in the West’s sphere of influence but whose dismal record of colonial plunder deprives their statements of any moral authority. Defending its close relations with the Sudanese government, a Chinese Foreign Ministry official, Zhai Jun, noted the contrast of African governments’ reception of China and the West: “Some people believe that by ‘taking’ resources and energy from Africa, China is looting Africa…… If this was so, then African countries would express their dissatisfaction...they would approach China, as they did...countries that exploited the continent in the past.” Chinese officials are, however, wrong to think that African NGO’s are merely parroting the rhetoric of self-interested western governments. In fact, civil society groups are just as critical of such Western governments, considering them as hypocritical. Commenting on the remark of a World Bank official to the effect that “Chinese handouts without reforms” would not be beneficial to Africa, John Karumbidza, a contributor to the “China in Africa” volume, acidly remarks that “It is the case...that this same bank and Western approach over the past half century has failed to deliver development, and left Africa in more debt than when they began.” Other problematic partnerships being based on actual events, the criticisms are unlikely to go away, not only in Sudan but in many other countries where China has a deep involvement with controversial regimes.

With relations with the west and even South Africa deteriorating over his political record, President Robert Mugabe of Zimbabwe has increasingly turned to China, which one of his key ministers has characterized as an “all-weather friend.” Chinese investment in mining, energy, telecommunications, agriculture, and other sectors was estimated at $600 million at the end of 2004, with another $600 million pledged in June 2005. The price, however, has been high, according to critics, who claim that Mugabe’s government has handed de facto control of key strategic industries to the Chinese. A contract with China to farm 386 square miles of land while millions of Zimbabweans remain landless has also come under fire, with rural sociologist John Karumbidza blasting it as amounting “to nothing more than land renting and typical agri-business relations that turn the land holders and their workers into labour tenants and subject them to exploitation.”

The Nigerian government is another problematic Chinese partner, according to civil society activists. China has extensive interests in Nigeria, particularly in oil exploration and production. John Rocha notes that the China National Offshore Corporation (CNOOC), has acquired a 45 per cent working interest in an offshore enterprise, OML 130, for $2.3 billion; the China National Petroleum Corporation (CNPC) has invested in the Port Harcourt refinery; and a joint venture between the Chinese Oil and Natural Gas Corporation and the L.N. Mittal Group, plans to invest $6 billion in railways, oil refining, and power in exchange for rights to drill oil.

These interests have led to an increasingly close alliance of China with the faction of the ruling People’s Democratic Party dominated by President Olusegun Obasanjo. This relationship has a controversial security dimension. As Ndubisi Obiorah, another contributor to the “China in Africa” volume who is also director of the Center for Law and Social Action in Lagos, notes: “The Nigerian government is increasingly turning to China for weapons to deal with the worsening insurgency in the oil-rich Niger Delta. The Nigerian Air Force purchased 14 Chinese-made versions of the upgraded Mig 21 jet fighter; the navy has ordered patrol boats to secure the swamps and creeks of the Niger Delta.” Not surprisingly, the rebel Movement for the Emancipation of the Nigerian Delta (MEND) has warned Chinese companies to keep out of the region or risk attack.

With their integrated political, military, economic, and diplomatic components, China’s “strategic partnerships” with governments such as those of Nigeria, Sudan, and Zimbabwe increasingly have the feel of the old US and Soviet relationships with client states during the Cold War.

The role of Civil Society is important in effecting change and many activists do not discount the possibility that things may yet be turned around. Though critical of current Chinese policies, Humphrey Pole-Pole of Tanzania appealed at the WSF Nairobi meeting, for a “win-win-win” strategy—that is, “a win for China, a win for African governments, and a win for African people. This is not impossible.” The key to such a change may be the growth of Chinese civil society organizations, some of which are increasingly independent of and indeed critical of government policies within China, according to Dorothy Guerrero, coordinator of Focus on the Global South’s China program: “If the Chinese government and business interests in Africa are to be moderated by concerns for local people, the environment, human rights, etc., it is of extreme importance that the international voices arguing for this are joined by a constituency of people within China who are also concerned about such principles.” She added that links must be forged between African and Chinese NGO’s and it was for that reason that representatives of Chinese civil society went to Nairobi.

But closer ties are not enough, said Justin Fong. Mechanisms have to be devised that could be effectively used to press for accountability on the part of the Chinese government. One point of vulnerability he identified is the practice of Chinese government entities, such as the China Export-Import Bank, of seeking co-financing for their Africa projects from international banks such as HSBC and Citigroup. When it came to controversial projects, he suggested, pressure might be indirectly placed on the Chinese by lobbying these institutions, which are more sensitive about their image than Beijing.

Others were sceptical that such tactics, which might have worked with Western governments and businesses, would succeed with China. But whatever their differences, African and Chinese civil society activists, have a consensus on one thing, it will be a hard, uphill struggle to change the Chinese juggernaut’s direction in Africa.

For further information read: "African Perspectives on China in Africa" published by Fahamu and can be obtained through their website - Fahamu.org

* Walden Bello is executive director of the Bangkok-based research and advocacy institute Focus on the Global South.

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