The ‘Washington Consensus’, which recommends programmes of privatisation, liberalisation and economic stabilisation measures are all about making Third World economies more dependent on (or “integrated into”) Western/Northern needs and in particular more open to exploitation by Northern multinationals; structural adjustment policies (SAPs) also guarantee the North a massive supply of cheap labour.
It is the sophisticated use of structural adjustment policies by the IMF and World Bank, which has ensured that the neocolonial process has been both systematic and widespread. The universal enforcement of SAP’s imposed by the IMF & World Bank can be considered a continuation of the imperialist manipulation which occurred in colonial times to achieve the domination of the colonial economy. SAPs, to use their abbreviation, do just that; they ‘sap’ the vitality of domestic economies. There is a wide gulf between the rhetoric and the reality of globalisation and between the rhetoric and reality of the proclaimed benefits of IMF and World Bank operations. The rhetoric promises progress toward broad-based prosperity and environmental stewardship. Many citizens see a different reality: pockets of obscene wealth in the midst of growing human misery, social dislocation, and environmental devastation [WDM June2000]. SAP’s lengthen the duration of the famously coined phrase ‘trickle-down’ to the extent of a dripping tap, while skewering the playing field in favour of multinational capital, consigning domestically led economic recovery firmly to the back-seat. The ‘globalisation’ process as a whole is rendered a downward spiral to nations in the South by a combination of fundamentally-flawed and dangerously irresponsible economic restructuring and the devastatingly dominant-impact on domestic-economies worldwide from the TNC’s oligarchy (for e.g. the impact of export dumping and the taking over of local grain markets by multinational grain companies like Cargill), together with the continued seepage of debt repayments from these economies.
The commonality of poor terms of trade amongst countries in the south, particularly Africa, is best understood if one accepts that exchange rates have purposively been deflated across the “developing world” (particularly in Africa), and so, could be considered a continuation of the imperialist manipulation which occurred in colonial times to entrap countries into the colonial economy when the imperialists’ intervention and subjugation of the colonies to new monetary and taxation systems ensured that the imperialist masters pre-determined the value of their goods, services and labour relative to the Imperial Powers’ own rate of exchange. Now, however, the new colonisers are multinational corporations who are reliant upon the use of tax-free havens – zones of tax-free status given protection afforded by colonial patronage so that these multinationals can enjoy off-shore banking, so that they are able to spread their tentacles into new markets around the world. Once again the Colonies provide lucrative potential bearing abundant fruit, ripe for exploitation. The flow, just like the days of rum, sugar and slaves, of “illegal” liquid cash is going directly from the Colonies to the bank accounts of the international wealthy capitalist class, most of whom reside in the north within the nations of the world who comprised the old colonial empire, which benefit from the tax revenues on these revenue streams on international share capital.
The same underlying process of expropriation and profit for the benefit of a few has been the driving-force underpinning both the ruthless colonial looting that occurred in Africa, Asia, Eire, Latin America and the West Indies, and present-day corporate investments that rely on speculation without respect of labour or environmental standards. For instance, the “explosion” in Export Processing Zones the last decade all around the poor parts of the world, employing more than 30 million people. In most of these places the companies’ hired workers endure long working hours (usually between 10 and 12 hours per day, and in exceptional circumstances, sometimes up to 16 h a day), no rights, and vulnerability of getting fired if involved in a labour union or if they’re pregnant or ill. The companies get tax exemptions and leave no support for the local/national government where they operate. Often these exemptions last for 5 years, and by then the company changes names or can even switch production to another EPZ in another country.
The majority of the population in countries of the South remain largely disenfranchised from the whole process of economic growth, being as they are increasingly dispossessed of having the ability to attain a decent livelihood within domestic agriculture through the market invasion of cheap grain from the North, and conversely, with those economically active subjected to the suppressed multiplier effect on the domestic economy from the simultaneous stranglehold of debt, neoliberal fiscal restraint, and the overbearing appropriation of profits and enclosure of markets by multinationals. Periodic attempts to cancel debt such as at the 2005 G8 Summit at Gleneagles, Scotland are nothing more than a small necessary sacrifice to ensure the economic path of each country is financially secure enough to pave the way for the final stage in the transformation of corporate globalisation. The international evidence indicates that the fall in popular living standards and employment levels is not a temporary but a permanent and increasingly intense characteristic of neo-liberal policies. Infact, job losses are not merely a spin-off of neo-liberalism; they are a core reason for the policy because it saves corporations money and reduces their vulnerability to organised labour.
Additionally, the most fundamental deceit is how financial liberalisation (opening a nation’s financial sector up to the encroachment of global finance capital) and the model of private credit monopoly spreads throughout countries in the south, hand-in-hand with a general push for privatisation in the south, meaning that these same countries are gradually being held more hostage to rampant forces of global capital, even more than has resulted in the past within the historical process of imperialism up until now. Now, the whole process continues to accelerate at an alarming rate, with the continual pressure for ever-faster rates-of-return on speculative investments. Those who are the enslaved primary-commodity producers whose output is largely consumed by the northern markets, and whose surplus-value is appropriated by the north, are left most disposable in this global system.
Meanwhile, on the African continent, out of recent events in Zimbabwe, the issue of land distribution and the colonial legacy pertaining to it, is sweeping like wildfire through the collective consciousness of the continent’s millions of poor, impatient and downtrodden millions. The movement against structural adjustment was similarly hugely powerful throughout the 1980s. However, with the combined effect of the massive outflow of wealth from the continent from debt-repayments, the iron-grip of structural adjustment policies and wholesale privatisation, and public health pandemics – notably the spread of AIDs, the result is that struggle for everyday existence is the norm for people on this continent – a legacy which it’s people do not deserve.
The legacy of colonialism, then, has been a familiar pattern starting with the straight swap of power from the colonialists to elite dictatorships, through to subjugation of national economies to the dictates of multinational power aided by the “unholy trinity” of the IMF, World Bank and WTO/GATT. There pervades a global adherence to neoliberalist dogmatic perspective, while being intellectually backward in that it is the fastest way to undermine the claimed objectives which are actually sought and hypocritical (we can subsidise our production through the military industrial complex, but you in the South can’t), as-it-is-implemented, the “unholy-trinity” of the WTO, WB and IMF are fundamentally complicit in the process of neo-colonial appropriation and resource exploitation.
Countries in the North are increasingly reliant on investments abroad to sustain their own economies. There is an obvious link between the nation state’s interest in diplomatically supporting multinational trading investments in poorer regions of the world, and those multinationals making a decent rate-of-return for their shareholders, who are largely resident in the nation states of the North. The stark reality is that as the US and EU push for further financial liberalisation abroad whilst also further extending the trend for increasing the ‘concentration’ of the money creation process within the private-banking systems of countries of the south, together with the floodgates to external investment and multinational encroachment being lowered in regions such as Africa perfectly highlighted by the terms and conditions of the NEPAD agreement (the New Partnership for Africa’s Development), it is plain to see that the process determining the flow of profit from the South to the North is being set-in-stone, consolidating the neocolonial process.
And what is the driving engine of this continued neocolonial subjugation of country after country around the world? For ex-colonising nation states of the post-industrialised world whose citizens are no longer cheap-labour for the manufacturing industry, it is the need to earn rates of return on investments abroad which can balance their own trade-deficits which exist because goods are no longer produced and are instead being imported. For multinationals, their pressure to achieve rates-of-return for their shareholders, it is their own debt schedules – borrowed against their assets (from banks) – which is a byproduct of a debt-money system which itself is the driving engine of capitalism and the necessary source of speculative investment for wealth accumulation, just like it was in the days when the first slave-ships ventured out, financed by banks such as Barclays. Within the North, the virtual monopoly that private banks have to undertake money creation through the liquidity ratio means that a national debt is not only unavoidable, but essential to sustain economic growth. However, as the leading world economy with seinorage status of it’s currency, the USA enjoys premium advantages in being ahead of the pack in the world economy, such as the benefit of the subsequent net capital inflows generated from the flood of US Dollars into the world financial system, permitting them the luxury of perpetually running up trade deficits and enormous budgets for defence spending (how long this precise arrangement will remain in place is questionable in years to come). Together with it’s domination of the multilateral institutions such as the World Bank and IMF, where voting rights are weighted in their favour as the largest member economy, the US penalise countries of inferior wealth who even attempt to implement policies which are long established within US economic management. It is effectively a delicate combination of factors complicit in ensuring the continued neo-colonial subjugation of countries in the South, particularly nations within Africa.
The same enclosure of local markets by the global market which occurred through the spread of the imperialist empire occurs now, except now it is happening at a colossal scale and at a furious rate, underwritten by a monetary system that is utterly demand-led by a world financial market that is driven by market signals generated from the collective might of this “casino stampede”. Countries of the South, infact, having embarked on a frantic re-run of our own history – propelling their societies into the modern world instead of being given the opportunity to learn from our mistakes and avoid the injustices of our history – have been forced through a fast-track version of that history, involving land enclosures, dispossession and wage dependency and industrialisation at the expense of rural development.
I close with the remarks of Elenga M’buyinga taken from his paper entitled “Pan-Africanism or Neocolonialism – the Bankruptcy of the OAU”:
“The essential requirement: A Break with the World Capitalist Market
All the fundamental features we have outlined previously point to one inescapable conclusion. Since the mechanisms of the world capitalist market, operating through unequal exchange, are at the root of the pillage of Africa, the only way out, the only way to establish the necessary conditions for authentic economic liberation, is to break with the world capitalist market. This does not necessarily imply economic autarchy. It is simply the elimination of the mechanisms of domination through which international imperialism subordinates the economies of the dominated countries, including the African countries, to it’s own economic laws. A geopolitical settlement within Africa would protect domestic industries from outside competition, and indeed, for individual nation states, include a degree of protection within bi-lateral agreements between countries.”
He continued: “There is a lesson from what occurred in 19th century France in the situation of free-trade between Britain and France. The effects of France’s liberal foreign trade policy between 1860 and 1892 were very negative and the precise opposite of those predicted by liberal and neoliberal theories. Economic growth was seriously slowed down, even once external factors have been discounted. The rate of growth was slower than in the equivalent periods which proceeded and followed the free-trade interlude. Indeed, it was the slowest rate of growth France has ever known, if one excludes the troubled years of the revolution and first empire and the great crisis of 1930.”