Africa: Beyond the World Bank Presidency - By Bala Yahaya

The contest for the World Bank presidency has come and gone.  The American-favoured candidate, the Asian-American Jim Yong Kim got it, our own Ngozi Okonjo Iweala lost out. Pundits were of the view that Iweala was more eminently qualified for the post than Yong. One of the many arguments bandied for the superiority of Iweala, an economist by training, over Yong was her vast experience in the institution which she served for over two (2) decades, a career that climaxed with the holding of the position of the Managing Director of the Bank.  Compared with Yong who is a health expert, health issues being no less important index of human development, Iweala towers mightily above.

Also the fact that Iweala is from a continent that is bedeviled by serious underdevelopment issues, which the bank is said to be established with the primary aim of addressing in the first place, should ordinarily give her an edge over Yong after all it is said that he who wears the shoe knows where it pinches the most!  There is no doubt today that Africa is the home of poverty, unemployment, illiteracy, income inequality, increasing child and maternal deaths, massive corruption, gender inequality, among many other such ills.  Therefore, a World Bank president from a background characterized by these ills is most likely to be more proactive in addressing them or so it is thought.

It is also argued that the notable contributions of Iweala in negotiating debt relief for Nigeria during her reign as the country’s Finance Minister in the Obasanjo II administration, debatable in terms of tangible economic benefits to the country as it were, was as well a pointer to her vast experience in high level international financial negotiations, a skill that is not only desirable but also vital for success in such sensitive position as World Bank President.

Furthermore, the fact that continental politics and the quest for supremacy in the region between Nigeria and its archrival South Africa was set aside to jointly sponsor the candidature of Iweala made a very strong statement of the continent’s resolve to forge a common front for adequate representation in the World Bank based on strong merit rather than national sentiments.  Also the fact that the candidacy of Iweala received the blessings of many World Bank former employees and leading financial tabloids across the world is an eloquent testimony not only of her sterling qualifications as an experienced economist but also of her general acceptance across the globe.

It is thus, an irony that in spite of the picture depicted above, Iweala lost the job to a less qualified and equally less experienced contender just because he had the blessings of the sole super power and its allies in the European Union.

This incident once more brings to the fore the question of the very negative implications of Africa’s and indeed other third world economies’ association with these metropolitan financial institutions. It is on record that in order to address the lingering economic problems of the global south the trio of World Bank, International Monetary Fund (IMF) and World Trade Organisation (WTO) recommend or even out rightly enforce policy templates on these disadvantaged countries, policies that over the years proved to be cure worse than the disease.

For instance it is on record that one of the causes of the numerous socio-economic problems bedeviling Nigeria today have their roots in the adoption of the World Bank/IMF’s recommended Structural Adjustment Programme in 1986 under the General Babangida Administration.   This was a policy which focal points includes currency devaluation, removal of trade barriers, privatisation of public enterprises, removal of subsidies, less government participation in economic activities, etc.

It is on record that these policies played key roles in strangulating the country’s economy through destruction of its infrastructural and industrial base occasioned by harsh operating environment and unfair competition with imported goods from countries with cheaper production costs.  For instance, the Manufacturers Association of Nigeria (MAN) reports that: a total of 834 manufacturing companies closed shop in 2009 as a result of their inability to continue to cope with the challenges posed by the harsh operating environment in Nigeria. The implication of this according to Dr. Warea Thomas an economic analyst with UNDP is that “when a company stops operation, the workers there become the frontline victims. If 834 firms were officially given by MAN to have closed shop in 2009, it is easy to speculate that not less than 83,400 jobs were lost in that year alone; if we assume that they were all medium-size manufacturing firms, with each having 100 workers” (Punch Newspapers 31/10/2010 edition).

The negative consequences of this state of affairs cannot be over-stated.  For instance it is a fact that the collapse the nation’s industrial base is substantially connected to the soaring rate of unemployment and by implication rising poverty level and crime rates in the country which are major indicators of under-development.  It has equally led to the near extermination of the middle class with the nation’s abundant wealth concentrated in the hands of a few thus consistently widening the income inequality gap between the rich and the poor.

Furthermore, the World Bank and IMF policies have played substantial roles in the eruption and escalation of social conflicts in Africa which over the years have claimed many innocent lives and left countries like Somalia largely ungovernable and many others in total disarray. For example, in his work entitled “The Political Failure of Globalisation in Africa”, the late erudite scholar Professor Sam Aluko stated that “the 1990 Rwandan ethnic strife between the Tutsis and the Hutus was largely fueled by the collapse of the Rwandan economy under the tutelage of the IMF.”

Perhaps, the full implications of the Rwandan genocide are as depicted by wikipedia.com in its analysis of the conflict. It recorded that out of a population of 7.3 million people–84% of whom were Hutu, 15% Tutsi and 1% Twa – the official figures published by the Rwandan government estimated the number of victims of the genocide to be 1,174,000 in 100 days (i.e. 10,000 murdered every day, 400 every hour, 7 every minute). It is estimated that about 300,000 Tutsis survived the genocide. Thousands of widows, many of whom were subjected to rape, are now HIV-positive. There were about 400,000 orphans and nearly 85,000 of them were forced to become heads of families.

Furthermore the relationship between African and other underdeveloped economies and the entire imperialist financial architecture is designed to perpetually enslave the former through an interminable debt chain. Nigeria is a living example of this assertion. According to Aluko, “the total externally borrowed money by Nigeria was about $17.5 billion between 1978 and 2000.  Although $32.5 billion had been repaid to the external creditors between 1978 and 2000, Nigeria still owed the external creditors $28.5 billion as at the end of year 2000.  However, the IMF and World Bank had been contending that at the beginning of year 2001, Nigeria still owed $34.5 billion and not $28.5 billion and that Nigeria must reach accord with the London and Paris Clubs of creditors on the debt issue before any rescheduling or relief to her would be considered.”

The above are just a few of the very negative consequences of the influences of IMF, World Bank and WTO on third world countries in the light of which it becomes expedient for African countries to rethink their association with these institutions and chart a new course for realistic, home-grown development strategies that will see to rapid human progress in their territories.  Leaving these economies to the dictates of the ‘market’ has proved to be not only unrealistic but catastrophic as well.

It is a fact of history that America under President Franklin Roosevelt used the machinery of government instead of market mechanism to rescue its economy from the great depression of 1929 through the famous “new deal”.  In this deal government might was deployed to rescue America’s collapsing economy, to construct roads, bridges, dams, to provide stable electricity all necessary ingredients to industrial growth and expansion.  Moreover, in the wake of the ongoing global economic meltdown, why did the Bush administration inject billions of dollars to save America’s collapsing giant financial institutions, a gesture which extends into the present regime of Barack Obama? After all one thinks that what is sauce for the goose is sauce for the gander as well.

It is therefore self-evident that the collaboration by the western powers to foist a weaker candidate as the President of World Bank to the detriment of Africa’s more qualified and more experienced candidate is a strong demonstration of not only their desire but also strong resolve, to maintain stranglehold on these institutions as a lever for further entrenchment of their imperialist hegemony over the rest of the world. Not that Africa’s holding of the Presidency would have made much difference anyway, but it only goes to show that like in George Orwell”s Animal farm, in these institutions all animals are equal but some animals are more equal than others.