Everybody wan chop from Ghana – why Ghana’s economic ‘success story’ is an imperial myth

“It is said, of course that we have no capital, no industrial skill, no communications, no internal markets, and that we cannot even agree among ourselves how best to utilise our resources for our own social needs.

“Yet all the stock exchanges in the world are pre-occupied with Africa’s gold, diamonds, uranium, platinum, copper and iron ores. Our CAPITAL flows out in streams to irrigate the whole system of Western economy. Fifty-two per cent of the gold in Fort Knox at this moment, where the USA stores its bullion, is believed to have originated from OUR shores. Africa provides more than 60 per cent of the world’s gold. A great deal of the uranium for nuclear power, of copper for electronics, of titanium for supersonic projectiles, of iron and steel for heavy industries, of other minerals and raw materials for lighter industries – the basic economic might of the foreign Powers – comes from OUR continent.

“Experts have estimated that the Congo Basin alone can produce enough food crops to satisfy the requirements of nearly HALF the population of the whole world and here we sit talking about regionalism, talking about gradualism, talking about step by step. Are you afraid to tackle the bull by the horn?”

Kwame Nkrumah, Address to the Conference of African Heads of State and Government, May 24, 63, can be found at page 237 of the book Revolutionary Path

Last week I walked in on a conversation between my friends where we live (for the moment) just outside of Accra, Ghana. “Ghana ye hye – Ghana is hot” one of them said to me. After some initial confusion (it was a cool day), they explained; “Pure water sachets are going up to 30 pesewas.” That’s a 50% increase.

After a quick news search I found out that from today (1st February) a sachet of water will go up from 20 pesewas to 30 pesewas and a bag of sachet water will sell at 5 Ghana cedis (an increase of 1 cedis 50 pesewas).

I asked them how they were feeling; “worried” was the instant reply; and then: “in our own land there is no peace”; “it’s impossible to sleep at night” and (laughing) “we’ll have to move to Togo”.  My friends are 24 years old and already fed up of politics, President Mahama and his party NDC, who have presided over an increasing number of price hikes and taxes; water by 67%, electricity by 59% and fuel by 28% – all the basic staples required to keep a country and its people running. In 2010 Ghana drilled for oil, but last year the IMF forced deregulation and the end of government subsidies and fuel prices increased by 13% in May, 4% in June and 15% in July. If the fuel prices go up, the cost of everything goes up. Except wages of course.

While doing some research on the price hikes to write this, I stumbled across this Guardian article published on Tuesday: ‘Ghana’s success story built on gold, oil and cocoa is foundering‘. The journalist gives an account of the protests taking place in Accra and the “difficulties facing the economy as the country heads towards presidential and parliamentary elections in November”, but also describes:

“Once an African success story, built on gold, oil and cocoa, Ghana leveraged its natural resources to produce strong economic growth in the early years of this century.”

This sentence stopped me in my tracks. I re-read it a few times, feeling a growing sense of frustration at the easy way hundreds of years of often oppressive and defining history can be erased in a single sentence; how easy it is to slip into comfortable neoliberal, imperial narratives.

I believe it does Ghanaians a huge disservice to place full accountability for their economic, political and societal problems at the feet of corrupt national governance and the autonomy of markets. I feel that the article has misplaced what is, in fact, a nuanced accountability for the crisis by failing to look at the historical and conscious international systemic contexts that Ghana exists within. Yes the Governance here is problematic, but this is a problem that is compounded and perpetuated by external and historical factors.

So, to elaborate on the story, let’s revisit some history and take a closer look at the international system that has contributed to Ghana’s economic problems…

Raw materials and cash crops – colonialism lives on

The dominant reason for the scramble and partitioning of Africa at the Berlin Conference in 1884-85 was economic exploitation. Namely, as articulated by Jules Ferry, the then Premier of France in 1885: to have free access to raw materials of the colonies; to have ready made markets for the sale of manufactured goods of the colonising countries, and; to use the colonies as fields for investment of surplus capital.

During the colonisation of Ghana (Gold Coast) in the 1890s, the colonialist agricultural policy was to turn the colony into a producer of raw materials for export and the importer of manufactured goods for consumption. The policy encouraged, educated and advised farmers to produce crops for export and gave little support for small-scale farmers producing food for the local market. Under the Colonial Department of Agriculture, Ghana saw a rapid growth in production of export crops to meet the demands of colonial authorities and expatriate merchants at the expense of non-export crops. Within 30 years of its introduction Cocoa accounted for over 80% of exports. Ghana had become a crop export nation and an import dependent economy. For various political reasons things did not improve for non-export crops after ‘independence’ either; colonial policy remained and the new government embodied the “modernisation and industrialisation craze” as the key to economic development. (Read more here.)

Today, agriculture accounts for approximately 42% of Ghana’s GDP and employs 54% of its workforce. Despite some diversification, cocoa still remains the primary export. It is this imposed over-reliance on export cash crops and raw materials that has left Ghana so vulnerable to the effects of the plummeting global commodity prices. The export revenues for cocoa, oil and gold declined from $8.2bn between January and September 2014 to $5.8bn just a year later.

This vulnerability is further compounded by the fact that Ghana is still operating primarily as a producer of raw agricultural product (e.g. cocoa, cotton, palm oil etc), which is then transported abroad to be processed. Without the infrastructure to process the products, Ghanaians are forced to re-import the processed results of their raw products back into the country – much of the chocolate and cotton fabric sold here has been processed elsewhere, transported back and sold at a profit – which is galling. Few African countries process their own raw materials – rather, the value is added elsewhere, for the benefit of others.

I’ve only very briefly touched on Ghana’s colonial past here – it’s almost impossible to ever do it justice, but I recommend reading Walter Rodney’s ‘How Europe Underdeveloped Africa’ for an eye-opening account. To think that Western governments, corporations and elites have ‘evolved’ beyond colonialism and exploitation today is evidently absurd – a quick Google of words like ‘foreign’, ‘exploitation’, resources’, ‘Ghana’, will bring up a range of news articles. Despite independence in 1957, the legacy of European colonialism across the African continent lives on and is today joined by neo-colonialism in the form of intervention from the US, China and foreign corporations, particularly when it comes to raw materials.

According to Dr Eric Twum, Chief Executive Officer of the Institute of Green Growth Solutions in Ghana, the country loses large amounts of revenue through non-renegotiation of most contracts with multinational companies. He suggests that “between 2011 and 2012, the country lost about $90 million and $70 million due to stability agreements in the mining and oil and gas sectors respectively,” and continues:

“Legislatively, so much control seems to have been given to foreign investors regardless of their natural resource use methods and its associated impacts in Ghana. A recent report (by Daily Graphic) indicates the problem of ambiguity in our tax laws which make them not fully applicable due to the varied interpretations. Additionally, our legal framework regulating natural resource use does not fully promote maximum benefit gains from foreign investors due to low tax charges. Before the introduction of the structural adjustment programme, the government of Ghana controlled at least 55% shares in all large mining operations. However, foreign companies now control an average of about 70% of shares in these mines with government controlling 10% free share in each mine, with the option to acquire an additional 20% at the prevailing market price. Furthermore, there are issues regarding protecting the interest of the Ghanaian worker in the event of a redundancy action as brought to bear by the unfavourable redundancy action by AngloGold Ashanti and Newmont Ghana Gold Limited in 2014 that rendered almost 6,000 workers jobless – bearing in mind that most of our natural resources are non renewable.”

Last year Ghana’s former Ambassador to the United Nations, James Victor Gbeho called on the government to enact a law that would help curb the control of foreigners exploiting the country’s natural resources. Gbeho suggested that the country had “lost 95 percent of its tropical forest since independence while very little royalties were paid to chiefs in communities endowed with gold, bauxite, timber, manganese, among other resources.”

I spent some time at Lake Bosumtwi in the Ashtanti region last year, which is considered a sacred lake. According to traditional belief, the souls of the dead go there to bid farewell to the god Asase Ya. Because of this, fishing in the lake is allowed only from wooden planks. I was staying nearby and was told by locals that foreigners had appeared unexpectedly and had drilled beneath the lake’s floor to explore for minerals. Not only had the intervention disturbed a sacred place, but I was told that it had killed huge numbers of the fish living in the lake, causing huge problems for the local community who depend on it. (This report would seem to back the story up.)

Not only are Ghanaians suffering from the effects of neoliberalism and imperialism with the destruction of their environment, they are then also missing out on any much-needed revenue generated by it. Instead the money resulting from the looting of their natural resources is going straight into the pockets of foreign companies who are focussed solely on making and repatriating profit.

China’s burgeoning relationship with Ghana has been problematic from the start; not only because there are a huge number of (largely) Chinese companies operating here illegally, but also because Chinese investment in Ghana has caused the collapse of Ghana’s manufacturing sector; proliferation of small arms in gold mining cities as a result of illegal mining activities; and increased unemployment due to the export of Ghanaian jobs to China through over-reliance on Chinese goods and services. Oh, and China is certainly not the only country playing this game – mining by foreign multinationals (as well as local companies I’m sure) displaces hundreds of thousands of people, destroys farm and forest land, and contaminates water supplies and pollutes the air causing disease and poor health.

The problem extends far beyond raw materials too; the desperation to attract Foreign Direct Investment has also left Ghana missing out on much needed finance. In 2008 the European multinational company Vodafone purchased a 70% stake in Ghana Telecom and, under the Sales Purchase Agreement, enjoyed a five year holiday from paying tax to the government. During that period the company made huge profits, all of which have gone to shareholders while Ghana saw very little, including little improvement to service quality (and in fact Vodafone prices have just gone up).

Ghana and the International Monetary Fund

“By far the greatest wrong which the departing colonialists inflicted on us, and which we now continue to inflict on ourselves in our present state of disunity, was to leave us divided into economically unviable States which bear no possibility of real development….”

Kwame Nkrumah, Speech OAU Summit Conference Cairo7/19/64 can be found on pages 282-4 of Revolutionary Path

As with the majority of economically ‘developing’ countries, Ghana has not escaped the clutches of the International Monetary Fund (IMF). Today Ghana maintains a relationship of dependency with the organisation, and by that I mean that the IMF depends on Ghana as one of several countries required to underpin its neoliberal agenda…

One such example of their involvement is the three-year electricity ‘crisis’ that Ghana is still in the midst of (‘dumsor’, or power blackouts have been a daily reality here for the duration). The IMF blames the power cuts on “lower rainfall on hydroelectric power generations and disruptions to the supply of gas from Nigeria,” but there is much evidence to suggest that the organisation itself is at least partly responsible. Former UK diplomat Craig Murray wrote last year that Ghana once had “the most reliable electricity supply in all of Africa and the highest percentage of households connected to the grid in all of Africa”. Murray believes that the success of this publicly owned and run enterprise posed too much of a threat to the neoliberal ideology of the World Bank and the IMF, and so, when Ghana needed some temporary financial assistance (against what he calls a ‘generally healthy background’), the IMF insisted that the Volta Region Authority be broken up. This resulted in the separation of electricity into production and distribution and the introduction of private sector Independent Power Producers to the market.

You only have to have spent a few days here over the past few years to know that the situation is a disaster for homes, public services and businesses that need a reliable power supply, especially as running a generator is so expensive (although the supply has seemed to be more consistent this year for those who can afford it…). According to Murray, there have been more power cuts in the country than ever in its history as an independent state. He claims that in July last year Ghana was producing 900 MW of electricity, which is half of what it was able to produce ten years ago, and suggests that the (mostly foreign owned and foreign financed) private sector Independent Power Producers were providing less than 20% of the electricity generation to the grid, but taking over 60% of the revenues.

To add insult to injury, as part of its loan conditionality the IMF and the USA then insisted on the privatisation of Electricity Company Ghana (ECG), the state utility body which provides electricity to the consumer and bills them. According to Murray, “the rationale behind this is that a privatised ECG will be more efficient and ruthless in collecting revenue from the poor and from hospitals, clinics, schools and other state institutions.” Or in other words, collecting revenue and channelling profits straight into the pockets of foreign businesses and banks. I know from living in the UK that the argument that privatising utilities means better service and prices is completely rubbish – it only profits the rich at the expense of the poor. (You can read a counter-response to Murray’s article here.)

The IMF has just approved a third disbursement of $114.6 million to ‘help tackle Ghana’s economic recovery’, which will undoubtedly see the country face further hardship while it tries to meet the IMF’s strict conditionality in order to ‘restore fiscal discipline and macroeconomic stability’. In the 1980s, implementation of the IMF’s ‘conditionality’ saw much needed subsidies wiped and public sector jobs cut while wages were kept low – under austerity many suffered.

These conditionalities look like structural adjustment policies, sound like structural adjustment policies and sure as hell smell like them, but no, the SAP has taken a trip to the marketing department and been rebranded as a ‘partnership’. The Managing Director of the IMF Christine Lagarde reportedly said herself:

“Structural adjustments? That was before my time. I have no idea what it is. We do not do that anymore. No, seriously you have to realise that we have changed the way in which we offer our financial support. It is really on the basis of partnership.”

“There is always in partnership a bit of hardship to go with it. If the Fund is called upon to help, it is that the country feels that it cannot decide certain things on its own. It needs backup support, financing to make sure that it has access to enough funding to finance itself.”

What IS so generous of the IMF (note the sarcasm) is that is has been considerate enough to offer “technical assistance and capacity-building” to Ghana with the opening of its fifth Regional Training Center in Accra. Lagarde states that the purpose of the centre is to offer ‘surveillance’ and try to ensure policy that is “more sophisticated, better adjusted to the new economy, more connected, more balance between the various regions and areas of the world” (Read: to ensure Ghana is behaving itself).

The burden of debt

“…the problem is how to obtain capital investment and still keep it under sufficient control to prevent exploitation; and how to preserve integrity and sovereignty without crippling economic or political ties to any country, bloc or system”

Kwame Nkrumah, Africa Must Unite

Ghana is a resource rich country. Aside from vast agricultural production, it also BLEEDS gold. You might ask yourself how a country built upon gold can be indebted to the rest of the world; but it is in debt… to the sum of 90bn cedis (£16bn), which, coupled with an apparent rise in public spending, gives the country a debt-to-gross domestic product ratio of more than 70%.

From the 1970s, many of the newly-independent African governments began to borrow huge amounts of money from rich countries and the Bretton Woods institutions. Throughout the Cold War such loans were often used as a tool to secure political support from key countries in a wholly non-discriminatory fashion – corrupt governments and those countries who would surely default (e.g. DRC), were given billions of dollars in credit. In Addis Ababa in 1987 at the summit of the Organisation of African Unity (now the African Union), the President of Burkina Faso, Thomas Sankara, called for a pan-African united front against debt in one of his most famous speeches. He said:

“We think that debt has to be seen from the standpoint of its origins. Debt’s origins come from colonialism’s origins. Those who lend us money are those who had colonised us before. Under its current form, that is imperialism-controlled, debt is a cleverly managed re-conquest of Africa, aiming at subjugating its growth and development through foreign rules. Thus, each one of us becomes the financial slave, which is to say a true slave…”

It was clear at the time that African countries were becoming increasingly crippled by debt. In the 1980s interest rates rose sharply, but governments continued to borrow more. According to This Is Africa;

“Between 1982 and 1990, African debt doubled from US$140 billion to US$270 billion. Sankara rightly predicted that this would cripple African development for generations to come. Despite debt relief programs, which have resulted in increased spending on health and education in African countries, Jubilee Debt Campaign estimates that in 2008, low income countries paid over US $20 million a day to rich countries.”

Today’s debt crisis in Ghana is unsurprising given the scale of lending to them still taking place and their dependence on fluctuating commodities. However, this debt is further compounded by the devaluing of Ghana’s currency which, in turn increases the real size of its debts.

Debts owed outside the country are valued in dollars or other foreign currencies, so a fall in exchange rate will immediately increase the relative size of debt repayments in domestic currency – a big risk of borrowing in foreign currencies. Even money leant by multilateral institutions like the World Bank and other governments carries this risk because the loans are given in dollars – even though they claim they are ‘risk free’ with a low interest rate of around 0.5% for the most impoverished countries.

According to the Jubilee Debt Campaign:

Between 2004 and 2013, Ghana was lent $2.8 billion by the World Bank, which totalled 3.8 billion Ghanaian Cedis. However, the fall in the Ghanaian Cedi now means that, based on current exchange rates, Ghana will pay back 12.8 billion Cedis, three times more what was lent. The effective interest rate Ghana is now paying on these World Bank loans is 9%.

World Bank interest rates

Source: Jubilee Debt Campaign.

The same applies to loans given to Ghana by foreign private financial markets, through bonds usually issued under English law. In 2013 Ghana borrowed $750 million through a 10-year bond in at an 8% interest rate. Due to the real cost payments increasing with the fall in exchange rates, the Jubilee Debt Campaign calculates that the effective interest rate for Ghana on these bonds is now 27%.

Once again Ghana, which spent over 30% of government revenue on debt payments in 2015, is at the mercy of the IMF, which ‘came to the rescue’ in April last year with a $918m three-year assistance programme to enable these debts to be paid. Essentially the programme equals more debt…and a hell of a lot of pressure on the government to create increase austerity within the country and to create the right conditions for external market forces.

It’s important to recognise that the costs of the commodity price and exchange rate falls are being borne by the people of Ghana and citizens of other countries in similar positions, and not by the lenders, whether that be the IMF, World Bank, private speculators or others. Economic growth will not improve things for Ghanaians – in general those countries heavily dependent on foreign lending grow faster than the average for low income countries, but they make less progress on reducing poverty and inequality is increasing, as this report from the Jubilee Debt campaign demonstrates.

A legacy of colonial leadership

“For the only great men among the unfree and the oppressed are those who struggle to destroy the oppressor.”

Walter Rodney, How Europe Underdeveloped Africa

My intention with this article isn’t to remove accountability or blame from the Ghanaian government completely – they are heavily indebted to a whole range of organisations, and within the seemingly narrow hallways of power they have been afforded within a system deliberately designed to limit power, they have made some terrible decisions. In fact, the Ghanaian government seems to share many of the incompetencies, failings and self-interests of the government of their former ‘colonial masters’ – in December last year the Ghanaian transport minister was forced to resign after it emerged that the government had spent 3.6m cedis painting pictures of President Mahama and other former leaders on buses. Reports of Mahama’s government lavishly rewarding officials with houses, cars and fuel on top of generous salaries feels as horrifying to me as when we discovered the British expenses scandal.

I’m loathe to patronise Ghanaians – they certainly do have the autonomy to select their own government. I can’t believe that there’s noone that could do a better job than the NPP or the NDC, but then again I also can’t believe that a majority of voting Brits could elect David Cameron and his blood-sucking, Eton romping, austerity wielding, old boys club – apparently anything can happen, and people are misguided and manipulated in myriad ways.

From slavery and colonialism, to independence and the forcible removal of former leaders, to today; Ghana has contributed immeasurably, at great cost, to boosting the coffers of Britain and its counterparts. In his address on the eve of Ghana’s independence, Nkrumah pointed out that of £124 million spent during the course of the Five Year Development Plan, the CPP internal self-government had only received £1.5 million in aid from Colonial Development and Welfare Funds, despite Ghana’s vast contribution to the gold and dollar resources of the sterling. He elaborated:

“The Gold Coast has contributed, on an average, 25% of the net dollar earnings of the British colonial territories, and, taking into account our contribution of  around ₤9 million a year in gold, in the five years from 1951 to 1955 in which the CPP have been in power, the Gold Coast contributed a net positive balance  of ₤150 million to the gold and dollar reserves of the sterling area. It will be seen therefore, that though the Gold Coast is small and, by Western standards, not a very wealthy country, it has made a significant contribution to maintaining the stability of  the sterling area.”

Kwame Nkrumah, “I Speak of Freedom”.

Nkrumah was a leader not without problems, but he was a socialist who loved his country and a pan-Africanist who stood up to imperialism and Western dominance until he was overthrown by a military coup in February 1966. There is much evidence to suggest that the United States of America was complicit in the coup, led by Emmanuel Kwasi Kotoka and the National Liberation Party – it was certain a welcome outcome for Western powers. In a memo from the United States President’s Deputy Special Assistant for National Security Affairs (Komer) to President Johnson in 1966, he wrote:

“The coup in Ghana is another example of a fortuitous windfall. Nkrumah was doing more to undermine our interests than any other black African. In reaction to his strongly pro-Communist leanings, the new military regime is almost pathetically pro-Western.”

Unsurprisingly, shortly after Nkrumah’s removal Ghana realigned itself internationally cutting ties with Guinea in favour of those with Western countries and allowing the IMF and World Bank to take a lead role in managing the economy.

So, is bad governance really surprising when Ghana has faced attempts to limit autonomy, self-determination, self-reliance and powerful leadership at every stage of its ‘modern development’?

Today the system of governance here, like the majority of national government systems across the globe, is incompetent, at least partially corrupt, self-interested and unwilling to stand up to big business, imperialism and neoliberalism. Africa has a legacy of creating great leaders who are thwarted by Western intervention and it is a sad state of affairs that Ghana, like many other countries once under colonial rule, has seemingly been forced into a self-perpetuating cycle of bad government after bad government. It seems that the collective way of operating is kowtowing to carefully marketed Western doctrine, allowing multinational corporations to eat up the country in return for a quick fix or a quick buck and putting self-interest and ‘economic growth at all costs’ first at the expense of citizens, traditional values, pan-Africanism and humanity. What’s worse is that I know most of you will be able to see these traits reflected in your own national governments as I can in mine – where the pursuit of ‘growth’ and of ‘more’ is leading us all.

To frame Ghana as a ‘once African success story’ begs the question; successful for whom? Ghana is a country that has forever been considered ‘developing’. It’s poor. Since it began its relationship with the West it’s gone from slavery, to colonialism, to neoliberalism; with poverty and inequality consistent themes throughout. The only people who have truly benefited from its gold, oil and cocoa are foreign governments and companies. Ordinary Ghanaians have seen little benefit from strong economic growth.

To call Ghana a ‘failure’, is also a misnomer, because actually it’s still doing exactly what it was designed to do, very successfully. If you rub off the sheen of ‘independence’, underneath is a country very much allowing largely free access to its raw materials, offering ready made markets for the sale of manufactured goods of foreign companies and allowing investment of surplus capital (to be repaid with interest).

A truly successful Ghana would be a Ghana bolstered with reparations for the many damages done to its economy, its people and its resources, one that is able to exist within an international system of true equality and respect, where foreign companies and countries follow the rules instead of making them and where Ghana is allowed to invent itself however the people decide – free from the shackles of neoliberalism, imperialism and being developed in the Western image, for Western benefit.

I’m not here to tell Ghanaians what they should be doing or how they should be doing it – there are enough people doing that. What I hope for with these words is to encourage those of us in the UK and in the Western world; who read articles like this one; believe in the narrative that tries to hide the fact that poverty and inequality are created; and disconnect ourselves and our lives from playing any part in it; to ask questions of these these stories. Our governments, our money, our history, our silence are all implicated in the poverty and inequality of others. Are we really surprised by the economic misfortune of a country deliberately constructed to serve foreign interests? Why is its success measured only by economic growth? How is poverty created? Who’s developing whom? Why not connect the dots?

I welcome your thoughts…

Further reading:

Sources:

  1. https://www.modernghana.com/news/118977/1/historical-odyssey-of-our-agricultural-policies.html
  2. http://gipcghana.com/17-investment-projects/agriculture-and-agribusiness/cash-crops/287-investing-in-ghana-s-cash-crops.html
  3. http://www.ghanaweb.com/GhanaHomePage/NewsArchive/IMF-backs-gov-t-to-snub-labour-410535
  4. http://myjoyonline.com/news/2015/July-4th/former-uk-diplomat-blames-us-imf-for-ghanas-economic-woes.php
  5. http://www.graphic.com.gh/business/business-news/57024-ghana-the-bumpy-road-to-economic-recovery.html
  6. http://jubileedebt.org.uk/blog/commodity-price-crash-causes-debt-payments-to-soar
  7. http://www.graphic.com.gh/features/opinion/45562-the-fallacy-of-britain-leaving-huge-sums-of-money-for-kwame-nkrumah-s-government.html#sthash.dI9Rij5j.dpuf
  8. https://history.state.gov/historicaldocuments/frus1964-68v26/d201
  9. http://jubileedebt.org.uk/reports-briefings/report/the-new-debt-trap 
  10. http://www.panafricanperspective.com/nkrumahquotes.html
  11. http://ghana-news.adomonline.com/opinion/2015/March-17th/natural-resource-governance-and-management-in-ghana-the-stride-towards-an-efficient-use-of-our-natural-resources.php#_ftn4
  12. http://www.ghanaweb.com/GhanaHomePage/NewsArchive/Chinese-money-for-Ghana-s-natural-resources-283400
  13. http://www.graphic.com.gh/features/opinion/21413-govt-must-review-tax-incentives-to-multinational-companies.html
  14. http://citifmonline.com/2015/03/29/diplomats-demand-laws-to-stop-foreign-control-of-ghanas-resources/
  15. http://www.bbc.com/news/world-africa-33643385
  16. http://www.newsghana.com.gh/an-analysis-why-akufo-addo-and-bawumia-are-right-imf-cannot-solve-ghanas-economy/
  17. http://www.newsghana.com.gh/imfworld-bank-bailout-will-bad-ghanaians/
  18. http://www.ghanaweb.com/GhanaHomePage/features/Ghana-lost-us-6-004-billion-in-oil-revenue-five-years-into-oil-production-389583
  19. http://www.theguardian.com/global-development/2016/jan/26/ghana-success-gold-oil-cocoa-economic-downturn

The dark side of Davos

What do the Chairman of the Board of Nestlé, the Chairman and Chief Executive Officer of PepsiCo and the President of the Inter-American Development Bank have in common? They’re all on the board of The World Economic Forum.

The World Economic Forum (WEF) is a Swiss non-profit foundation, which cites its mission as being “committed to improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas.”

Its annual winter meeting in Davos is currently taking place, bringing together more than 2,500 top international business and political leaders, invited academics and journalists to discuss pressing global issues. In short – it’s a pretty influential set up.

So let’s take a closer look at the 24 WEF board, which is currently made up of

  • Gender: 18 men and 6 women
  • Employment: 12 corporate executives, 4 university academics, 4 financial insitutions, 1 Director of WEF, 1 Intergovernmental Organisation, 1 Non-governmental Organisation, 1 Queen
  • Geographical location: 10 Europeans (including Russia), 6 North Americans, 6 Asians, 1 Middle Eastern, 1 South American, 0 Africans, 0 Oceanians
  • Education: 22 of the 24 went to universities in the USA or EU

Many of the board members have been through the revolving doors in their careers; work for or sit on boards or advisory boards to some of the world’s most powerful corporations; have strong political and academic ties; belong to powerful lobbying, policy-making and advisory groups and a number have been implicated in accusations of corporate malfeasance during their career.

Susan George described the board as follows:

“The Davos class, despite its members’ nice manners and well-tailored clothes is predatory… They run our major institutions, including the media, know exactly what they want and are much more united and better organized than we are. But this dominant class has weaknesses too; one is that it has an ideology but virtually no ideas and no imagination.”

My source for this post is this amazing infographic which has more detailed information about the careers of the current board: http://davosclass.tni.org/. The infographic is a collaboration of the Transnational Institute and Occupy.com. They believe the World Economic Forum is fundamentally about increasing corporate profits and rewarding political elites rather than “improving the state of the world” and describe it as an undemocratic, unaccountable and illegitimate institution that, far from improving the world, has over decades reinforced the global crisis of inequality, poverty, and environmental destruction.

The Davos class are powerful, with many corporate interests and completely unrepresentative of global society – should they be responsible for such an influential forum discussing and impacting global issues?

Image: https://www.tni.org/sites/www.tni.org/files/images/davos-facebook-share.png

The MOST important research on global poverty eradication I’ve ever seen…

Are you ready for it?

It will take 100 years for the world’s poorest people to earn $1.25 a day

I’ll just repeat that.

It will take 100 years for the world’s poorest people to earn $1.25 a day

In the bath last week I decided that, somehow, without any of the right skills or training, I would set about to work out what the world would look like, in the current global economic system, if there was more financial equality… and actually to ascertain if it’s even possible (working on the assumption that the ‘rich’ are only rich because the ‘poor’ are poor). Governments and corporations the world over talk about ‘poverty eradication’, but what does that actually look like, and, when the powerful 1% are only so because they’re being propped up by the 99%, is it ever going to happen under capitalism? I didn’t think so. Luckily for me, I don’t have to: in a Guardian article today Jason Hickel, an anthropologist at the London School of Economics, highlighted a piece of research by economist David Woodward published in the World Economic Review that demonstrates that our current economic model, built on GDP, “will never be inclusive or sustainable”. Hickel claims that the headlines and statistics announcing that “world leaders have succeeded in cutting global poverty in half over the past couple of decades” are untrue and that “the numbers have been furtively manipulated to make it seem as though our economic system is working for the majority of humanity when in fact it is not.” Is it possible to end poverty under our current economic system? NO.

Let’s assume that we can maintain the fastest rate of income growth that the poorest 10% of the world’s population have ever enjoyed over the past few decades. That was between 1993 and 2008 – after the debt crisis of the 1980s that crippled much of the developing world and before the banking collapse of 2008. During that period, their incomes increased at a rate of 1.29% each year. So how long will it take to eradicate poverty if we extrapolate this trend? 100 years.

And that’s just to get the world’s poorest over the standard $1.25 benchmark poverty line, which, increasingly, scholars are pointing out isn’t adequate for people to live on. Hickel points out that to eradicate poverty global GDP would “have to increase to 175 times its present size if we go with $5/day” (as a ‘fairer’ minimum living benchmark). If this were even possible, not only would it drive commodity extraction, production and consumption, and therefore climate change, to “unimaginable” levels, it would mean that global per capita income would have to be:

no less than $1.3 million. In other words, the average income would have to be $1.3 million per year simply so that the poorest two-thirds of humanity could earn $5 per day. It’s completely absurd, but shows just how deeply inequality is hardwired into our economic system.

Hickel argues that poverty eradication is possible in fewer than 207 years without destroying the planet, but it will require huge changes. He suggests that the abolition of debts owed by developing countries; the closing down of tax havens; the installation of a global minimum wage; a moratorium on land grabs and an end to structural adjustment programmes that “allow rich countries to control the fates of poor countries”, will help, alongside a ‘dethroning’ of the GDP measure and replacing it with “something more rational – like the Genuine Progress Indicator or the Happy Planet Index.” It’s a powerful piece of research and an important article that are desperately needed to question the seemingly futile Sustainable Development Goals and the global elite. Like me Hickel is sceptical that the hegemony will adopt any of the changes needed to truly eradicate global poverty, as to do so would “threaten the interests” of the1%. But, also like me, he believes that we need to be pointing these huge disparities and falsehoods at every chance we get. Please do read the full article on the Guardian Development Professionals Network here. I’d also really urge you to share his important work far and wide. You can follow Jason Hickel on Twitter @jasonhickel (and me at @devtruths). What do you think about this research? How does it make you feel? Do you agree or disagree with Hickel and Woodward’s conclusions?

Capitalism #ADifferentStory

You’ll know from previous posts that I don’t believe that ‘we can solve global poverty if rich countries give aid to poor countries’. This new campaign and video from The Rules questions that rhetoric too and recognises that, in the current system, “rich countries are rich because they grab land and natural resources and exploit the human labour of poor countries”. It calls for us to tell #ADifferentStory to capitalism, and, like me, believes that we can change things. It’s really worth a watch.

Here’s their intro to the video:

How many of us have a sneaking suspicion that something pretty fundamental is going wrong in the world? We keep hearing about the potentially devastating consequences of climate change but we are pumping more carbon dioxide into the atmosphere every single year. We are forced into economic crisis after economic crisis and the only people who aren’t brought to their knees are those that cause it. In fact, they often just get richer and more powerful while the rest of us work harder and harder for less reward. Politicians all say the same basic thing. No one, it seems, is offering anything that is really different. The whole operating system is somehow wrong, but also somehow inevitable. Nothing can really be changed because this is just how things are.

At least, that’s what we’re told, and how it can feel. But this way of living – our system of modern capitalism – is just a story.  And this story is not the only one there is.  It’s not inherent within us.  It was invented by human beings, and so human beings can change it.

But in order to get there, we first have to face up to some difficult truths.

You can find out more about The Rules and their campaign on their website.

Let me know what you think. What story would you tell?

27 years later…Thomas Sankara

I realised the other day that this week (yesterday in fact), marks 27 years since former president of Burkina Faso, Thomas Sankara, was murdered because of European and African interests in a coup d’état led by French-backed current president Blaise Compaoré. Having spent time in Burkina Faso and spoken to many people who adore him, I really couldn’t let this anniversary pass by without commemorating it in some way. Many of you reading this in the West may not have heard of Sankara, so this is for you.

One of the very first things I ever heard about Sankara when I was in Burkina was that he would often dress himself up in casual clothing and quietly take to the streets to talk to people and play football with children with little recognition or fanfare. He wanted it that way. He wanted to talk to people and know what was really going on, so that he could be a better leader.

Commonly referred to as Africa’s Che Guevara, Sankara is widely considered in the continent to be one of the great leaders of the Twentieth Century. His Pan-Africanism, sweeping social and economic reforms, commitment to women and challenging of the elite (both Burkinabé and international) and the West has labelled him a hero in the eyes of many.

I must hastily add that (in my opinion) Sankara is not without fault and he has been criticised by many for his often undemocratic policies. He was an authoritarian leader accused of human rights violations against his political enemies, he established Committees for the Defence of the Revolution and banned unions and free press. However, he championed Burkina Faso and the whole African continent, stood up to Western hegemony and “undertook one of the most ambitious programmes for social and economic change ever attempted on the continent.” In the words of Sean Jacobs (more below): “Sankara’s short four-year reign – for all its faults… pointed briefly to the potential of different political futures for Africans.” You really should know about him.

There is so much I could say about Sankara, but happily, there are two brilliant articles already written about him that will put it much better than I can.

The first; Sankara: Daring to invent Africa’s future was written in 2008 in the Guardian by Sean Jacobs, who wrote:

Sankara preached economic self-reliance. He shunned World Bank loans and promoted local food and textile production… Women, the poor and the country’s peasantry benefited mostly from the reforms. Sankara outlawed tribute payments and obligatory labour to village chiefs, abolished rural poll taxes, promoted gender equality in a very male-dominated society (including outlawing female circumcision and polygamy), instituted a massive immunisation programme, built railways and kick-started public housing construction. His administration aggressively pushed literacy programmes, tackled river blindness and embarked on an anti-corruption drive in the civil service.

You can read the full (and balanced) article here.

The second article appeared more recently on the Africa is a Country website (they are amazing, check them out).

It is the 27th anniversary of the death of Thomas Sankara, and once again we mark the passing of one of the great leaders of the Twentieth Century. Sankara was a Marxist revolutionary in the last years of the Cold War, a Pan-Africanist when the Pan-African project was at its lowest ebb, a committed feminist long before so-called “global civil society” started to preach about “empowerment” of women, a leader who sought to organize the uplift of a whole society long before elites began to boast about “Africa Rising”.

You can read the full article here and they’ve got some brilliant videos in their feature that are worth watching.

There’s still a lot more research I’d like to do on Sankara, but I’d be really interested to hear about what you know of him, or your thoughts on his leadership. Is he your hero? Can a great leader really be great and undemocratic? How can France and it’s co-conspirators justify his death? Thoughts welcome as always!

p.s I’d really like to know of any good books/websites/resources on Sankara so please do feel free to recommend.

 

Video

The Rules….

Might just happen to be my new favourite thing!

I am in the process of finding out more about getting involved with some of their amazing campaigns, but check them out!

http://www.therules.org/en

“Our world has never been more connected or more prosperous than it is today. Yet right now, one in every three of us alive today does not have access to the most basic needs for a decent life – food, education, medical care, a safe environment.

The good news is that for the first time, ordinary citizens like you and I have the power and ability to change the rules that are creating these injustices. Technology and the shift of global power mean that we can now demand our say in decisions that have traditionally been made by elites behind closed doors. But the truth is, these things will only change if we demand it.

That’s why we invite you to join /The Rules. If we work together, the voices of the world’s majority are too loud to be silenced. Change the rules, and we change the world.”