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Keep connecting dots…

Written by Alnoor Ladha and Martin Kirk, originally posted at The Rules

What do rising sea levels in Bangladesh, the break up of public utilities in Ghana and austerity in the UK have in common?

They’re all symptoms of the same disease: neoliberal capitalism.

This is not the story we’re most often told. Instead, we’re encouraged to see the many economic, political, environmental and societal crises faced by communities around the world as separate. In this story, rising food prices in Kenya, for example, have nothing to do with exploding student debt in America. But this simply isn’t true. They are both inevitable outcomes of the same neoliberal logic that says that life must ultimately serve capital, rather than the other way round.

It’s only when we connect enough dots that we can expose the deep logic and rules that govern the whole global economy. Rules like, “material growth, everywhere, at all costs”; a ridiculous idea on a planet with finite resources. And it’s only when we connect the dots that we can see that the people who have the most power in this system aren’t the most thoughtful, talented or worthy, but merely those who most effectively obey these rules.

Like all stories, the way to undermine its power is to be conscious of it. Understanding and then exposing the deep logic and rules of the global system is one of the most important political acts we can engage in. It’s the beginning of our own de-programming, and it leads us to alternative solutions to these whole-system problems. Alternatives like strong local economies that can bypass debt-based currencies, and food sovereignty approaches that challenge the monoculture model of neoliberal ‘development.’ Alternatives that are already to be found all around us; from the Brixton Pound in Britain, to the Zapatistas in Mexico, to Rojava, the Kurdish free state in northern Syria.

The mainstream media is not set up to see these shifts and so continues to push the old story of “growth at all costs”. It’s up to us to connect the dots. To expose how oppressions around the world are connected. And to recognise that something wonderful and powerful is emerging all around us, outgrowing the cruel limitations of neoliberal capitalism by embracing life in all its glorious, indescribable diversity.

Will you help us connect the dots and build the alternatives before it’s too late?

Here’s how you can help:

Watch and share our short video to keep #ConnectingDots between our global oppressions:

Keep connecting dots

Saying “everything is connected” is pretty popular these days. ‘Intersectionality’ is the latest buzzword.  ‘Systems thinking’ is the discipline du jour.  Everyone, it seems, is trying to make sense of this dawning awareness that the challenges we face do not stand alone. Climate change, for example, is not just about carbon emissions but also economics, race relations, patriarchy and power. There is no line of disconnect, except where we draw it with our minds.

Starting with How

Simply saying that everything is connected doesn’t get you very far, though. The real challenge is to understand how. When it comes to the root causes of inequality and poverty, many of the all-important hows are not only to be found in every national economy, but transcend them all.

Globalisation is a word that’s been in common use for at least thirty years. At this point, It feels old hat; the 90s version of the social justice struggle.

But that sort of easy dismissal surrenders crucial intellectual ground. It removes from view not just basic facts – e.g. global trade is the lifeblood of most national economies – but some critical realities about how the world works.

The first critical reality is that, in the most practical and important sense, there is one global economic system. There are networks of national systems within it, but they are all part of, and increasingly subservient to, a single mother-system.

This is an astonishingly important idea to get our heads around. Instead of starting with, for example, the US or Greek economies and then looking for where it links to the global system, we start with the global, look down at the US and Greek economies and start to connect dots to see how they are similar.

You don’t have to work from this perspective for long to recognise that there is a single set of rules. They may be implemented in different ways or clothed in different language, but they are as true for the US and Greece as they are for China and South Africa.

The second point is that this one system, with its single set of rules, is being governed. There are people who see its wholeness clearly and operate from that perspective. Right now, most of these people, unsurprisingly, sit in organisations that have genuine planetary reach; private corporations, international institutions like the World Bank and the World Economic Forum, and a small number of large NGOs.

This leads to the third truth, which is that the people with the most power in the global economy are those who align with its interests. Which is another way of saying that they effectively promote and implement its rules. This isn’t some conspiracy theory, merely a truth about the nature of complex adaptive systems. The top priority of any system is to survive. Once a network becomes sufficiently complex, it becomes self-organising. From that point on, it will always ‘want’ to survive. One way the global economic system does this is to draw into positions of influence those people who best serve that purpose. A capitalist system, whose Prime Directive is the production of capital, will work constantly to refine and improve its ability to do just that. It will continue until it is stopped by an external force of some kind, or it collapses under its own weight.

Connecting these dots leads us to one very important realisation: even the most powerful people in the world have no choice but to obey the rules as long as they want to be rewarded by the system, with more power or wealth. In other words, unless a politically significant mass of people actively choose otherwise, the rules of the system will govern us, not the other way round.

The system itself will not see human suffering as an imperative to change its rules as long as those rules serve its immediate survival. It has no inherent predictive capacity. It is self-organising but not independently sentient. It can no more ‘feel’ human suffering than it can foresee its own destruction at the hands of climate change. Only us humans, with our predictive capacities, can do that. If the rules are to be changed, we cannot expect the system to auto-correct. We must change them manually.

Growth as Given

There are few rules of the single global economy more fundamental than growth. The mantra that “growth is good” has been repeated so often that it has the feel of common sense. It is almost impossible to think of how economies might work, let alone how inequality and poverty might be reduced, if we aren’t growing the amount of capital there is in the world through ever-increasing production and consumption.

This logic pervades all international debates and plans. Take, for example, the recent “Sustainable Development Goals” (SDGs). They rest on the fundamental assumption that every country, every company, even every human being, must grow their material wealth over time, as a precondition to anything else. This is measured in GDP for countries, and profit for businesses. In other words, they obey the rule that the global economy must grow continually through the perpetual growth of all of its parts.

But what if there is a fatal flaw in this logic? What if this rule is not fit for the purpose of guiding us into the future? What if, instead of being a panacea for all that is good, it is a driver of so much that is bad?

The evidence is clear. Totalitarian growth of all parts of the system has not only led to destabilising the climate by making sure consumption is always increasing, everywhere, but has also created vast amounts of poverty and inequality. This might sound counter-intuitive at first glance – doesn’t more money mean less poverty? But consider this: since 1990, global GDP has increased 271%, and yet both the number of people living on less than $5 a day, and the number of people going hungry has also increased, by 10% and 9% respectively. Add to that the wage stagnation across the developed world, and increasing inequality both within and between countries pretty much everywhere, and the shakiness of this basic logic becomes evident. Aggregate economic growth does not translate into less poverty.

Maybe this would only be problematic, something that could be fixed by tweaking the growth model while keeping the basic imperative in place, were it not for the second part of the problem. The imperative for every part of the system to constantly grow its material wealth is destroying us, in the most real and painful way. The consumption-driven mechanisms we use to achieve it, and the GDP measure we use to define it, have us locked on a path to ruin by actively encouraging us to treat finite natural resources as if they were infinite, and prioritize the growth of the money supply over everything else. Said another way, the perceived moral imperative for economic growth actually contradicts the laws of nature.

It is only by connecting dots that we start to be able to see the true shape of the challenges we face. We all face. Whatever our issue-focus, there are underlying rules and norms that affect every facet of human life. Growth is just one.

At first glance, connecting dots in this way might make the job of radical change feel more difficult. We struggle hard enough to affect change locally, let alone nationally, let alone globally. But something liberating and empowering happens when you start to connect the dots to see what’s going wrong; the same process also allows you to connect the dots between the struggles for making things better. We start to see that what’s driving the destruction of the rainforest in Indonesia is the same basic set of rules that are causing rising food prices in Kenya, and the explosion of student debt in America. We become connected, in very real and actionable ways, by a realization that we are all being screwed by the same basic set of rules.

Most importantly, we start to see new and different solutions. Ideas that previously seemed to only mitigate one problem can start to be seen to mitigate all.

For example, strong local economies with independent currencies and food sovereignty challenge the monoculture model of ‘development’. Gift economies that deny the commodification of life disrupt the system’s rules by their very existence. As we contract new types of relationships, with each other, with our communities, with Nature itself, we will usher in new types of social relations based on a vast range of diverse and mutually-supporting solutions that will render the old paradigm, with its slavish adherence to ideas like perpetual growth, wholly obsolete.

These new models and experiments are already taking place all around us. From the Brixton Pound in Britain, to the Zapatistas in Mexico, to Rojava, the Kurdish free state in northern Syria; a new breed of post-capitalist thinking is taking hold and spreading through networks of conscious citizens. However, the mainstream media is not set up to see these shifts. They are pushing the old story of growth, lifting boats, charity and ‘financial access’. And in their blindness lies our opportunity. The antidote lies in our ability to see how the old system is connected, while recognising the patterns in the diversity and wellspring of wonder and power that is filling the void of the crumbling edifice of growth-based capitalism. The question is, will we connect the dots before it’s too late?

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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
Video

Mallence Bart-Williams on Sierra Leone – the richest country in the world and Western dependency on Africa

THIS.

Mallence Bart-Williams talks to Berlin about Sierra Leone – the richest country in the world, in nature, people, culture, treasures, minerals…and stamps.

“Of course the West needs Africa’s resources, most desperately. To power aeroplanes, cellphones, computers and engines. And the gold and diamonds of course. A status symbol to determine their powers by decor and to give value to their currencies.

One thing that keeps me puzzled, despite having studied finance and economics at the world’s best universities, the following question remains unanswered. Why is it that 5,000 units of our currency is worth 1 unit of your currency, where we are the ones with actual gold reserves?

It’s quite evident that the aid is in fact not coming from the West to Africa, but from Africa to the Western world. The Western world depends on Africa in every possible way, since alternative resources are scarce out here.

So how does the West ensure that the free aid keeps coming? By systematically destabilising the wealthiest African nations and their systems, and all that backed by huge PR campaigns, leaving the entire world under the impression that Africa is poor and dying and merely surviving on the mercy of the West. Well done Oxfam, UNICEF, Red Cross, Live Aid and all the other organisations that continuously run multimillion dollar advertising campaigns depicting charity porn to sustain that image of Africa globally.”

Why is economic growth our measure of human progress?

Whether you believe that ‘money makes the world go round’ or that it’s the ‘root of all evil’, increasingly humanity is waking up to the fact that money can’t ‘buy you happiness’ and that it’s certainly no longer an accurate or helpful measure of planetary progress. Our world faces multiple crises of which continuing economic growth has often been the cause and less often the solution.

Today the planet is a miserable and frightening place for most of its inhabitants. Many of the rich are not happy, while the gap between the rich and poor gets wider. The wealthiest 80 people in the world have the same wealth as the poorest 50%, or 3.5 billion people. Our pursuit of economic growth means that we are ruining the planet at such a rate that – sooner than most people can imagine – large parts of it will become uninhabitable. Our soils and forests are disappearing, our oceans are being vacuumed of fish, unstable financial markets lurch from crisis to crisis, disengaged people vent their anger and frustration at oppressive governments and we live in an economic system that rewards our greed and immorality and that forces those living in rural areas and no longer able to support themselves, more than a billion people, to swarm towards cities where there is no work for them.

In 2014 young people in 20 countries around the world were asked ‘to what extent, if at all, do you feel that today’s youth will have had a better or worse life than your parents’ generation or will it be about the same?’ On average, only 37% of young people living in the ten wealthiest countries ranked by gross domestic product (GDP) thought that life would be better for their generation than it was for their parents. In the US, the richest country, only 26% thought it would be better.

  Country GDP in millions of US$ (World Bank, 2013) % of people aged 29 or under who believe that today’s youth will have had a better life than their parents’ generation (Ipsos Mori, 2014)
1 USA 16,768,100 26%
2 China 9,240,270 76%
3 Japan 4,919,563 41%
4 Germany 3,730,261 30%
5 France 2,806,428 16%
6 UK 2,678,455 22%
7 Brazil 2,245,673 48%
8 Italy 2,149,485 21%
9 Russia 2,096,777 41%
10 India 1,875,141 46%
  AVERAGE(Rounded to the nearest whole) 4,851,015 37%

When the future is looking bleak for the wealthiest countries on the planet, it’s perhaps time to reconsider GDP as a measure of progress.

Gross domestic product, or GDP is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period, but usually calculated annually. GDP has traditionally been used to measure progress economically, but fails to take into account social and environmental ‘wealth’ or causes of social tension or inequality, something that I believe is essential to truly understanding if, how and where human progress is being made.

GDP measures everything “…except that which makes life worthwhile.”

“Our Gross National Product…counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armoured cars for the police to fight the riots in our cities…, and the television programs which glorify violence in order to sell toys to our children. Yet the Gross National Product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything, in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans.”

Robert F. Kennedy, speech at the University of Kansas, March 18, 1968

There is already an abundance of measurements that we could call on to replace GDP and give a fairer, more useful picture of what is and isn’t working and how we go about creating a world that works for all, not for the few. So far, suggestions range from birth weight (usually a good indicator of a child’s likely future quality of life) the number and sound of birds in a city (a good indicator for biodiversity); and ownership of washing machines (with the assumption that their requirement for piped water and electricity make them a good measure of development); to the economic emancipation of women. I’m sure you can think of more…

Today, I’d invite you to think about why our leaders and big businesses measure economic growth as a measure of human progress and how we can move beyond measuring success by how much we makerather than how we live.

What do you think human progress is? And why is growth the only answer? #WhyGrowth

This post was originally posted on The Rules website on 11th September 2015.

Have you heard of the African Growth and Opportunities Act?

Probably not, because it’s gone under the mainstream radar. It’s not #TTIP or #TTP but in my opinion the African Growth and Opportunities Act is more important – because we’re talking about what looks like the subjugation and continued exploitation of an entire continent.

Later this month, US officials will meet in Gabon for a summit to discuss the US-Africa agreement (AGOA) which has recently been renewed for 10 years by the U.S. Congress.

The act, which was originally signed in 2000 claims to provide 39 sub-Saharan African nations with liberal access to the U.S. market.

But, and here’s the crucial point of my post. Assistant Secretary of State for African Affairs Linda Thomas-Greenfield states that the agreement also allows the U.S. to export many of its intangible values — among them, an open-market system and an emphasis on development, democratisation and women’s empowerment.

I think this looks like a damaging neoliberal, unfair agreement that will continue to disempower and exploit the African continent and set up unequal trade and power relations that ONLY promote, further and benefit US interests to the detriment of African countries.

The comments from US officials imply that the emphasis on respecting human rights, press freedoms and rights of works will be of ‘significant benefit’ to African partners, but fail to mention the significant manipulation and damage the economic policies will do to to the continent and its people. To pretend that this self-interested, aggressive, immoral agreement is an act of altruism beggars belief.

I will be looking into this further, but really welcome your thoughts and comments on AGOA and anything you know about it too. They say we’re living in an era of post-colonialism, but ‘agreements’ like this just prove that it’s not true.  I’ll leave you to read the rest of the news story, originally posted here, and to make up your own mind. I’ll highlight in bold orange all of the bits (I could highlight the whole thing, but I won’t) which set off HUGE warning bells for me.

“We were delighted — I mean, absolutely delighted — with the recent 10-year reauthorisation of AGOA,” Thomas-Greenfield said during a briefing this week on the upcoming meeting. “The reauthorisation garnered bipartisan support here in the United States, and that’s a clear indication of promoting prosperity, opening markets, and inclusive development and stronger regional integration and good governance on the continent of Africa.”

Assistant U.S. Trade Representative Florie Liser claims that “The 10-year extension — the longest in the program’s history — will also provide more stability for all those involved.”

“Now that we are no longer worrying about AGOA expiring in the near term, the AGOA Forum will provide an opportunity for us to begin a more strategic conversation about the future of our trade and investment relationship with Africa,” she said.

Thomas-Greenfield added that AGOA also has a political element: “That has been an essential part of AGOA — encouraging countries to respect human rights, encouraging countries to respect press freedoms, and encouraging countries to generally respect the rights of workers. That has been a key part, a key component of AGOA’s success, and it’s something that our African partners, particularly the people, benefit significantly from.”

With that in mind, Liser said, the act holds a provision that allows nations’ status to be reviewed if they stray. That’s being considered right now, she said, in the central African nation of Burundi, which has been plunged into turmoil over the president’s decision to run for — and win — a third term, which is beyond his constitutional mandate.

“There is some discussion within the U.S. government of reviewing Burundi,” she said. “We have not reached the point of doing that review yet, but I think it will come sooner rather than later if the situation does not resolve itself very quickly.”

The act has also allowed African nations to move beyond just exporting raw materials, Liser said.

“What we’ve seen actually over the course of the last 15 years of AGOA is that the Africans have been able to triple the amount of non-oil exports that they have sent to the United States,” she said.

Overdevelopment, Overpopulation, Overshoot

‘In the developing world, the problem of population is seen less as a matter of human numbers than of western over-consumption. Yet within the development community, the only solution to the problems of the developing world is to export the same unsustainable economic model fuelling the overconsumption of the West.’

Kavita Ramdas.

Read the full article in The Guardian.

Photograph by Brett Cole.

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?