by Irogbe, Kema
Therefore, nowhere are impacts of the IMF/World Bank machinations felt more intensely than Africa. As Festus Iyayi laments: "The fact (is) that the economy of Nigeria is not owned by Nigerians; that World Bank and IMF officials are in control of our national politics and economy; that we are indebted to external creditors to the tune of over $32 billion when, indeed, other nations should be indebted to us."26 As a consequence of the IMF/World Bank austerity measures that have been imposed on Nigeria in the late 198Os, the country, like many other Asian and Latin American countries, is steadily retrogressing; or simply put, Nigeria has all of the trappings of 'the development of underdevelopment'. The 2002 World Development report succinctly unravels the puzzle on Nigeria. The report provides information on the quality of life and the level of poverty in 174 countries in the world. According to the report, in 1998, Nigeria ranked 23rd poorest country in the world out of the 174 nations. Between 1980 and 1998, gross domestic GDP per capita in Nigeria declined from $314 in 1980 down to $258 in 1990 and to $256 in 1998. The average annual rate of change in GDP during the period was a negative 0.7 percent. The life expectancy at birth in 1998 was 51.5 years for females and 48.7 years for males. That means the life expectancy of the people of Nigeria at birth was only 50.1 years. Indeed, the report further revealed that 33.3 percent of the Nigerian population in 1998 was not expected to survive to age 40. Again, whereas, the poorest 20 percent of population had access to 4.4 percent of the national income, the richest 20 percent consumed 55.7 percent of the national income. In addition, 70.2 percent of the Nigerian population earned less than $ 1.0 a day between 1987 and 1998, indicating that at least 43 percent of the copulation lived below the poverty line.27 In the midst of the abundant data that show the declining economic development, the IMF and World Bank are now demanding the repayment of their loans while the Nigerian government is requesting for a debt relief.
Indeed, under the rubric of global ization championed by the IMF/World Bank, many other African countries besides Nigeria have been going through unprecedented economic distress. Table III - Development Indicators for Selected African Countries and the United States, 1992-1993 - illustrates the enormity of the problem.
The inference from the data is that life in contemporary Africa is a matter of survival. While the income per capita as an economic indicator of the growth of a nation-state is debatable because it does not show the complete development outlook, suffice it to say that great disparity exists between African countries and the United States. The continent displays a great diversity in lifestyles and jobs. Approximately 70 percent of Africans live in rural areas and work in agriculture. Yet, the World Bank/IMF lending activities are not targeted at the grassroots where the peasants can be part of the development plans. Instead, development plans are usually urban-centered and the peasants are marginalized. Even a large number of the other roughly 30 percent of the African population who reside in the cities or urban areas have chronic problem of joblessness. A small number of the people in the cities make a very good living, but others barely make enough money to keep them from starving. The unemployed and the unemployable usually resort to social vices such as prostitution, drug abuse, begging, stealing, and similar activities. Indeed, large African cities are populated with beggars many of whom are children.
The African conditions as well as the Asian and the Latin American predicaments are the direct result of the policies of the IMF/World Bank. Globalization is not just a vague concept like liberty or equality. It is actually a well-planned program with an agenda for action. This agenda is known as "Washington Consensus,"28 an idea conceived by the United States government in close collaboration with the IMF/World Bank. It stands for ten policies, detailed in the Consensus document. They are (a) free trade; (b) freely flowing FCI; (c) fiscal disciplines meaning smaller budget deficits; (d) cuts in subsidies; (e) tax reforms; (f) competitive exchange rates; (g) liberalized financial systems; (h) privatization; (i) deregulation; and (j) property rights.29
There is little doubt that the agenda had been carefully designed to serve the needs of the rich nations at the expense of the poor. The developed countries have surplus capital. When the American capitalists started to accumulate surplus capital around 1980 or so, globalization like mercantilism, was envisioned. But it did not take off. It needed time for maturity considering the presence of the Cold War. However, following the collapse of communism in the former Soviet Union and the Eastern Bloc and the fashioning of privatization and democratization in those countries, the capitalists declared victory (see the works of Francis Fukuyama 1989 and 1992 - The End of History) and embarked on a mission to unify the world into one economic, political, and social entity. Thus, globalization designed to homogenize the world into a monoculture earnestly began in 1990. Its first test was Iraq. The invasion of Kuwait by Iraq in 1990 presented an opportunity for the United States to test its victory in the aftermath of the Cold War. The invocation of collective security and the use of military force against Iraq marked the first time the United Nations applied the collective security in its charter other than in 1950 in Korea (note that the former USSR, a permanent member with veto power, was not present in the security Council to cast a vote).
Indeed, the Bretton Woods twin sisters have failed woefully to alleviate poverty in the world. They have failed because they were never designed to serve the interest of anyone but their shareholders. Instead of promoting economic growth, the IMF and the World Bank have institutionalized economic stagnation in the underdeveloped countries. They are irrelevant to the central goal of eliminating global poverty. Driven by the interests of key political and economic institutions in the Group of Seven (G-7) countries, in particular the United States, the IMF and the World Bank are more concerned about the internal imperative of capitalist expansionism or empire building for capital accumulation. In terms of achieving positive development impact, a Meltzer Report in April 2000 indicates that the World Bank's own evaluation of its projects shows an outstanding 55-60 percent failure rate. The failure rate is particularly high in the poorest countries, where it ranges from 65 percent to 70 percent.30 These are the very countries that are supposed to be the main targets of the Bank's anti-poverty approach. The report states that the rhetoric about focusing on poverty alleviation is contradicted by the reality that 70 percent of the Bank's non-aid lending is concentrated in 11 countries, while the Bank's 145 other member countries are left to divide the remaining 30 percent. Moreover, the report concludes that: "80 percent of World Bank resources have gone, not to poor countries with poor credit ratings and investment ratings, but to countries that could have raised the money in international private capital markets owing to their having investment grade or high yield ratings."31
Furthermore, the World Bank in its quest for capital accumulation lends money to that states noted for atrocities including gross violations of human rights. This has been observed: "In Fiscal Year 2001 alone, the World Bank extended capital commitments totaling $17.3 billion...., in many cases to states that have been the venues for atrocities and abuses committed by either the government or other groups."32 It is important to note that a government engaged in or facilitating atrocities will have less incentive to adhere to international legal norms if it continues to receive funds from the World Bank or the IMF without any consideration of the atrocities or the impunity of those responsible. The issue is not whether the Bretton Woods Twin Sisters should automatically cease all activities in a country at the first sign of humanitarian law violations. The power of the purse is not even used by the institutions as one of the loudest voices, one that can be applied to complement the efforts by the United Nations, some concerned states, and non-governmental organizations (NGOs) to protect civilians and prevent violations of international humanitarian law. Diplomatic pressure will lose its muscle when matched with "reverse" economic incentives to the states that undermine the gross violations of human rights.
THE WORLD TRADE ORGANIZATION
With this backdrop, let us highlight the influence of the WTO on the underdeveloped countries not simply by examining its policy as preached but the reality of the policy as practiced. Although, the WTO proclaims to be the champion of facilitating or enhancing international trade by removing the trade barriers, on the contrary, it is a tool of multinational corporations that assault national sovereignty and cause environmental degradation. The protests or demonstrations and riots that greeted the WTO's 1999 ministerial conference in Seattle are a vivid reminder that, to paraphrase the late Reggae Superstar Bob Marley, "You can fool some people sometimes but you cannot fool them all the time". An increasing number of American working class has become aware of the shenanigans of the WTO. Supposedly an agent of free trade, the WTO's most important agreements promoted monopoly for U.S. firms: the Trade Related Intellectual Property Rights Agreement consolidated the hold over high tech innovations by U. S. corporations like Intel and Microsoft, while the Agreement on Agriculture institutionalized a system of monopolistic competition for third-country markets between agribusiness interests of the United States and the European Union.33 The motives for the introduction of the trade-related intellectual property rights were: to enable their firms to capture more profits through monopolistic higher prices and through royalties and the sale of technology products; and to put in place stiff barriers preventing the technological development of potential new rivals from the peripheral countries. This confirms our theoretical assumption that transfer of technology is a myth rather than a reality. There is no wonder why American Bill Gates is one of the richest men in the world. A man who is believed to be worth over $70 billion, a figure comparable to nearly all the yearly gross national products of African countries combined. While he may be legally challenged at home for monopolistic tendency or for his alleged Anti-Trust Act violations, he is certain to accrue enormous royalties from his international business deals. As one observer aptly argues:
When the Asian financial crisis engulfed countries that had been seen by many in the U.S. business and political elites as America's most formidable competitors, Washington did not try to save the Asian economies by promoting expansionary policies. Instead, it used IMF to dismantle the structures of state-assisted Asian capitalism that had been regarded as formidable barriers to the entry of goods and investments from U.S. transnational [corporations] that had been clamoring vociferously for years to get their piece of the "Asian Miracle." It was less the belief in spreading the alleged benefits of free trade than maximizing geo-economic and geo-strategic advantage that lay behind U.S. support for the policies of the IMF, the World Bank, and the WTO.34
The WTO serves the interests of the United States and its European junior partners. As Chalmers Johnson has posited: "A good case can be made that Washington's opportunistic behavior during the Asian financial crisis reflected the fact that "having defeated the fascists and the communists, the United States now sought to defeat its last remaining rivals for global dominance; the nations of East Asia that had used the conditions of the Cold War to enrich themselves."35 Under the disguise of free trade, the U.S. government uses the WTO to protect the market for its multinational corporations. Just as it was the United States' threat in the 1950s to leave GATT if it was not allowed to maintain protective mechanisms for milk and other agricultural products that led to agricultural trade's exemption from the GATT's rules, it was the U. S. pressure that brought the agriculture into the GATT-WTO system in 1995. The reason for Washington's change of mind was articulated quite candidly by the then Agriculture secretary John Block at the start of the Uruguay Round negotiations in 1986: "The idea that the [underdeveloped] countries should feed themselves is an anachronism from a bygone era. They could better ensure their food security by relying on U.S. agricultural products, which are available, in most cases at much lower cost."36 Predictably, it is not the concern of the metropolitan countries to assist the peripheral countries to become self-reliant. Political realists would remind us that each nation must seek for self-protection and self-reliance. The underdeveloped countries cannot expect the developed countries that had enslaved and colonized them to be a part of their solutions but rather the marginalized countries should view the now advanced, industrialized nation-states as an appendage to their problems.
The underdeveloped countries were expecting that the Uruguay Round would bring some desirable benefits; instead, there have often been many disappointments. The following are some examples of the potential benefits of the Uruguay Round that have not materialized:
* A lowering of northern countries' industrial tariffs may benefit those southern countries with a manufacturing export capacity. Even then, the reduction of average industrial tariffs in developed countries has only been from 6.3 percent to 3.8 percent, which means that an imported product costing $100 before duty could enter after duty at $104 instead of the previous $106, which is not a significant reduction. And "tariff peaks" (or higher-than-average import duties) remain for many products that [underdeveloped] countries export. For instance the U.S. tariff for orange juice is 31 percent.
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