Africa and global finance: potential resistance?

by Patrick Bond

, by Pambazuka

Far-reaching strategic debate is underway about how to respond to the global financial crisis, and indeed how the North’s problems can be tied into a broader critique of capitalism.

At minimum, the ongoing chaos offers new ideological space and material justifications for African finance ministries to re-impose exchange controls and re-regulate finance, and to find sources of hard currency not connected to the Bretton Woods Institutions or Western donors.

The 2008 world financial meltdown has its roots in the neoliberal export-model (dominant in Africa since the Berg Report and onset of structural adjustment during the early 1980s) and even more deeply, in thirty-five years of world capitalist stagnation/volatility. As South Centre director (and Ugandan political economist) Yash Tandon put it: ‘The first lesson, surely, is that contrary to mainstream thinking, the market does not have a self-corrective mechanism.‘ Such disequilibration means that Africa receives sometimes too much and often too little in the way of financial flows, and the inexorable result during periods of turbulence is intensely amplified uneven development. Africa has always suffered a disproportionate share of pressure from the world economy, especially in the sphere of debt and financial outflows. But for those African countries that made themselves excessively vulnerable to global financial flows during the neoliberal era, the meltdown had a severe, adverse impact. Read more