Tuesday, October 07, 2008
Rejoice Ngwenya, Harare, Zimbabwe
Proponents of liberal free trade have to be prepared for the onslaught on their fundamental beliefs by anti-globalisation activists. The swords of persecution are no doubt gleaming in the rays emitted by the demise of ‘terrible twins’, American mortgage disaster Freddie Mae and Fannie Mac.
For Africans, especially those of us whose pontificating on liberal values has almost reached ecumenical proportions, in particular the ‘high priests’ of this philosophy like Leon Louw, James Shikwati and Franklin Cudjoe – we could now be sacrificial lambs on the ritualistic altar of anti-globalisation. The latter has actually been debating anti-globalists in the Ghanaian media.
The obvious is that the nature of free global trade goes beyond mere exchange of goods and services, but the jitters and the tremors that Freddie and Fannie’s collapse have transmitted well-beyond American borders are testimony to umbilical linkages of global markets with accompanying risks and rewards. Many though fail to acknowledge that Freddie Mae and Fannie Mac, were government-created intrinsically linked to failure by the nature of their design.
African governments do not wield as much fiscal interventionist power as Western governments, so when it comes to what German Economist Hubertus Muller-Groeling refers to as time for ‘the social dimension of liberal policy’, we might be found wanting.
In one of the Occasional Papers of the Friedrich Naumann Foundation, Muller-Groeling writes: “Liberalism rejects the very expansion of mandatory insurance systems, the socialisation of private risks, and the nationalisation of altruism.” He continues defiantly: “It rejects the tutelage and incapacitation of the citizen by a caring authority and the cultivation of an entitlement mentality… The social dimension of liberal policy is not to be found primarily in the repair shop of the social process where the social policies of the government are supposed to correct the results of competition and the market forces.”
Although it is difficult to perceive the George Bush-type ‘social’ dimension of liberalism in Muller-Groeling’s context, his arguments against state intervention in markets are evident, yet if one still feels strongly that those African governments who are sold to globalisation are right, what would one prescribe to immunise our local markets from the Freddie and Fannie toxic phenomenon?
Protagonists of anti-globalisation, in a way, are almost ‘pan Africanist’, in the sense that they feel our continent’s productive capacity is not ready to ‘compete on equal terms’ with the world. The hemorrhage of unprocessed natural resources, they argue, is negative contribution to gross domestic product that can only be correct by ‘good’ aid agreements and ‘timely intervention’ by Bretton Woods Institutions. Or perhaps it is the lack of understanding of what real globalisation is that draws critics onto the arena of intellectual conflict.
In another Friedrich Naumann Foundation paper ‘Campaigning for Free Trade’, Tom Palmer reminds us that globalisation is not a new phenomenon, but is as much protolithic as is, perhaps tyranny and dictatorship – the two features of national governance that anti-free trade campaigners tend to ignore of Africa. Africa’s early relationship with China and Portugal were based more on trade than political imperialism.
However, the fact that Palmer includes in his definition of globalisation the phrase ‘increasingly integrated and complex global system of exchange and production’ raises valid questions of whether African fiscal and monetary systems are capable of dealing with the side effects of such integrated complexities.
Mario Vargas Llosa, in his paper ‘Liberalism in the new millennium’, notes: “Brainy professors from the University of Paris, Harvard University, and the University of Mexico pull their hair out trying to show that free markets do little more than make the rich richer and the poor poorer. They tell us that internationalization and globalisation only benefit the giant multinationals, allowing them to squeeze developing countries to the point of asphyxiation…”.
The question is: following the shock of global markets resultant from Freddie and Fannie’s global connections, can we ‘neo-liberal’ Africans still confidently say globalisation has not left us exposed to financial asphyxiation?