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Rawlings, Economic Policy Reform, and the Poor: Consistency or Betrayal?

Published online by Cambridge University Press:  11 November 2008

James C. W. Ahiakpor
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Extract

Flight-Lieutenant Jerry Rawlings has presided over two distinct types of régime as far as economic policy is concerned since the overthrow of the Third Republic at the end of 1981. The first was characterised by the extensive intrusion of the state, or by those claiming to act on its behalf, in directing economic activity, notably the sale of goods and services. The other, since 1983, has witnessed greater reliance on the market freedom of individuals in both production and exchange, largely consistent with the economic liberalism prescribed by the International Monetary Fund (I.M.F.). Most analysts familiar with the evidence have concluded that the experiment during 1982–3 was an unmitigated disaster for the wellbeing of Ghanaians, and that since then the Economic Recovery Programme (E.R.P.) has successfully reversed the downward spiral and created the conditions for real income growth.

Type
Articles
Information
The Journal of Modern African Studies , Volume 29 , Issue 4 , December 1991 , pp. 583 - 600
Copyright
Copyright © Cambridge University Press 1991

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References

1 The claim that the régime led by Rawlings never authorised many of the actions taken in its name during 1982–3 has been advanced by those who wish to distance the economically destructive activities of the early months of the P.N.D.C. from any Marxist-inspired programme. See, for example, Hutchful, Eboe, ‘From “Revolution” to Monetarism: the economics and politics of the adjustment programme in Ghana’, in Campbell, Bonnie K. and Loxley, John (eds.), Structural Adjustment in Africa (London, 1989), pp. 92–131.Google Scholar

2 West Africa (London), 2 05 1988, p. 767.Google Scholar

3 Haynes, Jeffrey, ‘The International Dimensions of the Sub-Saharan African Debt Crisis: a case study of a “success story”’, Political Studies Association Conference, Warwick, 1989, p. 1.Google Scholar See also Cornia, Giovanni AndreaJolly, Richard and Stewart, Frances (eds.), Adjustment with a Human Face, Vols. 1 and 2, (Oxford, 1987).Google Scholar

4 Hutchful, , loc. cit.Google Scholar

5 West Africa, 4 02 1985, p. 201.Google Scholar

6 The economic logic of the market liberalisation measures adopted by Rawlings has been discussed in Ahiakpor, James C. W., ‘Economic Policy Reform in Ghana, 1983–1990: some transferable lessons’, Western Economic Association International Conference, Seattle, June–July 1991.Google Scholar

7 For example, according to the World Development Report, 1990 (Washington, D.C., 1990), pp. 236–7, the poorest 20 per cent of the population in Bangladesh and Singapore received 9·3 and 5·1 per cent of the national income in 1981–1982 and 1982–1983, respectively. Yet would those same poor in Singapore, where the income per capita in 1982 was $5,910, have wished to exchange places with their counterparts in Bangladesh, where income per capita was only $140?Google Scholar

8 West Africa, 11 01 1982, p. 70.Google Scholar

9 Rawlings is here in good company with those activists and academics who take the view that ‘democracy’ exists only if the means of material sustenance are widely available in society, rather than by a process of political decision-making which represents the will of the majority.

10 E.g. Ray, Donald I., Ghana: politics, economics and society (London and Boulder, 1986).Google Scholar See also Hutchful, loc. cit. pp. 103 and 128.

11 The Supreme Military Council I under Ignatius K. Acheampong had evolved from the National Redemption Council, 1972–1975, and lasted till 1978, when it was replaced by the S.M.C. II under Frederick W. K. Akuffo, until the latter's overthrow in June 1979.

12 Calculations based on data in I.M.F., International Financial Statistics. Yearbook, 1990 (Washington, D.C., 1990), pp. 366–7.Google Scholar

13 Quoted in Yankah, Kojo, The Trial of Rawlings (Accra, 1986), p. 17.Google Scholar

14 Ibid. pp. 11–12.

15 West Africa, 11 06 1979, p. 1013.Google Scholar

16 Yankah, , op. cit. p. 75.Google Scholar

17 West Africa, 7 03 1983, p. 634.Google Scholar

18 See also the text of the broadcast delivered by Rawlings on 5 January 1982 in which he defended the necessity of his coup d'état against critics, arguing that the inaugural promises of the Third Republic in September 1979 had been ‘replaced by a new constitution of slavery’ for the ‘productive majority’ of the population; ibid. 11 January 1982, p. 71.

19 See ibid. especially pp. 68–76.

20 Ibid. p. 70.

21 Ray, op. cit. ch. 4, provides a background description of these groups and their activities. Also, see the long letter by Abdulaziz, Ousman O., headed ‘Ghana's “Super-Revolutionaries”’, in West Africa, 15 08 1988, p. 1503Google Scholar, and the ensuing correspondence by Chris B. Atim and Paul Okojie in ibid. 17–23 October 1988, p. 1964.

22 For a further description of the P.N.D.C.'s economic strategy and activities during 1982–1983, see Ahiakpor, James C. W., ‘The Success and Failure of Dependency Theory: the experience of Ghana’, in International Organization (Cambridge, MA), 35, Summer 1985, pp. 532–52.Google Scholar

23 According to Dadson, J. A., ‘Food and the Nation’, in West Africa, 11 July 1983, pp. 1596–7, bread had completely disappeared from the markets in Accra by January 1983, while many staples, including maize, garri, plantain, tomatoes, chicken, and sugar, had risen by 300 per cent or more by April.Google Scholar

24 I.M.F., International Financial Statistics (Washington, D.C.), 04 1984, p. 201.Google Scholar

25 Ministry of Finance and Economic Planning, Summary of Budget Statement and outline of Economic Policy for 1983 (Accra, 1983), p. 7.Google Scholar

26 Address to the nation by the Chairman of the P.N.D.C., 31 December 1986; West Africa, 12 01 1987, pp. 59–61.Google Scholar

27 Ibid. 12 September 1983, p. 2103.

28 Ibid.

29 According to the I.M.F. 1990, op. cit. pp. 376–7, with 1985 as the base year, the G.D.P. deflator rose from 1·2 in 1974 to 21·3 in 1981, reached 82·9 in 1984, and was at 263·3 by 1988.

30 Interview given to African News Wire Service in West Africa, 28 January 1985, p. 146.Google Scholar

31 Undated interview (1986?) recalled by Thomas Cooke in ibid. 18 January 1988, p. 72.

32 Calculations based on I.M.F. 1990, op. cit., with minimum-wage data taken from Jon Kraus, ‘The Political Economy of Stabilization and Structural Adjustment in Ghana’, Conference on the Political Economy of Ghana, School of Advanced International Studies,The Johns Hopkins University,Washington, D.C.,6–7 April 1991.Google Scholar

33 Calculations based on I.M.F. 1990, op. cit. pp. 376–7.

34 Kraus, , op. cit. Table 5a.Google Scholar

35 Data from World Bank, World Development Report (Washington, D.C.), 1980, 1984, 1988, and 1990.Google Scholar

36 I.M.F. 1990, op. cit. p. 163.Google Scholar

37 Reported in West Africa, 12 01 1987, p. 61.Google Scholar

38 For details on the recovery of the agricultural sector, see Ben Ephson, ‘More Potential Yet’, in ibid. 28 September 1987, p. 1891, on whose data I base my calculations.

39 The ratio reflects the degree to which the banking sector performs its function of channelling savings into investment. The sharp decline after 1982 was partly the result of the Government's virtual seizure of bank deposits worth over 50,000 cedis.Google Scholar

40 For an account of this episode, see Kwasitsu, K. K., ‘Through Mungo Park’, in West Africa, 21 09 1987, pp. 1844–6.Google Scholar

41 World Bank, op. cit. 1983, 1984, and 1990.

42 The contributions of these two sectors have changed over time. In 1982, agriculture accounted for 51 per cent of G.D.P., as against 41 per cent for services. In 1986, the proportions were 45 and 39 per cent, respectively. See World Bank, op. cit. 1984 and 1988.

43 See, for example, Cornia, Jolly, and Stewart, op. cit. Vol. 2, pp. 100–102.

44 For details, see Ray, op. cit. pp. 43–4.

45 For details, see Loxley, John, Ghana: economic crisis and the long road to recovery (Ottawa, 1988).Google Scholar

46 ‘War Communism’ did not produce the ‘Bread, Peace, and Freedom’ promised by the Bolsheviks when they staged their 1917 revolution. See Salvadori, Massimo, The Rise of Modern Communism (New York, 1952), especially pp. 16–26.Google Scholar

47 Quoted in Boettke, Peter J., ‘Soviet Admissions: communism doesn't work’, in The Freeman (Irvington, NY), 40, 2, 1990, p. 51.Google Scholar

48 Ibid.

49 Real income per capita declined at an average annual rate of –1·2 per cent between 1960 and 1966 during Nkrumah's attempts to construct a socialist society in Ghana. The nationalist economic regimentation introduced by Acheampong and Akuffo caused an annual decline of –2·0 per cent between 1972 and 1979, and Limann's weak efforts to revive Nkrumah's policies produced an annual decline of –5·3 per cent between 1979 and 1981. By way of contrast, the economic liberalisation measures of the N.L.C. and Bussia resulted in an average growth of 1·0 per cent in real income per capita between 1966 and 1971. See Ahiakpor, James C. W., ‘Creating the Structures for an Efficient and Dynamic Economy: the case of Ghana’, in Gemper, Bodo B. (ed.), The International Trend Toward Indicative Targeting (Hamburg, 1988).Google Scholar

50 For a summary of the failure of socialist or communist régimes to enhance the economic and social well-being of their citizens, see Jameson, Kenneth P. and Wilber, Charles K., ‘Socialism and Economic Development: editors' introduction’, in World Development (Oxford), 9, 9–10, 1981, pp. 803–11.Google Scholar

51 Between 1982 and 1988 the currency printed by the central bank rose by 900 per cent, while the G.D.P. (in constant 1985 prices) increased by 27 per cent. The inflation index (G.D.P. deflator) over the same period went up by 860 per cent, almost matching that of the growth in the currency.