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Towards Ending I.M.F.-ism in Southern Africa: an Alternative Development Strategy

Published online by Cambridge University Press:  11 November 2008

Ann Seidman
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Extract

In the 1980s, a financial crisis engulfed Southern Africa. Widespread evidence exposed the way that inherited institutional structures and technologies – reinforced by International Monetary Fund (I.M.F.) conditionality – had reproduced the region's poverty and vulnerability.1 To overcome the crisis requires an alternative strategy built on theoretical foundations fundamentally different from the neo-classical models that underpin the ‘restructuring’ programmes of the I.M.F. and World Bank. The state must play a positive interventionist rôle.

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Articles
Information
The Journal of Modern African Studies , Volume 27 , Issue 1 , March 1989 , pp. 1 - 22
Copyright
Copyright © Cambridge University Press 1989

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References

Page 1 note 1 The experience of the Latin-American countries differed only in detail. Cf. Riding, Alan, ‘Latin Frustration with IMF Grows’, in The New York Times, 16 05 1988, Business Section.Google Scholar

Page 1 note 2 Eg. Okai, Nii, ‘Ghana and the International Monetary Fund: 20 years of I.M.F. conditionality’, M.A. thesis, Clark University, Worcester, 1988.Google Scholar

Page 1 note 3 Adopting widely differing perspectives, many authors, ranging from Amin, Samir, Imperialism and Unequal Development (New York, 1977),Google Scholar to Dunning, J. H. (ed.), Multinational Enterprises, Economic Structure and International Competitiveness (New York, 1985), have extensively documented these propositions.Google Scholar

Page 2 note 1 Some progressive social scientists have rejected the need for state action, calling instead for mobilisation of the democratic masses. Waterman, Peter, in Southall, Roger (ed.), Trade Unions and the New Industrialisation of the Third World (London, 1988),Google Scholar calls for improved communications to facilitate international mobilisation outside state structures. Yet, as Manfred Bienefeld points out in ibid. pp. 332–50, despite the global impact of post-World War II technology, the uneven development of the world economy still necessitates mobilisation along national lines. In the last analysis, that process must aim at changing the character and rôle of the state.

Page 2 note 2 For a detailed analysis of these constraints, see Seidman, R. B., Law, State and Development (New York, 1978);Google Scholar also Mandaza, Ibbo (ed.), Zimbabwe: the political economy of transition, 1980–86 (Dakar, 1988).Google Scholar

Page 2 note 3 Cf. Shivji, Issa, The Silent Class Struggle (Dar es Salaam, 1970)Google Scholar and Thompson, Carol B., Challenge to Imperialism: the Frontline states in the liberation of Zimbabwe (Boulder and London, 1985).Google Scholar

Page 2 note 4 For constraints on creative participation at a local level, see Kalyalya, Denay, Mhlanga, Kethiwe, Seidman, Ann, and Semboja, Joseph, Aid and Development in Southern Africa (Trenton, N. J., 1987).Google Scholar

Page 3 note 1 E.g. Seidman, Ann et al. , Rethinking Agricultural Transformation in Southern Africa (Trenton, N.J., 1988).Google Scholar

Page 3 note 2 The author has elsewhere outlined general characteristics of alternative physical plans. See Seidman, Ann, Planning for Development in Sub-Saharan Africa (New York and Dar es Salaam, 1974),Google Scholar ‘Towards an Alternative Development Strategy’, Southern African University Social Sciences Conference, Lesotho, 1983, and ‘The Need for an Appropriate Industrial Strategy to Support Peasant Agriculture’, in The Journal of Modern African Studies (cambridge), 24, 4, 12 1986, pp. 547–75.CrossRefGoogle Scholar

Page 4 note 1 E.g. Seidman, ‘The Need for an Appropriate Industrial Strategy to Support Peasant Agriculture’.

Page 4 note 2 See Seidman, Ann et al. (eds.), Agricultural Transformation Reconsidered – the Southern African Experience (Trenton, N.J., 1988).Google Scholar

Page 5 note 1 See Kalyalya et al. op. cit.

Page 5 note 2 Cf. Allen, and Isaacman, Barbara, Mozambique: from colonialism to revolution, 1900–1982 (Boulder and Aldershot, 1983).Google Scholar

Page 6 note 1 See Kalyalya et al. op. cit.

Page 6 note 2 According to a report in West Africa (London), 2 02 1987, I.M.F. advisers pressed the régime headed by Jerry Rawlings in Ghana to abandon efforts to create workers committees.Google Scholar

Page 7 note 1 Mozambique's experiences, as recounted in Isaacman, op. cit., parallel those of Ethiopia and Tanzania in this respect. See reports of project-holders to Oxfam America, 115 Broadway, Boston, 1984–5.

Page 8 note 1 The Pneumonic, ‘Roccipi’, was devised for lawyers who draft legislation to alter the behaviour of relevant actors; See Seidman, , Law, State and Development Chs. 4 and 6. For use in grassroots projects, See Kalyalya et al. op.cit. pp. 27ff.Google Scholar

Page 10 note 1 For a rough estimate of a country's investable surplus, examine its national income accounts for the percentage of income not consumed, and add to that the amount spent on the military establishment.

Page 10 note 2 United Nations, Statistical Yearbook, 1983 (New York, 1983), Table 25.Google Scholar

Page 10 note 3 Calculated from International Monetary Fund, International Financial Statistics (Washington, D.C., 08 1988).Google Scholar

Page 11 note 1 Source: ibid.

Page 11 note 2 See the World Bank's Country Economic Report, China – Long Term Development Issues and Options (Baltimore, 1985), Summary and conclusions. Although the Chinese themselves criticise their relatively low levels of productivity, their economy's experience does merit examination for possible ways of achieving more desirable investment patterns to increase productive employment opportunities and to raise living standards.Google Scholar

Page 11 note 3 The Unilateral Declaration of Independence by the white minority régime lasted from 1965 to 1980.

Page 12 note 1 Cf.Innes, Duncan, Anglo American and the Rise of Modern South Africa (New York, 1984),Google Scholar and Pallister, David, Stewart, Sarah, and Lepper, Ian, South Africa Inc. The Oppenheimer Empire (London and NewYork, 1987). For details of Zimbabwe holdings, see Seidman, Money, Banking and public Finance, pp. 66–7.Google Scholar

Page 12 note 2 Khadani, Xavior, ‘The Economic Issues; reorms and prospects’, in Mandaza, (ed.), op. cit.Google Scholar

Page 12 note 3 Julius Nyerere remarked, after three decades of Tanzania's efforts to implement a socialist transformation, that it took much longer than he anticipated. China's political leaders today argue that they must encourage more private enterprise, since the state lacks the capacity to attain sufficiently high levels of productivity through administrative means. This seems to be a Treand among all socialist countries.

Page 13 note 1 For the theoretical debates and the experiences of several African states in this endeavour, see Seidman, Money, Banking and Public Finance in Africa, pts. I and II.

Page 13 note 2 Despite major differences, both South Africa and post-independence Zimbabwe provide the exceptions that prove the rule: domestic and foreign private inverstors imported sophisticated technologies that increased external dependence and aggravated unemployment at home. As the economic crisis deepened, they (legally or illegally) transferred growing amounts of locally-generated capital abroad. Cf. Greenberg, Stanley G., Legitimating the Illegitimate: state, markets, and resistance in South Africa (Berkeley, Los Angeles, and London, 1987), and Daniel Ndlela, in Samir Amin, Derrick Chitala, and Ibbo Mandaza (eds.), SADCC – Problems and Prospects for Disengagement and Development in Southern Africa (London, 1988).Google Scholar

Page 14 note 1 Cf. Seidman, The State, Law and Development, ch. 10.

Page 14 note 2 This could facilitate land redistribution without incurring heavy governmental expenditures for compensation.

Page 15 note 1 Ndoro, H., ‘Local Taxation in Zimbabwe’, Department of Economics, University of Zimbabwe, Harare, 1983.Google Scholar

Page 15 note 2 When Zambia's mine revenues plummeted as a consequence of the falling world copper price, the Government introduced higher taxes on other incomes. Unfortunately, however, many public servants and transnational corporate staff received non-monetary perquisites – free housing, cars, etcetera – that enabled them to maintain a living standard far above that of people with comparable cash incomes. Yet these benefits were not taxed, resulting in an increased tax burden on the rest of the population.

Page 16 note 1 The author once took part in a commission established to study incomes policy in Zambia in which the parastatal and private-sector representatives explicitly refused to permit publication of data relating to income distribution because they feared public reactions to their high salaries and associated ‘fringe benefits’. In Zimbabwe, the Head of State and the Minister of Finance simply publish new tax proposals without even consulting the Cabinet, far less members of parliament or the public.

Page 16 note 2 Portuguese banks played an important rôle in Angola and Mozambique, though they, too had links with the British Barclays and Standard Banks.

Page 16 note 3 See Seidman, Money, Banking and Public Finance in Africa, chs. 3–4.

Page 17 note 1 Tanzania set up a financial institute which began to contribute, not only to the training of personnel, but also to the formulation of national approaches to financial planning.

Page 17 note 2 E.g. Seidman, Ann, ‘A Development Strategy for Zimbabwe’, inaugural lecture at the University of Zimbabwe, Harare, 1984.Google Scholar

Page 17 note 3 Chimombe, T., M.A. thesis, Department of Economics, University of Zimbabwe, Harare, 1984.Google Scholar

Page 17 note 4 The colonial governments established state agricultural banks throughout Southern Africa mainly to provide cheap credit for white-settler farmers, a major factor in their much-touted successful production.

Page 18 note 1 Unless offset by appropriate governmental measures, expansion of cash cropping everywhere in Africa and the Third World has tended to favour more well-to-do farmers and to marginalise smaller peasants.

Page 18 note 2 The suspicion of corruption that appears as a major disrupting factor in small-scale projects could be reduced by a wider knowledge of book-keeping techniques. Cf. Kalyalya et al. op.cit. ch. 5, and Bridget O'Loughflin's report on Mozambique's experience to the Conference on ‘Pan Africanism Revisited’, Pomona College, California, 6–9 April 1988.

Page 18 note 3 For arguments for regional integration, see Green, Reginald H. and Seidman, Ann, Unity or Poverty? The Economics of Pan-Africanism (Harmondsworth, 1968);Google ScholarGhosh, P. K. (ed.), Economic Integration and Third World Development (Westport, CT, 1984);Google Scholar and Ballance, R. H., Ansari, J. A., and Singer, H. W., The International Economy and Industrial Development: the impact of trade and investment on the Third World (Totowa, N.J., 1982).Google Scholar

Page 18 note 4 For a detailed analysis of the negative consequences of institutions currently governing the separate nations' economic ‘commanding heights’, see T. Ostegaard, ‘Regional Integration: the case of the Southern African tractor industry’, Scandinavian Institute of African Studies, Uppsala, forthcoming.

Page 19 note 1 Amin, Chitala, and Mandaza (eds.), op.cit.

Page 19 note 2 From 1980 to 1987, South Africa's destructive tactics cost S.A.D.C.C. states an estimated $36,000 million; Hanlon, Joseph, ‘On the Frontline Against Destabilisation and Sanctions’, in Ortain, Marte (ed.), Sanctions Against Apartheid (Capetown, 1989). South Africa's own combined military and police budgets, in 1987 alone, cost an additional $8,000 million.Google Scholar

Page 20 note 1 In the 1970s, as a price for I.M.F. assistance, Zambia had to re-open trade routes through then-Rhodesia to South Africa, increasing South African goods from roughly a tenth to a third of all its imports; Burdette, Marcia, ‘The Political Economy of Zambia’, University of Zambia, Lusaka, 1982. More generally, as the countries pursue I.M.F. conditions reducing their controls over imports, the South African-based firms that dominate the region's ‘market forces’ have inevitably expanded their sales to them.Google Scholar

Page 20 note 2 Cf. International Financial Statistics, passim.

Page 20 note 3 Berg, Elliot Associates, ‘Regional Trade and Economic Cooperation in Southern Africa’, Alexandria, Virginia, 1987.Google ScholarBerg, Elliot was the main author of the 1980 World Bank Report, Accelerated Development in Sub-Saharan Africa (Washington, D.C., 1982).Google Scholar

Page 20 note 4 Cf. Green and Seidman, op. cit. The basic premises of their arguments still hold good, although both authors have recognised the more realistic potential for co-ordinated development in areas the size of Southern Africa, rather than the entire continent. For a concrete illustration of private-firm behaviour, see Ostegaard, op. cit.

Page 21 note 1 The Workshop on Money, Banking, and Finance, sponsored by the National Institute of Research, University of Botswana, Gaborone, 1986, formulated proposals for training and employing university staff for research, inter alia, into the negative behaviour of existing institutions along the lines suggested by ‘Roccipi’, above, and designing changes to overcome them.

Page 21 note 2 See Seidman, Robert B., ‘Foreign Private Investors and the Host Country’, in Journal of World Trade Law (Twickenham, Middlesex), 19, 6, 1985, pp. 637–65.Google Scholar

Page 21 note 3 See Murray, Robin, Multinationals Beyond the Market (New York, 1981).Google Scholar

Page 21 note 4 Cf.Stoneman, Colin, in Seidman, Ann et al. (eds.), Multinationals in Southern Africa (Harare, 1986).Google Scholar