Richebacher's bleak scenario

Mr P.A. Van Heusden pvanheus at
Wed Nov 3 01:39:59 PST 1999

On Tue, 2 Nov 1999, Brad De Long wrote:

> I don't know what to do (besides convince Congress to multiply the
> foreign aid budget tenfold) to improve the chances for economic
> growth in much of sub-Saharan Africa...

A debt cancellation would go some way. With the exception of South Africa, most sS-Africa states are crippled by foreign debt. In the case of Mozambique, manipulations of foreign debt have explicitely been used to destroy domestic industry - the World Bank's demands (before and after the HIPC process) forced the cashew industry to the wall, with the resultant loss of over 10 000 jobs (Patrick Bond can fill in the details on this - or you can look at the AIDC's WWW page:

The formula for sS-Africa - export-focusses production, dependence on foreign investment - leaves sS-Africa in a state where it is exporting unprocessed raw materials into a glutted world market. Developing 'niche' exports requires a level of domestic investment which is currently not possible, in part because of debt obligations.

I kinda doubt that a debt write-off will give sS-African countries enough slack to develop domestic productive capacity (repair infrastructure, modernise industry, develop a skilled workforce) - certainly sS-Africa is hardly in a position to compete with India, etc. in the high-skills/low-wages stakes. Which returns us to your point about a 10 times increase in aid - what is the US aid budget at present anyway?

Of course, the above is pretty much the view from a bourgeois economic point of view, and ignores the way the structuring of production in sS-African states politically precludes the development of 'modern democratic' states. In much of sS-Africa the majority of the population is excluded from the formal economy and forms a kind of parallel informal economy, only marginally being involved in production and consumption in the formal economy.

(I'm thinking here of the kind of situation I saw in Zimbabwe, where the 'informal economy' includes selling empty plastic bottles at the side of the road, and using every bit of free space as corn fields (a dream scenario for an 'urban agriculture' enthusiast, I guess) - I don't recall the unemployment rate, but very few of the people I met had a secure job)

All in all, social revolution seems to me to have a better chance of restructing sS-African economies than any 'economic policy' does.

Peter -- Peter van Heusden : pvanheus at : PGP key available Criticism has torn up the imaginary flowers from the chain not so that man shall wear the unadorned, bleak chain but so that he will shake off the chain and pluck the living flower. - Karl Marx

NOTE: I do not speak for the HGMP or the MRC.

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