Globalization And Its Discontents

I have just read Joseph Stiglitz’s Globalization and Its Discontents (2002).

Stiglitz was the Chief Economist at the World Bank and Chairman of President Clinton’s Council for Economic Advisors. He won the Nobel prize for Economics in 2001.

He has formidable expertise and experience and has succeeded in writing a book about economics that is both readable and compelling.

His basic argument runs that the International Monetary Fund (IMF), the international economic institution responsible for supporting countries facing economic crisis, was largely responsible for the failure of globalization in the 1990s.

The IMF, states Stiglitz, continuously adopted an out-dated and dogmatic adherence to market fundamentalism – the belief in letting the free market deliver economic stability and growth. Their policy to achieve this, in East Asia and Russia, was incoherent and went against the basic tenets of Keynesian economics.

The IMF’s failed policy prescriptions included fiscal austerity, high interest rates, rapid trade liberalization, liberalizing capital markets and privatization.The IMF’s institutional “fear of default” also comes in for criticism.

I enjoyed this book though I found the focus a little too narrow; it rarely deviates from its specific critique of the IMF. Surely other players should come into consideration if you intend to address the failings of a phenomenon as broad as globalization? Only the World Trade Organization, the U.S. Government and the World Bank, are addressed in this context.

The “behind the scenes” actions of corporations and foreign governments in influencing policy are ignored. Here Stiglitz misses an important trick. I would also have liked to see more analysis of how poor economic decisions directly affected people in these developing countries; the repercussions of, for example, liberalization policies were often enumerated only very vaguely.

Stiglitz undoubtedly succeeds in revealing the impudence and irresponsibility of the IMF’s interventions in developing countries. But I wonder how else it could operate? The “international bureaucrats” to which he so often refers must work according to very tight timelines. Sometimes these seemingly mundane factors help to explain their lack of flexibility or foresight.

But it’s nevertheless shocking to learn how much the IMF is governed by the narrow interests of the Western financial community, whose investments are recouped via the multi-billion dollar cash injections into these developing economies, while their poor lose their jobs and livelihoods and the middle classes foot the tax bill that ensues.

Stuffed and Starved

I have just finished reading Raj Patel’s ‘Stuffed & Starved’ (1st edition, 2008). In this brilliant polemic, he addresses most of the key factors underpinning the world food system.

Patel argues convincingly that the large food corporations are socially pernicious. His range is of research is really impressive. I also liked the tone he uses; he never speaks from a position of authority. He uses vignettes to paint the bigger picture. He lets others talk. And some of his ideas and insights are so illuminating.

Though Patel  seems to steer clear of any major political or structural analysis. Government policies and the role of global governance institutions, outside of the WTO, are barely addressed.  I got the impression that Patel implies that it is these corporations who are responsible for the ‘starved’; that they are leaving populations destitute. I would have liked a clearer argument on food security here. I think the responsibility for food security lies more with the governments within these countries than foreign corporations. But the role of government lies largely outside of Patel’s narrative.

In any case, this is, as Naomi Klein described it, a “dazzling” book and well worth a read.

Feeding Frenzy

“Can we feed a world of 9 billion by 2050? Is the current market turmoil an early sign that the global food system will not cope?” These are the questions that Paul McMahon seeks to answer in his highly readable book, Feeding Frenzy. Written in short, clear sentences and rarely lapsing into jargon, McMahon succeeds brilliantly in describing the food supply challenges we currently face.

Feeding Frenzy’s opening chapter gives us a succinct history of food from 10,000 years ago to the present day. The rest of the book covers the key threats to ‘food security’, such as population growth, finite food resources, the growing use of biofuels, climate change, unstable markets and self-serving traders, all of which saw food prices spike in 2008, causing a global food crisis, with riots flaring across the developing world.

 

Feeding Frenzy also looks at the macroeconomic obstacles; the fact that today many developing countries import most of their food, rendering them vulnerable to price rises. Two later chapters outline multinational commodity corporations’ scramble to secure ‘supply chains’, as well as food-importing governments’ efforts (through sponsored companies) to acquire land, in so-called ‘land grabs’. These moves see commercial actors seize control of supplies, with the dangerous potential to engineer price rises, while the ‘grabs’ undertaken by state bodies may insulate their domestic consumers from wider market volatility, but they also restrict global supplies, thus threatening food security in other countries.

McMahon gives a clear overview of these scenarios and sets out the essential steps which, he argues, must be taken: free trade in global commodity markets; enabling small farmers in poor countries to grow more food; agro-ecological approaches to farming (such as Henri de Laulanie’s rice-farming intensification system, applied in Madagascar and now adopted in forty countries worldwide); and the restructuring of markets to support food security over commercial gains.

Feeding Frenzy is really a rebuttal of those alarmists who believe we are failing to meet growing demand with adequate supply. McMahon argues convincingly that we have the natural resources to produce enough food to feed our richer, more populous and climatically varied world by 2050; we just need to rationalize our food supply systems.

 

Times Literary Supplement

 

Ethiopia: The Last Two Frontiers

John Markakis’s latest book, ‘Ethiopia: The last two frontiers’, presents a political history of Ethiopia covering the period 1916 to 2010. Focusing on the transformation of a multicultural empire into a modern nation state, Markakis continuously leans on the “centre/periphery” dynamic as a method of analysis. In the vein of subaltern studies, he seeks to give agency to “peripheral” peoples in the state-building process.  Using a vast range of historical, political and anthropological sources, Markakis describes Ethiopia’s northern and central regions as comprising the “centre”. The “last two frontiers” are the two peripheries: the “highland periphery”, essentially the Oromo-dominated southern highlands, and the “lowland periphery”, inhabited by the Oromo but also by major pastoralist groups such as the Afar and the Somali, as well many other smaller ethnic groups.

Split into five parts, the book begins with a discussion of the main peripheral peoples, followed by a history of the modern Ethiopian empire from the nineteenth to the twentieth century, under Emperors Menelik II (1844–1913) and Haile Selassie (1916–74). During this period, Amharic became the lingua franca, excluding non-speakers from power. Both highland and lowland peripheries were subjugated: exploited for labour, taxes and tribute. Markakis then assesses the period of Dergue rule after the deposition of Haile Selassie, in 1974, in which the Marxist dictator Mengistu Haile Mariam succeeded in expanding the state apparatus until his overthrow in 1991. The fourth part describes how the Tigray People’s Liberation Front (TPLF), led by Meles Zenawi, sought a state and national identity that would encapsulate Ethiopia’s diversity, empowering the three-quarters of the population that were not Amhara. Subsequently re-formed into the Ethiopian People’s Revolutionary Democratic Front (EPRDF), their brand of government has blended leftist nationalist ideology with a pragmatic drive to commercialize agriculture in the south. The final part of the book assesses the impacts of federalism on the diverse ethnic groups populating the southern regions.

Markakis believes the EPRDF has overseen an expansion of the state, with more schools and hospitals established in previously neglected regions. Pluralism has been feted. But beyond basic services and symbolic gestures, he argues, the “regime” has kept a “tight reign” and is “lacking in imagination” when it comes to offering real political power to peripheral regions.

‘Ethiopia: The last two frontiers’ reflects Markakis’s immense knowledge and passion for Ethiopia. Although the tone, structure and style could be lighter, readers will nevertheless find much worth in this expansive and original study.

 

Times Literary Supplement

Interventions – A Life in War and Peace

Kofi Annan’s memoirs narrate his career as a flying peacemaker, working for the United Nations. Interventions: A Life in War and Peace, takes us from one diplomatic precipice to the next. We traverse devastating failures and lasting successes. In the book’s chaotic world, Annan’s unwavering determination and moral conviction is perhaps the one constant.

Interventions is written by Annan with Nader Mousavizadeh, an ex-colleague, and focuses mostly on his efforts to prevent or resolve global conflict. After an opening chapter on his youth, observing the successful independence movement of Ghana’s first President, Kwame Nkrumah, and engaging in student politics, we then jump to his career, as head of the UN’s peacekeeping operation, followed by his ten years as Secretary General.

Chapters primarily cover the interventions in all forms of war since the early 1990s. Specific innovations such as the Responsibility to Protect doctrine, the International Criminal Court and the Millennium Development Goals (MDGs) are upheld. UN reform is explained, and UN resolutions are never far away.

The book could be more balanced, addressing Rwanda, Iraq and Afghanistan more, and Israel-Palestine a little less. It could also capture the rich detail of high-level political summits with more verve; at times the content is dry and excessively policy-orientated. Occasionally the language strays into latinate prose: “The impact of the MDGs in providing this coherence has not just secured the de-confliction of certain development paradigms…”

Despite these flaws in style, Interventions engages assiduously with key topics. Annan does not shy away from criticizing the Bush administration for undermining multilateralism over the Iraq war. He is right to point out that in development debates “the spotlight should not be on aid but trade. It should really be on the failures of rich countries to remove international trade regulations that stunt the economic ambitions of developing countries.”

Interventions really comes alive when we read about Annan’s efforts to work alongside difficult personalities such as the former Palestinian leader Yasser Arafat. These passages reflect Annan’s sensitivity and steeliness, as well as his sense for human psychology. The book’s substance lies somewhere between the personal and the policy-driven – more of the former would have made it more readable, but nevertheless it remains a fascinating account of contemporary statecraft in the post-Cold War era.

 

Times Literary Supplement

The Real Transition That Afghanistan Needs

The Afghan guessing game is intensifying. Nobody can accurately predict what will happen in 2014 – the “transition” year – when international ground forces finally exit and a new Afghan president is elected. Pessimists foresee the outbreak of civil war and a rise in the number of safe havens used by international terrorists. This current rise in attacks, assassinations and abductions around the country will increase their anxiety.

May’s Nato conference in Chicago saw world leaders promise more cash to bolster Afghanistan’s fledgling security services, but can we not learn from history and recognise that no matter how much money and lives are expended on military intervention and training, more soldiering and policing will not deliver long-term security.

Military force seeks to prevent insecurity but ignores its root causes. Afghanistan’s insurgencies find acceptance among the poorest, most marginalised communities. These are villages in remote districts that are neglected by government and aid agencies. As US General Eikenberry was fond of saying, “where the road ends, the Taliban begins”.  Roads are important, but providing quality services that vulnerable populations can reach is vital.

Afghanistan’s under-development remains shocking. One in two children under five is chronically malnourished. Nearly half of school age children are out of school. Around half the population is underemployed. Over a third of the country lives below the poverty line. In such precarious environments, religious extremism, narco-trafficking, criminality and corruption thrive, for survival is paramount.

Undeniably there have been achievements over the past ten years. Access to primary health care has increased from 8 percent of the population to more than 60 percent. Access to electricity has increased by 250 percent. The Afghan government has increased its ability to collect revenue. And, yes, thousands of kilometres of roads have been constructed. Donors, development partners and NGOs have played a critical role in supporting Kabul in these and other areas.

But the fact remains that, despite over ten years of enormous foreign investment in Afghanistan, the lives of ordinary Afghans have changed little. About 40,000 Afghans die each year due to poverty and hunger. This figure is fifteen times more than casualties from war. Yet NATO has spent more than twice as much on its intervention in one month than all the combined international aid spent on social protection in eight years.

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Investments in the basic building blocks – quality education, nutrition and rural livelihoods – have for too long been dismally low when compared with the vast sums disbursed on governance and more “visible” macro-economic projects deemed to be the “silver bullet” for Afghanistan’s future GDP.

The poorest Afghans have understandably grown disillusioned with the corruption among Kabul’s political elites when tax-payers’ money should be going towards improving people’s social services. These Afghans naturally start to view the international aid community as equally self-serving and hypocritical. No wonder then that they accept the alternatives that are pressed upon them by Islamist clerics and their foot soldiers.

Next week, Afghanistan’s stakeholders from the international community will meet in Tokyo to discuss development. This is a major conference and needs to be treated as such, not simply as another stop-off in the Afghan diplomatic carousel.  It presents a genuine opportunity for policymakers to shift the balance of power away from war-weary Generals to the Ministers, Ambassadors and senior UN officials who will be responsible for the country’s future development.

If the “transition” is a discursive tool, let us frame it this way: the following two years should see the international community transition from a security-dominated agenda to a development agenda. Critically, this agenda must prioritise the most vulnerable Afghans’ needs and focus on sustainability. The UN must become the major partner in supporting the government’s development strategy.

One thing is clear: the elephant in the room at Tokyo will be the abject lack of human development in Afghanistan; that is, the international community’s failure to help the country’s poorest. Everyone there will be aware of it, but few will have the courage to speak up and propose solutions.

When aid targets the right people directly, it can work. The National Solidarity Programme, funded by the US, UK, Canada and Denmark among others, has empowered communities across rural Afghanistan to spend US$1.2 billion on their own development priorities. This kind of development practice is helping hundreds of thousands of Afghans move out of poverty. What’s more, such measures improve security, cheaply.

As western constituencies vote for accelerated troop withdrawals, and the military aid teams pack up their bases, and the media spotlight moves away from this country after over ten long years, we must finally transition to a more realistic approach. Spending a greater share of limited budgets towards ‘smarter’ development will improve the lives of millions of Afghans, both immediately and in the longer term.

Reducing poverty and hunger, preventing illiteracy and disease – these are not only inherently good things, but they also make communities less amenable to an insurgent’s methods of persuasion. This clearly benefits Afghan people and will go some way to relieving the concerns of a worried, if tired, international community.

Dead Aid

Dead Aid is almost a good title. Like dead wood, argues Dambisa Moyo, today’s aid is both useless and obstructive. The Zambian economist makes a strong case against the use of systematic aid money given yearly by Western donors to African governments, but her book lacks nuance. No one writing about “Africa” can escape the charge of generalizing, but Moyo’s prescriptions for a better future rest too narrowly and too optimistically on private sector-driven economic growth.

Moyo begins by discussing fifty years of rich countries’ wasted aid to Africa, in the form of concessional loans or grants that are frequently forgiven by donors. This leads to the most compelling (if unoriginal) argument in the book; namely, that aid fosters corruption, which in turn hampers growth.

Dirty money is not easy to track, but Moyo could have substantiated her principal argument with more exact cases of aid corruption and stated specifically where and how this has corroded growth. There are few detailed examples, which could lead readers to make assumptions about African politicians – precisely the kind of thinking Moyo wants to change. There are also oversights: she calls “glamour aid” a phenomenon of the past decade, although it began with Live Aid in 1985. Others would trace the birth of the African cause célèbre to the late nineteenth century when Joseph Conrad and Arthur Conan Doyle reported on King Leopold’s atrocities in the Congo.

Dead Aid simplifies and in so doing ignores the fact that Africa has been a site for multiple competing growth and policy discourses at various levels since aid began. The second part of the book proposes a narrow focus on foreign direct investment, trade with China and microfinance as the best routes for African aid-free growth.

Aid itself is not the factor obstructing an otherwise inevitable stream of private capital; by pushing these approaches, Moyo overestimates the singularity of African markets. Aid is controversial for its historical and political connotations, but in reality its impact on Africa is secondary to structural factors such as global trading systems.

That most African countries have gone from being net food exporters in the 1960s to net food importers today is enormously significant for the livelihoods of Africans. Increasingly driven to cities, partly because of the effects of economic liberalization in the 1980s, millions now cannot afford to buy imported commodities. One issue Moyo neglects is agriculture. Ensuring more effective, equitable agricultural development will do more to promote growth in Africa than ending institutional aid.

Times Literary Supplement

Dead Aid by Dambisa Moyo is published by Penguin.