Power, Profit and Sport: The Real Legacy of the Football World Cup

July 16, 2018

By Sophie Nakueira

I watched the 2018 Football World Cup in four places. The first time was on a veranda of a pub with two friends in Halle, a small town in Germany that most people have not heard of or have heard of for all the wrong reasons. My friends were wary that they might be mistaken for Mexicans and this was something they desperately wanted to dispel (especially in a town renowned to be anti-foreigner) and more so as Germany suffered a 1-0 defeat in the end. The second time I watched Germany play was in Hamburg in a friend’s flat. It was a nail biting experience as Germany salvaged the game and beat Sweden in the very last minute. Nothing, however, prepared me for Germany’s defeat by South Korea. I was watching the match at work in a room that had been conveniently converted into a public viewing area in a work-place proudly known for the diversity of its workers.

Football in all its glory, brings out the sportsmanship or cheerleader in many of us. It’s the one time many people from different parts of the world convene and celebrate an imagined global community. Or like many of my friends whose countries did not participate in the World Cup, we adopt national teams based on a perceived belonging. Thus, for me it seemed only right that I would support Germany and perhaps any African country being that I am living in Germany and hail from Uganda. However, unlike other football fans, my interest in football and the World Cup has little to do with the sport itself. It has more to do with what takes place behind the scenes, away from the limelight and cameras. The rarely spoken about but much disdained aspects that come with organizing FIFA World Cups. I have researched the governance arrangements that enable FIFA to successfully run the World Cup. My research focused on the contractual arrangements that enabled FIFA to orchestrate security in the mega event zones of the 2010 World Cup in South Africa.

The World Cup in Russia was the first World Cup to be staged under a new president and I do not mean Putin but FIFA president Gianni Infantino. The last two World Cups in South Africa and Brazil were held under the now suspended president, Sepp Blatter. Under his leadership, the football governing body had been plagued with allegations of corruption. In particular it was alleged that the process for awarding World Cup tournaments and sponsorship deals was fraught with bribery which he and a few of his cronies had been benefiting from.

Unless there is a complete overhaul of the process of awarding sponsorship deals or choosing the World Cup host, it is naïve to think that allegations of corruption will cease to exist under the new president. However, fear of corruption is only one of the issues that people should be concerned about. Often unreported is another issue of equal importance: the role of transnational non-state actors, their increasing power and the protection of private profits. The contractual agreements for mega events are not open to much negotiation and are mostly signed on a ‘take-it-or-leave-it-basis.’ Due to the stiff competition between countries that seek to host these events, any country that seeks to negotiate the terms before being awarded the rights risks losing out on being picked. As a result, emerging economies such as South Africa, promise to deliver the same way developed countries in the West do despite being at different stages of development. Emerging economies often bid for these events with the promise that these events will accelerate development plans. This was the case in South Africa’s motivation and justification for bidding for the 2010 FIFA world cup.

What is noteworthy about the governance arrangements of FIFA World Cups is the increasing power of private corporations. This was most notable when South Africa hosted the World Cup in 2010. It was the first World Cup in Africa and so understandably there was pressure to put on a good show. Remarkably, as is the case with all countries that seek to host this event, there was little room for negotiating the agreements that needed to be in place for the success of the competition. Indeed, it was during the implementation stage of these agreements that South Africa saw how arduous some of the terms were which in turn led to people who had been engaged in informal businesses around spaces designated as FIFA zones, to lose the means to make a living during the months leading up to the event. This is because mega event zones are governed by special laws. For the 2010 World Cup, these were consolidated into two Special Measures Acts that were to bring into effect the terms agreed to between FIFA and South Africa.

FIFA insists on the protection of the commercial rights of the sponsors of the World Cup. Interestingly, in marketing mega events to the public, countries often cite that they will bring a lot of investment and tourists to the countries. In South Africa’s case, the event was marketed as an African World Cup and that hosting the event would allow groups formerly marginalized during apartheid to benefit from the event. However, in reality fulfilling the terms of the Host Country Agreement and Host City Agreements meant that many of the imagined benefits would indeed remain imaginary at best. As South Africa claimed – amidst criticism that they were spending public funds on expensive stadiums – the FIFA World Cup was meant to fast track infrastructure and other developmental goals that had already been planned. Disappointingly, as the host city of Cape Town found out for example, they would have to build a brand new Stadium at their own cost and in a swanky neighbourhood called Green Point and not in the poor area of Athlone, thus limiting the benefits for poorer sections and contrary to what had been promised.

So, the organization of football World Cup tournaments is a game in itself. It’s a game in which FIFA has the upper hand because the terms of the agreement are always in its favour. It’s a game in which FIFA always wins because they call the shots. What is largely unknown to the public, is the lack of transparency in some of the contracts. For instance, the clauses within the Host Country Agreement are mostly broad and FIFA states that incase of any ambiguity, FIFA’s word is final. This would not be so problematic if all terms of the agreement are known before hand by the Host Country or Host City. Instead, FIFA cleverly inserts that by signing the Host Country Agreement, the Host Country is deemed to have agreed to any future clauses that it may introduce. Moreover, it is hard to hold FIFA accountable in any meaningful way as the Host Country Agreement stipulates that the Host Country agrees to indemnify FIFA for any costs that may arise out of a lawsuit against it, in relation to staging the World Cup. This means that whilst anyone is welcome to sue FIFA, any costs will be borne by the host country. Thus in essence, FIFA exists in a legal vacuum. It is non-profit organization that is successfully run like a profit organization but can hardly be pinned down legally because of the web of protection it has woven.

As a consequence, what is at stake is not who wins the World Cup but the protection of the sponsors. The FIFA World Cup and Olympic Games maybe about bringing people together and promoting a global community, but it is also about the expansion of power and profit of global corporate brands such as Adidas, Nike, Coca-Cola, Anheuser-Busch (the makers of Budweiser) and the like. The security of mega sporting events is just as much about the protection of these events from terrorist attacks and hooliganism as it is about the protection of the intellectual property rights of the sponsors of these tournaments. The policing of the latter is in evidence when you attempt to enter public viewing areas, or any space designated as a FIFA zone with a branded item that is a competitor to any of the sponsors of the World Cup.

I have read the bidding documents and Host Country Agreement for Russia 2018. These documents which are meant to be public but were not easily accessible and I only got a hold of them much later. So, I have a slight idea what lengths Russia went through to win the bid to host the World Cup. The secrecy surrounding these documents can be credited to FIFA’s request for non-disclosure in the Host Country Agreement – a document that many would categorise as being in the interest of the public. By now it might be clear to discerning readers that these events are about much more than sport. For countries in the BRICS – Brazil, Russia, India, China and South Africa – the increasing interest in hosting mega sporting events is about self-promotion, profit and an attempt to attract investors and cement their status (politically and economically) on a global stage. Thus the exorbitant costs that goes into organizing these events, should not be measured in financial terms alone.

What will be the legacy of the Russia 2018 FIFA World Cup? Did Russia learn any lessons from South Africa or Brazil? Comparatively, Russia had a longer run in the tournament than South Africa did in 2010. However, like South Africa, the staging of the tournament will not only be remembered for the team’s performance. Will we still remember Russia in 2018 for the political fall-out with England over Novichok? Or will it be the feel-good atmosphere football fans around the world have experienced in the country? I suspect we will tell stories about white elephants and exorbitant costs used to erect masculine playgrounds for a global elite. However, are these the questions we should be asking or stories we should be telling? After a conversation with a friend, I was inspired to think differently. In our discussion about the purported patriotism that mega events promote, a friend expressed her discomfort in celebrating nationalism amidst a growing tide of anti-immigration sentiments. I think she is correct.

I hope that now the last whistle has been blown, we begin to ask questions that provoke new insights into what it really means to belong to a global community. My hope is that the questions that we ask will not hinge on age-old issues such as how much money was made or lost in staging the 2018 World Cup. Instead I hope we will interrogate the morality of spending such amounts to promote a supposed global community through sport extravaganzas whilst simultaneously building walls and reinstating borders around the world.

Sophie Nakueira is a research fellow at the Max Planck Institute of Social Anthropology in Germany. Her doctorate focused on the security governance of the FIFA World Cup and transnational private governance. Her current research is on migration and plural governance in refugee camps. She presented her latest research on the moral economy of informal governance in refugee camps in Uganda in Uppsala, Sweden at a workshop funded by ROAPE. She can be contacted at nakueira@eth.mpg.de.

Featured Photograph: Fans of Bafana Bafana, as the South African soccer team is known, watching the opening game of the World Cup on an open-air screen in Soweto (11 June, 2010).

Tariffs, Trade and Trump: Donald Trump’s Impact on Africa

ROAPE

July 12, 2018

Donald_Trump_greets_the_President_of_Egypt,_Abdel_Fattah_Al_Sisi,_May_2017 — President Donald Trump greets the President of Egypt, Abdel Fattah Al Sisi, prior to their bilateral meeting, Sunday, May 21, 2017, at the Ritz-Carlton Hotel in Riyadh, Saudi Arabia. (Official White House Photo by Shealah Craighead)

By Dirk Kohnert

The international discussion on Trump’s dispute over import tariffs for steel, aluminum and even cars is currently focused on the big global players. However, African countries will suffer severely from these punitive tariffs. After years of talk of partnership for African economic development (AGOA, Cotonou Agreement, EPAs, etc.) Trump’s tariffs mean a severe blow to participatory African trade and sustainable industrialization. Egypt and South Africa for example, potentially the most affected countries in Africa, face massive job losses and diminishing earning opportunities, with all the consequences that this entails for their already fragile economies and populations in dire poverty.

General impact of Trump’s tariffs on African trade

At least since the derogatory comments in January 2018, in which Donald Trump described African states as ‘shitholes’, the importance he attached to Africa became clear beyond doubt. Evidently, from his point of view, America’s greatness is based on spheres of influence other than Africa. Even though Africa and the African diaspora contributed significantly to the making of the United States and contribute to its development today. Trump prefers to concentrate on global competitors, such as China, Canada, Russia and Europe in order to ‘put America first again’.

In absolute terms Trump may be right. The extent of imports of steel and aluminum from Africa might be negligible in relation to overall imports and its supposed negative effects on employment of US white working-class in Rust Belt states. Trump targets states such as Pennsylvania, Michigan, Wisconsin and Iowa, which he regards as the clientele of his republican vote.

However, Africa is far more dependent on overseas trade than other economic regions and global players, such as the EU or North America that handle 63 percent and 40 percent respectively of their business with their regional neighbours. The major reasons of Africa’s dependency are the fragmented intra-African market, decades of stagnant regional and continental integration, high transaction costs, and corresponding tariff and non-tariff barriers to trade. Most of these barriers are at least partially due to rival neo-colonial foreign trade networks of anglo-, franco- and lusophone African countries, like the ‘closed shop’ of the notorious French business-network of the ‘Messieurs Afrique’.

Africa’s infant industries rely heavily on foreign trade in view of the continent’s limited local and regional markets. Intra-African trade accounts for far below 20 percent of total African foreign trade. The Pan-African Free Trade Agreement (CFTA) that was recently negotiated on a special African Union summit in Kigali (Rwanda, 21 March 2018) by 44 African states is not likely to change this situation in the foreseeable future. CFTA is supposed to liberalize intra-African services completely and 90 percent of trade in goods. Yet substantial problems remain, so the common external tariffs have not yet been negotiated because of existing agreements under the controversial EU-Africa trade agreements, and finally some major players, for example South Africa, Nigeria and Uganda, have not yet even joined the CFTA.

Importantly, unfair trade relations to the disadvantage of the continent have overshadowed African foreign trade since colonial times. Africa is still integrated asymmetrically into global trade. Raw material and agricultural exports on the one hand and capital goods imports on the other continue to dominate African foreign trade. One of the origins of Africa’s current inability to benefit fully from the expansion of world trade lies in the colonial division of labour, the consequences of which persist in economic structures far more than in other continents.

Under these conditions, the free trade ideology of the Bretton Woods Institutions, propagated for decades by the Structural Adjustment Programs of the IMF, conserved the status quo rather than generating sustainable African growth. These tendencies have been exacerbated in recent decades as Africa’s commodity prices have fallen in international markets since the 1970s, and consumer prices have risen. All this makes for the volatility of African foreign trade relations that will be further aggravated by Trump’s tariffs. Yet, Africa is mostly ignored in the international discussion about the effects of Trump’s protective tariffs on steel (25 percent), aluminum (10 percent), cars and other imports.

African countries like South Africa, Egypt and Rwanda have little power to retaliate, unlike the EU or China. Though Trump wants to enforce ‘good behavior’ on trading partners on the continent in order to ‘make America great again’. So, his administration took extreme steps against Rwanda this year for taxing second-hand American clothes in an effort to protect its infant textile industry – the country was suspended from duty-free access to US markets.

Steel production in the US and Africa in comparison

Steel production (in 1,000 tons) in the USA in January 2018 was 6,822, i.e. about ten times as high as in Egypt (660) or South Africa (577). Other major African steel exporters like Libya (48) and Morocco 45 (August 2017) were far behind in third and fourth place, respectively. Worldwide, South Africa and Egypt rank 22nd and 27th globally in steel production, that is, far, far behind China, the world’s largest steel producer, with 808.4 million metric tons or 50 percent of world production. Still, barely 2 percent of the steel imported into the US last year came from China (see S&P Global Platts, New York, 4 March, 2018). Levels in aluminum were a bit higher, but not particularly significant either. The vast majority of Chinese steel shipments went to other countries. Trade diversion as a result of Trump’s protective tariffs could lead to cut-throat competition with respect to the infant African steel industry.

However, compared to the US, China or Europe, the metalworking industry in African countries, such as South Africa, Egypt and Nigeria, has a significantly higher importance for its domestic economy and sustainable growth. In total, the manufacturing industry in South Africa had 1,213,560 employees in 2014, of which the largest share was in the metalworking industry, employing approximately 257,098 or 21 percent of the workforce. In Egypt, the total number employed in the industry in 2015 was 25 percent of all economic sectors, with its steel industry considered to embody the nation’s economic resilience.

Conclusion

African states still strive to cope with the legacy of the slave trade, colonialism, and the subsequent struggle for political and economic independence in a crisis prone world. Decades of development aid and well-intentioned though not necessarily altruistic treaties to promote development by trade, like AGOA and the ACP-EU Cotonou agreement which runs out in 2020, were regarded as steps in the right direction, though they actually had little impact and failed to accelerate development on the continent. The present move of the Trump administration to put ‘America first’ and to concentrate on the United States’ ‘real friends’, is a step backward. There is even a whiff of the period in the cold war, when, according to the maxim, if you’re not with us, you’re against us. The punitive tariffs introduced on imports from African countries is a harsh and blunt power without regard to the needs of developing countries on the continent, or elsewhere. Yet, unlike competing global players, targeted by Trump, African countries lack the power to retaliate. It is another slap in the face to those on the continent who thought there would be a more level playing field with the US, at least since the AGOA-treaty and the dashed hopes once aroused by the Obama-administration.

Dirk Kohnert is Associated Senior Expert at the Institute of African Affairs (IAA), German Institute of Global and Area Studies, Hamburg, Germany. He is also the retired deputy director of IAA (1991-2011) and former editor of the journal Africa Spectrum.

If you are interested in learning more on the impact of Trump’s tariffs on Africa, then we will be publishing a full Briefing by Dirk Kohnert in the next issue of ROAPE.

Featured Photograph: Donald Trump greets Egypt’s President, Abdel Fattah Al Sisi, at the Ritz-Carlton Hotel in Riyadh, Saudi Arabia (21 May, 2017).

Egypt’s Indelible Link: Corporate Food, Frontiers, and Popular Revolt

ROAPE

July 10, 2018

By Marion W Dixon

The neoliberal project has led to the growth of corporate food in the Global South. Industrial animal agriculture has spread, spawning a global livestock complex. Industrial horticulture has developed in many Southern regions, giving Northern consumers the opportunity to consume fruits and vegetables year-round. Corporate service (e.g. McDonalds franchises) and corporate retail (e.g. supermarkets and hypermarkets) have unevenly been capturing a larger percentage of the consumer market throughout the global South.[1] At the same time, chronic rural poverty and food insecurity have persisted.[2]

In my research, Food and Revolt: Egypt, ecology, frontiers, I analyse the commodification of food, and the growing power of corporations in agriculture and food in Egypt. I argue that Egypt’s participation in the expanded world market during the two periods of so-called globalization depended on the development of new lands for commercial agriculture. During the long 19^th century (c. 1820s-WWI) and the neoliberal period (c. late 1970s-2011), the continual expansion of cultivatable lands enabled and limited the acceleration of cash crop production for distant markets. In the neoliberal period, this desert frontier has enabled the growth of a corporate agri-food system, and this growth has contributed to class-based vulnerabilities to global food prices, losses in smallholder livelihoods, and public health threats (e.g. Avian flu). This has, in turn, engendered popular revolt against the ruling political regime, culminating in the 2011 uprising.

Land reclamation refers to the development of lands for expanded commodity production that were either not cultivated until recently or not intensively cultivated and through the development of an irrigation infrastructure, transportation routes, labour force, and the other enablers of larger scales of production and of connections to markets. During the colonial period and the neoliberal period, waves of land reclamation in Egypt responded to global commodity booms. Throughout the 19^th century, global price increases in cash crops for export to industrializing Europe spread sites of production from settler states to colonial states and soon-to-be colonized territories, like the Ottoman province of Egypt. In the neoliberal period, growing food retail and food service for affluent consumers domestically and abroad spread industrial agriculture from temperate regions to Southern regions. In Egypt investors responded to the growing markets by expanding production of fruits and vegetables and animal protein and by expanding food processing. During both periods of expanded commodity production, the state would grant rights to investors to cultivate the land and investors with the help of the state would draw irrigation water, labourers, and other resources from existing agricultural areas to the new lands. The new lands would become the locus of large-scale investments in agriculture (and food processing). This expansion of commercial agriculture would eventually lead to the degradation of the ecological conditions of production (e.g. social erosion, multiplication of pests). The resulting rising costs of production then precipitated the development of new lands, farther from existing agricultural and residential areas.[3]

This double movement of commercial agriculture – from temperate to Southern regions on a world scale and from existing agricultural lands to reclaimed lands within Egypt – reflects the ecological foundations of agricultural industrialization and in the neoliberal period the accelerating crises of industrial agriculture. In the neoliberal period farm organization and on-farm practice have transformed toward an increasingly coercive and capital-intensive set of agritechnologies and practices to manage the volatility of industrial agriculture (from monocultures, perpetual genetic erosion, cropping intensification, and so on). And it is more capitalized firms that have been able to afford adopting these measures that govern industrial agricultural production and global agri-food trade.

In Egypt, during farm visits on reclaimed lands and in interviews with agribusiness executives and managers, attention and resources on farms and in business operations were devoted overwhelmingly to threatening situations due to the blurring of the inside and outside of the production zone. Recurrent threats to poultry from parasite populations provided an initial push and pull from the Delta into semi-arid areas, and this movement became especially pronounced following the 2005-06 Avian flu outbreak. Many of the first investors to move into the new lands in the 1970s, at the time of President Anwar Sadat’s infitah (opening) policy, were building industry poultry complexes. The containment of parasite populations was cited as a motivation: containment was (and is) understood to be better assured with distance between farms and from residential areas. In response to the Avian flu outbreak, corporate poultry, which dominates the breeding of broiler chicks, further consolidated their market share and built more ‘fortresses’, as one poultry executive called them, and farther into the desert.

While much revolutionary activism and commentary in recent years focused on the illicit ways the ruling class – the political elite and the business elite – accumulate wealth and privilege, through my own participant observation in a family business in the business district of Cairo (Mohandiseen) in 2009, I have seen that the reformulated ruling class created class cohesion within the Egyptian social structure through legal transnational networks of family, education, and investments. However, a tension lies in the constitution of their class power: the very means to cement their class position engendered a popular (and subversive) critique of their entitlement to accumulate wealth, to govern, and so on. Their attempt to cement their class position through the growth and consolidation of the agriculture and food sector further exacerbated this tension, given food’s material and symbolic functions that link nature, human survival, livelihoods, culture, and health.[4]

Popular critiques of growing inequality took many forms, including among smallholders and advocates who had been organizing against structural adjustments. Since the early 1990s, structural adjustment policies had accelerated the buying and selling of land in existing agricultural areas in the Delta and Nile Valley and in reclaimed lands and had led to millions of farmer tenants and smallholder land beneficiaries losing their rights to land.[5] These policy changes simultaneously eroded the social contract, which had made smallholder agriculture viable in the post-independence period, and bolstered the growth of corporate food. The continual reclamation of land depended on drawing Nile irrigation water from the Delta, the state agriculture and transportation budget, and labourers from nearby Delta provinces. Yet, the promise of greening the desert policies continued to gain an audience among this network. The promise of greening the desert to solve a host of societal problems emerged immediately after World War II. To diffuse the tension from the growing polarization between the wealth and power of the ruling class and the immiserated peasantry, land reclamation began to be used as a policy to distribute land to peasants. Beyond being a commodity frontier, land reclamation from the post-WWII period onward became a way to resolve the inherent tension of bourgeois society.[6]

Frontier making develops a unique character in the post-World War II, post-independence period. However, by the 1970s and 1980s the frontier again becomes a main site of commercial agriculture as it was in the long 19^th century. From the perspective of the frontier, the neoliberal moment represents not a rupture with the past nor a seamless continuity in historical time (e.g. colonial legacies).[7] Rather, the neoliberal period is a moment of a reconstituted world market – and society and polity in Egypt are shaped by the conditions through which the modern state participated in the world market of the colonial period.

Growing class polarization that marked the long 19^th century, especially the period of direct colonial rule beginning in the early 1880s, was marked by cross-class anti-colonial movements. Growing class polarization in the neoliberal period is reflected in part in the dual (formal/informal) character of the country’s corporate agri-food system. The commodity chain of key corporate foods reveals that smallholders have been both excluded from direct consumer markets with the growth of corporate food and included in corporate commodity chains (often on a non-contractual basis). More than this, in so far as smallholders have been able to hold on to plots of land with the systematic undermining of the agrarian reform institutions of the post-WWII, post-independence period, they have been changing what they grow – e.g. berseem or animal feed for dairy cows, dairy cows for raw milk. Much of these foods are corporate foods, or more precisely, basic ingredients that are re-combined and re-packaged to make durable food commodities. As such, a reconstituted peasantry has been ‘the domestic supply’ of a number of key corporate foods (raw milk, potatoes).

In turn, domestic diets have shifted toward food high in animal protein, fats, and sugar. As in the global food economy, there lies a space of dietary convergence – where the affluent and working classes alike consume industrial, processed foods. A reconstituted middle class was supposed to be born in the neoliberal project through an expanding private sector and rising private consumption and because the consumer market of corporate food is wide in Egypt, a disparate middle class was able to ‘buy in’ – whether it be the low-end supermarkets or the street kiosks of snack foods and soda drinks. However, this new national consumer, by definition, is one of uneven access to the corporate food market – a market skewed toward the global consumer class in Egypt and abroad, in effect revealing the hallowed structure of the middle class.

The success of the corporate agri-food system as a class project is the fact that across class Egyptians had been able to buy in to the neoliberal project. The space of dietary convergence provided a societal consensus that legitimized the project, at least temporarily. However, its failure – one of many – was that the growth of corporate food did little to reduce food costs as a percentage of income for the vast majority of Egyptians. This failure began to become apparent at the time of the 2007-2008 food crisis, during which a labour protest in the industrial town of Mahalla erupted and spread to other parts of the country. When food prices began to rise again in 2010, a government official confided in an interview that an undisclosed government study confirmed a direct relationship between food prices and revolt. If prices of a few key food staples rise above a certain percentage of income, eighty-three percent of the time Egyptians will revolt. Months later they did.

Marion W Dixon will be a faculty member at Point Park University in Pittsburgh, PA beginning this 2018-2019 academic year. Her research includes agriculture and food, with a focus on the Middle East and North Africa.

Featured Photograph: A boy carrying a tray of bread (Cairo, 22 July 2009)

References

[1] For overviews of the spread of corporate food around the world, see: Burch, D. and G. Lawrence, eds. 2007. Supermarkets and Agri-Food Supply Chains: Transformations in the Production and Consumption of Foods. Cheltenham, UK: Edward Elgar; Wolf, S. A. and A. Bonanno, eds. 2014. The Neoliberal Regime in the Agri-food Sector: Crisis, Resilience, and Restructuring. London and New York: Routledge.

[2] The International Fund for Agricultural Development (IFAD) regularly keeps figures on rural poverty; see these 2011 figures worldwide, https://www.ifad.org/documents/10180/c1bbf5fa-bdc3-4ea6-9366-d163b95b1180. And the UN Food and Agriculture Organization (FAO) tabulates yearly statistics on food security and nutrition; check out the 2017 report on the status worldwide, http://www.fao.org/state-of-food-security-nutrition.

[3] Moore’s (2011) concept of relative exhaustion has been useful for capturing the relational character of frontier making in Egypt: Moore, J. W. 2011. “Transcending the metabolic rift: a theory of crises in the capitalist world-ecology.” Journal of Peasant Studies 38(1): 1-46.

[4] McMichael (2000) refers to these connections as ‘the power of food’; McMichael, P. 2000. “The power of food.” Agriculture and Human Values 17: 21-33.

[5] Bush, R. 2014. “Food security in Egypt.” In Food Security in the Middle East, edited by Z. Babar and S. Mirgani, pp. 89-114. Oxford: Oxford University Press.

[6] On outward/territorial expansion as a way to resolve the tensions of rising inequality, etc., see Hegel 1942 cited in Harvey 2001, p 286: Hegel, G.W.F. 1967. Philosophy of Right. Oxford: Clarendon Press; Harvey, D. 2001. Spaces of Capital: Towards a Critical Geography. New York: Routledge.

[7] Stoler, A.L. 2016. Duress: Imperial Durabilities in Our Times. Durham and London: Duke University Press, p 25.

‘For the Labouring People’

ROAPE

July 5, 2018

By David Seddon

One of the main objectives of the ROAPE website is to promote the critical analysis of African economies and societies in a global context from a radical left perspective and to link the contributions that are made to the ROAPE printed journal and the debates that take place within its pages with a wider activist community in Africa and elsewhere. It is important that this project does not become an ‘in-house’ dialogue but remains inclusive and effectively draws in contributions from all over the continent, as well as from Europe, from the Americas and from Asia. It is also important that, in the laudable focus on the present and the future, our current debates do not forget the past.

The experiences of the past and the debates of the past are often valuable in what they have to contribute to our analyses of the present and our visions of the future. But all too often, just as African intellectuals and political activists find it hard – even today when email and the internet facilitate valuable international interaction – to overcome the constraints of distance on meeting and debating face to face, so too it is often hard to be aware of and keep alive important experiences and debates of the past that may be very relevant to the issues facing us at present.

In this short piece, I want to remind readers of roape.net of the important contribution made by those who were involved with the Journal of African Marxists during the 1980s, and to express the hope that ROAPE can, in some way, ‘re-visit’ and ‘re-animate’ the work of those activist intellectuals who contributed to the Journal, many of whom have been major figures in debates on the left for decades.

The Journal of African Marxists was established in 1981 with seven main aims:

1) to provide a forum for the exposition of the fundamentals of Marxism in the conditions of Africa;

2) to encourage a thorough-going analysis of the problems of development from a Marxist perspective;

3) to discuss the various ‘socialisms’ in Africa and subject them to scientific and constructive criticism;

4) to facilitate the emergence of a systematic and coherent Marxist body of thought illuminating conditions in Africa;

5) to serve as an instrument for the creation of Marxist discussion groups which shall develop alternative policies for Africa based on socialism;

6) to highlight the gains of socialism where socialist policies have been adopted in Africa; and

7) to support the peoples’ struggles against imperialism and for socialism.

The idea was that the Journal would involve a number of local committees, in Africa and in Europe, and a permanent editorial board constituted by representatives from these local committees. Local committees were identified in Lusaka (Zambia) and London (UK), in Ghana, Kenya, Lesotho, Nigeria, Paris, Swaziland, Tanzania and Zimbabwe. Three ‘sponsors’ of the Journal were Samir Amin, ‘Ben’ Magubane and Ikenna Nzimiro (see Adam Mayer’s blogpost on Nigerian Marxists), and the provisional editorial board (initially based in Lusaka) included Eli Mwanangonze, Derek Chitala and Gilbert Mudenda, representing the Lusaka local committee.

Others on the provisional editorial board included Ben Turok (from South Africa), Strike Mkandla (from Zimbabwe, but representing the London local committee), Paul Mukwedi (from Cameroon, but representing the Paris local committee), Mike Sefali (from Lesotho, representing the Lesotho local committee) and T M Aidoo (from Ghana, representing the Ghana local committee). Others were being elected as representatives of Nigeria and Tanzania local committees.

The contents of the first issue included a statement of policy (in English, Portuguese and French) asking: ‘why the Journal for African Marxists?’ It answered this by referring to the ‘uselessness’ of most of the prevailing theories of African development and comments that ‘the rapid exposure of the hollowness of ‘African socialism’ and other African ‘isms makes it now possible to advance the only alternative which has proven its validity in practice, the ideology of scientific socialism.’ The Journal of African Marxists would provide a forum for debate for those wishing to pursue the implications of adopting this perspective.

The second question asked is: ‘which way Africa – socialism or capitalism’. The response was clear – most African states have taken the capitalist road and have failed to improve significantly the condition of the massesm only ‘a genuinely socialist option can deliver our continent from the crushing burden of underdevelopment and dependency.’ The task of African Marxist-Leninists, it is suggested, is ‘to stimulate the debate on the correct socialist path appropriate to the conditions of Africa, recognising the specific characteristics of individual countries, while yet seeking to discover what is common to our continent.’

In this debate, it is emphasised, ‘we must base ourselves on the common experience of struggling peoples the world over.’ In this regard, ‘the nature of class structures must therefore be analysed and exposed.’ ‘In our societies, there are the exploiters and the exploited. Standing over and above all is monopoly capital which persistently tries to win over local allies to uphold its interests.’ Marxist-Leninist theory upholds the centrality of the working class and was argued that ‘nothing has happened in Africa to disprove this notion.’

Concern was expressed regarding the role of trades unions since independence, but the important role of revolutionary intellectuals in providing the leadership and awakening the class consciousness of the working masses was also stressed. The peasantry may be backward and conservative, but it is not inherently ‘tribalistic’ – ‘tribalism’ is a product of colonialism but continues to be a scourge even after independence. ‘Racism’ is also seen as a social evil inherited from the colonial period and still alive today. Only a successful struggle for socialism will see ‘tribalism’ and ‘racism’ defeated and destroyed.

The Journal made a promising start, with local committees and clearly a committed set of followers and well-wishers. The Journal was based in Lusaka in Zambia, but it was managed by Zed Press from its offices in London and published by the Russell Press in Nottingham, both British publishers with strong leftist credentials. Significantly, from issue 3 (January 1983) onwards, the Editorial Collective (as it was now called) included Robert Molteno, the key figure at Zed Press, as well as a strong group in Lusaka.

Eleven issues were published in all, and I have found no explanation yet as to why this initiative foundered. But perhaps it is significant that the last issue (Issue 11) was published late and the Editorial Collective apologised for ‘the late publication’, blaming ‘the foreign exchange difficulty in Africa’ for the delay in publication schedules, and promising that future editions would be published on time. As far as I can determine, however, no more issues were published after this.

In ROAPE (Vol. 14/ No. 38) we published the statement from the conference held by the Journal of African Marxists in Accra, Ghana on 11-13 August 1986, stating that it was ‘a journal with whom we have collaborated over the years. Their emphasis on the struggle for democratisation echoes one of the strong messages coming from the 1986 ROAPE Conference.’ Roape.net readers can access the statement by clicking on the link here.

David Seddon is a researcher and political activist who has written extensively on social movements, class struggles and political transitions across the developing world. He studied ‘food riots’ and protest in a ground-breaking study on North Africa and the Middle East Free Markets and Food Riots: the politics of global adjustment with his co-editor John Walton.

On Filling Voids

ROAPE

July 3, 2018

From the editorial to Issue no. 155 of ROAPE, Reginald Cline-Cole discusses how roape.net and the print journal are becoming increasingly important to the task of promoting radical political economy analyses and debates – of filling intellectual, academic and revolutionary voids. The issue contains four research articles and, exceptionally, an extended Debates Special Issue on the Egyptian revolution. Readers can access these debates for free from our website by registering and logging in here.

By Reginald Cline-Cole

In January this year Donald Trump reportedly described various South American, Caribbean and (apparently all) African countries as ‘shitholes’ (or, according to some, ‘shithouses’) during a meeting on immigration with senators in the White House – eliciting widespread, often ‘forceful’, protest. Raj Shah, a White House spokesman, likens Trump’s stand on immigration to ‘fight[ing] for the American people [rather than] fight[ing] for foreign countries’ and explains the main thrust of his immigration policy thus: ‘Like other nations that have merit-based immigration, President Trump is fighting for permanent solutions that make our country stronger by welcoming those who can contribute to our society, grow our economy and assimilate into our great nation.’ Whether or not this represents racism, xenophobia, prejudice and bigotry is largely academic. But a list of Africa related questions directed at the State Department by Trump transition staff in January 2017 point to a questioning about the use of foreign aid, and even about American security interests, on the African continent. While after a whole year in office, the administration had still not outlined a clear Africa policy nor filled vacant senior diplomatic postings in both the US State Department and embassies on the continent.

For us at the Review of African Political Economy, the significance of this comment lies in its affirmation of the need for ROAPE to continue to provide ‘radical analyses of trends, issues and social processes’ in Africa, both in the pages of the journal and, increasingly, across diverse spaces of mobilisation and sites of resistance, including social media (see our posts on roape.net).

Twitter is Trump’s favoured means of communication, the one he resorted to with his denials and obfuscation when news of his alleged remarks broke. The comment was widely ridiculed, debated and contested in the blogosphere and online news sites, forcing Trump to send placatory letters to African leaders restating US commitment to their continent as the row threatened to overshadow Rex Tillerson’s planned first official visit to Africa as US Secretary of State. On the eve of his departure for Africa, Tillerson had contrasted ‘the U.S. approach of “incentivizing good governance”’ with China’s, ‘which encourages dependency, using opaque contracts, predatory loan practices and corrupt deals that mire nations in debt and undercut their sovereignty.’ However, his attempt to return to the subject in Addis Ababa apparently elicited the response from AU Commission Chairman Moussa Faki that, not only are Africans ‘mature enough to engage in partnerships of their own volition’, but that ‘[t]here is no monopoly, we have multifaceted, multifarious relations with [different] parts of the world’.

The United States, European Union and China all play competing, contradictory and, sometimes, complementary roles in aid, trade and investment relations with Africa. These roles are all integral to processes of transformation under capitalism and imperialism, and thus merit considerably closer and more critical attention than that offered by either Faki or Tillerson.

Entirely coincidentally, a debate on imperialism and capitalism between John Smith and David Harvey, which would subsequently include Adam Mayer, Patrick Bond, Walter Daum, Andy Higginbottom and Esteban Mora had started on the ROAPE Blog a few days prior to Trump’s outburst. This robust exchange includes among other things, the ‘changing landscapes of global capital’ (Mayer); the abandonment of ‘the concept of imperialism … in favour of a more open and fluid analysis of shifting hegemonies within the world system’ (Harvey); the ways in which ‘production outsourcing to low-wage countries … implies new and greatly increased flows of value and surplus value to US, European, and Japanese TNCs from Chinese, Bangladeshi, Mexican and other low-wage workers, [in a] transformation [which] marks a new stage in the development of imperialism’ (Smith); and how and why ‘[t]he missing links in contributions from both Smith and Harvey relate to processes of sub-imperial accumulation and class struggle, especially at a time that so-called global governance (multilateralism) has successfully assimilated the potential challenge by the main bloc of semi-peripheral countries: Brazil, Russia, India, China and South Africa (the BRICS)’ (Bond). These are ongoing debates over the interpretation of existing theories of, and the advancement of the beginnings of a possible new theory for imperialism.

Indeed, if Trump was truly interested in why America attracts far fewer immigrants from Norway than from ‘shithole countries’ in Africa and elsewhere, he could do a lot worse than start his quest for enlightenment by considering these debates. He would, we assume, recognise global capitalism’s implication in ‘differential geographical mobilities of capital, labour, money and finance’ (Harvey), if only from his business dealings and family history, including his ‘many friends going to [African] countries, trying to get rich.’ It would be equally safe to assume, too, that he is attendant to the existence of a ‘global-scale buffer elite…which the imperial powers generally find useful in terms of legitimation, financial subsidisation and deputy-sheriff duty – even when anti-imperial rhetoric becomes an irritant….’ (Bond). Why else would he have allowed himself to be prevailed upon to write the letter of apology and reassurance mentioned earlier to the foremost African representatives of this elite? Alternatively, he would find Mayer’s preoccupation with ‘the fate of the subaltern and the excluded, the figure of the migrant who desires legal, social and cultural capital’ nothing short of bewildering, given his belief in the need for walls to police or control their movement and visa bans to deny them access outright. But it is the following extended excerpt from Smith’s Imperialist Realities blogpost in the series on roape.net which must possess the greatest potential for eliciting the infamous response of ‘fake news’:

the imperialist division of the world … has shaped the global working class, central to which is the violent suppression of international labour mobility. Just as the infamous pass-laws epitomized apartheid in South Africa, so do immigration controls form the lynchpin of an apartheid-like global economic system that systematically denies citizenship and basic human rights to the workers of the South and which, as in apartheid-era South Africa, is a necessary condition for their super-exploitation.

Yet while most of this is unlikely to even register directly with Trump in his pursuit of his America First policy, much of it remains central to an understanding of – and probably contains the elements for fashioning forms and strategies of resistance to – the types of capitalism and imperialism, which appear central to Making America Great Again. In a sense, then, roape.net and the ROAPE Blog are becoming increasingly important to the task of promoting radical political economy analyses and debates – of filling intellectual, academic and revolutionary voids.

Nonetheless, our articles and debates in the print and online journal, sister to roape.net in our endeavour, remain central to this task. Issue no. 155 contains four research articles and, exceptionally, an extended Debates Special Issue on the Egyptian revolution. Readers can access these debates articles for free from our website by registering and logging here. The issue as a whole also has a distinctly North African focus, with a particular interest in class dynamics and social movements, the meaning of capitalism and, finally, revolution and counter-revolution. Our hope is that it will be read as a demonstration of the continued vitality of Marxist analysis.

Reginald Cline-Cole is a member of ROAPE’s Editorial Working Group and teaches Africa studies at the Centre of West African Studies, Department of African Studies and Anthropology, School of History and Cultures, University of Birmingham, Birmingham, UK.

Featured Photograph: Demonstrators protesting the election of Donald Trump marched near the White House in Washington (November, 2016).

Development Aid for Investors: Germany’s new Africa Policy

ROAPE

June 28, 2018

By Arndt Hopfmann

This blog analyses the German government’s most recent Africa initiatives. Soon after Germany took over the G20-Presidency in November 2016 the Merkel government almost immediately announced that was an opportunity to launch a new Africa initiative. What followed than gave birth not only to three policy concepts but also went along with a number of unexpected insights. Angela Merkel, the Chancellor of Germany, on the 19 June 2017 openly admitted that there are trade agreements between the EU and African States that are ‘not right’ and ‘even unfair.’ Then, more recently, she explained in an interview, published on the 24 February 2018, that ‘(w)e [still] have to learn how to use our development policy to create economic development’ in Africa.’

What a (verbal) turn-around. After more than 60 years of ‘Development Co-operation’ and almost 15 years of grim trade negotiations under the mantra of ‘Economic Partnership’ between the EU and the African Caribbean Pacific-Countries, and in particular sub-Saharan African states, the government has finally grasped the ongoing public criticism of the official development policy.

The notion that ’Development Policy’ was just a kind of all-round positive charity that benefits the poor would have continued to inform Germany’s Africa policy if 2015 had not happened. This was when the so-called refugee-crisis broke loose and about one million refugees mostly from Syria and Central Asia but also from Africa came to Germany. Since then it has become obvious – now apparently also to some government officials – that migratory movements of people from Africa (and other war-zones all over the world) will continue to increase, as long as young people have no incentive to stay. The ‘2015-refugee-shock’ deeply influenced the political aims and objectives that the government sought to achieve during its presidency of the G20-Group in 2017. This was seen as an excellent opportunity to put in place a joint international initiative that would help to keep thousands of refugees out of Europe.

The initiative Pro!Africa launched by the Federal Ministry of Economic and Energy Policy (headed by Brigitte Zypries of the SPD) might by the one with the shortest lived. Pro!Africa at its core is a programme to promote German private investment in Africa. These investments are expected to create additional employment opportunities. In order to foster the engagement of German investors, the programme promises improved government credit guarantees and the support of the Chambers of Commerce as well as a scheme to promote local skills development through vocational training activities. In short, Pro!Africa follows the old arrangements simply repackaged. Furthermore, as much as it was meant to spend €100 Million annually from 2018 onwards there are no allocations for this programme so far in the state budget.

The far more prominent programme that was launched under the title A Marshall Plan with Africa by the Federal Ministry of Economic Co-operation and Development (headed by Gerd Müller of the CSU) attracted remarkable attention not only in Germany but also abroad. The core idea of the new Marshall Plan is to ‘…mobilise the private sector to a greater extent’ and ‘…to boost private investment in Africa.’ But the programme is much broader and more comprehensive than Pro!Africa. So, despite that it has not been developed in true cooperation with African Partners and still contains certain paternalistic attitudes it does refer to Africa’s own vision in the African Union Agenda 2063 and tries to coordinate policies on foreign affairs, development, trade, economics, security, agriculture, climate environment and migration. What is more, it openly admits that that ‘Europe’s policy on Africa was for decades often guided by its own short-term economic and trade interests.’

This confession ties in with Chancellor Merkel’s own comment on the ‘unfair’ nature of Economic Partnership Agreements (EPAs). However, the Marshall Plan with Africa does not take into account either the challenge of the UN’s Global Sustainability Goals nor the differentiation and diversity between African countries. The programme might in one way or the other continue since the CSU’s Gerd Müller the former Minister of International Co-operation and Development will stay in office. Nevertheless, it remains to be seen to what extent the original plan will be implemented in the light of the declining importance of the department of development inside the new government.

The third initiative is called Compact with Africa and the Marshall Plan with Africa share the astonishing fact that they do not have a specific budget. In fact, no additional funds are allocated to these initiatives. This is particularly strange since the Compact has been launched under the guidance of the Federal Ministry of Finance, then headed by Wolfgang Schäuble of the CDU, during the Conference of the G20 Ministers of Finance on the 30 March 2017 in Baden-Baden. So, the Compact with Africa is the only document that has been prepared in cooperation with IMF, World Bank and African Development Bank prior to the G20 summit which took place on the 7-8 July in Hamburg. The commitment of the G20 as well as the involvement of international financial institutions makes the Compact the most likely that the three initiative, to survive the post-election confusion in Germany.

The Compact aims – like its two ‘sister programmes’ – to support private and infrastructure investment in Africa. Based on a macro-economic framework that is evocative of the infamous structural adjustment programmes the Compact ‘…is meant to mobilise governments and international partners to implement concrete measures to boost investment in Africa. … (T)he Compact with Africa initiative has three building blocks: (i) a macroeconomic framework, (ii) a business framework, and (iii) a financing framework. The macroeconomic framework stresses resilient macroeconomic policies with a focus on debt sustainability, investor-friendly domestic revenue mobilisation, and sound public investment management. The business framework highlights the reduction of risk through more reliable institutions and regulation, investor protection, insurance against political risk, better project preparation and standardised contracts. The financing framework emphasizes reducing the costs and risks of providing financing, particularly through efficient risk-mitigation instruments and domestic improvements in the areas of debt and institutional investor finance. Further, restrictions on international investments in Africa, particular those on institutional investors, ought to be loosened.’

In other words, within the framework of the Compact’s selected African countries – the first five are Côte d’Ivoire, Morocco, Rwanda, Senegal, and Tunisia, followed by Ghana and Ethiopia – commit themselves to assiduously follow the prescriptions of the G20 and the international finance institutions in order to improve their investment climate and to reduce the costs of doing business. Only then can they hope that private investors will acknowledge these improvements and start to invest. But these are just hopes, there are no guaranties at all.

Altogether, the three German Africa initiatives have one common denominator: the role that Germany wants to play in Africa’s development is no longer left to the traditional tools of development co-operation. The common understanding that ‘migration dynamics’ can only be successfully controlled if the economies of African societies provides enough incentives for the young. These efforts have now been shifted into the hands of the core government departments of Economics and Finance. Consequently, the role of the Ministry of Development has shrunk.

However, the Compact not only has a number of serious omissions, it ignores the importance of education and does not discuss the G20’s responsibility in creating a trade and investment environment, it is also silent on social and environmental risks associated with private investment and fails to take seriously a comprehensive sustainable development agenda. Above all it builds on highly questionable assumptions.

The most serious assumption is the conviction that private investment simply depends on the correct frameworks but ignores the importance of profit for private entrepreneurs. But where should the profits from infrastructure investments come from? Moreover, since the initiative is obviously aiming to build up industrialization which can only take place with domestic consumption and local demand, how will the required purchasing power be generated that will render private manufacturing in Africa profitable?

Interestingly these questions are not addressed in any of the new German and G20 Africa programmes. This deepens the suspicion that these profits shall be generated by converting official development aid, which is essentially taxpayer’s money, into private gains for multinational investors. So, these initiatives might end-up serving public-private-partnerships where the state (in Africa) receives ‘development aid’, then pays with this aid-money the profits of institutional investors (pension funds, banks, insurance groups etc.) who are seeking compensation for currently low interest rates in Europe and North America. It seems that Germany’s recent turn to Africa is another false dawn.

Arndt Hopfmann studied Economics and African Studies at Karl Marx University in Leipzig between 1977 and 1982. He holds a PhD in development economics. After his academic career he took up various positions in the Rosa-Luxemburg-Stiftung (a political foundation/think-tank close to the Left Party in Germany) with which he worked as head of its regional office in Southern Africa (2003–2006). Currently he is researcher and senior advisor on economic and trade issues to the Foundation.

Featured Photograph: German Chancellor Angela Merkel celebrates during the 2010 World Cup quarterfinal between Argentina and Germany in Cape Town, South Africa.

Plundering from Inside and Out

ROAPE

June 26, 2018

By Remi Adekoya

First and foremost, Lee Wengraf’s Extracting Profit provides a breathtakingly detailed account and analysis of some of the major socioeconomic ills that have been plaguing Africa for centuries. Amongst the host of issues she tackles, arguably the most consequential are mass poverty in African societies, their indefensible economic inequalities and the steady plundering of the continent’s resources, starting from the slave-trade era up till the present-day.

With a focus on how the extractive industries operate in Africa, she shows the negative political, economic, social and environmental impact of the carting away of Africa’s mineral and natural wealth by any means necessary for the past five hundred years. The book deploys tools of Marxist class analysis to offer interesting insights into the internal and external structural environment and policies that have made this plunder and the consequent poverty it has left in its wake possible.

Importantly, Wengraf also deconstructs the myth of the so-called ‘Africa Rising’ years showing how the overwhelming majority of wealth created during that period of rapid macro-economic growth flowed to the ruling classes and their cronies rather than to African societies as a whole. In fact, poverty levels in nations like Nigeria, Africa’s largest economy and a poster-boy for the ‘Africa Rising’ narrative, actually rose during that period!

According to Nigeria’s National Bureau of Statistics, as at 2004, which is considered more or less the beginning of the ‘Africa Rising’ years, 54.7% of the country’s citizens lived in poverty. By 2016, that figure had risen to a whopping 67.1%. How anyone could claim a continent was rising when the poverty rate in its biggest economy was expanding as rapidly as it was beats the imagination.

Wengraf also rightly rubbishes the ridiculous claim made by the African Development Bank at the time that ‘one in three Africans’ was now middle-class. This was announced following the ridiculous calculation that anyone spending between $2-$20 a day could be categorized as ‘middle-class.’ The idea someone living on $3, $4 or even $5 a day in a continent where consumer goods even as basic as food can sometimes be more expensive than in Europe, is middle-class, is so preposterous I find it difficult to comment and it is certainly good riddance that the ‘Africa Rising’ narrative has died a natural death and is no longer taken seriously by thinking people both on the continent and outside it. Wengraf’s book also does very well in highlighting the economic and military rivalry between China and the US in Africa and the consequences this rivalry has had on policies and economic structures on the ground.

However, as someone who grew up in Nigeria and experienced first-hand the awful effects of poor governance and corruption, not just at the highest levels of government, among the political one percenters, but at the lowest levels of government, namely the local government level where funds earmarked for roads, schools and hospitals are often simply stolen, I think the book does a disservice by de-emphasizing these issues, downplaying African agency and involvement in them and suggesting their scale is being exaggerated by hypocritical and moralizing Westerners.

While the Western officials and institutions doing the ‘finger-wagging’ at African leaders that Wengraf writes of may indeed be very hypocritical and moralizing, that should not distract from the fact that Africa’s resources, quite significant in countries such as Nigeria and others, have been gleefully plundered by its political and bureaucratic classes from the highest levels to the lowest levels ever since independence. These Africans plundering the continent have not waited for orders from the West to do their looting but have happily taken it upon themselves to rob their fellow Africans. And, like I mentioned earlier, this does not just apply to those at the highest echelons of government but also to those at grassroots level local government politics as well.

For instance, when I was growing up in 1990s Nigeria, the road in front of my parents’ home was unpaved despite the fact we lived in what was considered a middle-class neighbourhood in the country’s commercial capital of Lagos. That road still remains unpaved today. Why? Well, as it happens, a few years ago after countless visits, letters and petitions to the local authority governing the area my parents lived in, the residents were finally informed that in fact funds had been allocated to the local government to pave the road in four different budget years. However, every single time, some person or group of persons working within the local government had simply pocketed the money! And so, the road remains unpaved.

This is just a tiny example of the real-life consequences of corruption and poor administration at all levels of government that people face in Nigeria every single day. People die because hospitals are poorly-equipped and under-staffed and this is often, not always, but often, due to corruption and poor governance more than anything else. Money allocated to buy medical equipment is simply stolen. The same goes for schools, universities and every other sphere in which the state is the main investor. Read the social media feeds of people in Kenya, Zimbabwe or Uganda, and they will often complain of exactly the same problems in their countries.

Without a change in the mind-set of those running the continent, no true change or revolution is possible for any systemic change would, in practical life, simply mean the replacement of one set of looters by another, only this time holding up different slogans. Change in Africa must start from change in attitudes to power. We cannot simply imply Africans have no agency and are helpless in the face of Western imperialist structures. If that is the case, then what exactly is the point of this whole independence thing anyway?

However, irrespective of these elements I disagreed with in her book, I think Lee Wengraf’s Extracting Profit is an absolute treasure-trove of facts and figures about Africa and its extractive industries and a very informative read for anyone generally interested in the socioeconomics of Africa past, present and future.

Remi Adekoya is the former political editor of the Warsaw Business Journal. He has provided socio-political commentary and analysis for BBC, Foreign Affairs, Foreign Policy, Stratfor, Geopolitical Intelligence Services and Radio France International among others. Remi is currently finishing his PhD research in politics at the University of Sheffield and is a member of ROAPE’s editorial working group. His twitter handle is @RemiAdekoya1

Featured Photograph: A giant diamond pit in Gauteng, South Africa. The mine is 190 metre deep and covers 32 hectares (18 May, 2011).

Mutual Profiting: Unpicking the Harvey-Smith Debate

ROAPE

June 21, 2018

By Esteban Mora

The entire debate between David Harvey and John Smith on roape.net on whether East Asia and the Pacific (including China) or the Triad (US, EU and Japan) is ‘draining’ the other is based on several misconceptions. The debate is based on Paul Baran and dependency theories, which postulate a correlative profiting of the ‘central’ countries over the ‘peripheral’ ones. This means there is a ‘drain of value’ from South to North, and just as companies in the North augment their profits, they ensure that companies in the South diminish their own. In simpler terms there is a correlative movement between rising profits in the North and falling profits in the South. So, this is what they look for in the relationship between BRICS or East Asia and the Western Triad, a relationship where there is a ‘drain’ or a flow of value from one region to the other. But these notions are not entirely accurate, and hence the terms of the debate

For example, the rate of profit is higher in the South thanks to a less developed organic composition and cheap constant capital (something pointed out by Ernest Mandel), which means a higher rate of profit not only for international companies operating in the South, but for the local Southern bourgeoisie as well. The mass of profits might be significantly inferior, but not its rate. The same mechanism which is seized by companies in the North in profiting from the South, is used as well by the local and weaker bourgeoisie.

Another example is the export sector. The export sector in the South acquires dollars (or any other dominant currency as means of payment, depending on the region and the trading partners, etc), and this means they have acquired an overvalued currency in nominal and exchange market terms, which gives them an advantage over sectors dealing with the local currency. Not only that, but fluctuations in this currency (for example, the dollar) now affect not only the companies in the North, but the local bourgeoisie whose assets are now in dollars and who have greater purchasing power because of that. So once more the same mechanism which produces or increases profits or even gives advantages to countries in the North, also gives advantages to the local bourgeoisie in the South.

These examples contradict the notion of a correlative movement between rising profits and diminishing profits which is supposedly ‘ingrained’ in the very relationship of dependency between ‘core’ and ‘peripheral’ countries. In addition, not only is the notion of ‘dependency’ based on Ricardian assumptions (measuring value as price, and so measuring value in absolute terms or in terms of mass, and not relatively), but it seems to be extremely partial in its understanding of the world market. I am not denying there is a ‘draining’, or unequal exchange (which is not the same in Raúl Prebish as it is in Arghiri Emmanuel, two prominent pioneers of dependency theory and unequal exchange), but that imperialism cannot be reduce to these phenomena.

What does this mean? It means you do not have to look only for an inversion between ‘drained’ countries and countries who ‘drain’ the others, but also a relationship of mutual profiting between an international bourgeoise which in no way makes the Triad ‘dependent’ on East Asia. Dependency theories are partial and cannot be said to summarize the totality of relationships which can be encountered in the international market, nor the operations of imperialism.

Of course, the Triad has an upper hand financially, but nobody can overlook the fact that East Asia and the Pacific is producing more value added in industry (as well as being the biggest producer of high tech in the world in terms of value added), and has larger capital formation than the Triad, or has more capital good exports than the Triad. All of these elements of capitalist production were dominated by the Triad just a few decades ago, and they were considered marks of their imperialistic character over the world market. Increasingly they are being taken over by East Asia. Instead of looking for a relationship that involves ‘draining’ as a marker of imperialism or not or seeing the Triad on the verge of becoming ‘dependent’ on East Asia, we must also look for relationships which are beneficial for all bourgeoisie – whether they are from a large central state in the United States, the UK or Japan, or a smaller capitalistic partner like the ones in the South (in this respect, Harvey is also mistaken in looking for such ‘draining’). We have to go back to the notion from Lenin’s Imperialism where ‘central’ states and ‘peripheral’ states are all ‘agents of financial capital’, and not simply the ‘central’ ones that operate against the ‘peripheral’ ones. This contradicts the ‘three worlds theory’ on which dependency is based (and seems to inform much of the context of the debate on imperialism on roape.net) and makes us look at international economic phenomena, instead of national or regionalist frameworks.

We also need to make a small correction. Smith argues that this study reveals not only financial returns, but also FDI, portfolio investments and repatriated profits. But it is only from tax heavens, not the whole world market. If we go to the data for world corporate profits or FDI, etc (see the report here), we realize the South or ‘emerging’ economies are not only profiting at almost the same level as the North in absolute terms (for example, the 10 biggest Chinese companies in the Fortune 500 have revenues for 2,11 trillion dollars, while the 10 biggest US companies in the same list have revenues for 2,22 trillion), but that this means a superior dominance in portfolio investments or dividends than the North in relative terms. The problem with focusing on absolute terms (as Smith does in his book Imperialism in the 21^st Century) is that you do not have the same purchasing power in the US as you do in China (means of production or raw materials do not cost the same in the US as in China, even if they have the same absolute mass of profits), and as Michael Roberts points out, there is no socially necessary value for the whole world, but only for specific societies. This means the absolute mass of profits can be bigger in companies in the North (for example, General Motors, as is pointed out by Smith), but that does not mean the same control over means of production, the same purchasing power, nor the same rate of profit (which is bigger in the South). This is why FDI, portfolio investments and profits in general are relatively superior in the South or emerging economies at the moment, as well as gross capital formation or value added for industry for East Asia. In addition, the nominal GDP, if considered equal to total profits (not corporate profits, but the totality of profits produced by a society before it is distribution into profit, interest and rent), is of course dominated by the South, specifically East Asia.

Besides what I have already said, we have to clearly state the limitations of dependency theory. Not only is it a Ricardian paradigm, but ‘three worlds theory’ disconnects nations and regions in the world market, when in reality, and beyond all mystifications, there are relationships of mutual profiting within a global financial bourgeoisie. Another perspective that considers this relationship is world-system theory, but it chief proponent Immanuel Wallerstein still divides the globe into the ‘three worlds view’.

Such ideas do not exist in the original theories of imperialism made by Nikolai Bukharin or Vladimir Lenin. For these writers all nation-states, whether bigger or smaller, were considered imperialists or agents of financial imperialist capital. The division into three worlds was inserted historically into Marxist frameworks by Alfred Sauvy, Frantz Fanon or Lin Piao, and dependency theory picked it up from there. But even if dependency is correct on the fact that underdevelopment persists, capital exports and multinational capitals are being socialized in every single nation-state in the world, which is precisely why East Asia now is dominant (specifically in productive terms).

In conclusion, we are witnessing a refutation of dependency, in the fact that capital has penetrated rural and urban life in the South, from agriculture to high tech industry. We are also seeing an inversion of positions between North and South which does not imply a new dependency of the North, something nobody in the study of emerging multinationals, BRICS or East Asia seems to be proposing. Instead of an inversion of dependency as Smith and others seem to be arguing on roape.net, we must look at other ways to understand the vital processes that we are witnessing.

Esteban Mora is a graduate student in Communications Science at the Universidad de Costa Rica, he has written three books, and writes a Marxist economics blog. He has written a detailed blogpost Colonialism and periphery: Latin America, Africa and the Middle East.

Featured Photograph: Protest at the G20 Meltdown protest in London on 1 April 2009

A Self-Enriching Pact: Imperialism and the Global South

ROAPE

June 19, 2018

By Andy Higginbottom

Does the concept of imperialism explain major characteristics of the capitalist world in the 21st century? John Smith is right to insist that it does. Smith’s argument in the ROAPE exchange with Harvey makes three crucial points, that:

there is an ongoing and systemic transfer of value from the Global South (including China) to the global North
the basis or source of this international transfer is the super-exploitation of workers in the Global South
while capitalist super-exploitation of labour has been present since Marx’s time, it’s scope has expanded rapidly to include manufacturing in the last period, and this drives neo-liberal globalisation.

Harvey does not deny the second point completely, at least he recognises that labour super-exploitation occurs, but he does not accept that any rethinking of Marx is required to take account of it as a concept. Harvey’s argument is rather that super-exploitation should not be made too essentialist, nor can he agree the systemic determinations of the first and third points. In short, Harvey denies the categorical significance both of imperialism and of labour super-exploitation.

Selectivity of evidence

Smith’s important book Imperialism in the 21st Century proceeds from global patterns of value production and distribution, including a critical analysis of the very data available to us to identify those trends, in particular the distorting lens of the ‘GDP illusion’.[1] Both in the book and in response to Harvey, Smith assembles evidence of the massive and indeed increasing drain of value to the US, Europe and Japan from the Global South and challenges Harvey to substantiate his claim that this flow has been reversed.

In marked methodological contrast, so far Harvey’s response is absent of data and mostly rather anecdotal. But even these anecdotes are to be qualified under scrutiny. For example, Harvey writes: ‘A cursory look at land grabs all across Africa shows Chinese companies and wealth funds are way ahead of everyone else in their acquisitions. The two largest mineral companies operating in Zambia’s copper belt are Indian and Chinese.’

Taking indeed a cursory look at Zambia one finds that of the ‘big four’ copper mining companies, two are Canadian (Barrick and First Quantum), one is Swiss (Glencore) and one is owned by the Anglo-Indian conglomerate Vedanta. Chinese companies do run several smaller mines, but not one of these majors. China has been playing a distinct role in big infrastructure projects.

The sources of accumulated foreign direct investment stock in Zambia, as of mid-2016 are Canada 27.3%; the UK 20.3%; China 14.5%; Switzerland 12.9%. So, China’s stake is significant, but what slips past unmentioned in Harvey’s overview, is the greater stakes of Canada and the UK, two traditional Western imperialist mining powers. UNCTAD data confirms the rapid increase in Chinese mining FDI in Africa. But is that the only message we take from the following table?

Top Ten Countries of Mining FDI in Africa

Country of Origin	2010 $bn	2015 $ bn
United States	55	65
United Kingdom	47	58
France	52	54
China	13	35
South Africa	19	22
Italy	10	22
India	12	17
Singapore	20	16
Switzerland	12	14
Malaysia	17	12

The unstated big picture that the table indicates is the continuing pre-eminence of the US, UK and France, the three established powers in Africa. China is not yet ‘way ahead’ of Western imperialism, but is rapidly catching up and does threaten to soon begin to overtake them. Right now there is a whole industry of China watchers, but the point is in what context and against what competition does China rise?

Western imperialism is the unmarked legacy centre here. One hardly need add that the reality of the unmarked centre is that all such figures are routinely reported in US dollars, the de facto world currency. Where are the critical watchers of the continuing super-profits of the US, UK, France (Switzerland, Canada, Australia etc) whose banks and extractive corporations are still the main beneficiaries of the exploitation of the labour and natural resources of Africa, Asia and Latin America?

At the same time, the global mining industry is an index of China’s dramatic rise. PWC publish an annual report on the top 40 mining companies in the world. The two biggest companies ranked by market capitalisation are BHP Billiton and Rio Tinto Zinc, both UK/Australia bi-national corporations. There is just one Chinese company in the top 10, but it has 11 corporations arriving in the top 40. The report shows that China is moving from being the main source of demand, as it was in the last ‘super-cycle’, to anticipating the next cycle. At the bottom of the commodity cycle, Chinese companies have been buying up assets and are poised to take advantage of the next upswing, in other words to establish supply lines to manufacturing and become sellers as well as buyers of industrial minerals. This is a further challenge to the interests of the existing powers.

It was long ago pointed out by Kwame Nkrumah that mining corporations are a major agent of neo-colonialism. To what degree the growing incidence of Chinese corporations alters that exploitative relation in Africa is part of the even bigger discussion to which we now turn.

Sub-imperialism as neo-colonialism

On roape.net Patrick Bond highlights the emergence of sub-imperialism of the BRICS countries as a major phenomenon of the last period that has to be taken fully into account. We can agree this, but, as Walter Daum’s post argues, the emergence of the BRICS does not mark the demise of imperialism, rather it is evidence of a modified imperialism entering a new phase.

There is in any case a strong differentiation within the BRICS grouping: between the former socialist giants Russia and China that are respectively actual and potential global powers on the one hand; compared with Brazil, South Africa and, despite its tremendous size, even India on the other. Big capital in the latter countries is not fully independent of the West, as a general pattern it works in alliance with Western capital, as the junior partner. These joint relations have various forms, but the key point is of an alliance to the advantage of both parties. One aspect of this is a reconfiguration of location to London as a financial centre. Some of the stronger extractive companies have moved their corporate HQs from their main country of operations to London, where they get better terms in the capital markets, and the protection of the UK state for their global operations. South Africa allowed its corporate big-hitters, the beneficiaries of apartheid, to migrate to London in the late 1990s. Vedanta has followed that trend. Vedanta is no longer simply an Indian corporation, it is bi-national between the UK and India. With its roots in the fortune of Anil Agarwal, and still over 60% owned by him, Vedanta is listed on the London Stock Exchange. This is a pattern of big capital based on super-exploitation that has emerged in the Global South, seeking to consolidate its position and scope through a partnership with finance and the state in the imperialist centre.

It is important to remember the concept of sub-imperialism that Ruy Mauro Marini developed concerning Brazil, and which Bond extends more generally, has two sides to it. Sub-imperialist states are situated in a singular condition in the international hierarchy of nation states. As sub-imperialist states they are in a mid-level location that is constrained by rules set in the interests of more powerful states, whilst as sub-imperialist states they have some capacity to impose on their regional neighbours. What this means in terms of international economic exploitation is a pattern where value is transferred into the sub-imperialist capitals, mostly from ‘their’ region, at the same time as it flows out of these countries to the imperialist North (or West as you prefer). Sub-imperialism is still based on the super-exploitation of those at the bottom, with a more refined division of the super-profits up the chain.

Imperialism in the 21st century does not for the most part rule directly through colonial means, but indirectly through an alliance with national elites who have captured their national state and thrown their lot into voluntary, self-enriching pact with the global system. Neo-colonialism is such a well known endemic condition in Africa and across the Global South that it is surprising that Bond should lose sight of it in his analysis. Concerning corruption in Africa Bond writes:

the sleight of hand here is the ability of local elites – not just Western or BRICS corporations – to accumulate offshore in places like Mauritius (the African continent’s leading hot money centre). This part of the outflow is not a function of ‘imperialism’ but local greed and higher profits gained by an unpatriotic bourgeoisie who can hold funds offshore (even idle), instead of investing in African economies whose currencies are often rapidly declining in value.

The point is relational, that the neo-colonial form of imperialism is an alliance of interests with two parties involved, but what underpins the locally sourced elite corruption is indeed a function of imperialism’s ultimate control over the destiny of African nations. Militarily, ever since Patrice Lumumba, the imperialist powers have intervened forcefully to make sure that it is the greedy and unpatriotic who rule. Economically, it is imperialist relations that determine that African currencies decline in value, it is imperialist corporations that are sucking out Africa’s wealth. Local oligarchs salt away their gains in the imperialist centres. If imperialism could be wished away by putting scare quotes around it, we would all have a simple job indeed!

Sub-imperialism does not mean the end of imperialism, rather it is a mutation out of neo-colonial capitalism and continues to demonstrate many of its features, with a further internalisation and class differentiation along pro and anti-imperialist lines.

Labour super-exploitation as cost reduction

Let us now turn to the theory of labour super-exploitation. Labour super-exploitation as a specific dimension of surplus-value further accentuates the distinction that Marx established between the cost of labour-power to the capitalist and its unique use-value as the source of surplus-value. Capital can increase surplus-value by reducing the cost of labour-power, the price it pays for labour-power of a given quality; this decreases the necessary labour time required to produce the equivalent value of ‘paid labour’, and increases the ‘unpaid labour’ that capital expropriates. By reducing the cost of labour-power, capital expropriates an extra surplus-value at the worker’s expense, the worker is even more exploited than hitherto. This dimension of increased exploitation by lowering wages (or even no wages at all) holds in combination with the other dimensions determining surplus-value, specifically the extent of labour time, its intensity and labour’s productivity. As I argue elsewhere, and building on the breakthrough in this field by Marini and other authors, labour super-exploitation requires a further elaboration of Marx’s concept of surplus-value beyond absolute surplus-value and relative-surplus value. [2]

To explain the paradigmatic Foxconn/Apple case, where surplus-value is produced in one part of the world and realised in another, we need to fill in one more gap in the theory, and that is to explain the difference between a commodity’s cost of production and its full value. Marx examines this distinction, but not until Volume 3 of Capital, where he explains the relation between the production of surplus-value and its realisation as profit. In the surface reality of capitalism, a commodity’s value appears not as itself but in the modified form of cost of production plus profit, this is indeed what capitalism knows of itself. But capitalism cannot explain, nor does it need to, that the source of profit is surplus-value extracted from the workers. Marx’s explanation is founded on the change in form, from surplus-value as essence into profit as appearance. The capitalist only sees profit, yet behind profit there must be surplus-value. As already noted, Marx did not integrate labour super-exploitation into his theory of surplus-value in Volume 1, but the need to do so is even more pronounced in Volume 3 when we consider this change of form from surplus-value to profit, both qualitatively and quantitatively. The extra surplus-value becomes super-profits that are either retained by a group of capitals that enjoy more favoured access to cheap labour, or spread to raise the general rate of profit.

John Smith and several authors have analysed the relations involved in Foxconn/Apple, as does David Harvey, who seems to converge with our analysis when in his book Seventeen Contradictions he points out the difference between the location of surplus-value production and its realisation as profit:

By exerting immense pressure on the capitalist producers, the merchant capitalists and the financiers, for example, can reduce the return to the direct producers to the smallest of margins while racking up major profits for themselves. This is how Walmart and Apple operate in China, for example. In this case not only does realisation occur in a different sector, it also occurs across the ocean in another country (creating a geographical transfer of wealth of considerable significance) (2015, p. 84).

Indeed so. But then how does this explanation fit with Harvey’s reverse transfer thesis?

Walter Daum comments wittily, ‘Hm, a transfer of wealth from East to West? In the same book, as John has already noted, [Harvey] argues that the transfer has been reversed: “The flow of wealth from East to West that had prevailed for some two centuries was reversed and China increasingly became the dynamic centre of a global capitalism as the West, after the financial crash of 2008, lost much of its momentum.” Is this David Harvey’s Eighteenth Contradiction?’[3]

We put the two ingredients of labour super-exploitation and profit realisation together and we get a theoretical explosion. The price at which Foxconn sells on to Apple allows both capitals to make a profit, but Apple’s buying price is set at the cost of production plus a significantly lower profit for Foxconn. This means that the extra surplus-value produced by the workers in China is realised as super-profits by Apple rather than by Foxconn, by virtue of the wide discrepancy between its buying price and its selling price. Labour super-exploitation is hidden in plain sight, in the terms of commodity exchange. Apple’s role compared to Foxconn in this relation is similar (not the same) as that of the landowner vis a vis the tenant farmer in Marx’s theory of ground rent. Ownership of the Apple technology and brand is an expression of monopoly within the law of value.[4]

Combine conditions of labour super-exploitation with high labour productivity and you have arrived at the gates of capitalist heaven, since both together really puts the cheap into cheap commodities. This combination is however deadly for the super-exploited work force, as in Foxconn, and often relies on gendered oppression in many sectors.

This general pattern has a further twist in the extractive industries. In extractive capitalism labour productivity is enhanced by capital’s appropriation of any particular condition found in nature that gives a high yield in use-values against effort expended, copper deposits for example. Under imperialist social relations cost reduction goes one step further, and does not cover the social and ‘external’ costs of the destruction of the environment. This now lethal cocktail is more than ‘accumulation by dispossession’, Harvey’s much overworked phrase. Access to the land and its conversion into means of production is at first obtained by dispossession, as in clearing off the local inhabitants from their territory, and then by combined super-exploitation in order to generate a high rate of surplus-value and realise it as profit. Framing extractive imperialism as dispossession carries a truth but its one-sided. Dispossession sets up the pre-conditions of extractive accumulation but does not alone explain the internal condition that generates super-profits from the realisation of extra surplus-value produced by the workers.

Capitalist accumulation by super-exploitation is the premature exhaustion of all forms of life; the life-giving energies of human workers and the life-giving energies that capitalism draws from nature, that it will never replenish.

The limits of Harvey

Harvey is coming to the end of his Marx cycle. He points out that with the collapse of the Soviet Union and with it the traditional communist parties, Marxist thought has survived predominantly in academia. One can only add, with the distortions that entails. In my view Harvey’s lasting contribution is as a Marxist informed geographer, rather than in critical political economy. Notwithstanding his contribution as a communicator and educator, and his celebrity as ‘the world’s leading expert on Karl Marx’, nonetheless Harvey is an unreliable guide to Capital.

Harvey jokes of a disease called ‘volumeoneitis’, whose afflicted believe that studying the first book is enough to grasp Marx’s theory, and he rightly argues it isn’t. He emphasises the need to study all three volumes of Capital to get a holistic view from Marx. But then he does not follow his own advice, and especially he has little helpful to say on the first half of Volume 3, Parts One to Three. As a geographer Harvey does foreground Part Six of Volume 3 and Marx’s theory of rent, but overall he draws his main lines of interpretation of the totality of the system from Volume 2, rather than Volume 3.

Indeed, Harvey suffers from the rarer but growing disease of ‘volumetwoitis’. Linked to this is his shorthand that Volume 1 is about production of commodity values, Volume 2 is about realisation and Volume 3 about distribution. This framing is only partially correct, for it misses the vital point that Marx completes his explanation of realisation, the realisation of surplus value as profit, in parts One to Three of Volume 3, culminating in the formation of the general rate of profit and the tendency of the rate of profit to fall. Only once Marx establishes the laws of profit does he then move the analysis on to profit’s distribution as interest, merchant’s profit and rent, that is, from Part Four onwards. Harvey’s rendering of Capital downplays the significance of Marx’s general, systemic laws of profit that demonstrate the capitalist mode of production’s inevitable tendency to crisis.

Harvey theorises capitalism as process as distinct from capital as social relation, whereas Marx’s methodology combines both aspects that become expressed in laws of motion. In Capital contradictory internal relations become articulated as systemic laws of motion that point clearly to the inevitability of systemic crisis. Even before we get to Lenin, Harvey cavils against determinacy in Marx. There are many expressions of this in Harvey’s work: his preferred definition from Marx that capital is ‘value in motion’ rather than capital as ‘self-expanding value’; his misrepresentation of Marx’s explanation of relative surplus-value, a key concept in Volume 1;[5] his aversion to the law of the tendency of the rate of profit to decline; his preference for Volume 2 over Volume 3; the continued emphasis on surplus capital, and so on.

But the revealing denouement of Harvey’s mistaken approach comes with his presentation of the capitalist mode of production as a circuit, an analogy with the hydrological cycle – water vaporises off the sea, forms clouds that rain, becomes rivers and returns – so the circuit of capital passes through production, realisation and distribution, and so on. The crunch comes next when Harvey asks the question ‘where does the energy come from to propel the system onwards?’ In the hydrological cycle the answer is the Sun, the Sun’s rays of energy. Next he asks, what is the source of energy coming into the circuit of capital? Pause there, what answer would you give?

Would you not expect the answer be labour, or perhaps labour in combination with nature, as the energy source? Is it not from there, from inside the box labelled ‘production of commodities’, that labour’s living energy creates the new value that animates the entire system? Whether it be enslaved on the colonial plantation, loading at the docks, slogging away in the assembly plant, cleaning toilets or laying bricks – labour animates the system. The even more deeply hidden source of energy into the system is the unpaid and socially unrecognised caring labour, almost entirely performed by women, that contributes to the reproduction of labour power. Yet Harvey’s answer mentions none of these, and is nothing short of jaw dropping. For him the new energy comes into the system from three places, capital in production, capital in realisation and capital in distribution. Not from labour at all.[6]

This then is the reductio ad absurdum of Harvey’s position: his prioritisation of capitalist process over capitalist social relations; his not seeing the agency of capital as anything other than an inversion, that its social power through accumulated money is entirely derivative from the expropriation of labour. The denial of imperialism is not only a denial of labour super-exploitation, in the end it is a denial of labour itself.

For a rejuvenated Marxism, for anti-imperialism

Finally, we come to agency. Harvey’s latest contribution was a ‘commentary’, more like a ‘correction’, to the Utsa Patnaik and Prabhat Patnaik’s articulation of drain theory.[7] These authors critique both Luxemburg and Lenin’s theories of imperialism, and emphasise that imperialism is an ‘abiding relationship under capitalism’ (p. 87). From their perspective capitalism has always been imperialist. Indian drain theory has a long tradition from the days of British colonisation.[8] Critical social science in Latin America and Africa has produced similar theories that correspond to the conditions of colonial capitalism and its aftermath. It is not only Marxists who recognise colonialism as exploitation, and that its legacy persists in India’s relations with the world economy. But since we are particularly interested in Marxist theoretical elaboration of drain theory, there is a risk that these voices will be drowned out.

Can the subaltern Marxist speak against imperialism? Even discussing imperialism as formative of contemporary capitalism invites the irritation of the world’s leading expert on Marx. After explaining the impact of British colonial and imperialist thought on India, Radha S’Souza concluded that ‘we cannot use capitalist knowledge to build socialism, or imperialist knowledge to exercise self-determination.’ David Harvey responded with ‘you could resolve all those questions without changing the capitalist dynamic’, and asks ‘what does it mean to be anti-capitalist?’ [9]

This brings us to the question of where the power of imperialism resides and where resistance to it is coming from in the 21st century. The Third World War has already begun, in the form of structural violence and proxy wars against the oppressed in the ‘third world’, their significance largely unnoticed by the doyens of euro-centric Marxism.

One exception to the rule of ‘unnoticed’ was the Marikana Massacre, the police shooting dead 34 striking miners, whose awful televised presence made it an immediate world event, entering into global consciousness. Thomas Piketty opens his book with the massacre. But, pace Piketty’s explanation, Marikana was about structurally exploitative social relations than cannot be understood through his limiting lens of inequality. The migrant labour system, the condition of racialised and gendered labour super-exploitation bedevils platinum mining as much as gold and diamond mining before it. As I know fellow activist Patrick Bond agrees, the massacre hinged on the toxic collusion between the ANC leadership, the police and the UK based Lonmin corporation.[10] After the massacre, one of its principal perpetrators Cyril Ramaphosa was protected by Farlam at the official enquiry and has since risen to the presidency, from which executive position he now appeals for more foreign investment. If the Marikana Massacre and its aftermath are not evidence of continuing neo-colonial imperialism, what is?

The platinum mineworkers returned to strike action, and their struggle continues. As does the struggle of black students, against colonial education and neoliberal fees.[11] As does the struggle of the Amadiba Crisis Committee, fighting the destruction of their way of life by a coast stripping Australian corporation MRC.[12] As do the struggles of Abahlali baseMjondolo[13] and the Cape Town based Housing Assembly [14] for the most elementary, decent housing. The people in all of these struggles are facing criminalisation and assassination, yet they continue their fight for dignity. Theirs is the energy of humanity.

As further demonstration of the structural and ongoing neo-colonial violence that is normalised as business as usual, in Colombia since the signing of the ‘peace agreement’ in November 2016 the state’s dirty war has led to 150,000 people being forcibly displaced and over 200 social movement and environmental activists have been assassinated.[15] Yet here again real mass mobilisation continues, as evidenced by the three week long general strike of Afro descendant Colombians in Buenaventura in May/June 2017, literally a life or death struggle for half a million people to have a public hospital in their port city.[16]

As for proxy wars, it was the US and UK as imperialist military powers who were the principal architects of the genocidal massacre of 70,000 and more Eelam Tamils in 2009, not China despite its economic strength and self-serving support for the murderous Sri Lankan regime.[17] The Eelam Tamils have the grave misfortune of seeking independence at a strategic location for the playing out of inter-imperialist rivalries, right by the crossing of the world’s major sea lanes in the Indian Ocean. The US and UK need a unitary Sri Lankan state, and especially Trincomalee harbour, as an integral part of their 21st century geo-strategy, the so-called ‘pivot to Asia’. Whether Obama or Trump or Clinton, the US is showing every sign it will use naval force to block the consolidation of China as an independent global actor. Such is the geography of imperialism.

Let us take one last example from the same part of the world, the popular uprising in Thoothukudi, Tamil Naadu against Vedanta subsidiary Sterlite copper, that planned to double production at its copper smelting plant that already produces 40% of India’s copper.[18] The nearby communities have suffered the smelter’s contamination for years and decided enough is enough. They mobilised action to demand the District Collector (designated as the revenue collector for the British in colonial times) block the expansion. The police shot thirteen protestors dead in what looks like targeted assassinations, followed up with mass detentions and torture.[19] One heartening aspect of a dreadful situation is the immediate response of Tamils in the diaspora, the Foil Vedanta campaign and others mounting strong protests in London. The London solidarity effort adds important leverage to the heart of the struggle, the mass movement in India.

Struggles like Marikana, Buenaventura and Thoothukudi are the real movement context of John Smith’s challenge to David Harvey. The debate confirms the urgent need for a rejuvenated Marxism that contributes to the renewal of anti-imperialism, with our special responsibility of doing so in the global North.

Can euro-centric Marxism continue to deny the fact capitalist imperialism is systemic plunder of the working class in the Global South? What indeed does it mean to be anti-capitalist, if not at the same time being anti-imperialist? If it does not aid the fight against imperialism what is Marxism worth? Capitalist imperialism has to be fought in theory and practice. Wherever imperialism exists, sooner or later the empire strikes back. These are values that also need to be transferred from South to North, and not before time.

Andy Higginbottom is an Associate Professor at Kingston University, London. He is involved in solidarity groups supporting social movements in Colombia, South Africa and Tamil Eelam.

Featured Photograph: Marines stand guard outside a destroyed Panamanian Defense Force building during the first day of Operation Just Cause, on 20 December, 1989.

References

[1] See John Smith, Imperialism in the 21st century Monthly Review Press, 2015 Chapters 6 and 9; and John Smith ‘The GDP Illusion: Value Added versus Value Capture’ Monthly Review, July 2012

[2] Andy Higginbottom ‘Structure and Essence in Capital and the Stages of Capitalism’ in Journal of Australian Political Economy No 70, 2012; 251-270

[3] Personal communication, 15 June 2018

[4] Torkill Lauesen and Zac Cope give a good explanation in ‘Imperialism and the Transformation of Values into Prices’ Monthly Review July-August 2015 67(3) ; 54-67

[5] Harvey summarises Marx’s position as “Machines are a source of relative surplus-value but not of value” David Harvey, A Companion To Marx’s ‘Capital’, 2010, p169. This is just nonsensical, arrived at by snipping sentences out of context. The underlying point is that capital uses machines as a ‘source’ of relative surplus-value only because by doing so labour is rendered more productive and the individual labour time taken to produce a given commodity produced is less than the socially necessary labour time. Workers’ labour creates value and relative surplus-value, using machines to do so.

[6] ‘Visualizing Capital’ with Professor David Harvey from minute 22 onwards

[7] Utsa Patnaik and Prabhat Patnaik, A Theory of Imperialism, 2017 Columbia University Press.

[8] For a recent reminder see Shashi Tharoor Inglorious Empire: What the British Did to India, 2017 Chapter 1.

[9] Radha D’Souza Industrialism, Law, Science and Imperialism, 2015 minute 22:14 and David Harvey Speech at Network AQ Conference II, 2015 minute 18:45

[10] A term coined by Dali Mpofu. See Dali Mpofu, Mpati Qofa and Reghana Tulk Heads of Agreement On Behalf Of Injured And Arrested Persons, 2014

For a review of the literature, see Andy Higginbottom The Marikana Massacre in South Africa: the Results of Toxic Collusion, 2018

[15] Stephen Gill, ‘Are Colombia’s social leaders facing another extermination?’ Colombia Reports 22 February 2018

[16] See Seb Ordóñez and Patrick Kane Colombian strike: ‘To live with dignity, our people don’t give up’ 31 May 2017

‘The “military response” of the Government to Buenaventura: 300 wounded, 10 with firearms’ 5 June 2017

[17] See Bremen Human Rights Association and Permanent Peoples Tribunal on Sri Lanka.

[18] Vedanta Resources, A Great Diversified Story – Mining Indaba presentation, 7 February 2017 p. 19

[19] NDTV “No Warning”: Witnesses Describe How Police Shot Anti-Sterlite Protesters 29 May 2018

Being Made Poor: Economic Development in Nigeria

ROAPE

June 14, 2018

Abiodun Olamosu reviews the classic 1975 book, Economic Development of Nigeria: The Socialist Alternative by Ola Oni and Bade Onimode which will soon be republished. Oni and Onimode wrote about the underdevelopment of Nigeria and how the country and its people were made poor. They also provided a programme for the country’s development which included the disengagement from international capitalism, the introduction of democratic planning, public ownership and control of the means of production, distribution and exchange. Olamosu provides a critical introduction to the book. In 1975 ROAPE published the address made by the authors on the publication of the Economic Development of Nigeria, which can be accessed from our archives here.

By Abiodun Olamosu

Ola Oni and Bade Onimode, Economic Development of Nigeria: The Socialist Alternative (Nigerian Academy of Arts, Sciences, and Technology, 1975).

Economic Development of Nigeria: The Socialist Alternative, originally published in 1975, was perhaps the first political economy treatise with a socialist perspective to emanate from Nigeria. This book is soon to be re-published by Option Books and Information Services in Nigeria. Economic Development of Nigeria was not only a pioneering work on Nigerian political economy, but also served as an economic programme to defend the best interests of working people. At the time the poor were being attacked by both the ruling elite and scholars from the faculties of social sciences in Nigerian universities. The latter came forward to present right-wing solutions for the country after the Civil War of 1967-70.

The authors of Economic Development of Nigeria were two notable socialists and teachers of economics at the University of Ibadan, Nigeria. They had backgrounds in the radical traditions of the London School of Economics and University of London College, Ibadan (now University of Ibadan) where they received their training in economics (the address made by the authors on the publication of the Economic Development of Nigeria can be accessed here).

The new edition is expected to be timely as it is coming at a time that capitalism has created more problems than it can solve in the present era of neoliberalism. At its inception, the Economic Development of Nigeria set out to unravel the underdevelopment of the Nigerian economy by foreign capitalists while suggesting a socialist path of development to solve the economic problems identified in the study.

There have been significant changes since the Economic Development of Nigeria: the Socialist Alternative was written and published in 1975. For instance, the economy of Nigeria has experienced significant growth in the last four decades without impacting positively on the lives of ordinary working people. The economy is also no longer under foreign domination, but under the control of the indigenous capitalists and the ruling elite. In 1973, a couple of years before publication, Nigeria joined the Organisation of Petroleum Exporting Countries (OPEC) to maximise its gains in oil exploration and this helped its oil to be sold at a higher price. As a result, over the decade of the 1970s, Nigeria earned huge wealth from oil, to the extent that one of the military heads of state, General Yakubu Gowon, declared that ‘money is not the problem: of Nigeria, but how to spend it.’ With oil, corruption has become prevalent. As Olukoye Ransome-Kuti revealed, between October 1979 and December 1983 during the second republic, over US$200 billion was realised from oil sales as revenue but there was little to show for this. The prevailing state of inequality could account for why Aliko Dangote, a Nigerian and the richest person in Africa is worth about US$15 billion in assets (net), while the minimum wage in Nigeria remains less than US$20 per month.

The economic importance of Nigeria in Africa cannot be overemphasised. It has the largest economy in sub-Saharan Africa and a huge population that dwarfs any other country in the region. In addition, its role as a semi-imperialist state in the region makes it imperative that any analysis of the Nigerian economy also includes a wider analysis of sub-Saharan Africa.

Central to the discussion by Oni and Onimode was the issue of foreign domination of an economy largely influenced by capitalist interests. This, according to them, started from the colonial period, spanning about a century. The authors therefore canvassed for the taking over of the neo-colonial economy from foreign capitalists as a way of addressing the problem.

Oni and Onimode went on to state that the huge wealth realised from oil was spent on frivolities for the elite in the face of the enormous challenges of economic well-being facing the poor masses. The authors also condemned the Nigerian government for not being enterprising enough to capitalise the oil and gas sector in order to be able to generate more wealth. Instead the government allowed the foreign oil majors free rein to dominate the sector, the major source of the country’s foreign exchange earnings and government revenues.

In pursuing the same line of argument, Oni and Onimode identified five ways that the foreign multinational corporations short-changed the Nigerian economy and carried out its exploitation. These included the repatriation of profits and dividends, interest, contractor finance and supplier credit, service charges and rents. In addressing such problems, the authors canvassed for a policy shift towards greater economic relations with Russia, China, etc that they believed were socialist economies.

The authors argued that social inequality was a form of waste which should be eschewed in the interests of the poor. Other forms of economic waste that they identified included unemployment, underemployment, capitalist competitive rivalry as with advertising, corruption, destruction and misallocation of resources by poor economic planning.

Oni and Onimode described the economic planning in place as neo-colonial and argued that the social infrastructures provided by the instrumentality of such planning worked to serve the business interest of the capitalists, imperialists and investors at the expense of the poor. In the opinion of the authors, this form of economic planning was responsible for why successive national plans did not capture the needs of the poor as they had little or no provision for social welfare – employment, education, health, rural communities or housing.

In reaction to the prognosis of Nigeria’s economic planning, Oni and Onimode proffered an alternative socialist economic plan. This they defined as a strategy for the establishment of a non-exploitative society with the full liberation of everyone to enjoy the fruits of their labour. The characteristics of such planning as explained by the two authors included disengagement from international capitalism, the introduction of democratic planning, public ownership and control of the means of production, distribution and exchange and comprehensive physical planning. This planning, they argued, should emphasise the needs of the mass of the people rather than serving an exploitative profit motive. The focus and target of such socialist economic planning, according to Oni and Onimode, should be towards enhancing economic development and the well-being of working people. This should include full employment with living wages, free education at all levels, equalisation of educational opportunities, mass education, acquisition of skills in terms of the introduction and application of science and technology, better working conditions, cultural decolonisation and the provision of social infrastructures – water, electricity, transport, medical and educational facilities.

In showing how varied the resources available to the economy were, Oni and Onimode identified different types of natural resources in which the country had a comparative advantage. These include ferrous and non-ferrous, metals, petroleum, natural gas, arable land, thickly wooded forests, huge rivers, prodigious fisheries, crops and animal husbandry. The authors therefore canvassed for a major national programme that would bring science and technology to the masses who as the direct producers of the wealth of the country could harness and develop the available resources to their full capacity.

Oni and Onimode also touched on the inefficiency associated with the public utility corporations of the 1970s. The problem was said to hinge on poor planning, management and the capitalist economic environment rather than being due to any inherent short-comings of public enterprises.

The argument of Ola Oni and Bade Onimode on the underdeveloped state of industrialisation was that this could be traced to the deliberate colonial policy that strongly discouraged industrial development. In contrast, only the first stage of processing primary products and the last stage of assembling manufactured goods was introduced. This was why, according to the authors, the issue of acquiring technology in advancing the cause of industrialisation in the country had not been addressed.

The authors identified various ways that agriculture had been neglected. This explained the plight of the poor farmers. Typical of this problem was the colonial orientation in agricultural policy that placed a premium on growing cash crops rather than food crops for the local market. This policy continued even after the end of colonial rule and had its attendant consequences as highlighted in the Economic Development of Nigeria.

Oni and Onimode also showed how the involvement of multinational corporations led to the domination of commercial activities. These institutions, according to the authors, controlled the entire commercial system of import and export of goods and services together with other sectors including insurance, banking and shipping services and other forms of transportation.

In taking a concrete step against such foreign domination, the programme of action canvassed by Oni and Onimode was for the state to take over all wholesale trade. They also canvassed for the replacement of the role of the foreign multi-national companies by indigenous small business owners organised in cooperatives. These would then control and manage the import-export business.

Oni and Onimode drew a parallel between socio-economic regulation and socio-economic reform meant to ameliorate the system to avoid crisis and achieve economic stability and by extension political stability. Key to such reforms and regulations according to the authors was the Keynesian economic recipe that involved state intervention to drive the economy. Other types of regulations identified include fiscal and monetary policies, price control, income regulation and control of foreign trade. Comprehensive state planning was seen as a way of addressing problems associated with socio-economic regulation that regularly surfaced. The book then goes on to discuss in detail the foreign control of the economy and indigenisation.

The starting point of the authors’ analysis of foreign domination of the Nigerian economy has been overtaken by events. Most of the economy is now in the hands of Nigerians. This is in contrast with the position in the 1970s when over 80 per cent of the formal economy was owned and controlled by foreign companies. This process started as early as the 1970s with the government policy of indigenisation. Yet the result was an indigenisation of capitalism rather than its replacement. This did not resolve the fundamental contradictions and crises of capitalist Nigeria.

Despite the high level of indigenisation, the dominant oil and gas sector is still responsible for most of the country’s foreign exchange earnings and government revenues, yet it predominantly remains in the hands of foreigners. This is due to the technical skills and huge capital outlays that are required. But also, the fact that the local ruling elite still handsomely benefit from the sector.

Since the book was first published, successive governments have paid lip service to the issue of diversifying the economy. Though the ideas of the ruling elite on the question of diversification are also problematic as this is restricted to going back to the old ways of practising and exploiting agriculture. There is no programme for the diversification of the oil and gas sector. No more than 30 percent of production is refined with the remainder sold as crude oil, a form of raw material.

The authors promotion of economic planning is flawed. Economic planning may be desirable to address the basic needs and interests of working people, but its actualisation in a class divided society like Nigeria will largely depend on the balance of forces between the different classes. This is why more often than not the best economic plans turn out to be a mirage for working people. It is also not enough to have what the authors referred to as alternative socialist economic planning that is undertaken by experts from above. Their approach to the alternative socialist programme outlined throughout the Economic Development of Nigeria exposes their sympathy towards the former USSR, China and other so-called communist states. This shows a contradiction inherent in their analysis. In one breath, they canvassed for democratic control and management of the economy, including economic planning, but on the other they show-cased the USSR and China as examples of what they hoped to achieve.

However, the best way to achieve welfare programmes or better living standards for working people is for them to pursue the cause of socialism from below. This aims to win power into their own hands through their own collective actions. This strategy sees that reforms are only granted under the threat of revolt.

In addition, the role of state intervention in the economy must be understood in a historical perspective. So, state capitalist intervention was introduced during the Second World War under colonial rule, and saw the state playing a key role in the commanding heights of the economy. This was to strengthen the economy by providing employment while expanding public infrastructures like road, rail and ports. Such intervention could hardly last. As soon as the situation normalised after the war capitalists were tempted to continue in their old way of economic competitive rivalry and reduced state intervention. In such circumstances, economic planning, as envisaged by Oni and Onimode, was hardly practical.

Oni and Onimode claim that it was a deliberate colonial policy to discourage industrial development. Looking to multi-national corporations or foreign donors for foreign direct investment (FDI) has caused more harm than good – industrial development has remains elusive. The effect of this is that since the 1970s more money has left Africa (as looted funds transferred to western bank accounts and the repatriation of profits) than has come into the continent as donor aid or FDI.

The authors are correct to see the neglect experienced in the area of agriculture that was previously the mainstay of the economy before oil. Agriculture should be systematically linked with industry in order to achieve maximum benefits for both sides. Investment in agriculture could also alleviate the key problem of unemployment and underemployment. In fact, agriculture has suffered in the same manner as local manufacturing by the introduction of free trade, allowing cheap exports to stifle local development.

As we have seen the indigenisation of commercial activities has not improved the situation. This is a clear indication that the problem was not that of the dichotomy between foreign and indigenous capitalists, but fundamentally the problem of capitalism. A programme that canvasses for the nationalisation of the economy under workers’ control, planning and management would be a more practical solution.

On the issue of socio-economic regulation and reforms, it is only by understanding the ideological dimension of such reforms and their class nature that they can be properly understood. As Oni and Onimode explained in Economic Development of Nigeria, the regulation of workers’ wages unilaterally by the government through commissions was forced down the throat of workers and their organisations. In contrast, the government failed to regulate the prices of goods services, rents etc. The reason for this disparity in implementation is class conditioned.

Reform and regulation are not designed to favour the poor. They are meant to persuade the victims of the system to retain faith in the organisation of society while the real beneficiaries of the reforms and regulations are the elite. This is why socialists today should have no illusion that reform and regulation can permanently change society to the benefit of the poor majority.

More often than not reform is a product of pressure from below, especially when the overall situation is not favourable for the ruling class. Under more favourable situations, the capitalist class dictate the pace of reform in their own interests. This is what we have experienced over the last three decades or so, under the regime of neoliberalism. Governments have gradually reduced the tax burden for the rich (by reducing the rate of corporation tax and providing other ‘incentives’) while the same governments have reduced expenditure on health and education and often introduced fees, either directly or indirectly.

A recent report from Oxfam confirms these trends for the Nigerian economy. Annual economic growth averaged over seven percent in the 2000s, and yet Nigeria is one of the few African countries where both the number and the share of people living below the national poverty line over that period increased.

Government policies implemented under neoliberalism include privatisation, commercialisation and liberalisation of the economy. In the 1980s the Nigerian government was advised by the IMF/World Bank to cut spending on education, health and public transportation. This brought an end to government intervention in business and public utility corporations as was the case during the ‘Keynesian period’ in the 1940s-1970s. The huge inequality brought about between the poor and the rich as a result of these policies necessitated a corresponding reform in the form of a debt package which was meant to be extended to individuals and the state. The repercussion of the crisis resulting from such debt accumulation has been enormous.

The main thesis of Ola Oni and Bade Onimode’s book was that the Nigerian economy was at the mercy of colonial capitalism in terms of control and domination by foreign capitalists and other interests and such a pattern continued in post-colonial Nigeria. This was the case in the varied sectors of commerce, trading, agriculture, industrialisation and oil and gas. The Nigerian working people were at the receiving end of such socio-economic relationships as their living and working conditions deteriorated and unemployment increased. Any attempts at regulation and reform were geared towards sustaining the system of capitalism. Economic Development of Nigeria also argued that by virtue of the country’s abundant human and natural resources Nigeria could not be said to be poor, yet the economic system has resulted in most them having been made poor. For this reason, the authors argued for the total transformation of the economic system.

The new edition of Economic Development of Nigeria will surely serve a useful purpose for new readers despite changes that have taken place in the nature of Nigerian capitalism since it was written. The book still provides a vital account of the economic history of Nigeria up to the mid-1970s. This book is highly recommended to students of economics, labour economics, political economy, economic history, activists and those interested to know how the Nigerian economy developed and the possibility of a radical alternative future.

Abiodun Olamosu is a Senior Researcher at the Centre for Social Policy and Labour Research (SOPLAR), in Lagos, Nigeria. As a long-standing socialist and activist he was interviewed on roape.net.

Featured Photograph: Market in Lagos, Nigeria (3 May, 2005)

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