frontline 17.

Capitalism's Agenda for Poverty in Africa

Bill Bonnar looks at the hypocrisy of the G8 leaders meeting in Gleneagles. In this article he illustrates why they and their policies bear the blame for poverty in the continent and he gives some socialist alternatives.

The G8 Summit at Gleneagles has pushed the international issues of aid, poverty, debt and arms sales to the centre of the political stage and created an unparalleled opportunity for the Left to set the agenda. Its approach of ‘making poverty history’ by ‘making capitalism history’ has struck a chord with hundreds of thousands of people throughout Britain. They may not consider themselves socialists or have a Marxist world view but are almost instinctively aware of the connection between the internationalist capitalist order and the great problems facing most of humanity. There is widespread cynicism directed at establishment politicians and world leaders who mouth concerns about world poverty yet are clearly part of the economic and political power structure that has contributed so much to the problem. This, in part, has fuelled much of the protest seen at the G8 Summits and other such events. By linking the struggle against world poverty to the struggle against world capitalism the Left can provide the leadership in shaping a much more radical approach and connecting with the significant numbers of people who are open to our ideas.

The starting must be an objective assessment of what the problems are and where in the world we are talking about. Terms like the Third World/Developing World/Underdeveloped World are commonplace although generally inadequate. The areas covered include Africa, all of Asia with the exception Japan and increasingly the Pacific Ring of Asia and Latin America; in other words most of humanity. We should also recognise that even within some of the poorest countries there can be quite significant pockets of economic development that would not look out of place in Europe or North America. These, however, tend to be like islands of development floating on a sea of poverty and underdevelopment.

Most of the population of the world live in poverty as defined by a range of international organisations including the United Nations and World Bank. Measurements of poverty tend to centre on income levels although a more realistic criterion would pose the question, ‘how many people exist without all or some of the most basic conditions for life?’ Such conditions would include access to food and clean water, security, education and health care and the means to support oneself and one’s family through work. If a person lacks access to all or some of these then that person is likely to be living in poverty. The key question is whether things are getting better or worse. Those bodies tied to international capitalism such as the IMF and World Bank tend to paint a rosy picture sighting rapid economic growth in places like China and India as examples of improvement. This is often misleading. While clearly there will be winners in this process there will also be losers. In China, for example, rapid economic growth has been accompanied by a large increase in rural poverty. Also certain types of economic development can cause crude economic indicators to go through the roof while having little impact on living standards. E.g. In 2004 Chad announced an economic growth rate of 65% caused by an oil pipeline becoming fully operational. Yet virtually all the benefits went to the oil company and those countries the oil was being exported to. The only beneficiaries in Chad were a notoriously corrupt government who made sure they got a slice of the action. The pipeline is of almost no benefit to the people of Chad and most indicators show that people in that country, already among the poorest in the world, are getting poorer. So much for a 65% growth rate.

Most international aid organisations paint a much bleaker picture. They believe that in reality things are deteriorating with most of the indicators that actually matter showing a decline as compared to 30 years ago. To put it bluntly, there are now more people suffering hunger than at any point in human history. More people dying of poverty related diseases, more wars (other than the two world wars) and more environmental degradation. There are even more slaves in the world today according to the World Anti-Slavery League as compared to when the organisation was first founded in the early 19th century.

The principle international responses to this situation have either had little or no effect or have made them much worse. Lets have a detailed look at those responses.


Aid - when dealing with the issue of aid it is important to separate aid given by governments and that donated by aid organisations. Most of the latter is entirely honourable and largely targeted at specific projects in particular countries. Aid given by government is much more problematic. While it is important to support demands to increase aid, it is also important to be critical of the nature of much of this aid. There are a number of problems. In the case of Britain much is not genuine aid but rather commercial subsidies to British companies. Typically a company will identify a project which it can supply and approach the particular third world government to sanction the project, often after some financial persuasion. The company then approaches the British Government to pay for the project out of the aid budget. These projects are of often-questionable value to the people of that country or well down any list of priorities. The main benefit is to British companies. Much of the aid is also politically motivated; used to reward ‘friendly’ governments and withheld from countries that are deemed ‘un co-operative’ and increasingly comes with strings attached. These strings invariably include demands to economically re-structure in favour of capitalism and globalisation irrespective of the specific needs of that country.


Debt – the issue of debt reduction/abolition has reached centre stage in much of the discussion around third world poverty. People, quite reasonably, ask the question. What is the point of giving money in aid to a poor country when that poor country has to give vastly more money back to us in debt repayments? It also highlights the point that the principle flow of wealth is from poor countries to rich countries, not the other way around. Most of the debt was accrued by corrupt pro-western regimes where loans were given to buy loyalty and provide the financial framework to keep these regimes in power. A case in point was Zaire. Countless tens of billions of dollars were loaned to the regime of General Mobuto for his staunch defence of western interests in the region. Almost all this money went straight into the pockets of Mobuto’s family and friends with virtually none of it filtering down to the Zairian people who got progressively poorer during his rule. In fact, when he died it is estimated that he had 8 billion dollars filtered away in foreign bank accounts. Not only does the Country have no way of retrieving this money, the country is saddled with colossal debts it cannot possibly pay. Soaring interest rate in the 1970’s also meant that very quickly loan repayments exceeded the amounts originally borrowed.


Trade – world trade is structured in such a way that it mainly benefits those countries that have a strong manufacturing or financial base and massively disadvantages those countries whose main exports are primary products such as raw materials. As primary products are the main source of export wealth for third world countries, these countries are extremely disadvantaged when trading on the world markets. In fact, the international trading system is basically subsidised by easy access to cheap raw materials and all international economic structures are designed to defend and extend this unfair system. Third world countries will always remain poor and dependent while this set up remains and is an example of the direct co-relation between the interests of international capitalism and poverty and exploitation in the third world.


Arms sales – if one looks at the example of Africa, much of the continent has been literally torn apart by wars in recent years. At this moment in time there are, at least, a dozen significant conflicts going on. That which is taking place in the Congo is the worst example. Over the past six years this conflict has become the African equivalent of the European First World War. An estimated 5 million dead, millions turned into refugees and the intervention of at least seven neighbouring African states in a scramble for resources and strategic influence. These conflicts are being fuelled by massive imports of arms from rich countries with Britain one of the worst offenders. Since New Labour came into power in 1997, arms sales to Africa have increased by 600%. Remember the ethical foreign policy? It also meant that when Gordon Brown was swanning around Africa looking for his next photo opportunity his government was busy signing every arms deal it could find. The demand for a complete moratorium on all arms sales must be a key demand of the Left.


Governance – much has been made of the corrupt and oppressive nature of many regimes. While this is certainly true there is almost no discussion on how these regimes emerged and have been maintained in power. Almost without exception they have been clients of the west often put in power as a result of western intervention and maintained in power with money and military support. Despite the hypocritical words of western leaders, the west likes these kinds of regimes. They like regimes that are corrupt and repressive all the better to keep their own people in check while running their countries on behalf of international capitalism. As long as they get a slice of the action. Africa is a case in point although a further point has to be made. The problem with most African states is not so much bad government but weak government. Huge countries with a central government whose remit does not extend much beyond the capital. Sometimes the lack of government can lead to far worse oppression and exploitation.

In dealing with these problems there are basically two roads that the world can go down; the capitalist road or an alternative socialist road. The problem with the capitalist road is that it is the problem. Asking capitalism to solve the problems of the third world is a bit like giving a major supermarket to take responsibility of sorting out the problems of a declining town centre. The supermarket was the major factor in the closure of local shops in the first place and can only embrace solutions that defend and extend its own interests. At best it will produce solutions that tinker round the edges of the problem. More likely it will change nothing and ultimately will make matters worse.


What are capitalism’s solutions to the problems of the third world? Aid – at best a commitment to increase aid from the tiny amounts given now to slightly bigger tiny amounts. This aid will continue to be based on the principle of mutual beneficiality i.e. it must continue to benefit domestic business and will continue to be used to reward compliant regimes. Debt – remove a small amount of debt from those countries so poor that they simply can’t meet even modest debt repayments or from countries in which central government has effectively broken down so no-one is there to make the repayments. Package this as a major breakthrough but leave the bulk of the debt burden in place.

Trade – accept the current unfair trade set up as the ‘natural order of things’. Argue that the way forward for poor countries is to open themselves up for even more of the same; structural adjustment. Tell them that whatever the short-term pain they will benefit in the long term. Produce absolutely no evidence to back up this assertion.

Arms Trade. – This is a competitive business. If we don’t sell arms someone else will.

Strive to increase arms sales and strive even harder to do a better PR job on the public.

In asking international capitalism to solve the problems of third world poverty we are asking it to square a circle; to do things that are against its immediate interests for possible long-term advantage. This might have been conceivably possible in an era when there was such a thing as national governments in control of national capitalist states. However, in the era of globalisation, driven by its own remorse logic, this is simply not going to happen.


What would an alternative socialist approach be like? The Left has to embrace and popularise a set of radical demands which, while not socialism, strikes at the heart of international capitalist interests and would make a real difference to the third world. They also have to be a set of demands that can be campaigned around and presented in a way that makes sense to people. These would include: Debt- stop tinkering with the issue of issue and cancel the debt. Some should be cancelled with immediate effect. The rest should go as part of an internationally agreed timetable.

Trade – establish a series of trade agreements that specifically protect African economies even if they operate against the principles of free trade. Challenge the idea that what these countries need is even more capitalism. Campaign to put a new structure of international trade in place that places the interests of people above that of multi-national companies and financial institutions.

None of the above amounts to socialism but these demands can be part of a programme that can gain a hearing among the millions marching to ‘make poverty history’. In the era of globalisation socialists have to see the struggle for socialism in global terms. Scotland may be a long way from Sudan, Bolivia or the Philippines but our struggles and theirs are increasingly the same.