Agyeman-Duah, Ivor

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Macalester InternationalVolume 7 Globalization and Economic Space Article 14Spring 5-31-1999Response to MkandawireIvor Agyeman-DuahFollow this and additional works at: http://digitalcommons.macalester.edu/macintlThis Response is brought to you for free and open access by the Institute for Global Citizenship at DigitalCommons@Macalester College. It has beenaccepted for inclusion in Macalester International by an authorized administrator of DigitalCommons@Macalester College. For more information,please contact scholarpub@macalester.edu.Recommended CitationAgyeman-Duah, Ivor (1999) "Response to Mkandawire," Macalester International: Vol. 7, Article 14.Available at: http://digitalcommons.macalester.edu/macintl/vol7/iss1/14ResponseIvor Agyeman-DuahAny serious discussion about the global economy is unlikely to occurin the absence of freedom, democracy, and the operation of the mar-kets. These have become the primary elements of economic develop-ment. Also, the transnationalization of any economy and its impact onthe sovereignty and national structures of any country demand thesediscussions. This response will focus mainly on the African experience.Without freedom of speech and freedom to make choices, democ-racy is difficult to attain. And if democracy becomes difficult to attain,it affects the very well-being of citizens because it jeopardizes the eco-nomic structures of the country. The problems of civil wars, the atten-dant refugee crises, and immigration to Europe and America, as theyoccur in Africa and other developing countries, all relate to citizens’lack of freedom to make choices for democracy to prevail. The UnitedNations Universal Declaration of Human Rights (Article 19) says:“Everybody has the right of freedom of opinion and expression, thisright includes freedom to hold opinions without interference and toseek, receive and impart information and ideas through any mediaand regardless of frontiers.”1 This is more an economic statement thana political one. And Mr. Mkandawire shares this view.Information has become the basis of economic growth, capitalexport, and how to entice investors, be they transnationals or locals.Whilst Mkandawire writes at length about leadership betrayal, a situa-tion that undermines free media and information, he does not closelyexamine the role of the media in globalization. Information hasbecome the world’s window on the status of the market. Today infor-mation comes from sophisticated sources, in addition to such tradi-tional sources as newspapers, magazines, radio, and television. It iseasy now to share “inter” and “intra” economic news by means ofthese mass media. Consider, for example, that someone in a smalltown in Senegal can, within a minute, get information from a small cityin Sweden via the fax machine, satellite hookup, telephone, courierservice, or other resource along what United States Vice President, AlGore, dubbed the “Information Super Highway.” The global village ofinformation has become intimately linked with the global village of theeconomy. As a result, I can exchange economic data within seconds viae-mail or the Internet. I can instantly check the listing on the New York116Stock Exchange by going to its Website, and I can print business newsfrom CNN or Time or Newsweek from my computer — all because I amconnected.Today, a Ghanaian who lives in Alabama or rural Ohio can listen toa broadcast from a radio talk show in Accra, Ghana, and even con-tribute to the discussion. We live in an era when economic conferencescan take place on the Internet, eliminating the need for speakers totravel 4,000 miles and more from Buenos Aires or Melbourne to CapeVerde. Media technology and its concomitant availability are soadvanced (even in developing nations) that dictatorships find it diffi-cult to suppress information. During the reign of the late Nigerian dic-tator, Sani Abacha, it was an offense punishable by imprisonment tosend critical newspaper clippings across the border to Togo or Benin,Nigeria’s closest neighbors. But by courtesy of the Internet and satellitedishes, some Nigerians and those outside the country could knowwhat was happening.The liberalization of many economies, especially in developingcountries, and the privatization of state-owned media ensure that peo-ple have alternative sources of information. But, like all ideas capitalis-tic, the freedom to be connected to the Internet, to read data on stockexchanges and to contact brokers, to access satellite television, and tosubscribe to M-Net and other broadcasting agencies are expensive.And poor, undemocratic countries lack the opportunity to avail them-selves of these facilities and the freedom that can facilitate economicgrowth. (Africa has about 12 percent of the world’s population butonly 2 percent of world media.) Fortunately, in some African coun-tries, including Ghana, Senegal, Botswana, and South Africa, wherethere are relatively stable governments and relatively better democra-cies, the limited media technologies are helping to facilitate economicgrowth. But this is clearly not the case in places like Sierra Leone,Ethiopia, Eritrea, or Mozambique, where coups are frequent and gov-ernance is volatile But because freedom and democracy in economicdevelopment are becoming inevitable everywhere, Africa also hassomething to prove. A June 1998 World Bank news report on Africasays that nine sub-Saharan African countries have privatized theirstate-run telephone companies, which represent 75 percent of all tele-phones, a move beneficial to transnationals. According to the report,this change, among others, has generated nearly $2 billion in govern-ment revenues and another $4 to $6 billion in investment commit-ments over the next five to seven years.2Ivor Agyeman-Duah117In an essay published in the fall of 1996 and titled “Screening Outthe Flies,” Larry Campbell reveals that there are more than 100,000Internet users in Singapore, an island nation of three million people.The government disapproves and attempts to control its usage byclaiming the Internet broadcasts pornography. The same impressivefigure for Internet usage is recorded in China. The governments ofthese two Asian countries are traditionally wary of freedom anddemocracy, and quick to ban what is deemed unsuitable. That theyseek to control freedom of information rather than ban it altogether isbecause they recognize the usefulness of media technology in promot-ing economic growth. It is expected that, for both developed anddeveloping economies, the irresistible freedom and democracy that thenew media technology offers cannot be separated from economicdevelopment. The concluding point of Campbell’s article holds truefor Africa, too: “We are certainly aware that the Chinese authorities arelooking to restrict access, but we are confident that technology willmove quicker than the Chinese government. I don’t believe they havethe resources or the knowledge to control what goes on in cyber-space.”3*****Trade between Africa or the developing world of the South and theindustrialized countries of the North has never been balanced. Theindustrialized countries of the North and, more especially, the Groupof Seven have engaged in international trade with the South for cen-turies. Just as the North, or industrialized world, dominates the “infor-mation order” (controlling more than 80 percent of world informationor media), so too does it dominate the economic order. The South pro-duces raw materials for the industrialized world to turn into finishedgoods. Prices of these raw materials are dictated by the industrializedworld, which also dictates the price of their finished goods. This tradeimbalance partly accounts for the South’s underdevelopment and itsdebt to the North. This imbalance is of international concern. South-South cooperation (the encouragement of international trade withinthe developing world of Africa, Asia, Latin America, etc.) became afashionable hope in the late 1970s not only to establish fair practicespertaining to inter-African and intra-African trade but also to consoli-date regional groupings, which emerged in Africa and Asia in the1960s. The Organization of African Unity, formed in 1960 in AddisMacalester International Vol. 7118Ababa, Ethiopia, was the first such regional group; by 1990, forty-nineAfrican states, with a total population of 465 million, had regroupedthemselves in subregional economic communities. In West Africa,there are the West African Economic Community (1973), the ManoRiver Union (1974), and the Economic Community of West AfricanStates (1975). In North Africa, there is the Arab Maghreb Union (1989);in Central Africa, the Customs and Economic Community of the GreatLakes Countries (1976); and in Eastern and Southern Africa are theSouthern Africa Customs Union (1910) and the Southern Africa Devel-opment Coordination Conference (1980). These unions and otherswant strong economies for their countries and regions. Apart fromthese union creations, many declarations, hopes, and promises havebeen made to achieve this goal: the Lagos Plan of Action, Final Act ofLagos, Africa’s Declaration on Economic Cooperation and Develop-ment (1973), Africa’s Priority Program of Economic Recovery (1985),Africa’s Submission to the Special Session of the United Nations Gen-eral Assembly on Africa’s Economic and Social Crisis (1986), theUnited Nations Program of Action for African Economic Recovery andDevelopment (1986 – 90), and many more. Indeed, if regional group-ings, declarations, and promises alone could save Africa’s economicposition, I think the aim would have been reached. Professor S.K.B.Asante asserts in a World Bank Report: “Economically, African statesinclude a high proportion of the world’s least developed countries; in1991, the World Bank reckoned the poorest of all as Mozambique witha GNP per capita of a mere U.S. 80 dollars while of the 32 countries inthe world with per capita income of less than 500 U.S. dollars, no fewerthan 21 were to be found in sub-Saharan Africa.”4 Such depressing sta-tistics account for why many people reasonably think that developingregional groups with the aim of building strong economies could helpAfrica. After all, even Europe in the 1950s and 1960s saw the need tointegrate in the European Coal and Steel Community (1951), the Euro-pean Economic Community (1957), and the now-famous EuropeanUnion (EU), organized in the 1990s.The question is: How feasible are some of these attempts at unitingthe economies of Africa in the face of transnational operations? The lat-ter include, for example, the transfer of huge amounts of capital toAfrica (but sometimes transferring it from Africa); skills and setting up,in some cases, the economic agendas of countries; and dictating howsovereign countries should conduct their business. Because unstablegovernments breed unstable economies in Africa, with resultantIvor Agyeman-Duah119poverty, the International Monetary Fund/World Bank brought Struc-tural Adjustment Programs to the continent, despite protests fromtrade unions and students. Today, almost all countries in West Africaand beyond are on IMF/World Bank prescriptions, which encourageliberalization of the economy and deregulation. Transnational compa-nies flourish in this atmosphere due to “access to international know-how, management techniques and capital as well as technology.”Attempts to redeem Africa’s regional groupings and United Nationsdeclarations notwithstanding, it is the presence of transnationals thatmakes the greater impact, for good or bad.How exactly do transnational companies affect the sovereignty ofAfrica? Obviously, Africa needs external support in the form of capitaltransfer. All countries, as they are being developed, need it. Think, forinstance, of the Marshall Plan following World War II and the hun-dreds of millions of dollars that were given to the countries of EasternEurope after the fall of the Berlin Wall and the death of communism inthe late 1980s.*****Many Pan-African institutions (like the Pan-African News Agency inDakar, Senegal, set up in the 1970s to report about Africa from theAfrican perspective) are currently selling huge shares to non-Africans.The insistence that only African capital, insufficient in any case, shouldbe accepted to run this agency almost led to its collapse. The samething happened to the African Development Bank (ADB) in the IvoryCoast, which was seen as an African bank, with very limited capitalfrom non-African institutions and persons; today, however, capitalinvestment in the bank is 40 percent non-African and 60 percentAfrican. At the bank’s 1998 board of directors meeting in Abidjan, non-African institutions clamored for more shares, indicating a strong pos-sibility of African institutions taking an even lower percentage thannon-Africans in the future. These two examples reveal how Pan-African sovereignty has withered in the face of transnational aggres-sion.Furthermore, there is the general consensus that, in the words of Dr.Douglas Zormelo, “their [transnational companies] ability to affectgovernments stems from several factors including their potential abil-ity to undermine the policy prerogatives of governments by virtue oftheir methods of transferring finance and their overwhelming eco-Macalester International Vol. 7120nomic strengths. It is, therefore, their ability to circumvent tax lawsand undermine monetary and fiscal policy that concerns govern-ment.”5 And because they are motivated mainly by profit, they don’toften invest in areas of long-term profit. Instead, as Mkandawirerightly says: “Much of the foreign investment has gone into miningactivities (especially oil and gold) and in a few countries; little of thishas gone into manufacturing industry and the little that has, has beendriven not by plans to set up new productive enterprises but to buy upexisting ones that are being sold under fire-sale privatization condi-tions.”6 Despite what Mkandawire and Zormelo correctly contend,some government officials aid certain transnational companies inAfrica by collaborating with them to dupe their own countries. InGhana, for example, strong allegations have been made in the mediaagainst some government officials of collaborating with transnationalcompanies, especially from Malaysia, that buy state companiescheaply under divestiture in which these officials are shareholders.There are many Malaysians and other investors in Ghanaian media,hotel, and other businesses who have partners in government and whomay help companies subvert tax and other obligations to the state.Laws like the Industrial Relations Act, 1965 (Act 299) and the LaborDecree, 1967, exist to check the excesses of transnational corporationsthat do not have government officials as partners. But how effectiveare they? For example, no proper account was rendered to the peopleof Ghana when the government sold more than 30 percent of its shareof Ashanti Goldfields, one of the richest such resources in the world, toLohoro. Though some Ghanaian economists — led by a former gover-nor of the Bank of Uganda, Dr. Jones Ofori Atta—took the sale to courtfor rape of the national economy, the judiciary, whose independencecannot be assured, issued no ruling of consequence.Another dubious form of collaboration is that of governments andpolitical parties working together to cheat host countries by way offunding party activities and other sponsorships. Again, rememberNigeria in 1995, when Shell International collaborated with the gov-ernment of the late General Sani Abacha to kill Ken Saro Wiwa andeight other human-rights activists of the Ogoniland in eastern Nigeria.Not only did Shell support the Abacha government in hanging peoplewho had legitimately complained about Shell’s destruction of theirenvironment, but it also looked on with impunity as the internationalcommunity declared the jury illegal. Thus, Shell International, whileIvor Agyeman-Duah121creating employment opportunities in Nigeria, had more power andinfluence under the government of Sani Abacha than some Nigerians.*****Mkandawire concludes his essay by saying, “We need to place on theagenda some of the key concerns of nationalist politics — equity,nation-building, sovereignty. And we need a much more creative insti-tutional design to respond to the peculiarities of Africa’s social plural-ism.”7 This is perfectly true, especially for those of us who cherishcommunalism and communal sharing in African culture. But one canalso argue that, in many cases, transnationals can take away the sover-eignty of a people or a state, not simply by themselves but in concertwith people in local government. Since these transnationals gain moreprofit by collaborating with corrupt governments and officials, gov-ernments must be more nationalistic to avoid the erosion of sovereignstatus. Host government officials should make sure they don’t sellstate enterprises to transnationals for the infamous 10 percent cut. Andthey should make sure state properties are given to citizens who canafford to buy. Finally, they should prevent activities, like tax evasion,that are bad for the state.Transnational companies are not philanthropic organizations,although they do provide employment and sometimes training forlocal personnel; in these ways, the operations can be positive. Sometransnationals, including banks and media institutions like AT&T andM-Net, have granted scholarships and sponsored sporting events andother forms of entertainment, even if the costs of which are but a frac-tion of the huge profits the companies transfer back to their own coun-tries. And some, like M-Net, which are controlled by non-Africans, setagendas and standards in culture that barely reflect African values. Itis safe to say, then, that African governments need transnationals toimprove their economies, just as transnationals need bases to operatetheir businesses. Economic liberalization has come to stay in theabsence of a rival, and transnationals will swim in its glory.Notes1. “Universal Declaration of Human Rights—Article 19,” Committee to Protect JournalistsQuarterly, no. 56 (1998): 2.2. “Changing Face of Telecommunication,” Daily Graphic, World Bank Report (24 June1998): 7.Macalester International Vol. 71223. Larry Campbell, “Screening Out the Flies,” Nieman Reports Vol. L, no. 3 (Fall 1996): 58–60.4. S. K. B. Asante, The Strategy of Regional Integration in Africa (Accra, Ghana: Ebert Foun-dation, 1996), 2–3.5. Douglas Zormelo, “Multinational Corporations Control Mechanism on the BargainingPower of Trade Unions,” Niya Alabi and Peter Mayer, eds., Liberalisation, MultinationalCorporations and The Bargaining Power of Trade Unions (Accra, Ghana: 1996), 5–8.6. Thandika Mkandawire, “Globalization and Africa’s Unfinished Agenda,” MacalesterInternational Roundtable, October 1998.7. Ibid.Ivor Agyeman-Duah123

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