Globalisation is presented to us by the big and powerful countries as if it is inevitable, as a natural phenomenon, and as if it is good for Africa to integrate into the global system. Globalisation is a conscious policy of Western countries in order to bail out their own corporations from cyclical and systemic crises. Like natural tsunamis where the waves start from a core of instability and travel outwards to the periphery, the globalisation tsunamis start also from social instability and profit needs within the centres of capital and travel outwards. Both kinds of tsunamis bring untold suffering to the peoples swept away by the waves. In both situations the victims are the poorest peoples of society.

The first major political-economic tsunami to which Africa was subjected to was the slave trade. This was to satisfy the labour requirements of plantation and colonial economies spawned by European expansion to the new territories of the Americas. The second major political-economic tsunami that swept Africa was direct colonial conquest beginning the Berlin Conference of 1884. This, too, was a result of crisis in Europe, and its need for outward expansion to access natural resources and cheap labour abroad. In the 1870s and 80s, the industrialised countries of Europe had reached a point of serious social and economic instability. They had reached the limits of growth given the limitation of the domestic national markets and the existing state of technology. The pressure for wages was cutting deep into profits. Internal repression of the working classes had reached a point where there were fears of a revolutionary upheaval. It is against this background that European capital was forced to find an outlet into Africa in search for cheaper raw materials and investment opportunities. The colonial exploits brought cheap resources from Africa. They also helped increase the profits of European entrepreneurs, out of which to meet the increasing demands for wage increases. This helped to maintain social peace in Europe, especially in Britain. The English colonialist Cecil Rhodes summed it right when he said that the colonial expansion was a “bread and butter” question. The outward expansion of capital helped to secure social peace at home.

A hundred years later, in our own times, the industrialised countries are facing a similar crisis of profitability and the danger of social unrest. The underlying force that has set in motion the current phase of Globalisation in the mid-1970s is the tectonic friction between two forces: one is the pressure on corporate profits as a result of the increasing demand by the workers in the West for higher wages and the increasing cost of inputs, especially oil. The other is the increasing competition from some of the newer economies of Asia. Thatcher and Reagan, when they came to power in Britain and the US respectively, set out vigorously to help their corporations out of this problem. They have become historic figures because with them began the present phase of “Globalisation”. Faced with the falling fortunes of the world of business Thatcherism-Reaganism deregulated and liberalised the economy. Paradoxically, the first act of “deregulation” was to regulate the unions in order to lower the pressure for wage demands. Gradually, the economy was deregulated so that there was minimum state interference (giving rise to the concept of the minimalist state), creating conditions for the private sector to recuperate their depressed profits, and assume control over the economy. Encouraged by the state, the corporations carried out a programme of rationalisation of production -- including “flexibilisation” of labour, and mergers and acquisitions. At the same time they expanded into spheres of society that were earlier regarded as outside the purely economic sphere – such as the environment and the social sectors.

The state undertook (especially in the UK where the social welfare system had gone further than the US) measures of privatization of the social and infrastructural sectors such as transport, energy and later health and education. Then followed liberal pro-corporate taxation policies, then in 1990s the shifting of still more public assets (such as pension funds) to the private sector. Then financial liberalisation and the convergence of national stock exchanges which opened the door to round-the-clock transactions in the burgeoning financial and speculative markets. These measures have created serious social dislocation in the West, for example, in the area of pension funds.

These measures, however, are not adequate to get Europe, the USA and Japan out of intensifying crisis of overproduction. As in the 1880s, it is necessary to expand outside their geographic boundaries. But unlike the 1880s there is no room for territorial expansion. Only two options are possible. One is to re-capture the markets of the newly independent countries of the South. The other is to deepen the penetration of capital directly into the production process. Just as in the decades following 1884, the present outward expansion is dictated by the tectonic crisis in the industrialised countries.

The measures taken in their own countries – such as the control over the unions and the freezing of wages, and mergers and acquisitions, have to be supplemented by additional measures in the countries of the South. Because their own markets are already saturated, they have to force open the markets of the South for their goods and services. Large economies such as India, China, Brazil and Argentina are asked by the WTO to liberalize their markets. As for Africa, with the aid of conditionalities imposed by the World Bank and the IMF, measures of trade liberalization and market opening were then more or less enforced on them.

The liberalization of the goods market is only one part of the process. It was the liberalization of the services, the General Agreement on Trade in Services (GATS) that has opened an enormous area of profits for western corporations. The privatization of water, health, communications, electricity, education, etc. is not an accidental affair. These services are being taken out of the hands of the state to make more profits for the private (i.e. multinational) sector. Increasingly even strategic and security sectors are being privatised, as well as indigenous knowledge systems through patent legislations. Now they have brought Genetically Modified Organisms (GMOs) as a mechanism for increasing food production. The real reason behind it is not to stave off hunger in Africa, but to create new means of controlling agriculture in our countries, so that those who control the GMO technology can reap profits. Goods and services and technology have been the means used as mechanisms for prying open third world markets, and to maintain control over the market.

Trade in goods and services, however, is not a sufficient basis for the protection of their industries. The primary thing is investments. If they only exported goods and services, in 10-15 years they will be not be able to hold on to their markets, because the Chinese with their lower wages will out-compete them. By 2015 40% of consumer goods in global trade might come from China. Hence, the only strategy for western countries is to go for the services and investment sectors. That’s why there was so much pressure put by the OECD countries to multi-lateralise the investment agreement. Thus in 1997 they pushed for conditions where investments could come and go as they wanted. This became the major problem at the WTO conference in Singapore in December 1996, and gave rise to the so-called “Singapore issues”.

Everybody has got the issue of FDIs (foreign direct investments) upside down. It is presented as if it is the countries in the South that need FDIs. The reality is that the West needs to export its capital, if its corporations are to survive. Western corporations need to create conditions in our countries so that FDIs can come to control production.

Conclusion:

We need to realise that like their natural counterparts, the political-economic tsunamis are caused by tectonic slides in the economies of the developed countries. They set in motion waves that overwhelm the rest of the world. Africa has been subjected to over 500 years of a series of such waves that have originated initially from Europe, and now from the collectivity of industrialised countries that includes the US and Japan. It is to protect and advance their interests that they have set in motion the present phase of globalisation and trade liberation.

Globalisation is also presented by its ideologues as offering an “opportunity” to the peoples of the South to “benefit” from the system. In international negotiations (such as in the UN, the UNCTAD, the WTO, the UN Economic Commission for Africa, or in the World Economic Forum, etc.) whenever representatives of the South challenge globalisation as a risky proposition for the people of the South, the representatives of the West unfailingly secure an amendment to the text to the effect that globalisation offers “opportunities” as well as presents “risks”. This linguistic double-speak has become part and parcel of the texts as they are “negotiated” in international conferences.

The fact of the matter is that barring a couple of million rich beneficiaries in our countries, globalisation overall has brought devastation to the bulk of our populations. Again, just like its natural counterpart, the political-economic tsunamis have more serious consequences for the poor amongst us than the rich. However, it is possible to ward off some of the effects of these tsunamis. The proper place to start in Africa is first to slow down our further integration into this system of political created inequity. Parallel with this Africa needs to build the unity and strength of our own regional organisations (such as SADC, EAC and ECOWAS), based on the creation of regional markets rather than production for export.

In another paper we have identified some of the key strategic elements that should go into an alternative strategy to the tsunamic globalisation that we face today:  http://www.all4all.org/2006/04/2457.shtml ( http://www.seatini.org/publications/epas/AlternativesToNeoliberalism.htm)

 http://www.seatini.org/publications/epas/globalisationTsunami.htm