The Multinational Monitor

MAY 1983 - VOLUME 4 - NUMBER 5


Africa's Uneven Development

Agribusiness in Africa
by Barbara Dinham and Colin Hines.
London: Earth Resources Research, Ltd.
1983, 224 pages, GBP 4.95

Agrarian Policies and Rural Poverty in Africa
edited by Dharam Ghai and Samir Radwan.
International Labour Office
1983, 311 pages, $15.70.

"Accelerated Development in Sub-Saharan Africa:
What Agendas for Action?" in IDS Bulletin
edited by Caroline Allison and Reginald Green.
January 1983, 54 pages, GBP 3.15

by Guy Gran

The evidence continues to build: if Africans and the world community really want equitable development, present strategies by aid agencies, multinationals, governments, and local capitalists will have to change.

Africa's long term food decline shows no sign of reversing. Income inequality in many African countries is worsening in situations of both high and low growth. As the International Labor Office (ILO) of the U.N. concludes, "In the absence of active policies to combat poverty, growth per se cannot be expected to bring about widespread improvement in living standards."

It is important to analyze this sad reality with a view of a system at work. The development structure that creates and sustains mass poverty in Africa has its roots in the colonial system. As colonialism dismantled the subsistence economy, rural poverty grew. Land was confiscated to grow cash crops for export, and wages did not meet family needs. The colonial states controlled markets to their own advantage.

This unfortunate system of relations was passed on to the elites of new African states. Non-democratic economies have almost always meant unequal growth or stagnation. For instance, control over natural resources and market prices consistently benefit urban areas, while the quality of rural land declines. Then, migration to the cities diminishes rural labor supplies.

To complete the system, one must add the newer actors in the development scheme - corporations and aid agencies - and their forms of organization. It is by now a widely accepted tenet that the common world-system approach to organizing change - the blueprint, top-down social engineering exercises called projects - are not conducive to poor people participating equitably or effectively. Cultural factors may also block development: ethnic affiliation, religion and education may work to devalue and underreward farm labor and to stratify women, children, and the elderly.

The three studies under review here recognize this system and contribute significantly to our understanding of rural poverty. They explore different bodies of evidence and have different primary concerns - states, international corporations, and the World Bank. But they do not lose sight of the world system as a whole.

In Agribusiness in Africa, Barbara Dinham and Colin Hines of the London-based Earth Resources Research have assembled the first substantial review of "the impact of big business on Africa's food and agricultural production." Both the general analysis and the case studies (coffee and sugar companies, Unilever, Kenya and Tanzania) demonstrate concretely that export-led growth of primary commodities is not compatible with mass welfare.

Scholars in the Institute for Development Studies at Sussex have focused the January 1983 issue of the IDS Bulletin on another key component of long term agricultural stagnation in Africa: the World Bank. This issue contains eight essays that vigorously, sometimes brilliantly, refute the assumptions and policies of the Bank's 1981 report prepared by Bank economist Elliot Berg, Accelerated Development in Sub-Saharan Africa.

The third work, edited by Ghai and Radwan, presents edited versions of ILO World Employment Program working papers. These papers focus their analysis on the quantity of rural poverty and how growth (or its absence) has changed patterns of poverty between regions and classes in the 1960s and 1970s. Case studies are presented on nine countries representative of different development models and rates of growth: Kenya, Malawi, Ivory Coast, Botswana, Zambia, Nigeria, Ghana, Mozambique, and Somalia.

The best study of the group analyzes Africa's development problems in human as well as statistical terms. In Zambia, Charles Elliot concluded that one-half to two-thirds of rural households have "incomes that are so far below official minimum wages that malnutrition and seasonal famine are a constant fear and a too frequent reality." One review of available local research on Nigeria also uncovered uneven rural growth patterns. "Even the massive income derived from the oil boom, which could have transformed rural living standards, has substantially been diverted to other beneficiaries," the writer claims. Here, as elsewhere, many outside forces, as well as family size, structure and resources, help determine ability to compete or climb out of precarious circumstances.

As a U.N. agency, the ILO has to be careful of the sensitivities of other donors and governments. Thus these essays are not flamboyant, but they do come down hard on state-sponsored policies that seek growth through exports, favor urban areas, and extend credit and technology only to rich farmers. A less central villain is the World Bank. In Malawi the Bank's four integrated rural projects were clearly no answer to mass rural poverty; these corporatist growth efforts affected only about 20 percent of the rural population.

As independent researchers, Dinham and Hines haven't the political restraints of ILO. African governments would do well to look at their summaries of the real historical performance of multinational agribusiness in terms of social welfare. At best this export-oriented strategy produces uneven growth for some; at worst it leads to overall economic stagnation and decline.

In Sudan, for example, multinational consultants have been working on several sugar schemes to their own considerable profit. "The formidable problems associated with the development of new sugar schemes have meant that, in all probability, Sudan will end up subsidizing its own food exports to much richer Arab neighbors." The study finds that the government has to keep investing to continue exporting in order to repay the debts incurred in creating such schemes.

African governments are in a weak position when they depend primarily on urban and international supporters. "Finding peasants too difficult to deal with," say the authors, "governments have adopted `advanced' agricultural schemes, by-passing rural people and further isolating them both politically and economically." But, Dinham and Hines are quite correct to see no quick avenues to a more peasant-oriented process.

This work is pleasing for more than style, coverage and overall coherence. It is sensitive to other actors in the system. For instance, the authors find that multinationals are by no means the whole problem. They skillfully link them to the larger system. But they also show that agribusiness is deeply involved throughout the U.N. system. For example, the Industrial Council for Development was set up in 1980 to influence the U.N. Development Program (UNDP). The Food and Agriculture Organization's campaign against tsetse flies was led by global chemical and beef companies.

Logically, perhaps, African governments could do some or all of the production, processing and marketing with state corporations or private local firms. But Agribusiness in Africa shows how hard this is in practice. Multinationals hired for consulting services drain industry profits through management and service contracts. They also increase the use of imported raw materials and high technology.

If multinationals offer Africa a vision of enduring inequality, can the World Bank offer any more authentically developmental advice? Scholars at Sussex reviewing its policy report for the 1980s in the recent IDS Bulletin say no. A few of the specific propositions of the Bank are of themselves reasonable, but the package, they say, unacceptable. Their arguments are persuasive.

Manfred Bienefeld put it well: "The [World Bank] document as a whole [is] fundamentally wrong in its analysis; selfserving in its implicit allocation of responsibility for current problems; misleading in its broad policy prescriptions; and totally unrealistic both with respect to the social and political implications of its `solutions' and with respect to its assumptions about real aid flows, price and market prospects for African exports and the robustness of Africa's struggling institutional structures."

Sussex scholars realize that the World Bank's 1981 Berg report may not direct all cases of day-to-day Bank activity, but they are quite properly appalled at the substance, the style, and the methodology of Bank policy-making.

The Berg report, they say, simply ignores most of the empirical evidence on most countries. It stays on the level of Reagan-like ideological simplicity, seeking to get government out of the market place by pointing to specific bad policies of specific African states. But if Bank Africa specialists ever looked at the Asian experience they would find that in the so-called "success stories" touted by the Bank, Asian governments played a major role in most sectors.

How indeed, as several authors note, should Africans value Western "expertise?" The Bank's model for the 1980s is little different from the model of the 1960s and 1970s that was so central in creating the present crisis in rural development. Africans must know that, outside official Washington, there is a growing consensus that such orthodox economic analysis should be put into the trashcan of history. It would be ludicrous, for example, to continue to accept the narrow economistic World Bank perception of peasant incentive structures as the basis for agricultural policy initiatives.

More dangerous is the Bank's efforts to enhance its own power by redirecting African governments' policies. Governments which do not follow Bank advice cannot expect to get new structural (nonproject) loans. The Bank dictates that such loans are to grow as an overall percentage of lending. They discourage other donors from more project lending and encourage them to co-finance structural loans. It is difficult to understate the dangers to African development and welfare of this further concentration of political and economic power by the North against the South. This topic needs far more exposure.

Beyond the discussions of Bank "expertise" are more specific illustrations of the Bank's illusions. Case studies of the current dilemmas in Kenya and Malawi explore the fallacies of export-led growth in the face of ominous price prospects of primary commodities. The Bank's notions of privatizing African economies and social services are refuted by showing that African government expenditures are not any larger a percentage of the GDP than those of other governments North or South.

The heart of the IDS critique of the Bank's approach to African agriculture is the essay by Reginald Green. He chronicles the Bank's inability to study or learn from the past, to admit mistakes, or to see a majority of the crucial issues. The Bank's own price projections do not support a conclusion that more exporting is or will be financially viable. If all African states follow the Bank's advice, this would glut the market and be "a recipe for starvation."

The Bank's record indicates that it has learned little over the last few decades. There is not much likelihood that the situation will change. The Bank simply does not see the African peasant. Lacking methods and incentives for communicating with the African poor, the Bank may never take their interests into account in Bank policy and practice. Twenty or more years of history is enough of such social experiments.

The ILO, Agribusiness in Africa, and this issue of the IDS Bulletin have thus performed very important tasks for all those interested in a truly developmental future for Africa. But we need to know much more. We need more detailed and complete data on income inequality in every society than political authorities are likely to desire to be collected. We need far more complete information on corporate activities and profit flows than can be obtained by a handful of diligent researchers. Finally, we need more regular critiques of the Bank's policies and practices to work toward ending its stranglehold on global growth policy.

Guy Gran teaches and writes in Washington. He is the author of Citizen Construction of a Just World, published by Praeger in April 1983.

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