Rhodes’s spectre haunts Europe; Africa beware a new imperialism!  

Saturday May 19 2012

Illustration: Patrick Gathara

The body count of European governments being felled by the economic crisis continues to rise.  After the determined two-decade embrace of neo-liberal economic policies following the end of the Cold War, most Western countries find themselves directly or indirectly in debt to large private banks, and their economies at the mercy of massive speculative adventures by short-termist market speculators.
Of the 27 members of the EU, seven are officially in recession while 10 of the rest —including some of their biggest economies — hover on the brink.

If we are to avoid prolonging our own century-long economic crisis, and to also avoid the new complications headed this way from Europe, the East African Community will have to rethink its euro-like single currency idea, that the EU — temporarily, it turns out — enjoyed.

Several countries have changed government since 2008. The first wave was from governments being held responsible for failing to prevent the crisis. A second wave now seems to be governments that are falling because their populations are not prepared to stomach the austerity measures being imposed upon them by the emergency governments that replaced the first lot. This predicament began in the private sector. For that reason, it should be of interest to the planners and managers of Africa’s economic future, given that their devotion to IMF-inspired neo-liberal private sector policies.

The debate is whether to pump more public money into the economy in the hope of jump-starting it, or for the masses to tighten belts. The trouble with the first option is that the governments have failed to convince the banks and stock markets — the main source of the cash — to lend them money cheaply for the stimulus, as the markets are not convinced that they will get it back. The private sector is admitting to a shortage of confidence, not cash, in its own system and is now holding Western governments to ransom by placing very lending tough terms.

The second option is faced with a complication called Democracy. The European voter is not willing to take the same “medicine” that their politicians imposed on Africa and South America for 30 years, in exchange for donor assistance.

Collectively, the European politicians are now faced with the dilemmas that African politicians have been battling with for decades: To whom should their loyalty belong? The banks and financiers that hold the purse-strings, or the populations in whose name they govern?


The problem was solved quite easily here in Africa: Selected factions of the local elite were allowed to form dictatorships that then locked the population out of the economic debate while the harsh economic measures demanded by the global finance system through the IMF and World Bank were imposed.

The financial powers have tried to get round this democratic inconvenience by demanding the appointment of “financially responsible” technocratic governments willing to push through the harsh fiscal measures.

With the latest round of elections, the European voters have begun to push back against this, and that is where the real problems will begin.  
France’s Sarkozy has become the 11th Eurozone politician to lose power — one way or another — as a result, and indications are that, after democracy, the biggest single casualty of this contest will be the euro currency in its current form.

Since nearly all the EU countries now share it, those worst affected by the crisis, such as Greece, cannot simply devalue their currency as many countries in that situation have done in the past. Therefore, the only option has been to devalue the standard of living for their citizens instead, through selling off state assets, severe cuts to public sector jobs and wages, slashing public pensions funds, and cutting back on social service provisions like health and education, all to immense public outrage.

At the very least, we can expect to see the euro broken into differently weighted bands. At worst, those with the least to gain from the current strictures may simply revert to their original national currencies, thereby further dividing the EU. Indeed, Germany’s unhelpful position is that any member of the currency zone not willing to implement austerity measures should make arrangements for an orderly exit.

They can well afford to be this hard-nosed. Their commitment to manufacturing — currently an impressive 25 per cent of GDP — means their economy is most robust and cash-rich compared with the rest of the EU. (By way of comparison, UK manufacturing is just 11 per cent). The creation of a single currency therefore simply made it easier for Germany to sell these goods to consumers throughout the Eurozone. This has left Germany with the biggest stick in terms of policy dictatorship. The country is now to the rest of Europe, what the West has been to the developing world.

The trouble is that neither position — be it technocrat-imposed austerity or a democratically demanded public spending stimulus — may help the Eurozone out of the crisis. Their real challenge is to return to economies based on actual material production, as opposed to the service-based format they recently embraced.

The crisis has extended the corporate war on democracy to Europe, and should not be looked on as “business as usual.” Governance and economics now globally face challenges not seen since the last World War, and the West’s attempted solutions may equally become dangerously imaginative.

Africa therefore, needs to consider three things at present, regarding our own regional security.

Until 1945, Europe was the site of the most bloody and prolonged conflicts of the past 500 years. The very idea of a union of Europe is largely inspired by a desire to break with that past.

They may now feel compelled to export their problem to Africa once more. Cecil Rhodes, that great planter of the European state in much of Southern Africa, was very clear on this point. Having witnessed firsthand the growing popular anger over the prevalent poverty in 19th century London, he warned, “If we want to avoid civil war, we must become imperialists.”

To what extent therefore, are all the current regional conflicts — from the DRC through to Somalia — an advancement of the African interest, and to what extent are they a Western turf war?

Therefore, to what extent will the proposed East African economic and currency union be a union of the peoples of the region, as opposed to a union of the undemocratic member states hosting western Corporations?

What role will the United States, through its Africa Command (Africom) play in this?  Will it help to keep the Europeans out, or join forces with them against the Chinese? To what extent do any of our current rulers care about any of this?