Greece and Africa: learning the lessons of structural adjustment

For nearly two decades, from the World Bank’s Berg report of 1981 onwards, Africa suffered the consequences of structural adjustment – or more kindly economic reform – at the behest of the international finance institutions. The consequences were devastating for employment, livelihoods and state capacity. But the neoliberal medicine did not work. There was a period in the 1990s when there were all sorts of arcane debates on why. Was it the imbalance of economic measures, was it the timing and sequencing, was it the lack of political will to implement properly? But in the end most agree that it was a disastrous period, the consequences of which are still being felt.

These consequences include the massive undermining of state capacity, including health services, agricultural research and extension and more, along with the loss of a generation of potential. The recent shocking impacts of the Ebola outbreak in West Africa can be in part related to these long-term effects of systematic underdevelopment – what some call ‘structural violence’.

In Zimbabwe, the Mugabe government abandoned its post-Independence ‘growth with equity’ strategy for one modelled on the designs of the World Bank and the IMF in 1991. The Economic Structural Adjustment Programme (ESAP – also known as ‘economic suffering for African peoples’, and many other plays on the same) was rolled out through the 1990s. It presaged the unrest that provoked the labour movement and war veteran mobilisations in the latter part of the decade, and was of course the backdrop for the land reform from 2000.

Of course some benefit from such neoliberal economic reforms. Despite the high-flown rhetoric, the Mugabe government did not push for land reform or other redistributions in the 1990s. Instead elites accumulated, corruption extended and a new politics emerged. In this period large-scale, mostly white-owned (but also now incorporating some of the new black elite) farming and other businesses profited. In agriculture, high value farming operations boomed, seeking profits in export markets as part of the new, competitive neoliberal order. In some ways, it was a great success. But in many ways a troublesome anomaly, as the benefits were not widely shared, and the festering discontents around land distribution, unresolved from the colonial period, continued unaddressed.

So what has this all to do with Greece? A week ago a new party, Syriza, dramatically came to power in Greece committed to ending the structural reforms imposed by the European Union, and Germany in particular, but also committing to tackle the deep corruption and oligarchic elitism that had come to characterise Greek political economy. The rise of Syriza has sent shockwaves through Europe with its rejection of the status quo, and the deep inequities of the ‘austerity packages’ imposed, what have been described by the new finance minister, Yanis Varoufakis, as “fiscal waterboarding” that had turned Greece into a “debt colony” (see excerpts from his book via this link).

A former colleague of mine, Diana Conyers, who lived in Zimbabwe during the ESAP period, and now lives in Greece wrote a thought-provoking blog for the IDS website recently. It drew the parallels between Greece and Africa in interesting ways. On the day of the Greek election, the UK Sunday broadsheet, The Observer, had an extended editorial on the Greek situation. If you replaced ‘Greece’ with ‘Africa’ (or any particular African country) in the piece – as I do below – the parallels that Diana drew attention to are striking:

Africans have been subjected to what many feel is a sustained, brutal and unnecessarily destructive attack on their basic living standards, way of life and national independence. If a country is invaded and occupied by hostile forces, it might expect to lose its freedom and its voice. But the subjugation of Africa, in the name of fiscal responsibility, debt reduction and structural reform, was undertaken by so-called friendly powers, principally, [western donors, the World Bank and the IMF[…[A]usterity is not working, either, as a group of leading economists noted… “The historical evidence demonstrates the futility and dangers of imposing unsustainable debt and repayment conditions on debtor countries [and] the negative impact of austerity policies on weakening economies… Debt should be cancelled”.

In the 1990s the global policy elite and the international commentariat, let alone ‘leading economists’, did not offer such a perspective on Africa. Partly Africa was far away and had less influence on the West than even Greece, but also the ‘historical evidence’ – mostly resulting from the failed experiments in Africa, post-Soviet Russia and elsewhere – had not been learned. And of course in Africa, where emergent democracies were being controlled through the same route as their economies via programmes of ‘good governance’, the prospects for an insurgent, popular, progressive, alternative politics, as has emerged in Greece (and maybe Spain too), was not feasible.

Through the 1990s, in Zimbabwe and elsewhere, political and business elites were quite happy to build their wealth and power on the back of austerity and ‘reform’, with inequality and deepening structural poverty growing with this. The Greek Syrzia moment perhaps has some parallels with Zimbabwe in 2000. The challenges will be similar: the prospects of diplomatic isolation, capital withdrawal, external pressure to conform and political tensions regionally, but equally the need to compromise, manage change and seek an alternative, while offsetting corruption, political division and social conflict that threaten a more humane, redistributive growth path.

In the past 15 years, Zimbabwe has sought an alternative political-economic trajectory, breaking some of the shackles of the past; but it has also failed dramatically to address other challenges, with the consequence that the economy continues to languish, corruption has extended even further, growth has failed to take off and the benefits of redistributive policy remain to be realised. Let’s hope the Syriza coalition fares better. Perhaps in the future Athens, rather than Washington, will be able to send economic advisers to Africa.

This post was written by Ian Scoones and appeared first on Zimbabweland