Redefining the Afro – Euro and Afro- Asia Relationships

Topics: International trade, Economics, Africa Pages: 16 (5077 words) Published: July 5, 2013
By Kingsley Ughe

The need for radical re-thinking on development strategy is imperative for African countries to be relevant in the global economy. This is further reinforced by the stark reality of extreme poverty in Africa. Over the years, the share of Africa in global trade remained insignificant despite the implementation of the policies that were recommended by international financial and development institutions, such as the International Monetary Fund (IMF) and the World Bank. The dismal performance of African economies calls to question, the effectiveness of the economic ideologies being prescribed by international institutions, and points to the need for a paradigm shift in order to achieve sustainable development. Over the last quarter of a century, Africa has been at the receiving end of liberal orthodoxy from these institutions that have persistently advocated, amongst others things, privatization of state-owned enterprises, free trade, intellectual property rights protection and deregulation of foreign direct investment (FDI) as requirements for developing countries to grow and develop. This policy prescription was what John Williamson coined the “Washington Consensus”. This neo-liberal ideology is reflected in the policies of the Bretton Woods Institutions: the IMF, the World Bank and the World Trade Organization (WTO). Specifically, both the IMF and the World Bank condition their offer of assistance to developing countries on the strict adherence to the Washington Consensus policies. The Consensus had continued to be under severe criticism because the performances of countries that adopted its doctrine, especially in Sub-Saharan Africa, Latin America and the former Soviet bloc showed that it had failed to deliver sustained growth as promised by its promoters. The remarkable economic growth of China in the past 30 years, with the country having declined to adopt the original and extended framework of the Washington Consensus, has raised further doubt on the unassailability of its capabilities. The significant economic miracle of China which has been described as the “Beijing Consensus” by Joshua Cooper Ramo, represents a symbol of China‟s success and a challenge to the Washington consensus normative power. The Beijing consensus is enshrined in three principles of innovation, Chaos management promotion and theory of self-determination. These tenets are embedded in the policies of China that features incremental reform, innovation and experimentation, export-led growth, state capitalism and authoritarianism. Though the Beijing consensus had recorded remarkable success, it has, however, been argued, that it might not be sustainable in the long-run because it maintains large state-owned sectors and authoritarianism, which runs contrary to people‟s aspirations, as the series of revolutions in the North African countries have shown . In addition, a historical review of how the advanced countries developed shows that they did not adopt policies that they are recommending for the developing countries. Curiously, some of the policies that the Bretton Wood institutions kick against today, were the very policies they adopted for their development. For example, the WTO currently opposes the use of export subsidy and protection of infant industry, whereas the United Kingdom and the United States embraced these policies in their early stages of development. There is therefore, the need for pragmatic policies and institutions that best suit the developmental stages and realities of developing countries in order to achieve sustainable and fast growth, and for the benefits of developed countries in the long-run. Against the apparent failure of the Washington Consensus as applied in developing countries, and the possibility of the un-sustainability of the Beijing consensus in the long-run, there must be a paradigm shift in Africa’s development strategy for sustainable...
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