Governance, NEPAD and the G-1/8

The New Partnership for Africa’s Development (NEPAD), a market-oriented programme which has not received the stamp of democratic consensus from the African people, is set to be added to the foreign economic domination toolbox of the G8, itself an institution undergoing a legitimacy crisis. This development is symptomatic of the democratic deficit facing a global system in which the voices of the few drown out those of the many.

by Eric Squire

“Those seated around the table represent little more than one-eighth of the world’s 6.2 billion people. But they account for almost two-thirds of the world’s annual income. Together they have a decisive influence over international financial institutions, including direct control of 46% of the votes in the World Bank and 48% of the votes in the International Monetary Fund (IMF). The G8 members similarly control other powerful international institutions, such as the World Trade Organization (WTO) .... Although their decisions may mean life or death for tens of millions with no seat at this table, there is no global body that can demand accountability from the rich-country leaders.” - Salih Booker, director of Africa Action

The legitimacy crisis of the Group of Eight (G8) is inherent. Characterized by highly non-transparent processes, exclusive participation, and the lack of any mandate from a more representative body, it nevertheless aspires to set the global agenda. It has gradually mutated into a full-fledged rogue institution, and yet Canada shares, with increasing complicity, in the policy-making ambitions of this body. How long can we pretend this sort of behaviour is benign? Eventually, as Canada increases its stakes in the global neoliberal project - via its G8 position, a disproportionately active presence in the WTO, and an appeasement policy with regard to the latest wave of American imperialism - something is going to happen. Canada’s greatest diplomatic asset on the international level - namely, this country’s reputation for integrity and magnanimity - will be undermined and replaced by a new attitude towards Canadians: an attitude of suspicion and hatred.

The G8 track record

The G8 leaders regularly talk about increasing aid - a standing joke, it seems. In 1975/76, the fiscal period in which the G7 was founded, Canada’s official development assistance (ODA) contributions stood at 0.53% of Gross National Product (GNP), a high point which was not far off the 0.7% target established within the United Nations. By 1990, this had fallen to 0.45%, and last year the figure had dipped to a dismal 0.27 percent. Roy Culpeper of the North-South Institute has pointed out that “Canada used to stand among the top five or six of the world’s most generous aid donors .... [but] Canada’s position has fallen to 17th in 2001.” And this steady decline has been characteristic of all the G8 nations with the exception of Japan.

Regarding debt cancellation, a small portion of the $100 billion in debt relief promised in Cologne in 1999 has been forthcoming. But meanwhile, it has become apparent how the enhanced HIPC (Heavily Indebted Poor Countries) programme was, from the very start, more designed to impose IMF/WB-dictated structural adjustment programmes (SAPs) - including privatizations, cuts in spending on services, and liberalization of investment and remittance regulations - than to allow poor countries to get back on their feet again. The enhanced HIPC programme proposes that poor countries not eliminate debt but, rather, achieve a “sustainable” level of debt. In practice, “sustainable” has come to be measured in terms of an IMF mentality where “the level of debt a country is deemed to be able to repay is primarily assessed in relation to its export revenues”. So countries which are not restructuring quickly enough to suit the IMF taste for export-oriented economies end up being denied debt relief in spite of crushing poverty. Mali, Benin, Chad, Burkina Faso and Malawi are all cases in point.

As for the countries which achieve IMF approval, they are then stuck with a liberalized, export-oriented economic framework, but without the well-developed social and economic structures that can make it work. This leaves their economies wide open to the most predatory forms of foreign direct investment (FDI) which, rather than contributing to long-term sustainable human development, are focussed purely on resource extraction (read: ‘pillaging’), the exploitation of cheap surplus labour, and snapping up bargains on the privatization auction block. To top it off, the countries are now bereft of any meaningful regulating mechanisms to rechannel corporate profits into local investment. Indeed, one of the first financial obligations of the SAPs is to lift restrictions on capital flows so that corporate remittances can flow back to the developed world. In short, although the debt burden may be reduced for countries who have passed the PRSP test, the “sustainable” condition which ensues is more akin to “sustained economic slavery.” This is the essence of what African critics term “global apartheid.”


The G8 is now eyeing the possibility of adding the New Partnership for Africa’s Development  (NEPAD), the new plan for African governance tabled by a coalition of African leaders, to its foreign economic domination toolbox.

The official NEPAD document (October 2001) contains bold rhetoric suggesting, on the surface, that it seeks to redress the tremendous inequities of the Africa/industrialized world relationship and to empower Africans. But getting down to the nitty-gritty, we find that what NEPAD really advocates is a heavy emphasis on attracting more FDI via a liberalized trade and financial framework. It talks about “instituting transparent legal and regulatory frameworks for financial markets” - which, as journalist Raj Patel points out, means ensuring that capital interests take legal precedence over social and environmental ones. Robert Fowler, Canadian Prime Minister Jean Chretien’s representative for the G8’s June summit in Kananaskis, Canada, has stated that NEPAD is “about putting in place the conditions that will allow investment to come to Africa, because private investment is going to bring to Africa far, far more than any foreseeable amount of global assistance could bring.” Of course it is precisely these “conditions” that have many representatives of African civil society most worried.

Patrick Bond, a researcher with the Alternative Information & Development Centre in South Africa, has written an in-depth essay questioning South African President Thabo Mbeki’s allegiances in framing NEPAD. Bond points with apprehension to the proposed reliance on further multilateral loans (initiating a new cycle of debt), to the promotion of foreign participation in Public-Private Partnerships (PPPs), and to NEPAD’s blithe espousal of privatization policies, including suggestions that areas as fundamentally monopolistic as roads and ports be opened to foreign control.

At the recent African Regional Dialogue convened by the High Commissioner for Human Rights, NEPAD was again heavily criticized for its marginalization of women and its excessive “market focus” and lack of “people focus”. Delegates were reportedly worried about “the danger of selling NEPAD to the Group of 8, the European Union and other external agencies before it was sold to the people on the ground ..., especially in the light of the provision under paragraph 27 of NEPAD that referred to Africa having learned from the ‘painful experiences’ of the past. The past was characterized by neglect of real consultation with and full involvement of the people. Poverty reduction and increased decentralization required greater grassroots ownership of NEPAD.”

Which brings us to the most serious charges against NEPAD. Trevor Ngwane, Secretary of the South African Anti-Privatization Forum, puts it plainly: “No civic society, church, political party, parliament or democratic body was consulted in Africa when NEPAD was put together. Instead the first time we heard of it was when Thabo Mbeki presented it in Davos at the World Economic Forum in January 2001 to the likes of George Soros. At the time it was called the Millennium African Recovery Plan (MAP). Through a series of ‘high-level’ discussions, that is, discussions above the heads of the people, MAP changed into NAI (New Africa Initiative) and now to NEPAD. Any changes to the plan have been in response to the international ruling class’ comments on the plan, for example, during the G8 Summit in Genoa [in 2001] where Mbeki was told to include ‘good governance’ in his plan. The G8 treated him with utter contempt giving him only 5 minutes to make his presentation before sending him off to do his homework.”

Clearly there is no democratic consensus regarding NEPAD in Africa itself - in fact few people have even heard of the initiative - but with Canada dangling $500 million before the eyes of  cash-strapped African leaders, an entrenched neoliberal future may be in store for Africans whether they like it or not.

The global governance crisis

The primary dilemma facing the global system is democratic deficit. The voices of the few dominate those of the many, leading to situations of accelerated environmental and social exploitation. But, as Tom Barry, co-director of Foreign Policy in Focus, writes, “the G8/G7 has contributed to this crisis by supporting policy solutions that bypass the UN.” Simply in financial terms, the G8 is a considerable drain on resources. The bill for hosting Kananaskis will almost certainly exceed Canada’s total UN dues for 2002. The G8 serves to undermine the building of a participatory global governance, and in this, it hearkens back to a former age - that of the “Concert of Europe” - in which the main European powers conspired to consolidate their hold on power by periodically intervening in and suppressing popular movements. By its exclusive nature, the G8 can only amount to the same sort of thing.

The way out of this mess is a more equitable representation of voices at the global level. Take the money spent on G8 summits and use it for something constructive - for debt cancellation initiatives, for getting aid contributions up to that 0.7% figure they should have reached long ago, and to finance efforts at building global governance within a democratic context. Phase out the G8 and phase in Kyoto. There will be less hot air all round.                                                        

The above article is reproduced with permission from SEATINI Bulletin (Vol. 5, No. 14, 31 July)

From Third World Economics No. 286 (1-15 August 2002)