Socialist Worker

Africa’s economic crisis

by Mzimasi Makiniki
Issue No. 1959

Lots of commentators ask why Africa does badly compared to Asia. Here’s a quick answer.

Up to 1975, African post-war economic performance was not much worse than that of the world average and better than that of South Asia and even of the wealthiest among First World regions, north America.

After 1975, Africa experienced a collapse. This was part of the global economic crisis of the 1970s which hit the US and Europe hard.

The result was a huge sucking-in of cash. The $47 billion outflow of capital from G7 countries of the 1970s turned into an inflow of $347 billion in 1980-1989, and of $318 billion in 1990-1999.

Interest rates rose, because the US was borrowing so much, and the US forced down prices of basic commodities, which Africa exported. Not all of the Third World was affected the same.

Sub-Saharan Africa was far more dependent on foreign capital than East or South Asia. This dependence became unsustainable. Africa had also not recovered from colonialism.

The US favoured its Asian allies with aid during the Cold War. US aid to South Korea from 1946-78 was $6 billion. In the same period the whole of Africa received $6 billion.

The US gave the exports of its East Asian allies privileged access to the US domestic market, while tolerating their state interventionism and exclusion of US multinationals.

But the real division is not Asia versus Africa or South America. It is the rich against the poor, which is why I was heartened by the radical elements in this week’s protests.

For a full answer see Giovanni Arrighi’s article The Africa Crisis, which I have used here. Go to www.newleftreview.net/nlr24901.shtml


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