So the question, does Africa need capital? is not such a simple question as might appear at first sight. And it is certainly not the kind of question that should get African leaders to open their doors wide open for all manner of FDIs to enter and leave the continent at will.


F. NEPAD's doubtful road to Africa's renaissance through FDIs
There can be no doubt that the path that NEPAD offers is the neo-liberal path that is espoused by the IMF, the World Bank and the WTO, and most mainstream economists that work in African institutions such as the Economic Commission for Africa. Neo-liberalism has become a code word for the contemporary development theory. This theory puts "integration" into the globalized economy on the basis of the liberalisation of markets and the free movement of capital at the centre of the development paradigm. Can the further integration of Africa into an asymmetric globalised system that is dominated by a few countries really be the basis for Africa's "renaissance"? NEPAD seems to think it can and should. The leaders of Africa do not see any other alternative to integrating into the neo-liberal globalised model of development. NEPAD appears to lean towards the creation of the "right" kind of conditions within Africa - good governance as understood by the Northern partners, open economy, and partial measures on debt relief, increase aid from the North, and greater access to their markets.

At one point (paragraph 7), NEPAD does recognise that globalization "has increased the ability of the strong to advance their interests to the detriment of the weak", but this brilliant and incisive observation on the current asymmetrical power relationship is quickly forgotten. It is only a descriptive statement; for NEPAD it has no strategic or tactical significance. Nowhere, for example, does NEPAD recognise that "liberalisation" and the "open economy" are practically forced on Africa, of which the fourth WTO Ministerial Conference at Doha was a living testimony. NEPAD also admits, indirectly, that the Structural Adjustment Programmes (SAPs) have failed, in that they paid "inadequate attention to the provision of social services" [para 24], but it fails to recognise the claims of African people that SAPS have not just failed to pay attention to social services, they have been at the very root of Africa's economic and social crises.

In a civil society initiated research project called SAPRIN - the Structural Adjustment Participatory Review International Network - researchers from Argentina, Ecuador, Mexico, Central America, Ghana and the Philippines carried out a four-continent impact assessment of economic adjustment policies. They examined the economic and social effects of neo-liberal policies, such as financial - sector and trade liberalization, privatization and public-sector reform, imposed by the World Bank and the IMF. And they came to the following conclusion.

. the effects [of adjustment policies], particularly on the poor, are so profound and pervasive that no amount of targeted social investments can begin to address the social crises that they have engendered. Only restructuring of the productive sectors through more appropriate public policy can ensure economic opportunities, resources and benefits to all segments of the population. (SAPRIN, "Executive Summary, The Policy Roots of Economic Crisis and Poverty, A Multi-Country Participatory Assessment of Structural Adjustment", November 2001, page 24.)

NEPAD admits that SAPs have failed. African governments knew, in advance, that SAPs would lead to the diminishing of social services to the people. The IMF was stringent in its demand that in return for accepting its money, it expected governments to cut down on budget deficits, which meant, in practical terms, expenses for things like health and education. In recognition of this, Governments were then advised to set aside a "social fund" to cushion the effects of SAPs.

In none of the countries in Africa that accepted SAP did the social fund prove adequate to fill the social gap that it created. This is what NEPAD means when it says that SAPs were "inadequate." So what is its solution? NEPAD's solution is to place these services in the globalization basket, and let private capital (foreign, as it would mostly turn out) to finance the provision of these services. African countries must attract FDIs to finance the provision of these services, says NEPAD. Thus, from a peripheral matter (as under SAPs), services now occupy a central place for investments on a competitive bid. African states must now fight amongst themselves to attract FDIs so that these can be employed to provide water, electricity and other services, to the population of Africa.

This is not only a pipe dream (such investments are not likely to materialise), but also a dangerous one. Why? Because in trying to attract foreign capital for essential services, African governments are going to be dragged into downward spiral of offering to the owners of capital competitive terms, including tax incentives or tax holidays, free land, borrowing in local currency, and so on. Indeed, such competition may take place not only between states but also between provinces within the same state. Thus, in South Africa, Gauteng may compete with Cape Town and with other provinces.

Furthermore, services are one of the mandated issues for negotiations under the General Agreement on Trade in Services (GATS) provision of the WTO. Countries are expected to make offers on the kinds of services they would want to put up front for negotiations under the WTO. In bringing services into the centre of its "vision" for the future of Africa, what NEPAD does is to risk the lives of African people, their access to basic essentials of life, into a volatile and fluid global investment situation. Does this sound too alarmist?

No, it is not being alarmist, for this is the precise logic of NEPAD. SAPs were "inadequate", says NEPAD, because they neglected social services, so let us put the services, too, into the investment basket. NEPAD thus is SAP+GATS. But it is more than that. Once a matter is brought under the purview of the WTO, it is subject to the provisions of the Disputes Settlement Body, with all its attendant legalism, appeal panels, and sanctions. The DSB, it is widely known, is an asymmetrical system, where the rich countries can both afford the legal costs and impose sanctions, but the poor can afford neither.

It is possible that the authors of NEPAD did not have the time or the necessary advice from those who should have known better that the route they have chosen to bring the "renaissance" of Africa could well be Africa's final and utter submission to the rule of the IMF/WB plus the WTO. IV Conclusion: The NEPAD way versus the People's way

The sentiment behind NEPAD is noble. It is to put Africa on a "self-reliant" path to development where Africans themselves own the processes. But, as they say, the road to hell is often paved with good intentions. The intentions notwithstanding, the practical effect of NEPAD would be to surrender the human rights of the people of Africa (their rights to food, water, energy, etc.) to the whims of a volatile and untrustworthy global capital. If the experience of Argentina does not give wisdom, then Africa sadly will learn, bitterly, from its own experiences.
It is, however, not necessary to go the NEPAD-way in terms of strategy. There are alternatives. NEPAD's noble intentions may be embraced, yes, but the strategy for self-reliance is just that. Self-reliance. Not FDI-reliance. African governments must pledge to provide the basic services to the people - drinking water, basic food, essential housing and transport, and access to energy, etc. - as necessary elements of their basic human rights. They must then work upwards from there and see how the production and distribution (including domestic savings and investments) are organised in order to meet these basic needs. Leave these matters to the whim of international capital, and Africa would find itself in a worse mess than it is in now. If foreign capital is absolutely necessary, mostly in the form of technology (for example the IT), then its entry into Africa must be negotiated "with a hard head", and its operation and exit must be monitored closely, if possible on a Pan-African, and if this is not possible then on a regional, basis.

The point to start is not further integration of Africa's economy into the process of globalisation that NEPAD suggests. Africa is already more fully integrated into the global economy than, for example, the United States. The point to begin is with human needs. This is not being pedantic. There is a profoundly strategic difference between the NEAPD-way and the peoples' way. For example, the people of Soweto in South Africa need, among other things, access to drinkable water. There are two ways of going about it - the NEPAD-way, and the peoples'-way. In the NEPAD-way, you open this essential service of water provision to international competition; whoever is able to bring capital from outside can have control over the distribution of water, and must be able to charge "cost recovery" price to the water-users. If people cannot pay, then their water pipes must be closed until they are able to pay. In the process, the Government of South Africa must create a climate of confidence (above all, the ability of the investor to externalise his profits and eventually the capital value of his assets) so that an investor is induced to come to South Africa rather than to, say, Vietnam or Chile or Rumania (because, says NEPAD, capital is global, and must be induced with attractive terms to come to Africa). This is the NEPAD way. The people's way starts with the recognition that whether or not foreign capital comes to South Africa to provide water to the people, water is a basic human right. Its provision to all households in Soweto (our example in this case) is Government's responsibility that cannot be turned on or off on the basis of the peoples' ability to pay for the water. Access to water is a human right not a privilege. And the same is true of food, adequate housing, electricity, basic education and essential transport. Subject these to the whims of profit, and you have subverted the human rights of the people.