Nairobi — Because of the ongoing War on Iraq, a report released by the International Monetary Fund (IMF) containing grave implications on Africa's economies is receiving limited attention. So limited that nobody is actually talking about it.
For the first time the IMF has admitted that forcing developing countries to open their markets to foreign investors could increase the risk of financial crises. That has been said before - but not by IMF - and that is not a sweet story given the way we rush to the IMF to get economic prescriptions.
The report says that in some cases the process of liberalisation - which it imposed on us - has been accompanied "by increased vulnerability to crises", an issue when raised previously by advocacy groups was dismissed with a wave of the hand.
And to twist the knife, the IMF report says there is "little evidence" that its policies on liberalisation encourage economic growth in poor countries.
"If financial integration has a positive effect on growth, there is as yet no clear and robust empirical proof that the effect is quantitatively significant," it says in part.
The IMF released the document at a time world attention was focused on Iraq and it was sure that it would not get any coverage since every critique is on the Gulf War, which is taking up most air time and newspaper pages.
Prepared by IMF's chief economist Kenneth Rogoff, the report should mark a turning point in the way the fund runs its business. But the major question is: were we deceived into liberalisation programmes and where do we go from here? The damage, for us, is already done and the warnings are coming too late.
In one of the warnings, IMF asks countries to take caution when integrating with the global economy, and countries are advised to achieve an economic balance by creating strong domestic financial institutions.
Now how do we create such strong institutions when they have all collapsed as a result of opening our markets? Where do we start, or do we return to IMF and World Bank and borrow more money to resuscitate these institutions?
The privatisation schemes that were advocated by IMF stifled economic democracy and people had little voice in determining how national assets were valued and handled. These policies exposed people to risk and the most vulnerable people were left with no access to basics like water, food, and health care.
Subsidy programmes for impoverished people were eliminated, and basics became unaffordable. But what do we get, after all that? The same IMF now turns again to tell us that it has learned that that policy could have been wrong in the first place.
And that brings me to the core of this article. Africa must come up with its own initiatives for addressing development rather than relying on policies cooked up in Washington boardrooms and experimented on the struggling continent.
And this is not the first time you are hearing this.
For the past few decades Africa has come up with a series of initiatives aimed at addressing the developmental challenges of the continent. Two such initiatives stick out: The Lagos Plan of Action and the follow-up African Alternative Framework for Structural Adjustment. But what happened?
These initiatives were undermined and frustrated by policies developed from outside the continent and imposed on it. Today we are singing about NEPAD, another non-starter that masquerades as a homegrown solution.
Africa should stand and confront the challenges and constraints imposed by the hostile international economic and political order within which our economies operate. It should also confront the domestic weaknesses deriving from socio-economic and political structures that we have built as a result of the IMF-World Bank pressure.
It is time to understand that the so-called integration into the global economy is a hoax. This is because we exist in the global economy as exporters of primary commodities and importers of manufactured products. Both ways we lose because, we do not dictate the prices. This has crippled Africa's economies and undermined the continent's capacity to plan development strategies.
In particular, our manufacturing industries have been destroyed; agricultural production (for food and other domestic needs) is in crisis; public services have been severely weakened; and the capacity of states and governments in Africa to make and implement policies in support of balanced and equitable national development emasculated.
Some of the institutions that took time to build have collapsed in recent years as a result of the policies that were imposed on us and which today IMF admits need a new appraisal.
Let us admit that no development policy in Africa will survive if it is not supported through appropriate trade, investment and macro-economic policy measures. We have to do away with excess military expenditure; eradicate corruption and mismanagement and end capital flight and tax evasion.
Besides, states should be reconstituted and reconstructed to reflect social equity and social inclusion. Further a form of democracy that integrates people's control over decision-making at all levels in the management, equitable use and distribution of social resources should be put in place.
Today farmers are just roaming in Uasin Gishu District waiting for the rains but not sure whether the produce will be profitable. Such guesswork is not good for any economy. They must be told that no more dumping of cheap imports will happen and that the local market is there for them.
The government should also take thorough measures and look at the liberalisation policy, now that the IMF is admitting failure.
But once the focus shifts from Iraqi war, we still have a bone to pick with IMF. We sure will.
Mr Kamau is the Editor of Rights Features, Nairobi. Comments\Views about this article