EFFECT OF IMPERIALISM ON NIGERIA, WITH RESPECT
TO ECONOMICS, SOCIAL, CULTURAL, AND POLITICAL SEGMENT OF NIGERIA
TO ECONOMICS, SOCIAL, CULTURAL, AND POLITICAL SEGMENT OF NIGERIA
THE EUROPEAN IMPERIALISM IN AFRICA
The
imperialism of the 18th and 19th centuries was conducted differently from the
explorations of the 15th and 16th centuries. In the earlier period, imperial
powers often did not penetrate far into the conquered areas in Asia and Africa.
Nor did they always have a substantial influence on the lives of the people.
Each European nation had certain policies and goals for establishing colonies.
To establish control of an area, Europeans used different techniques. European
rulers also developed methods of day-to-day management of a colony. Two basic
methods emerged. Britain and other nations preferred indirect control.
imperialism of the 18th and 19th centuries was conducted differently from the
explorations of the 15th and 16th centuries. In the earlier period, imperial
powers often did not penetrate far into the conquered areas in Asia and Africa.
Nor did they always have a substantial influence on the lives of the people.
Each European nation had certain policies and goals for establishing colonies.
To establish control of an area, Europeans used different techniques. European
rulers also developed methods of day-to-day management of a colony. Two basic
methods emerged. Britain and other nations preferred indirect control.
A
BRITISH COLONY IN NIGERIA
BRITISH COLONY IN NIGERIA
Britain’s
rule in Nigeria shows the ways European Imperialist used to gain control over
an area and it also shows the ways they used to manage and continue to control
economic and political life in that area. The British got control over Nigeria
in both the hard way and the good way. In a good way, because some of the local
leaders agreed to sign treaties of protection with the British and to accept
British residents in Nigeria and in the hard way, because even though the local
leaders signed a treaty with the British, others didn’t accept the intervention
from the British and rebelled against the intervention, therefore Britain used
military force to put the rebels down. Since the Nigeria was such a complex
area with three large groups (the Hausa-Fulani, the Yoruba, and the Igbo), they
decided to manage the area indirectly with local leaders from the three groups.
This indirect management of the groups worked out well in the Hausa-Fulani, but
it wasn’t so efficient in the other two groups.
rule in Nigeria shows the ways European Imperialist used to gain control over
an area and it also shows the ways they used to manage and continue to control
economic and political life in that area. The British got control over Nigeria
in both the hard way and the good way. In a good way, because some of the local
leaders agreed to sign treaties of protection with the British and to accept
British residents in Nigeria and in the hard way, because even though the local
leaders signed a treaty with the British, others didn’t accept the intervention
from the British and rebelled against the intervention, therefore Britain used
military force to put the rebels down. Since the Nigeria was such a complex
area with three large groups (the Hausa-Fulani, the Yoruba, and the Igbo), they
decided to manage the area indirectly with local leaders from the three groups.
This indirect management of the groups worked out well in the Hausa-Fulani, but
it wasn’t so efficient in the other two groups.
THE
LEGACY OF COLONIAL RULE
LEGACY OF COLONIAL RULE
The
European colonial rule over Africans brought both negative and positive
effects. beginning with the bad news would be how the Africans lost control of
their land and their independence. millions died because of diseases or if not
of this, they were killed. they were also affected in a traditional aspect,
many of their traditional authority figures were replaced. the most harmful
effect was the division of Africa, many rival chiefdoms were sometimes united
while others were in constant rivalry. on the other hand, there were also some
positive consequences. For example colonialism reduced local warfare, colonies
improved sanitation and provided hospitals and schools. Because of these
benefits life-spans and literacy rate in Africa increased. To provide a way of
economic stability railroads, dams, telegraph lines, and telephones were built
in African colonies. This so called positive effects benefited only European
business interests not Africans’ lives. The British took control of Nigeria.
European shad a thirst to seek for more raw materials and resources that could
quickly fuel the growing industrial production. So they turned their eyes to
Africa. There were oposing groups,the ones who agreed and wanted their
protection and rule, and the others who opposed and rebelled. This conquest was
succesful thanks to the Royal Niger Company. This copany gined control of the
palm-oil trade along he Niger River after the Berlin Conference gave Britain a
protectorate over the Niger River delta. In 1914, Nigeria was claimed as a
colony. In order to have everything under control and to their benefit, they
had to have the people in Nigeria tamed. This task gave much trouble to the
British, beacuse Nigeria was divided in about 250 different ethnic groups. All
with different religion, languages, and culture. There weren’t enough troops to
handle the situation going on, so they sought to control indirectly. This
didn’t work so well either, beacuse local chiefs that were appointed by them,
started to resent the limited power. The forms of imperialism used by European
powers to gain control of an area. Britain aimed for the control of economic
and political life of the area. British gained control of Nigeria through
diplomatic and military. Basically Britain used imperialism as if it was a take
over. British conquest of northern Nigeria was accomplished by the Royal Niger
Company which supports them with the economic conditions since they have control
of the palm-oil trade along the Niger River. British claimed the entire area of
Nigeria as a colony. British ended having limited power over Nigeria because it
was large and many ethnic groups lived there so for Britain to still have power
but not all of it the chief made them have it limited.
European colonial rule over Africans brought both negative and positive
effects. beginning with the bad news would be how the Africans lost control of
their land and their independence. millions died because of diseases or if not
of this, they were killed. they were also affected in a traditional aspect,
many of their traditional authority figures were replaced. the most harmful
effect was the division of Africa, many rival chiefdoms were sometimes united
while others were in constant rivalry. on the other hand, there were also some
positive consequences. For example colonialism reduced local warfare, colonies
improved sanitation and provided hospitals and schools. Because of these
benefits life-spans and literacy rate in Africa increased. To provide a way of
economic stability railroads, dams, telegraph lines, and telephones were built
in African colonies. This so called positive effects benefited only European
business interests not Africans’ lives. The British took control of Nigeria.
European shad a thirst to seek for more raw materials and resources that could
quickly fuel the growing industrial production. So they turned their eyes to
Africa. There were oposing groups,the ones who agreed and wanted their
protection and rule, and the others who opposed and rebelled. This conquest was
succesful thanks to the Royal Niger Company. This copany gined control of the
palm-oil trade along he Niger River after the Berlin Conference gave Britain a
protectorate over the Niger River delta. In 1914, Nigeria was claimed as a
colony. In order to have everything under control and to their benefit, they
had to have the people in Nigeria tamed. This task gave much trouble to the
British, beacuse Nigeria was divided in about 250 different ethnic groups. All
with different religion, languages, and culture. There weren’t enough troops to
handle the situation going on, so they sought to control indirectly. This
didn’t work so well either, beacuse local chiefs that were appointed by them,
started to resent the limited power. The forms of imperialism used by European
powers to gain control of an area. Britain aimed for the control of economic
and political life of the area. British gained control of Nigeria through
diplomatic and military. Basically Britain used imperialism as if it was a take
over. British conquest of northern Nigeria was accomplished by the Royal Niger
Company which supports them with the economic conditions since they have control
of the palm-oil trade along the Niger River. British claimed the entire area of
Nigeria as a colony. British ended having limited power over Nigeria because it
was large and many ethnic groups lived there so for Britain to still have power
but not all of it the chief made them have it limited.
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CHAPTER TWO
AN
REVIEW OF HOW IMPERIALISM HAS EATEN DEEPER INTO ECONOMICS, SOCIAL, CULTURAL,
AND POLITICAL SEGMENT OF NIGERIA
REVIEW OF HOW IMPERIALISM HAS EATEN DEEPER INTO ECONOMICS, SOCIAL, CULTURAL,
AND POLITICAL SEGMENT OF NIGERIA
Social implications
New
Imperialism gave rise to new social views of colonialism. Rudyard Kipling,
for instance, urged the United States to “Take up the White Man’s burden” of
bringing European civilization to the other peoples of the world, regardless of
whether these “other peoples” wanted this civilization or not. This
part of The White Man’s Burden exemplifies Britain’s attitude towards
the colonization of other countries:
Imperialism gave rise to new social views of colonialism. Rudyard Kipling,
for instance, urged the United States to “Take up the White Man’s burden” of
bringing European civilization to the other peoples of the world, regardless of
whether these “other peoples” wanted this civilization or not. This
part of The White Man’s Burden exemplifies Britain’s attitude towards
the colonization of other countries:
Take up the White Man’s burden—
In patience to abide,
To veil the threat of terror
And check the show of pride;
By open speech and simple,
An hundred times made plain
To seek another’s profit,
And work another’s gain.
In patience to abide,
To veil the threat of terror
And check the show of pride;
By open speech and simple,
An hundred times made plain
To seek another’s profit,
And work another’s gain.
While
Social Darwinism
became popular throughout Western Europe and the United States,
the paternalistic French and Portuguese “civilizing mission” (in French: mission
civilisatrice;
in Portuguese: Missão civilizadora) appealed to many European statesmen both in and outside of
France. Despite apparent benevolence existing in the notion of the “White
Man’s Burden”, the unintended consequences of imperialism might have
greatly outweighed the potential benefits. Governments became increasingly
paternalistic at home and neglected the individual liberties of their citizens.
Military spending expanded, usually leading to an “imperial
overreach”, and imperialism created clients of ruling elites abroad that
were brutal and corrupt, consolidating power through imperial rents and
impeding social change and economic development that ran against their
ambitions. Furthermore, “nation building” oftentimes created cultural
sentiments of racism
and xenophobia.
Many of Europe’s major elites also found advantages in formal, overseas
expansion: large financial and industrial monopolies wanted imperial support to
protect their overseas investments against competition and domestic political
tensions abroad, bureaucrats sought government offices, military officers
desired promotion, and the traditional but waning landed gentries sought
increased profits for their investments, formal titles, and high office. Such
special interests have perpetuated empire building throughout history.
Observing the rise of trade unionism, socialism, and other protest movements
during an era of mass society both in Europe and later in North America, elites
sought to use imperial jingoism to co-opt the support of part of the industrial
working class. The new mass media promoted jingoism in the Spanish–American War (1898), the Second Boer War
(1899–1902), and the Boxer Rebellion (1900). The left-wing
German historian Hans-Ulrich Wehler has defined
Social Darwinism
became popular throughout Western Europe and the United States,
the paternalistic French and Portuguese “civilizing mission” (in French: mission
civilisatrice;
in Portuguese: Missão civilizadora) appealed to many European statesmen both in and outside of
France. Despite apparent benevolence existing in the notion of the “White
Man’s Burden”, the unintended consequences of imperialism might have
greatly outweighed the potential benefits. Governments became increasingly
paternalistic at home and neglected the individual liberties of their citizens.
Military spending expanded, usually leading to an “imperial
overreach”, and imperialism created clients of ruling elites abroad that
were brutal and corrupt, consolidating power through imperial rents and
impeding social change and economic development that ran against their
ambitions. Furthermore, “nation building” oftentimes created cultural
sentiments of racism
and xenophobia.
Many of Europe’s major elites also found advantages in formal, overseas
expansion: large financial and industrial monopolies wanted imperial support to
protect their overseas investments against competition and domestic political
tensions abroad, bureaucrats sought government offices, military officers
desired promotion, and the traditional but waning landed gentries sought
increased profits for their investments, formal titles, and high office. Such
special interests have perpetuated empire building throughout history.
Observing the rise of trade unionism, socialism, and other protest movements
during an era of mass society both in Europe and later in North America, elites
sought to use imperial jingoism to co-opt the support of part of the industrial
working class. The new mass media promoted jingoism in the Spanish–American War (1898), the Second Boer War
(1899–1902), and the Boxer Rebellion (1900). The left-wing
German historian Hans-Ulrich Wehler has defined
href=”http://en.wikipedia.org/wiki/Social_imperialism”
title=”Social imperialism”>social
imperialism as “the diversions outwards of internal tensions and
forces of change in order to preserve the social and political status
quo”, and as a “defensive ideology” to counter the
“disruptive effects of industrialization on the social and economic
structure of Germany”.[12]
In Wehler’s opinion, social imperialism was a device that allowed the German
government to distract public attention from domestic problems and preserve the
existing social and political order. The dominant elites used social
imperialism as the glue to hold together a fractured society and to maintain
popular support for the social status quo. According to Wehler, German
colonial policy in the 1880s was the first example of social imperialism in
action, and was followed up by the 1897 Tirpitz Plan
for expanding the German Navy. In this point of view, groups such as the Colonial
Society and the Navy League are seen as instruments for the
government to mobilize public support. The demands for annexing most of Europe and Africa in World War I
are seen by Wehler as the pinnacle of social imperialism. The notion of rule
over foreign lands commanded widespread acceptance among metropolitan
populations, even among those who associated imperial colonization with
oppression and exploitation. For example, the 1904 Congress of the Socialist International concluded that the
colonial peoples should be taken in hand by future European socialist
governments and led by them into eventual independence.
title=”Social imperialism”>social
imperialism as “the diversions outwards of internal tensions and
forces of change in order to preserve the social and political status
quo”, and as a “defensive ideology” to counter the
“disruptive effects of industrialization on the social and economic
structure of Germany”.[12]
In Wehler’s opinion, social imperialism was a device that allowed the German
government to distract public attention from domestic problems and preserve the
existing social and political order. The dominant elites used social
imperialism as the glue to hold together a fractured society and to maintain
popular support for the social status quo. According to Wehler, German
colonial policy in the 1880s was the first example of social imperialism in
action, and was followed up by the 1897 Tirpitz Plan
for expanding the German Navy. In this point of view, groups such as the Colonial
Society and the Navy League are seen as instruments for the
government to mobilize public support. The demands for annexing most of Europe and Africa in World War I
are seen by Wehler as the pinnacle of social imperialism. The notion of rule
over foreign lands commanded widespread acceptance among metropolitan
populations, even among those who associated imperial colonization with
oppression and exploitation. For example, the 1904 Congress of the Socialist International concluded that the
colonial peoples should be taken in hand by future European socialist
governments and led by them into eventual independence.
Cultural Imperialism
Cultural
imperialism denotes how a dominant group’s cultural practices come to dominate
the cultural landscape of a subjugated population. In contemporary life,
cultural imperialism can refer to the dominance of American or European popular
culture in poor countries. One example is when American music dominates the
charts in a developing society. When European art is idealized as fine art
while African art is derided as “local craftsmanship,” this suggests
cultural imperialism. The term can also refer to the spread of Christianity
from the colonial period until today.
imperialism denotes how a dominant group’s cultural practices come to dominate
the cultural landscape of a subjugated population. In contemporary life,
cultural imperialism can refer to the dominance of American or European popular
culture in poor countries. One example is when American music dominates the
charts in a developing society. When European art is idealized as fine art
while African art is derided as “local craftsmanship,” this suggests
cultural imperialism. The term can also refer to the spread of Christianity
from the colonial period until today.
Political Imperialism
The
process through which a dominant country establishes political control —
called a sphere of influence — over a poor country is political imperialism.
Colonial expansion is one type, as is the establishment of puppet governments.
Both the United States and Soviet Union used puppet governments during the Cold
War. The intrastate wars that took place in Latin America during this period
are now understood as proxy wars in which both countries tried to install
sympathetic leadership via behind the scenes financial support and military
training.
process through which a dominant country establishes political control —
called a sphere of influence — over a poor country is political imperialism.
Colonial expansion is one type, as is the establishment of puppet governments.
Both the United States and Soviet Union used puppet governments during the Cold
War. The intrastate wars that took place in Latin America during this period
are now understood as proxy wars in which both countries tried to install
sympathetic leadership via behind the scenes financial support and military
training.
Economic Imperialism
Economic
imperialism — coined by political theorist Leonard Woolf — refers to the way
in which dominant powers establish economic power over developing countries.
During colonial expansion, this meant exploiting forced labor and pillaging
local resources to enrich the dominant countries. Left-leaning social
scientists sometimes refer to the World Bank and International Monetary Fund as
bodies that exert the West’s economic domination over poor countries. They
argue that this happens through structural adjustment programs that impose
harsh austerity programs on sovereign states to force loan repayment.
imperialism — coined by political theorist Leonard Woolf — refers to the way
in which dominant powers establish economic power over developing countries.
During colonial expansion, this meant exploiting forced labor and pillaging
local resources to enrich the dominant countries. Left-leaning social
scientists sometimes refer to the World Bank and International Monetary Fund as
bodies that exert the West’s economic domination over poor countries. They
argue that this happens through structural adjustment programs that impose
harsh austerity programs on sovereign states to force loan repayment.
THE REMEDY FOR EFFECTS OF EUROPEAN
IMPERIALISM IN NIGERIA
IMPERIALISM IN NIGERIA
Social capital
While current concern about
unsustainability largely has an ecological basis, it is clear that human
situations or ways of life can be unsustainable for social and economic reasons
as well. In the words of Becker (1996) credited with the fatherhood of the
human and social capital concepts, ‘social capital incorporates the influence
of past actions by peers and others in an individual’s network and control
system’. It also includes relationships between individuals, organizations, and
between individuals and organizations, kinship, and charitable behavior. Social
capital can be deemed the ‘glue’ that holds society together without which
societies are themselves unsustainable (Pearce, 1996). The identification of
this type of capital stems from the observation that different societies can
have broadly equal endowments of other forms of capital, but that certain
societies perform better in terms of economic and social development. This
missing link is thought to lie in the fact that the better performing societies
have less conflict between social groups, more participatory decision-making
procedures, greater trust between economic agents, and so on (World Bank,
1997). Thus Putnam (1993) found that one of the factors explaining Northern
Italy’s better economic performance compared to Southern Italy was the presence
of many more voluntary organizations. This is not to suggest that this form of
capital is easy to measure in a manner consistent with how other forms of
wealth are quantified. Nevertheless, the destruction of social capital can
easily be identified. The wars in Congo, Sierra Leone, etc. obviously
constitute a stumbling block to the right social atmosphere necessary for both
sustainable development and pursuit of the benefits of globalisation.
unsustainability largely has an ecological basis, it is clear that human
situations or ways of life can be unsustainable for social and economic reasons
as well. In the words of Becker (1996) credited with the fatherhood of the
human and social capital concepts, ‘social capital incorporates the influence
of past actions by peers and others in an individual’s network and control
system’. It also includes relationships between individuals, organizations, and
between individuals and organizations, kinship, and charitable behavior. Social
capital can be deemed the ‘glue’ that holds society together without which
societies are themselves unsustainable (Pearce, 1996). The identification of
this type of capital stems from the observation that different societies can
have broadly equal endowments of other forms of capital, but that certain
societies perform better in terms of economic and social development. This
missing link is thought to lie in the fact that the better performing societies
have less conflict between social groups, more participatory decision-making
procedures, greater trust between economic agents, and so on (World Bank,
1997). Thus Putnam (1993) found that one of the factors explaining Northern
Italy’s better economic performance compared to Southern Italy was the presence
of many more voluntary organizations. This is not to suggest that this form of
capital is easy to measure in a manner consistent with how other forms of
wealth are quantified. Nevertheless, the destruction of social capital can
easily be identified. The wars in Congo, Sierra Leone, etc. obviously
constitute a stumbling block to the right social atmosphere necessary for both
sustainable development and pursuit of the benefits of globalisation.
Until the incursion of the western
political and cultural colonialism, Africa could be said to be very rich in
this form of capital. Originally, African societies were founded on communalism
where reciprocity and kinship bonds reigned. Resources were held in common and
interdependence was recognized as a fact of life. These attributes, however,
are fast disappearing. The social philosophy of the emerging global economic
order is that of individualism, survival of the fittest and winner takes it
all. As the wind of globalisation continues to blow through Africa, rendering
the world more selfish and predatory, and as long as we continue to accept the
western culture as superior over other cultures, the societal glue that held
African societies in one piece will continue to get weaker.
political and cultural colonialism, Africa could be said to be very rich in
this form of capital. Originally, African societies were founded on communalism
where reciprocity and kinship bonds reigned. Resources were held in common and
interdependence was recognized as a fact of life. These attributes, however,
are fast disappearing. The social philosophy of the emerging global economic
order is that of individualism, survival of the fittest and winner takes it
all. As the wind of globalisation continues to blow through Africa, rendering
the world more selfish and predatory, and as long as we continue to accept the
western culture as superior over other cultures, the societal glue that held
African societies in one piece will continue to get weaker.
Human capital
Human capital refers to the relevant
past consumption, experiences, knowledge and skills that affect current and
future utilities. Recognition of the importance of this capital stock is
critical both for sustainability and globalisation. As rightly noted by Prof.
Anya O Anya (1999), with the onset of the post-industrial society, development
has gone from the resource-exploitative model as the basis for increased and
increasing prosperity to the knowledge-based and technology driven. In the
process, the new forces of globalisation, and the attendant liberalization,
fostered aggressively by TNCs have ensured that goods and services, capital and
finances can move across national boundaries, attracted often by the skill and
knowledge base of a given society. Thus, skills and knowledge rather than
natural resources are now the basis of comparative and competitive advantage in
the developed world. African nations are grossly poor in this aspect of
development. They are not only still dependent on natural resources for
comparative advantage as noted above, but possess a stock of grossly
underdeveloped human capital – that is in terms of the type of knowledge and
skills presently required by western capitalism.
past consumption, experiences, knowledge and skills that affect current and
future utilities. Recognition of the importance of this capital stock is
critical both for sustainability and globalisation. As rightly noted by Prof.
Anya O Anya (1999), with the onset of the post-industrial society, development
has gone from the resource-exploitative model as the basis for increased and
increasing prosperity to the knowledge-based and technology driven. In the
process, the new forces of globalisation, and the attendant liberalization,
fostered aggressively by TNCs have ensured that goods and services, capital and
finances can move across national boundaries, attracted often by the skill and
knowledge base of a given society. Thus, skills and knowledge rather than
natural resources are now the basis of comparative and competitive advantage in
the developed world. African nations are grossly poor in this aspect of
development. They are not only still dependent on natural resources for
comparative advantage as noted above, but possess a stock of grossly
underdeveloped human capital – that is in terms of the type of knowledge and
skills presently required by western capitalism.
It is always assumed that there can
be no depreciation on human capital since knowledge and skills are always
increasing, rather than declining, and can always be passed on to future
generation. But nothing can be farther from the truth. Depreciation on human
capital does occur and this is expressed in the loss of indigenous skills and
knowledge through displacement of tribes, loss of ancient crafts, culture,
language, etc. as is going on all over Africa at the moment. This is
particularly crucial for African countries because in the indigenous knowledge
lies the cultural history of inter-dependence on which the ‘glue’ value
attribute of social capital is hinged. Also health hazards and poor sanitary
conditions will lead to a depreciation of human capital in the sense that the
incapacitation of a human being to maximize the utilization of his/her embodied
knowledge or skills through poor health is akin to the loss of that knowledge
or a portion of it. So what is the fate of Africa’s human capital in a
globalising world? Firstly, globalisation is already obliterating the
indigenous cultures of many African societies. The indigenous knowledge and
skill is giving way to western knowledge and skills and many African languages
have been predicted to be on the path to extinction. While one can not deny the
benefits of the western knowledge, the questions are: Must these new knowledge
and skills be acquired at the expense of the indigenous knowledge and skill
base? Are there no elements of our indigenous knowledge and skills that are
relevant to our present development effort?
be no depreciation on human capital since knowledge and skills are always
increasing, rather than declining, and can always be passed on to future
generation. But nothing can be farther from the truth. Depreciation on human
capital does occur and this is expressed in the loss of indigenous skills and
knowledge through displacement of tribes, loss of ancient crafts, culture,
language, etc. as is going on all over Africa at the moment. This is
particularly crucial for African countries because in the indigenous knowledge
lies the cultural history of inter-dependence on which the ‘glue’ value
attribute of social capital is hinged. Also health hazards and poor sanitary
conditions will lead to a depreciation of human capital in the sense that the
incapacitation of a human being to maximize the utilization of his/her embodied
knowledge or skills through poor health is akin to the loss of that knowledge
or a portion of it. So what is the fate of Africa’s human capital in a
globalising world? Firstly, globalisation is already obliterating the
indigenous cultures of many African societies. The indigenous knowledge and
skill is giving way to western knowledge and skills and many African languages
have been predicted to be on the path to extinction. While one can not deny the
benefits of the western knowledge, the questions are: Must these new knowledge
and skills be acquired at the expense of the indigenous knowledge and skill
base? Are there no elements of our indigenous knowledge and skills that are
relevant to our present development effort?
Secondly, there is a valid fear that
globalisation may put African economies at a greater risk of income inequality.
Income inequality has been increasing at an increasing rate in Africa. In
Africa as a whole, the richest 20% of the population had, in the early 80s, an
income four times that of the poorest (UN ECA, 1983). Since then, the condition
of the poor has deteriorated further as governments across the continent are
compelled to cut public expenditures and restrict necessary imports to conserve
foreign exchange as part of an International Monetary Fund (IMF) or World Bank
economic restructuring programs, thereby curtailing investment in the
productive sectors (Cornia, et. Al., 1987; World Bank, 1989). Consider some
examples of how the market reforms associated with globalisation can affect
inequality in African countries. Recent evidence shows that trade
liberalization leads to increasing wage gaps between the educated and
uneducated, not only in the OECD countries but in the developing countries
(Birdsall, 1999). This risk is potent in no other place as much as it is in
Africa where the greater percentage of the populace are uneducated. Apparently
the combination of technology change with the globalisation of markets is
raising the demand for and wage premium to skilled labor faster than the
educational system is supplying skilled and trainable workers.
globalisation may put African economies at a greater risk of income inequality.
Income inequality has been increasing at an increasing rate in Africa. In
Africa as a whole, the richest 20% of the population had, in the early 80s, an
income four times that of the poorest (UN ECA, 1983). Since then, the condition
of the poor has deteriorated further as governments across the continent are
compelled to cut public expenditures and restrict necessary imports to conserve
foreign exchange as part of an International Monetary Fund (IMF) or World Bank
economic restructuring programs, thereby curtailing investment in the
productive sectors (Cornia, et. Al., 1987; World Bank, 1989). Consider some
examples of how the market reforms associated with globalisation can affect
inequality in African countries. Recent evidence shows that trade
liberalization leads to increasing wage gaps between the educated and
uneducated, not only in the OECD countries but in the developing countries
(Birdsall, 1999). This risk is potent in no other place as much as it is in
Africa where the greater percentage of the populace are uneducated. Apparently
the combination of technology change with the globalisation of markets is
raising the demand for and wage premium to skilled labor faster than the
educational system is supplying skilled and trainable workers.
A second example is privatization.
Privatization of utilities (power, water, telecommunications, etc.) is always
perceived as good for the society. This is because most if not all publicly
managed utilities in Africa are inefficient and bedeviled by poor and corrupt
management. But it is increasingly obvious that privatization poses grave risks
of concentrating wealth in the hands of a few unless done well and with the
full complement of regulation. The risk of privatization arise because
developing and transnational economies, almost by definition, are handicapped
by relatively weak institutions, less well-established rules of transparency,
and often, not only high concentrations of economic and political power but a
high correlation between those two areas of power. These conditions combine to
make it difficult indeed to manage the privatization process in a manner that
is not disequalizing.
Privatization of utilities (power, water, telecommunications, etc.) is always
perceived as good for the society. This is because most if not all publicly
managed utilities in Africa are inefficient and bedeviled by poor and corrupt
management. But it is increasingly obvious that privatization poses grave risks
of concentrating wealth in the hands of a few unless done well and with the
full complement of regulation. The risk of privatization arise because
developing and transnational economies, almost by definition, are handicapped
by relatively weak institutions, less well-established rules of transparency,
and often, not only high concentrations of economic and political power but a
high correlation between those two areas of power. These conditions combine to
make it difficult indeed to manage the privatization process in a manner that
is not disequalizing.
The third attribute of globalisation
with a lot of implication for human capital is financial liberalization. While
the elimination of financial repression and increased competition of a modern
and liberalized financial sector will benefit small enterprises, through
increased access to credit, it also presents some adverse effects as well. In
the short run at least, financial liberalization tends to help those who
already have assets, increasing the concentration of wealth, which undergirds,
in the medium term, a high concentration of income. For one thing,
liberalization increases the potential returns to new and more risky
instruments for those who can afford a diversified portfolio and therefore more
risk, and who have access to information and the relatively lower transacting
costs that education and well-informed colleagues can provide. In Africa, with
repeated bouts of inflation and currency devaluation in the last several
decades, the ability of those with more financial assets to move them abroad
(often while accumulating corporate and bank debt that has been socialized and
thus eventually repaid by taxpayers) has been particularly disequalising.
with a lot of implication for human capital is financial liberalization. While
the elimination of financial repression and increased competition of a modern
and liberalized financial sector will benefit small enterprises, through
increased access to credit, it also presents some adverse effects as well. In
the short run at least, financial liberalization tends to help those who
already have assets, increasing the concentration of wealth, which undergirds,
in the medium term, a high concentration of income. For one thing,
liberalization increases the potential returns to new and more risky
instruments for those who can afford a diversified portfolio and therefore more
risk, and who have access to information and the relatively lower transacting
costs that education and well-informed colleagues can provide. In Africa, with
repeated bouts of inflation and currency devaluation in the last several
decades, the ability of those with more financial assets to move them abroad
(often while accumulating corporate and bank debt that has been socialized and
thus eventually repaid by taxpayers) has been particularly disequalising.
Inequality is destructive, when for
example it reflects deep and persistent differences across individuals or
groups in access to the assets that generate income – including not only land
(which is extremely unequally distributed in Africa) but, most important in
today’s global information age, the asset of education. Obviously, this
destructive inequality undermines economic growth and efficiency, by reducing
the incentive for individuals to work, to save, to innovate and to invest. And
it often results in the perception if not the reality of injustice and
unfairness – with the political risk in the short term of a backlash against
the market reforms and market institutions that in the long term are the
critical ingredients of shared and sustainable development.
example it reflects deep and persistent differences across individuals or
groups in access to the assets that generate income – including not only land
(which is extremely unequally distributed in Africa) but, most important in
today’s global information age, the asset of education. Obviously, this
destructive inequality undermines economic growth and efficiency, by reducing
the incentive for individuals to work, to save, to innovate and to invest. And
it often results in the perception if not the reality of injustice and
unfairness – with the political risk in the short term of a backlash against
the market reforms and market institutions that in the long term are the
critical ingredients of shared and sustainable development.
But of course, as many will argue,
not all inequality is bad. Some inequality is a manifestation of the healthy
outcome of differences across individuals in ambition, motivation and willingness
to work. This constructive inequality provides incentives for mobility and
rewards high productivity. Some would say constructive inequality is the
hallmark of the equal opportunity society the US symbolizes. Increases in this
constructive inequality may simply reflect faster growth in income for the rich
than the poor – but with all sharing in some growth. In any case, so far as
welfare for all is part of the goal of sustainable development, inequality is a
negation of sustainability objectives.
not all inequality is bad. Some inequality is a manifestation of the healthy
outcome of differences across individuals in ambition, motivation and willingness
to work. This constructive inequality provides incentives for mobility and
rewards high productivity. Some would say constructive inequality is the
hallmark of the equal opportunity society the US symbolizes. Increases in this
constructive inequality may simply reflect faster growth in income for the rich
than the poor – but with all sharing in some growth. In any case, so far as
welfare for all is part of the goal of sustainable development, inequality is a
negation of sustainability objectives.
Policy implications
Here I present seven interrelated
policies to ensure the sustainability of African nations in a global economy.
The policies reflect my position on globalisation, which is that every society
should consider any aspect of globalisation side by side with their own
economic realities and circumstance: there is no standard foolproof model for
every society. While globalisation opens a door of new economic opportunities
for developing and transitional economies, it does appear to have some costs as
well. The challenge for African policy-makers remain how to balance the
benefits against the costs in such a way that they come out better off and
without compromising the principles of sustainability. The following policy
measures might have a role to play in this regard.
policies to ensure the sustainability of African nations in a global economy.
The policies reflect my position on globalisation, which is that every society
should consider any aspect of globalisation side by side with their own
economic realities and circumstance: there is no standard foolproof model for
every society. While globalisation opens a door of new economic opportunities
for developing and transitional economies, it does appear to have some costs as
well. The challenge for African policy-makers remain how to balance the
benefits against the costs in such a way that they come out better off and
without compromising the principles of sustainability. The following policy
measures might have a role to play in this regard.
Modify the national income
accounting system
accounting system
The national income accounting
system as it is presently structured is a poor reflection of the sustainability
of African economies. National income accounts are intended to track growth of
aggregate income in national economies. Following Lindhal (1933) and Hicks
(1946), an indicator of income should measure the value of goods and services
that could be consumed in a nation during a given period without reducing
future consumption opportunities. This leads to an interpretation of income as
the return to a capital stock, and of economic growth (or aggregate income
growth) as increases in that flow. Funds generated through reduction of the
capital itself are not actually income or contributions to economic growth. In
national accounts, however, there is no attempt to measure depreciation of
natural capital. Revenues from activities that reduce the stock of natural
capital are treated as income without considering the impact of lost stock on
future consumption opportunities.
system as it is presently structured is a poor reflection of the sustainability
of African economies. National income accounts are intended to track growth of
aggregate income in national economies. Following Lindhal (1933) and Hicks
(1946), an indicator of income should measure the value of goods and services
that could be consumed in a nation during a given period without reducing
future consumption opportunities. This leads to an interpretation of income as
the return to a capital stock, and of economic growth (or aggregate income
growth) as increases in that flow. Funds generated through reduction of the
capital itself are not actually income or contributions to economic growth. In
national accounts, however, there is no attempt to measure depreciation of
natural capital. Revenues from activities that reduce the stock of natural
capital are treated as income without considering the impact of lost stock on
future consumption opportunities.
It is this anomaly in income
accounting that sends false signals to African policy makers, blinding them
from the need for corresponding savings or re-investment of the rent from
natural capital consumption. For instance, Gross Domestic Savings in Africa
fell from 24.5% of GDP in 1975-84 to 16.2% in 1990-1997, likewise Gross
Domestic Investment plummeted to 19.3% of GDP in 1990-1997 from 25.4% in
1975-84 (IMF, 1997). In the same vein, failure to factor environmental costs
into the prices of exported commodities ensures that African economies are
continually drained of their natural resources at marginal prices and that they
remain unfavorably positioned in the world economy. In a more integrated world
in which multinationals call the shots, the rate and volume of resource outflow
from natural resource dependent economies is bound to grow, while the income
received per volume of natural resource output will continue to decrease.
According to ECA (1998), Crude oil prices declined by 10% in 1997 from an
average of US$ 22.1 to US$ 20.0 per barrel. To compensate for the shortfall in
their foreign exchange earnings, these countries – and more so the non-OPEC
producers – increased their output from 368.42 million tons in 1996 to 378.40
million tons in 1997, an increase of 2.7%. In South Africa, mines continue to
face significant productivity problems associated with dwindling reserves and
slender profit margins. Such is the story of Africa’s economic situation.
Modifying the national income accounting framework is thus key to ensuring that
the rents on depleted natural capital are captured and adequately re-invested.
This will serve two important purposes. One, it will provide information on the
level of income that the nation can consume while leaving capital intact. Two,
it will indicate the amount (rents on natural capital depletion) to be
re-invested into other income generating ventures which is the key to
diversification of the economy.
accounting that sends false signals to African policy makers, blinding them
from the need for corresponding savings or re-investment of the rent from
natural capital consumption. For instance, Gross Domestic Savings in Africa
fell from 24.5% of GDP in 1975-84 to 16.2% in 1990-1997, likewise Gross
Domestic Investment plummeted to 19.3% of GDP in 1990-1997 from 25.4% in
1975-84 (IMF, 1997). In the same vein, failure to factor environmental costs
into the prices of exported commodities ensures that African economies are
continually drained of their natural resources at marginal prices and that they
remain unfavorably positioned in the world economy. In a more integrated world
in which multinationals call the shots, the rate and volume of resource outflow
from natural resource dependent economies is bound to grow, while the income
received per volume of natural resource output will continue to decrease.
According to ECA (1998), Crude oil prices declined by 10% in 1997 from an
average of US$ 22.1 to US$ 20.0 per barrel. To compensate for the shortfall in
their foreign exchange earnings, these countries – and more so the non-OPEC
producers – increased their output from 368.42 million tons in 1996 to 378.40
million tons in 1997, an increase of 2.7%. In South Africa, mines continue to
face significant productivity problems associated with dwindling reserves and
slender profit margins. Such is the story of Africa’s economic situation.
Modifying the national income accounting framework is thus key to ensuring that
the rents on depleted natural capital are captured and adequately re-invested.
This will serve two important purposes. One, it will provide information on the
level of income that the nation can consume while leaving capital intact. Two,
it will indicate the amount (rents on natural capital depletion) to be
re-invested into other income generating ventures which is the key to
diversification of the economy.
REFERENCES
Becker, G.S. (1996) Accounting
for tastes. Harvard University Press, Cambridge.
for tastes. Harvard University Press, Cambridge.
Birdsall, N. (1999) Globalisation
and the Developing Countries: The Inequality Risk. A paper
delivered at the ODC conference ‘Making
Development Work’ in Washington DC.
and the Developing Countries: The Inequality Risk. A paper
delivered at the ODC conference ‘Making
Development Work’ in Washington DC.
Cornia, G.A., Jolly, A. and Stewart,
P. (1987) Adjustment with a human face: Protecting the
vulnerable and promoting growth.
Oxford University Press.
P. (1987) Adjustment with a human face: Protecting the
vulnerable and promoting growth.
Oxford University Press.
Daly, H.E. (1995) Consumption and
welfare: Two views of value added. Review of Social
Economy,
LIII(4), 451-473.
welfare: Two views of value added. Review of Social
Economy,
LIII(4), 451-473.
Daly, Herman (1997) ‘Reconciling
Internal and External Policies for Sustainable Development’ In Dragun, A.K. and
Jakobsson, K.M. (eds) Environmental Policy: New Perspectives. Edward
Elgar, Cheltenham, UK. PP. 11-31.ECA (1998) African Economic Report
– 1998
Internal and External Policies for Sustainable Development’ In Dragun, A.K. and
Jakobsson, K.M. (eds) Environmental Policy: New Perspectives. Edward
Elgar, Cheltenham, UK. PP. 11-31.ECA (1998) African Economic Report
– 1998
Ekins, P. (1997) ‘Sustainability
as the basis of environmental policy’. In Dragun, A.K. and
Jakobsson, K.M.
(eds.) Environmental Policy: New perspectives. Edward Elgar,
Cheltenham, UK. Pp. 33-61.
as the basis of environmental policy’. In Dragun, A.K. and
Jakobsson, K.M.
(eds.) Environmental Policy: New perspectives. Edward Elgar,
Cheltenham, UK. Pp. 33-61.
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