Samir Amin on the evolution of the cap world economy

Africa looks to break its euro chains: DEBATE/Samir Amin and Victoria
Brittain on an unwanted legacy of
convergence
SAMIR AMIN AND VICTORIA BRITTAIN
GUARDIAN , November 23, 1998

FOR economists in West Africa the euro is increasingly seen as a
nightmarefor the fragile economies of the franc zone, tied into
a strong currency and in thrall to the technicians of European social
democracy who seem to have abandoned the political use
of monetary policy.

>From January 1, the 290 million people of the franc zone will be even
further distanced from control over their affairs than in the
30 post-colonial years during which Paris has controlled exchange rates
through the mechanism created in 1939. There are 14
west and central countries in the zone, which includes the Comoro
Islands.

Some 250 African economists met earlier this month in the Senegalese
capital of Dakar to debate the likely impact of the euro
on the franc zone; the attitude of other European partnersto France's
large family; and the possibility of another devaluation
being forced upon countries in the franc zone.The devaluation imposed by
France in 1994 had traumatic effects which are far
from being completely assimilated.

The critical question posed by the economists was that of establishing
national currencies. As one official from the United
Nations Economic Commission for Africa put it, at last the taboo issue
is now firmly on the agenda.

The Dakar meeting was a rare political phenomenon bringing together two
major UN bodies, the ECA and the UN
Development Programme - concerned with Africa - and former ministers,
bankers and academics from across the continent.
'Nobody can talk about lack of capacity in Africa after listening to
these debates and reading the papers prepared,' said one
UN official.

The debates were based on detailed papers of analysis or national
experience. The organisers, from the Dakar-based socialand
economic research body, Codesria, had the financial support of ECA
andUNDP, which have been trying for several years to
move African economic and social debate forward.

For 20 years or more the power of the World Bank in Africa has been its
ability to instil the conviction that there is no
alternative to its vision. But, as several participants noted in Dakar,
'the pensee unique has had its day here, even if not in
Europe and America'.

One of the World Bank's African economists, Celestine Monga, made a
strong casefor getting out of the franc zone now.
Speaking in a personal capacity, heoutlined how the franc zone stops its
economies developing.

'It is a myth that stability has come to the franc zone through the
convertibility of the(African region) franc and its guarantee by
the French franc,' he said.

Asan admirer of the market, Mr Monga's criticisms were in part based on
the price of transactions which must go through the
French Central Bank.

But the fundamental point on which he and many others spoke most
strongly was thequestion of why they should give up
control of monetary policy. The debates of the 1960s were revisited as
speakers from Guinea and Tunisia - which opted at
independence not to join the franc zone - and Ghana, which opted out of
the British West African Currency Board, described
the consequences ofchoices made in a different era.

There was palpable envy of the Tunisian economists' description of their
lack of urgency over the euro as they already have a
sensitive monitoring of a basket of currencies to fix their exchange
rate as part of their overall economic policy tools.

PROFESSOR Chedly Ayari, a former Tunisian government minister, said:
'Flexibility has served us well and should be
maintained; we have no urgent need to link to the euro.' He was one of
many who underlined the need for more regional
co-ordination among the West African economies. 'The European Union is a
common market aspiring to be a monetary union,
but the franc zone is a monetary union aspiring to be a common market.'

The impact of globalisation on the countries of the periphery, which
includes all of Africa, can only be mitigated by a
reinforcement of regionalisation. Many delegates spoke of a return to
pan-Africanism and of the need to re-examine the
question of development and the cancellation of debt as the central
concerns for Africa's fragile economies.

Codesria has used the question of the euro to challenge every West
African state to rethink its responses to the probable
scenario of another externally imposed devaluation, with increasingly
catastrophic consequences.

National currencies with regional arrangements - including regional
monetaryarrangements between countries of the franc zone -
as well as with European partners, and not exclusively France, are the
only way to progress from the stagnation and
underdevelopment which is still the region's curse.

Professor Samir Amin is Director of the Third World Forum in Dakar

Copyright © 1998 The Guardian. Source: World Reporter ™ - FT McCarthy.

World Reporter
© 1999 The Dialog Corporation plc. All rights reserved.
Dialog® File Number 20 Accession Number 3518689





What they didn't talk about at Davos
Africa News Service , Feb. 05, 1999 , 23:23 E.T.

Johannesburg (Mail and Guardian, February 5, 1999) - Unknown to most of
the official delegates at the World Economic
Forum in Davos, Switzerland, last weekend, a caravan of 60 leftist
economists, researchers and activists had sneaked through
the police cordons to stage an "Alternative Davos".

It included intellectuals and activists from all five continents, a
motley butdetermined crew who had spent two days in Zurich
planning protests and other actions before surreptitiously staging a
media conference on Saturday under the noses of the
forum's security phalanxes.

The mood in the bunker-like conference centre where the official Davos
was being staged was disconsolate and contrary. Spin
doctors failed to hide the undercurrents: the polite but stern tiff
between United States and Japanese officials; European leaders'
undisguised disquiet at Washington's apparent serenity; and deep concern
about, as one Latin American central banker phrased
it, "a loss of interest in globalisation in emerging markets" and the
danger of a "political backlash" against it.

The contours of disagreement seemed stark.

Ranged on one side is the hang-on-for- the-ride camp (captained by the
US and transnational corporations). On the other
there's the loose band of "Third Way" politicians in Europe and some
countries of the south, keen to stir up an alchemy
between dynamic market economies and greater social responsibility.

Pundits will fuss about this divergence, missing thefact, said Egyptian
economist Samir Amin, that there remains a fundamental
consensus to press ahead for more open markets, especially for financial
investments.

"These differences should not be exaggerated. The debate at the
officialDavos is really only about what, if any, types of
self-regulation should accompany this drive."

Whereas speeches at the official Davos came swaddled in metaphors ("a
global village that has caught fire", "boats tossed on
stormy seas" and "plumbing" that had to fixed), at the Alternative Davos
the gristle and bones of the world economy held centre
stage.

"In 18 months," said Kang Sang Goo of South Korea's union-linked Policy
and Information Centre, "we've gone from almost
zero unemployment to 3, 65-million people without jobs and tens of
thousands of people homeless. The suicide rate among
young women is catastrophic."

In Brazil, some 200 000 peasant farmers have lost their land in the past
four years and almost $600-million of state assets have
been auctioned off to transnational corporations, said Mario Luis Lill,
leader of that country's Movimento Sem Terra.

"I cannot speak here as a citizen of a rich country when the homeless
die on our streets this winter," said Robert Cremieux of
France's Movement of the Unemployed.

A recently leaked French government study, he added, has pegged the true
number of jobless not at the official three million,
but at almost seven million.

Many of the group's demands were pointed. Topping the roster was the
need to block a new round of Multilateral Agreement
on Investment talks. Scuttled last year in the Organisation for Economic
Co- operation and Development by worldwide
protests mounted mainly through the Internet, these negotiations are
being shifted to the World Trade Organisation's
"Millennium Round", due to start in November.

If passed, warned development analyst and activist Susan George, the
Multilateral Agreement on Investment would exempt
transnational corporations from most national labour laws, environmental
regulations and investment codes.

The agreement expressed pure free market ideology applied globally:
"Once it's in place, the south will have little to resist with.
This hasto be our first line of attack."

Other demands issued by the Alternative Davos included instituting a tax
on capital flows, eliminating tax havens and cancelling
the debts of all countries of the south - "not just the 20 or so
poorest". Wistful and unattainable?

In Davos's conference centre bunker, US officialspounded much more
chaste proposals to limit hair-trigger capital movements,
fix currency trading zones or design "early warning" systems for
troubled economies.

"We're not here to bend the ears of some masters of the universe,"
countered one of the Alternative Davos delegates. "We're
not asking. We're at the beginning of new struggles across the world
around these issues. Often they know nothing of one
another. Our aim is to link them."

The fissures and disquiet coursing through the official Davos meant that
sanitised versions of left-wing demands could feature in
the surgery being performed on the global economy. It's not for nothing
that Davos's theme this year was "responsible
globality", or that the words "a new social contract" featured in the
official proceedings.

"Their idea of a new social contract is a little wider consultation
which legitimises measures that - perhaps - could slightly soften
the social and developmental devastation achieved by free market
capitalism, " said Amin.

"Ours is different. It will come about only if the kinds of forces at
the Alternative Davos grow strong enough to engage and
eventually negotiate with dominant political and economic powers.

Out of that new, democratic social contracts can be created.

"I'm talking about ordinary peoples' struggles - Brazil's peasants,
workers in South Africa, youth in France - not just round
tables and conferences."

Copyright 1999 Mail and Guardian. Distributed via Africa News Online.

Africa News
© 1999 Africa News Service Via Comtex. All rights reserved.
Dialog® File Number 606 Accession Number 065406