In recent days many of our readers have requested analysis of the Greek/Euro crisis and how to relate it to Africa’s long and bruising experience with major international creditors. So we put the following question to a range of thinkers and commentators: What can African politicians learn from the Greek crisis and Syriza’s approach to dealing with creditors? What wider connections do you draw?
Grieve Chelwa, PhD candidate in economics, University of Cape Town: Greece’s experience with the troika (IMF, European Central Bank and the European Commission) is yet more confirmation of what we in Africa have been saying about how punitive austerity measures are. The Greek economy has contracted by about 25% since the Troika began effectively calling the shots in Athens around 2010. The austerity pill was administered for far longer in most parts of Africa, starting around the late 1970s and running all the way through to the 1990s. Only the heavens know the magnitude of the wreckage that this left in its wake.
The second lesson is that international creditors are the enemy of democracy. The Troika, which really has been weighing heavily on the side of creditors, tried to bully the Greek government into not consulting with its people, as democracy requires, over further austerity proposals. In a blatant display of elitism, Yanis Varoufakis, the outgoing finance minister, was once asked: “How do you expect common people to understand complex issues“?
Robtel Neajai Pailey, Liberian academic, activist and author: In its recent vote to reject austerity measures proposed by international creditors, Greece has shown that economic might does not always make right. Syriza’s tough stance has mirrored the approach that Thomas Sankara of Burkina Faso had to structural adjustment, so this is nothing new. Perhaps a potential Grexit might be a sign of the times and Africans may evoke this as a clarion call to reject odious debts accrued from kleptocratic and authoritarian regimes of the past.
Steven Friedman, scholar and public intellectual: The key lesson for African politicians is that, in the fight against economic bullying, the people are the most potent source of power. Giving voice to the people is rarely if ever a core strategy in the fights for economic justice which are waged across the continent – Greece shows that it needs to become that. What is so important about Greece is that the fight for justice is being waged using the methods made available by formal democracy. Regardless of the outcome, this shows that formal democracy is not a plot by the powerful to tame the powerless: it has often been that only because too many people have been excluded from democratic participation and too few issues have been up for popular decision . By pushing the boundaries of what the people can decide and who should decide it, the Greek government is hopefully beginning a new era of democratic politics as a weapon for social justice. It is essential that Africa become a part of this.
Patrick Bond, scholar and public intellectual: We have witnessed what are termed “IMF Riots” in Africa over the last third of a century – most successfully in reversing the January 2012 petrol price increase in Nigeria – but if these have not worked in most of the continent, there’s a lesson for future leftist electoral politics last Sunday. If Syriza can break through not only by its January election with nearly 40% of the vote but now with the 61% vote against banker logic, it suggests a strong latent support for anti-neoliberalism. Here in South Africa this is a sentiment that has bubbled away for years but hasn’t found an expression like Syriza, uniting such a large share of society. But it’s surely the future of politics.
Cassandra Veney, political scientist, Quinnipiac University: Greece, like many African countries, is simply facing structural adjustment. By the 1990s, most African countries were under structural adjustment superimposed upon them by the International Monetary Fund (IMF) and World Bank.
The cornerstone of SAPs include: devaluing national currencies, eliminating subsidies and price controls, reducing tariffs on imports, selling off state enterprises, retrenching state workers, freezing wages and salaries for state workers, introducing user fees in clinics, hospitals, schools, and universities. Governments are to design and implement policies to achieve these goals with little input from its citizens. In other words, African governments have had very little leverage to negotiate more favorable loans as pressure is put on them to spend scarce resources on servicing the debt at the expense of housing, education, and healthcare.
The IMF and World Bank also tie reducing corruption and instituting transparency measure to loans. Angola serves as an example. One of the conditions of Angola’s loans over the years was it had to become more transparent in terms of its oil revenues. Angola complied when it was desperate for money and it ignored the conditions when its finances improved. Angola was in the position to do this because it has oil and diamonds to sell. Angola has a record of entering into negotiations with the IMF, refusing to implement conditions, breaking off negotiations, and turning to the Chinese for loans.
Most of the countries, not just African countries, that were brow beaten into imposing SAPs experienced economic and social upheavals for all sectors of society except for perhaps the super rich.
African governments can explain to Greek citizens what will happen when the government no longer funds, or funds are decreased for, infrastructure that all countries need if they have any hope of meeting the basic needs of its citizens, let alone developing and becoming a part of the global capitalist economy. SAPs have now proved that one size does not fit all—there is no magic pill that all sick economies can swallow to make them all better. There is nothing wrong with the Greek government calling for a referendum and letting the people decide if they want a debt bailout or not.
Greece may want to take advice from some African countries if it wants to lessen its dependence on the IMF–borrow money from the Chinese as it comes with fewer onerous strings attached.
What Greece is experiencing is not different from what African countries have faced in their attempts to balance austerity with humane policies toward their vulnerable. The troika is quick to place Greece’s economic problems at the feet of the government. It cannot admit that it had a role to play in creating this economic mess. African governments were also accused of engaging in corrupt practices, not selling off state enterprises in a timely manner, and dragging their feet in the implementation of some austerity measures. What is wrong with this? One of the most important functions of a state is to protect those who cannot protect themselves. Greece should be applauded and not vilified for standing firm in its efforts to provide for the vulnerable. The problem is Greece is alone in its stand on a continent that is awash in contempt and distain for the downtrodden. Africans, even as their governments implemented structural adjustment programs, were united in their contempt for the measures and took to the streets to demonstrate. Hopefully, Greece like several other African countries will rise from the ashes of this economic abyss not because of the IMF but despite international financial institutions that do not have the best interest of Africans as part of their agenda.
Siddhartha Mitter, journalist and consultant: I would be cautious about drawing direct lessons for African or other debtor states. For one thing, we don’t know yet where this story ends: Greece could yet get forced out of the Eurozone. Irrespective, the Greek crisis is as much a political crisis as it is an economic one. Greece is bound to its creditors by a double layer of political institutions: those of the EU, and those of the Eurozone. The transfer of Greek debt to the Eurozone governments and ECB, and the relatively small share of IMF debt in the overall Greek portfolio, only add to the political and intra-European nature of this crisis. The genius of Syriza, in calling the referendum, was to force the political stakes, and the need for a political resolution, to the surface.
Debtor states in Africa or elsewhere face a very different problem. They aren’t bound to their creditors in a political union. Much of their debt is commercial, and their official debt is largely to multilateral lenders. Bilateral debt is rarely the problem. Moreover, the austerity terms that the IMF and World Bank typically require are not quite as draconian as they were 10 or 20 years ago. And there are new lenders available, particularly China and the Gulf states. So it’s really a different game.
With that said, the political message from the Greek referendum — that there is a limit to austerity beyond which people cannot and should not tolerate further hardship — is one that will resonate worldwide. If it is to have an impact in Africa, I think that will be more among opposition parties, grassroots activists, and “civil society,” emboldening opposition to fiscal policies that governments may initiate to satisfy their creditors’ terms. In this short term, this risks making life more difficult for African governments, not easier. In the medium term, it should encourage them to do what smart ones are already doing: diversify their debt portfolio, and improve technical management of the economy no matter which policy orientation they favor.
Benjamin Fogel, writer and doctoral student in history, New York University: The Greek resistance to the EU’s austerity regime could only be possible after years of sustained struggle both within political parties and social movements since 2008. These are struggles are further drawing on the great traditions of Greek resistance beginning with the Greek war of independence against the Ottoman empire and later the resistance to both the Italian and German invasions during WW2 and the various Military Juntas of the last 50 years. This has produced an eclectic and militant left political scene in what there are a multiplicity of strong intellectual and political tendencies which combine to produce a left intelligentsia and activist scene capable of building hegemony over a large swathe of Greek society. It should be noted this resistance has no real solidarity from any other state in the Eurozone.
Debt peonage is something experienced by many African and third world countries, Greece and similar resistance and Latin America shows the need for us in South Africa to develop our own political movements and allied intelligentsia not only capable of building political power, but battling for hegemony, in the sense of providing an alternate vision of society, too often ‘resistance’ or ‘debt’ gets caught up in the depoliticised rhetoric of bourgeois NGOs masquerading as the political resistance to neoliberalism or as ‘civil society’, movements exist as fundraising tools, Greece shows both the courage and strength of working class based political movements and the ability to offer a model of resistance that breaks with depoliticised social justice rhetoric.
Dennis Laumann, historian, University of Memphis: The gospel of neoliberalism is manifested not only in global capital’s insane insistence on “austerity” in the face of unemployment, homelessness, and hunger, but also in the perverted bourgeois morality that condemns, belittles, and silences any criticism of it.
At a recent, exhilarating and triumphant concert in Memphis by the Afrobeat star Seun Kuti, son of the late Fela and leader of his father’s band Egypt 80, the concert organizers felt compelled to apologize for his politics. Though “IMF,” a standout song from Kuti’s latest album, A Long Way to the Beginning, stands for “International motherfuckers,” it was his good-natured, often funny, but sincere bantering between songs, mostly about poverty and corruption and a few times laced with a swear word or two, which offended the venue management. First they displayed an impromptu and incomplete message on the giant stage screen – in the middle of Kuti’s set! – apologizing for Kuti’s language and assuring the audience that they do not endorse his political views. Then the same woman who enthusiastically introduced Kuti at the start of his set returned to the stage after his standing ovation to verbally reiterate the apology. Like the Greek “no” voters, however, the audience responded to her with loud boos and later insulted Levitt Shell, the concert venue, on its Facebook page (One of my favorites was the comment describing the giant electronic message as “Orwellian”).
It seems obvious the concert organizers knew nothing about Kuti’s politically-charged music when they invited him– not to mention his father or in fact his family lineage going back to his grandmother, the anti-colonial fighter Funmilayo Ransome-Kuti! Moreover, they somehow believe there are artists who do not have politics and audiences that cannot handle the truth. International motherfuckers, indeed.