Africa
Page 24
NEW PLAYERS ON THE AFRICAN SCENE
The Soviet Union, China and the EEC each pursued their own political and economic agenda in Africa during the 1960s. Apart from its involvement in the construction of the Aswan Dam in Egypt following the 1956 Suez Crisis, the Soviet Union became involved in West Africa at the beginning of the 1960s when it became a trading and potential aid partner to the three West African ‘socialist’ states of Ghana, Guinea and Mali. In 1958, when Guinea was isolated by France, Soviet exports to it were negligible but they rose rapidly thereafter to be worth Guinea francs (GF) 134 million in 1959, GF2,000 million in 1961 and GF3,000 million in 1962 by which time the Soviet Union had become the country’s most important source of imports. In broad terms no African country had diplomatic relations with the USSR at independence; however, during the 1960s almost all received Soviet diplomatic missions while there were frequent exchanges of delegations. The USSR announced that it was prepared to give aid to all African countries and trade with them.
African countries that approached the Soviet Union sought assistance on two fronts: help to strengthen their bargaining positions vis-à-vis their main Western trading partners; and economic and technical assistance to supplement Western aid. They did not regard the Communist centrally planned economies (CPEs) as alternative partners to the West, but as additional ones. As the Russians realized very quickly, they could not replace the West but only supplement what it did and what it offered. ‘The chief advantage of the Soviet Union and other CPEs in the field of trade was that they were prepared to deal independently of the free market. By selling produce directly to them, Africans hoped that supplies to the free market could be reduced sufficiently to raise the price prevailing there.’24 This was more complicated than it might seem though it did bring benefits to some countries. At this time African states saw aid as the prerequisite for establishing manufacturing capacity. The development sections of their plans included aid for manufacturing and it was hoped that the USSR would help in this area particularly as Soviet aid normally took the form of credits for the purchase of machinery and equipment to be repaid in kind by shipments of the recipients’ exports. The first Soviet technical assistance agreement with an African country was with Egypt on 29 February 1958; by 1966 the USSR had concluded such agreements with a total of 16 African countries – Ghana, Guinea, Ethiopia, Egypt, Algeria, Cameroon, Congo (B), Kenya, Mali, Morocco, Uganda, Senegal, Somalia, Sudan, Tanzania and Tunisia. All Soviet aid was ‘tied’ and, for example, an agreement worth US$30 million meant that if suitable projects could be found the USSR would make available up to US$30 million in goods and services to facilitate construction.25 By the late 1960s the Soviet Union had become concerned over the cost of its aid and emphasized the importance of self-generated development and the peripheral role of foreign aid. The USSR often made gifts to African countries although these were small and did not form a significant part of its assistance.
Aid from the two sides in the Cold War was not mutually exclusive. However, where African countries relied on one side only, it was always the West while approaches to the Soviet bloc were most likely to be made after it had become apparent that the West was unwilling to meet particular aid requirements. Western scare stories about Communist penetration of Africa were out of proportion to the reality. Three African leaders made plain their suspicions of Communist advances. In 1966 President Nasser told the United Arab Republic (UAR) National Assembly that while the UAR and USSR had been ‘linked by mutual interests… I do not claim our thoughts and positions were always identical’.26 And both Presidents Kenyatta and Nyerere warned forcefully that socialist state international economic policies – like those of capitalist states – were primarily related to their own perceived national interests ‘which may or may not coincide with those of African states’.
During the 1960s both Africa and the USSR learnt the limitations of Soviet aid. The Soviet Union ‘had to recognize that limitations exist in African countries even where there is a leadership that is anxious to overcome them … In none of the three countries (Ghana, Guinea, Mali) has the Soviet bloc been the major provider of aid (if US public and private activity in the Guinean mining industry is included). Thus all three tried to build socialism with capitalist funds.’ Neither Soviet bloc aid nor the markets it offered were sufficient to make an economic break with the West practicable for the majority of underdeveloped countries. There was simply no alternative to Western aid and investments or to western markets.27 Both the West and the Russians came to accept ‘non-alignment’ and were prepared to offer aid without insisting on bases or military alliances. In real terms, however, Western aid became irreplaceable. Although it came to be argued that no aid meant no development, what was less clear was whether aid really did mean development.
China was only to become a significant player during the 1970s when it undertook to construct the TANZAM railway, although it had already become embroiled in ideological arguments with the USSR when the two antagonistic Communist powers faced each other in Africa on various occasions after their break at the beginning of the 1960s. Early Chinese advice to underdeveloped countries was to expropriate all foreign capital and to accept no more – because poor countries should rely on their own efforts and mutual co-operation and shun any aid from the rich. This stance was not to last. Instead, China soon began to compete as an aid donor in Africa, not least as a means of pursuing its dispute with the USSR. During the Cultural Revolution of 1966–69, China’s external activities declined and its aid only really took off at the end of this period. Aid to African countries increased from 13 to 27 with a huge boost in the amounts disbursed in 1970 due to the US$400 million grant to Tanzania and Zambia for the TANZAM railway. At this time China had two political objectives: to rival the Soviet effort in support of the Aswan Dam in Egypt; and to provide aid to any government, even conservative ones, in return for diplomatic recognition.28
After the watershed of African independence, Europe determined that Africa should continue to supply what it wanted from the continent on its terms. The emergence of the European Economic Community (EEC) or Common Market in 1958 provided a new framework that would permit Western Europe as a whole (though without Britain) to impose conditions upon the new states of Africa under the guise of collective benevolence. ‘For Africa, an area of weak economic bargaining power, it appears difficult to see the European Common Market as other than a guarantee of continued under-development along existing lines.’29 EEC associate status was a mirage for it certainly did not give African participants any control over their export prices. Rather, it perpetuated European control. There was much discussion at the beginning of the decade (1961–63) when Britain was negotiating, unsuccessfully as it turned out, to join the EEC about the impact of the EEC upon Africa. In 1961, for example, the ECA issued a study The Impact of Western European Integration on African Trade and Development which saw the EEC rather than the looser British dominated European Free Trade Association (EFTA) as a threat to African interests even though the exporters of coffee, cocoa, vegetable oils, bananas and tropical timber were likely to make gains in the EEC market over non-associate members. At the time, the demands of the non-associated African countries (Anglophone Africa) for imports from the original six EEC members were rising more rapidly than from the associated states as a result of these generally larger and more advanced economies. As the ECA reported: ‘Measures reducing obstacles to export of manufacturers may be of less direct concern to countries at the stage of economic development reached by the African associates of the EEC than provisions concerned with the growth of manufacturing industries working for the local market. Competition from imported (EEC) manufacturers is a more immediate problem in these countries than exports of manufactured goods.’ Commenting on the ECA report, the Africa Digest30 said:
No form of association with industrial countries will, in itself, be sufficient to solve the long-term economic problems of African countries. But a country which maintains o
r seeks association with EEC should not dissipate the short-term benefits gained. It should deliberately aim at using them for decreasing its economic dependency, mainly by reducing its import prices and internal costs, by diversifying the geographical pattern and commodity composition of its trade and by channelling as much investment as possible towards productive purposes. If this is not done, association with EEC can easily tend to perpetuate economic dependency and thus turns out to be a long term disadvantage to the country concerned.
In East Africa, EACSO laid down guiding principles for deciding the attitude of the East African territories to the EEC (although this was before they had achieved independence). They demanded that any British agreement with the EEC should not involve them in any political alignment with Europe. In West Africa, Nigeria, Ghana and Sierra Leone opposed associate status with the EEC for political reasons, Ghana most of all. They believed that ‘associated status’ was a French device designed to maintain French influence within its former colonies. It was one thing to oppose associated status; it was something else to oppose it effectively. The advice of The Economist to the Anglophone states was ‘to accept associated status (this could hardly result in Accra voting the French way at the United Nations), and set about replacing the ties that bind francophonic Africa to France and Europe with new ties that would bind the African states to each other. The economic and culture ties to France are not weakening.’31 Nigeria alone was big enough to ‘hold out’ against EEC entanglements and was then trying to build up a West African group of countries that included Francophone states. As Britain continued its negotiations for entry into the EEC, Ghana, Nigeria and Tanganyika were most fearful of the political implications of associate membership. Dr Nkrumah, as ever, insisted that Africa’s real need was for a Common Market of its own, so that Africans could bargain collectively with the industrial countries.32 The difficulty with such arguments was that Africa’s main exports to the EEC were almost entirely confined to agricultural and mineral commodities. Anglophone African concern at the possible impact of Britain joining the EEC was expressed continually throughout 1962 until de Gaulle vetoed the British bid at the beginning of 1963. At the same time West Africa argued that both the Casablanca and Monrovia groups (the OAU would not be formed until mid-1963) favoured the formation of an African Common Market.
While these debates went on the EEC drew up a new five-year association convention between the Six and the Eighteen African associated states to run from 1963 to 1968 under which the EEC would provide aid worth US$800 million (US$730 million for the associated states and US$70 million for dependent states) compared with US$581 million that had been provided under the 1958–63 agreement. This Second Yaounde Convention was ratified in 1964. It did not involve any real reassessment of Euro-African relations; rather, the Eighteen, at the behest of France whose former colonies they were, became the clients of the Six. Associate status in essence combined a customs union and an area in which private enterprise from the Six could enter relatively freely along with the transfer of public capital in the form of aid. The consequence of this new Yaoundé Convention was simply to broaden the dependence of the consenting African states to include the Five as well as France; it certainly did not achieve any fundamental reconstruction of the relationship that would have promoted African economic independence. Instead, the overall development strategy of the African associates would now be subject to decisions taken in Brussels as well as in Paris.
THE GROWTH OF THE AID INDUSTRY
Between 1958 and 1963 the aid industry – that is, the creation of structures to facilitate the provision of aid by the rich developed donor countries to the poor developing countries – gathered momentum and took off. During those years the EEC set up the European Development Fund (EDF), the World Bank established its ‘soft’ arm for finance on easy terms – the International Development Association (IDA), and the OECD countries established the Development Assistance Committee (DAC). The United Nations proclaimed the 1960s the First Development Decade. Between 1960 and 1962, Canada, Kuwait, Japan, Britain, Denmark, Sweden, Norway, France and West Germany each set up aid departments or ministries. Aid had become an international fashion and the whole of Africa, as its individual colonies emerged to independent status, became a principal recipient region, a status that, for good or ill, would continue to the end of the century.
The first question for Africa to pose about the sudden determination of the rich nations to provide aid was why had this not been done sooner? If at independence every African state was in need of aid, then they must also have been in need of aid while still colonies, yet prior to 1960 this had only been supplied, if at all, on a limited and selective basis. Was the new readiness to provide assistance done from a guilty conscience because the colonial powers had failed to develop their colonies adequately when they were in control? Or was it motivated by considerations of Cold War strategy since there was nothing to prevent the newly independent states from turning to the Communist world for assistance and partnership if this suited them? Or, as Nkrumah first insisted, was aid a necessary weapon of neo-colonialism, a means of perpetuating economic control after the surrender of political control? Whatever they said publicly, African leaders did not believe that the new generosity was solely motivated by concern with their development.
After independence, in theory, all decisions by the new states should have been solely in the hands of Africans. In practice, aid ensured that this did not happen. In 1960 foreign aid was practically the only source of investment capital and its donors could impose political conditions that did not necessarily coincide with the development needs of recipients. At this crucial time for African development too many Africans were going to Europe for training and then working to extend their training instead of returning home to develop their own countries. When they did return home they only wanted to work in the capital city. Problems related to the aid process soon surfaced. ‘Distortions in the use of aid may arise from two sources: the intrusion into planning decisions of African political calculations that are incompatible with economic rationality, or the donor’s desire to sell as much equipment, machinery and technical assistance, or receive as much short-run prestige as possible irrespective of its effects on the recipient’s economy.’33 When the UN Development Decade was launched in December 1961 the average annual increase of African per capita incomes was at the rate of 3–3.5 per cent; the UN target was to increase this to 5 per cent by 1970. By the mid-1960s, however, there was little sign that this would occur despite the growth in aid that had taken place. A 1965 OECD survey of aid suggested it needed rethinking. The 1964 flow of US$10 billion of aid worked out at US$4 per head in recipient countries that were obliged to generate 85 per cent of the capital they required for modernization. Nearly half of this aid was in the form of grants or near grants, 25 per cent was in the form of official loans, private capital and trade credits accounted for another 20 per cent and World Bank loans for a further 10 per cent. Already at this stage in the aid relationship repayments at US$1 billion a year represented 10 per cent of the aid flow. Pleas for more multilateral aid had as yet made little headway while bilateral aid was too often linked to the donor’s goods and thus was open to the suspicion of being given primarily to serve the political ends of the donor. Development in Africa was greatly handicapped by poor transport and communications systems so that productive areas often lacked any adequate access to markets with the result that valuable natural resources remained unexploited. At this time over half World Bank and IDA loans were provided for the transport sector. Technical assistance was generally seen as the best form of aid, provided it meant imparting skills and then departing; too often, however, it came to mean providing certain kinds of skills on an ongoing, indefinite basis.
At the centre of the aid relationship was the growing dependence of African countries upon aid inputs, and a parallel perception that aid would be available indefinitely. At the same time, African governments wished to extend their re
lations to countries that formerly had been closed to them: essentially this meant the Communist bloc. The West, however, exerted strong pressures to keep Africa tied to it. In his study, The New Societies of Tropical Africa, Guy Hunter examines the impact of the Cold War on the aid process.
Finally, all the newly independent States naturally wish to get to know the international commercial world, after a long period in which their contacts were confined mainly to the commerce of the colonial power. No doubt they will have varying experiences. It certainly ill behoves the British or French, who still occupy so dominating a position in the field, to complain about the still trivial sections of African economies which are directed towards the Eastern bloc; their main task is to prove as efficient as any competitor.
America on a world scale has partly destroyed the credit she might have gained from her real generosity by openly expecting the recipients (of her aid) to keep to the West in the Cold War – it is hard to expect American taxpayers to adopt any other attitude.
Yet it would be difficult for an African government to make an effective protest – such as the freezing of assets – against a major Power upon which it was economically dependent. It is unrealistic to suppose that aid can be altogether divorced from political interest, and it is better either to accept this openly or to channel aid through the United Nations, as many Africans would prefer.34
The main donors, however, did not want to channel their aid through the United Nations and only in a later age did they discover the advantages of the multilateral approach. Africans meanwhile, from a position of weakness, saw clearly enough how economic dependence upon a single power would distort the type and direction of trade into forms that suited Europe rather than the individual African economies. Neo-colonialism became a guiding principle of European and American behaviour in Africa throughout the decade. It simply meant the continued dominance of Western controls by other means once the transfer of formal political power had taken place. In any case, ‘Relations based on economic weakness acquire a character of dependence, no matter whether the objectives of the dominant interest are limited or total; whether the dominant interest controls the economy or earns 10 per cent of the gross national product, finances what it thinks sound development or keeps a subservient government in office. The large dominates the small simply by being large, quite apart from its specific aims, which in turn may have far broader impact than intended.’35 Throughout the 1960s, consciously or not, development in Africa was harnessed to the flow of aid in all its forms from the developed world. The former colonial powers each had their particular interests to defend in their ex-colonies and designed their aid to this end. The Cold War warriors comprising the United States, the USSR and China used aid as a weapon in their confrontations with each other. The specialized agencies of the United Nations, and most especially the World Bank and IMF, imposed concepts of development that reflected the wishes of the principal Western donors who controlled the votes, on the one hand, and gradually, by the increasing sophistication of their expertise, became the arbiters of all major development decisions on the other hand. Africa, the world’s poorest, least-developed region, divided into 50 weak states, found itself the recipient of these variously motivated attentions and though its leadership collectively recognized what was happening found, by and large, that it was too weak and too disunited to prevent the triumph of such aid machinations directing the course of its post-independence development.