Approaching 2020, geopolitical order is experiencing widespread disruptions that are creating flux in global power structures. This, along with economic and political progress across Africa, creates an opportunity for states to make structural change in the extractive industries through the implementation of the Africa Mining Vision (AMV). Development in African states has been curtailed first by structural adjustment policies imposed by Western international financial institutions and donor states, then more recently, by emerging states that have pursued partnerships on the continent to meet their domestic demands. In light of these relationships, the African Union designed the Africa Mining Vision as a vehicle to restructure the natural resource extractive export industries. I argue that current geopolitical trends create space for African states to renegotiate with existing and new international partners in a way that can impact socio-economic development.
African states have long been pinned to the bottom of mineral value chains which has stymied economic development. In the post-2008 Financial Crisis era, influential liberal democratic states in the West are flummoxed by domestic controversies; among them are backlash against the liberal globalization project, the rise of nationalism and protectionist policies, and growing distrust among allies and adversaries across the globe. The continuity of the liberal international economic order (LIEO) is in disarray, but this is an opportunity for African states to strengthen their capacity to engage international partners.
This retrenchment within leading liberal democratic societies is an existential threat to the perseverance of the good governance agenda (GGA) and the democratic norms it advances. However, as retrenchment in the west is exacerbated by the employment of mercantilist trade strategies that disrupt global value chains, other emerging economies are maneuvering to fill the gaps. Emerging economies including, Turkey, the Gulf Cooperation States, South Korea and Brazil are seeking access to African raw material markets. Of these, China is the most significant actor out pacing the others in pursue of energy security and the expansion of the ‘One Belt, One Road’ initiative. China’s leadership strive to restructure global economic relations making Beijing the hub of global economic activity.
China has a long-term strategic plan to position itself as the future steward of a technologically integrated global economic and political order. This is exemplified on the African continent by a sustained and increased engagement in economic activity across the continent. East Africa is where China has made it initial foothold by investing in shipping ports, mineral extractive sectors and communications sectors in multiple countries. The motivation is to expand and integrate the ‘One Belt, One Road’ trading system. China is also creating bilateral military partnerships with individual states, increasing its presence in the United Nations Peace Keeping Force(s), and engaging the African Union. China’s engagement with the continent, compounded by other authoritarian regimes, threatens the advancement of the West’s liberal democratic project.
International engagement with Africa
In Africa, the 1980s were marked by Western-based interventionist policies that led to waves of deregulation, privatization and institutional reforms designed to integrate developing states (in Africa and across the globe) into the liberal international economic order (LIEO). Over these decades, two phases of structural adjustment can be distinguished. The first begun in the 1980s and consisted of policies of stabilization and structural adjustment (Hugon 2001); while the second, occurred during the 1990s, and was marked by political adjustments in favor of democratic processes that were supposed to move beyond the failures of structural adjustment programs of the previous decade (Hilgers 2012, 82-83). During the second phase, the emphasis was put on the good governance agenda (GGA).
The political machine behind the promotion of structural adjustment and the GGA was termed the ‘Washington Consensus.’ It was perceived to prioritize ten principles for market liberalization: fiscal discipline, appropriate public expenditure, priorities from subsidies to pro-growth services, tax reform to reward enterprise, market-determined interest rates, liberalization of trade barriers such as licensing and tariffs, abolition of barriers to foreign direct investment, privatization of state utilities, the abolition of regulations that impede market entry and free competition, and legal security for property rights (Williamson 1990). This ideology influenced decisions about how to disperse official development aid.
Official development aid (ODA) from Western donor states and institutions during the era of structural adjustment tended to be conditional upon reforms in the recipient country even though it was determined ineffective in encouraging real policy change. Donors such as the International Monetary Fund, the World Bank and the United States, have focused upon performance and good governance agenda (GGA) as prerequisites for aid, a practice called, “selectivity.” This is a means of requiring a recipient state to demonstrate the seriousness of its commitment to economic and social reforms. Despite this emphasis,
[t]here are no objective standards for determining good governance: some aspects include political stability, the rule of law, control of corruption, and accountability. High levels of poverty and weak governance are linked, making selectivity difficult to implement. For reforms to succeed, domestic support, ownership, and commitment are crucial, as are the recipient’s cultural context and history.(Nanda 2006)
The good governance agenda is an example of an “Integrationist” multilateral regime. Fogarty (2013, 2) claims that all multilateral regimes pose a similar dilemma to their constituents: “Do actors prefer the benefits of international cooperation or the integrity of their internal governance? They can only avoid this tradeoff, enjoying cooperation without adjustment, through successful polity projection – by ensuring multilateral regimes reproduce aspects of their internal governance at the global level, thereby maintaining their integrity while others bear the costs of adjustment.” The agenda aims to harmonize rules and centralize authority with Western norms. The Integrationist regime forces constituents to adjust their internal governance in the way structural adjustment has been used to ‘integrate’ African economies into the global market.
The good governance agenda (GGA) is not sustainable without effective democratic institutions. As the perspective of the World Bank evolved, it recognized corruption as a significant obstacle to aid effectiveness further inducing the Bank to take into account the possibility of corruption in the recipient country as a determinant for allocation of aid (Collier and Dollar 2001, 21). The fight against corruption and support for an accountable government is the core objective of the GGA along with the attribute of effective public participation.
Since the turn of the century and accelerating in post-2008 Global Financial Crisis, a shift has occurred in the long-standing relationship between North-South, industrialized-developing countries. The global economic system is in flux and creative approaches to capital and capitalism are emerging. A paradigm shift is occurring moving the international economic system away from ‘globalization’ to a more rigid ‘varieties of capitalism’ (Hall and Soskice 2001) in which states take a more transactional approach to market activity. This is marked by the ascent of ‘emerging’ economies. Many located in Asia creating a trend toward South-East international relations substituting for the influence of the Organization for Economic Co-operation and Development Assistance Committee (DAC) donorship.
In describing the shifting modalities of DAC provided aid over the decades, Kragelund (2011) mentions that in the early part of this century the terminology and aid modalities have changed to ‘partnerships’ to ‘harmonize’ the interests of donor and recipient in otherwise, inequitable arrangements. This reframing of international aid and economic relations claims mutually beneficial projects absence of the types of conditionality leveraged by DAC donors. Yet, a study by Abrahamsen (2004) cautions that developmental partnerships can be considered:
[a]s a more insidious and subtle form of power. Because they appear to rest on consent and legitimacy, such accounts argue, partnerships are a way of influencing a country’s development choices more effectively, or in ‘a far more all-encompassing way’. In an insightful analysis, Harrison (2004) argues that through contemporary aid practices certain sections of the African elite and bureaucracy come to internalize the neo-liberal values of global governance. While not explicitly stated or theorized, these interpretations derive actors’ interests from their structural position in the world economy and the global capitalist system is seen to shape actors’ ideology in ways that ultimately serve the interests of capitalists rather than the poor. This, in keeping with Lukes’ (1974) third dimension of power, poor countries are prevented from realizing their ‘real’ interests due to the hegemonic ideology of neo-liberalism” .(Abrahamsen 2004, 1459)
Abrahamsen’s observation highlights the hierarchical structures of international relations in which each state must seek to maximize its own capabilities to promote its own interests and the trap set for states at the low end of the power scale.
Neoliberal globalization in the latter part of the 20th century created wealth by further integrating the periphery with core economies. This process empowered industrial elites from emerging states. Today there is less space between and among the ‘core’ and ‘emerging’ states in terms of economic and political power. Yet, still there remains a ‘periphery.’ In some African cases, the periphery is expressing agency in international relations due to the enhanced choices in international partners (Harman and Brown 2013; Brown 2006; Kararach, Hanson, and Shaw 2013); yet, there remains structural barriers that constrain the periphery from reaching its full potential and joining the upper echelon of emerging economies.
This prompted a reaction by DAC donors as new methods of engaging the global South were designed to address concerns about new models of development aid offered by emerging powers. This phenomenon is termed, South-South cooperation (SSC). According to the United Nations Office on South South Cooperation (UNOSSC 2014), it is defined as:
… a broad framework for collaboration among countries of the South in the political economic, social or cultural, environmental and technical domains. Involving two or more developing countries, it can take place on a bilateral, regional, sub regional or interregional basis. Developing countries share knowledge, skills, expertise and resources to meet their development goals through concerted efforts. Recent developments in South-South cooperation have taken the form of increased volume of South-South trade, South-South flows of foreign direct investment, movements towards regional integration, technology transfers, sharing of solutions and experts and other forms of exchanges. The global economy has largely remained orientated to trade between the North and South.(UNOSSC 2014)
In addition to “boosting the volume of aid, non-DAC countries, including Brazil, China, India, South Africa, and the Gulf countries, have demonstrated their willingness to make a departure from conditionally driven aid to promote ‘horizontal cooperation’ based on the principles of equality, partnership and mutual interest” (Quadir 2013). Although, Kragelund in (2011) points out that the inclusion of emerging developmental actors’ emanating from the global south does not point towards a new model in contrast to the “(post-) Washington Consensus model.” He claims that emerging donors are “too diverse and display too many internal conflicts to signal a general direction in terms of development.” Nonetheless, DAC-donors do have concerns regarding a seemingly new model for ODA stem from the principles that China expounds in its relations with South-South cooperation.
Southern assistance has little if any policy conditionalities compared with aid provided by northern donors and international institutions. Northern donors align country policies / especially programme based support with those of the IMF and World Bank … governance and macroeconomic conditionalities. … In contrast, bilateral Southern contributors emphasize that development assistance should not interfere in the internal affairs of programme countries. Program countries prefer such assistance without macroeconomic or governance conditionalities (ECOSOC 2008).
In less than a decade, however, Kragelund’s assertion has been challenged as the Chinese model or the ‘Beijing Consensus’ is now used to describe Chinese development aid. It differs from that of DAC countries because it has little if any policy conditionalities that are tied to governance and macroeconomic policies. The Chinese approach to bilateral partnerships emphasize that development assistance should not be allowed to interfere with the internal affairs of the recipient countries (ECOSOC 2008).
Conditionality has been fundamental to Western countries’ development programmes in Africa and elsewhere as a means to reshape economies to be more market-focused, hence concern with China’s apparent different approach (Jackson 2012). Shaw et.al. (2009, 32), point out that “All the BRICs use soft power not simply as a means of selling cultural products, developing global brands, for attracting tourism and economic investment, but also as a means of promoting their national interest. This approach goes with increases in foreign aid.”
All states have agendas, and although donorship within SSC is considered to have ‘no conditionalities’ attached the pattern usually reveals that ODA is often followed by some sort of Foreign Direct Investment (FDI). In the African context, these arrangements often concentrate on the extractive industries for export. China’s ‘aid-for-oil’ policy in Africa is an example. It resembles traditional trade-and-aid once offered by Northern states, but “contrary to the Africa policies of the EU and the US, China is not posing policy conditions … based on its principle of non-interference in domestic affairs … no demands for macroeconomic reforms, good governance, or respect for human rights” (Jilberto and Hogenboom 2007). The Chinese bargain is linked to access to hydrocarbon fuels and industrial metals and minerals necessary to drive China’s economic development.
The power of partnerships being argued here speaks of the imbalances between donors and African recipient states in both North-South and South-South Cooperation arrangements. More specifically, the conclusions of the Commission for Latin America under the leadership of the economist, Raul Prebisch, determined that a major factor resulting in the lack of economic development in Latin America (and this thesis can be expanded to include Africa as well) was due in part to the “ unequal exchange of the raw materials produced in the Third World countries [of the South] and the industrial First World countries, which were unwilling to share their expertise and to offer equitable terms of trade, implying an unequal distribution of power” (Singer 1984; Jackson 2012). SSC patterns of international trade with Africa reflect long standing patterns of trade between Africa and the global north since they are focused on exports of raw natural resources.
Looking Forward to a New Paradigm?
As we approach 2020, African states with extractive sectors find themselves situated between a receding Washington Consensus and a striving Beijing Consensus. This period before Beijing establishes itself on the continent offers an open policy window. African states must reassess their extractive industry policies, business partnerships, and international relations as is prescribed in the African Union’s Africa Mining Vision (AMV).
The Africa Mining Vision (AMV) (African Union 2009) is a pan-African approach to governance of the extractive sectors. It was adopted by Heads of State at the February 2009 African Union Summit as an alternative regional scale policy framework with the purpose of doing business differently by “integrating the broader extractive industry into the local, national, regional and global value chains” (Busia and Akong 2017, 146). The underlying goal of the AMV is to utilize Africa’s mining wealth to move from a historic status as an exporter of cheap raw materials to manufacturer and supplier of knowledge-based services. The AMV embodies the ambitions of a continent to move beyond social challenges of poverty and underdevelopment to build a productive working class that enjoys modern technological advancements.
The AMV framework consists of seven tenets:
Promote good governance;
Develop institutional and human capacity;
Optimize knowledge and use of minerals;
Build local and regional infrastructure;
Stimulate economic diversification;
Harness the potential of small-scale mining; and
Foster transparency and accountability.(Oxfam, 2017, p. 8)
The AMV presents opportunities for Africa states to reassess their domestic extractive sectors in addition to building regional collaboration aimed at creating continent-based links to the mineral value chain. Considering Africa’s recent history with ODA and FDI, this has the potential to encourage a new economic paradigm for Africa that integrates national, regional, and international levels around a developmental mining approach to build economic and social linkages that benefit African socio-economic development (African Union 2009; AMV 2013). The AMV is a policy program that could strengthen African agency in relation to international partnerships with northern states as well as, South-South Cooperation.
MORE about the AMV to come …
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