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Plus ça Change

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The infamous structural adjustment programmes of the IMF and World Bank are essentially loans with conditionalities that benefit the lendee institution and place onerous controls on the debtor nations. Fundamentally, the IMF offers financial inducements with strings attached, most commonly in the form of political interference. Countries are pressured to restructure their economy to suit the needs of the loan payers. In its heyday in the 1970s and 1980s, the conditionalities imposed on indebted countries were financially and socially oppressive – described as “economic circumcision”26 by one writer.

Just after her first election victory, UK Prime Minister Margaret Thatcher applauded Malawi for having “the courage to take difficult decisions on your economy when they have been required by the World Bank and the IMF because you knew that in the long-term it was the best thing for your people”.27 The measures insisted, inter alia, that Malawi liberalize its import processes, remove credit controls, and reform the Post Office, etc.28 Interference in the governance of an erstwhile independent country was de rigueur. As public health academics Thomson et al. point out, even today, “recipient countries are required to reform various macroeconomic and fiscal policies according to a neoliberal rubric, typically cohering around economic stabilisation, trade and financial liberalisation, deregulation, and privatisation … critics argue such adjustment comes at a high social cost, while the recidivist nature of program participation also suggests that gains to macroeconomic stability are underwhelming.”29 Once again, Malawi’s hopes of urban renewal are reliant on outside forces.

At least, in the 1970s and 1980s, there was mounting consternation among left-wing, anti-capitalist groups and other concerned citizens in the West at the structural adjustment programmes being imposed on the Third World (as it was known). These loans came with demands for social reforms and were (rightly) seen as authoritarian. Countries would have their payments revoked, for example, if they didn’t change certain domestic policies that the IMF and World Bank considered to be a hindrance to market liberalization. But a shift occurred at the turn of the twentieth century when intervention in the affairs of developing nations was re-posed in a more morally legitimate way. Now aid would be given in order to protect the environment, and “good governance” became the buzzword; it incorporated the notion of responsible or sustainable development. In this way, sustainability became a vehicle for western intervention in sovereign states in the guise of virtuous social justice. Millennium Development Goal 11, for example, insisted that “no effort must be spared to free all of humanity … from the threat of living on a planet irredeemably spoilt by human activities”.30 In order to restrict development, the World Bank indicates that Malawian businesses and landowners may be “eligible for compensation if operations are restricted for reasons of wildlife protection”.31 No wonder Malawi is torn between developmentalism and protectionism, between urbanism and anti-urbanism.

Nowadays, criticism of environmental interventions tend not to rebuke the intervenor for meddling in the affairs of another country, but to chastise the dominant party for not intervening sufficiently stringently. Instead of debt repayments, sustainable aid campaigners demand “transparency” and environmental accountability. As such, environmentalism provides incentives to interfere and to penalize non-compliant states. The New Economics Foundation calls these actions “sustainable adjustment programmes”, whereas free marketeer Paul K. Driessen describes it as “eco-imperialism” or “a virulent kind of neo-colonialism”. Same intervention, different language.

Meanwhile, China is now forging relationships with Africa, seen by some as an opportunity and by others as a contemporary version of colonial enslavement. There is some credibility to such criticisms, with China taking substantial amounts of raw materials out of Africa while providing loans for infrastructure projects. In Lilongwe alone, in return for political allegiance, trade relations, and exports to China of timber and minerals, China has built a series of presidential villas, the Bingu International Conference Centre, the New Parliament Building, a five-star hotel, and Bingu National Stadium, and is set to invest heavily across the country. In other areas there are new roads, hospitals, highways, and the Malawi University of Science and Technology. In 2016, a US$1.79 billion finance agreement was signed to construct a power plant and international airport.

China’s intention is to provide infrastructural spending as a way of emulating its own rise out of agrarianism. By creating more dynamic economies around the world, China wants to lift people out of poverty and coincidentally increase its share of international trade. Even though there is the threat of default and crippling debt from loans from any source, it is widely acknowledged that instead of a neoliberal economic shakedown of poor countries that was common under the World Bank and IMF interventions, China has implemented a more contractual business relationship and reiterates – somewhat ironically – that Beijing does not interfere in other countries’ internal affairs.32 However, as we have seen, both the structural adjustment policies and the interventionist environmental policies are direct political acts of interference in the sovereign rights of an independent nation state, so a straightforward transactional deal seems, on the surface, to be more appealing to the Malawians.

In her book The Dragon’s Gift,33 author Deborah Brautigam shows that China, in its early stages of development, recognized that it needed infrastructural investment in order to kick-start its own economic plans. With little or no foreign direct investment in the mid-1970s,34 China had to utilize a trade arrangement with Japan, which was granted rights freely to extract quantities of raw materials from China. But instead of having to pay hard cash, Japan was required to build roads, bridges, and other infrastructure within China to literally lay the foundations for its rapid rise towards development. China’s engagement in Africa follows a similar model. While clearly neocolonialist in some areas, it is also a facilitator for real, necessary development in others. In terms of China’s business model, there tends not to be any social, political, or environmental conditions attached to its loans, and this is important for Africans who are concerned about the re-emergence of an imperial intervention. Even though the gloss is wearing thin on Chinese carpetbaggers taking advantage of Malawian opportunities on the ground, the international deals still form a straightforward contractual relationship that seems to benefit both sides.

Admittedly, debts are amassed for services rendered (like Djibouti’s US$3.5 billion loan to build its International Free Trade Zone, or the US$100 million for Malawi to build its new coal-fired power station), but the past-President Mutharika says: “We have chosen to stop depending on aid. Much of the aid to Africa was spent on services and consumption, and not so much on production. As such we have chosen to move from aid to a trade. But you cannot trade if you don’t produce goods. Therefore, we have chosen to become a producing and exporting nation.”

The Climate City

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