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Homework answers / question archive / According to the authors, "Subsaharan Africa is likely to have recorded the fastest economic growth among all world geographic realms" since the beginning of this century, and caution that many of the countries in the realm "remain resource-dependent economies"
According to the authors, "Subsaharan Africa is likely to have recorded the fastest economic growth among all world geographic realms" since the beginning of this century, and caution that many of the countries in the realm "remain resource-dependent economies". In general, will this realm have a future in manufacturing and be a significant player in the processes of economic globalization?
Answer:
The difficult situation in Africa is well known: economic crisis, political instability and social conflict. But what is the connection between globalization and the current state of precariousness in Africa?
The most prevalent version is that the continent suffers from profound underdevelopment - that is, the absence of sustained economic growth - due to the combination of the effects of the colonial legacy and its vulnerability in the contemporary world system. It is the weakness of their economies that is seen as the source of the political and social problems afflicting African countries today. In addition, there is little probability that the application of Structural Adjustment Programs (SAPs) will allow them to achieve a competitive advantage in the world market, since the price of the raw materials they sell would experience a fall if production were increased. Finally, foreign capital does not arrive, as most African countries lack the political climate, institutional stability, legal framework, or quality of workforce required by multinationals. As trade declines and investment shrinks, Africa becomes a victim of globalization.
At present, for example, the economic outlook for Africa is subject to various risks and uncertainties, as the extroversion of African countries conditions their performance on the growth of their main trading partners and donors; This is still worrying, even though some of the continent's macroeconomic indicators are somewhat more encouraging, with the year 2010 highlighting the control of inflation and the slight deterioration of the fiscal deficit (5.8% of GDP) (1).
On the other hand, in the current scenario, local governments are unable, first, to independently design and implement their own national development agendas; second, to control the various political and economic operations that are taking place in their respective territories, and, third, to prevent the subordination of Africa in the international arena (20). In effect, state intervention in the economy was discredited; However, the facts have shown that without it, for example, small farmers have seen their access to capital diminish, have become debtors and have been disempowered to such an extent that they cannot influence prices, quality processes and in the differentiation of products (2).
Likewise, the World Trade Organization argues that the end of tariff barriers encourages greater production and, therefore, greater benefits to African growers and traders; However, the reality is very different: transnational companies block supply and demand mechanisms in order to obtain a low-cost supply of raw materials, control merchandise production chains and obtain most of the profits. Then, if this trend is not drastically changed in the coming years, raw materials from African countries will continue to devalue without pause, requiring, therefore, political definitions that return a certain power to producers in terms of their financial, human and technological capital.
So Africa is not simply the victim of globalization. Its elites are active participants in the unofficial global marketplace, the reverse of the globalized economy that seemingly bypasses the continent. The truth is that those millions of Africans who are not beneficiaries of the patrimonial generosity dispensed by the political and business elites of the continent are getting poorer every year. It is also true that the wealth that circulates in Africa is not serving to stimulate any form of sustained economic development. But for those who are thriving in the informal global economy, and their clients, enrichment without development is a very beneficial situation.
Finally, however, the current situation in Africa must be analyzed from the dual perspective of its place in the world market, both official and unofficial. Only then can we assess the true impact of globalization on the African continent and viceversa.
(1). United Nations Economic Commission for Africa. Economic Report on Africa 2011. Governing development in Africa: The role of the state in economic transformation. Addis Ababa: United Nations Economic Commission for Africa; 2011.
(2). Kabunda M. África en la globalización neoliberal: las alternativas africanas. Revista Theomai 2008; 17: 77-87.