ASIAN INTERNATIONAL INFRASTRUCTURAL DEVELOPMENT BANK REPLACE WORLD BANK AND IMF IN AFRICAN COUNTRIES BY BABA ALI MUSTAPHA

            In this decade, we will witness the collapse of the leading Western financial institution World Bank and IMF and raising profile of Asian International Infrastructural Development Bank in doing businesses in African/Latin American countries. The bank was founded and funded by China and some members of BRICS. It was surprise to many African countries that even the leading western nations like Britain and Canada has joined the Bank.

            In recent time, the project of that Bank is very visible in many African countries which include:

i. Construction of Railway line from Mombasa to Nairobi in Kenya

ii Construction of railway line from Niamey to Diffa in Niger Republic

iii. Construction of Railway  line from Lagos to Kano, and Abuja to Kaduna in Nigeria

iv Construction of Abuja International Airport in Nigeria

v Construction of African Union Headquarters (HQ) in Addis Ababa in Ethiopia. This is to mention but the few.

WORLD BANK AND IMF

Forty-four countries participated in Breton Woods Conference in New Hampshire, USA in June 1944 of the four plans under consideration, delegates finally approved the American one to organise the international monetary system. Accordingly, the International Monetary Fund (IMF) and the world bank (International Bank for Reconstruction and Development) were founded.

The U.S also drafted the first constitution. Only 16 countries took part in discussing the draft in Atlantic city, New Jersey. After minor changes, the 44 founding countries then signed it. Then U.S.A laid the cornerstone of the IMF to suit its own interest and those of the capitalist world.

The American representative also suggested another program to form the practical basis of the fund to determine voting right and shares of each country based on GNP, gold and dollar reserves, volume of imports, export fluctuations and the ratio of export to GNP. Wealthy countries had more and even overriding votes.

The constitution called for 22 appointed and 16 elected executives managers. The US appointed executive is permanent, Britain, Germany, France, Japan and Saudi Arabia (because of its high shares) each appointed one executive manager. Other executive manager are changed every two years. Composition is such that the executive director is always a European and his assistant by unwritten tradition, is always an American. Therefore, the U.S.A keeps the IMF under close supervision and can easily enforce its opinion anytime it desires.

The United States designed the IMF, drafted its constitution and determined quotas and  voting rights in such a way that the institution acts as a tool for the implementation of U.S. policy. Although Washington does not uses control mechanism all the time, the fact that it exists, proves that the international body is nothing but leverage in the hand of America.

75 years has now passed since IMF began operations, and with its close operation with the World Bank, since they have been affecting the world’s economy. Critics of the monetary fund nearly always criticize the world bank as well because both pursue similar goals. The World bank and the IMF have worked closely since their inception and meet twice annually, in Spring and Fall.

The World Bank only accepts countries which are already members of IMF, even though such a pre-condition does not exist in the constitution of the World Bank. Officials of the two institutions exchange view and share reports before and after sending specialists to developing nations. This show close co-ordination between the two.

Since the cornerstones of those institutions were laid with American self-interests and since in their about 75 years of operations both have tried to strengthen the western capitalist economic system, especially that of the US, by promoting a free economy, they have earned world wide criticism.

Presently, many economists in developing countries are among those criticing the two institutions . Certainly, not everyone supports their policies.

International Monetary Fund programs still have not brought about economic growth in developing countries and if they do, it is uncertain if it will be of benefit to the poor. Instead of eradicating poverty, the two institutions have destroyed the poor. Today in most of latin American countries poor must work four to seven times more for their basic food and necessities than before, that is, prior to the onset of the debt crisis. According to UNICEF, 500,000 children die every year as a result of IMF policies which limit heath services.

External economic development is promoted by the World Bank and the IMF so they encourage external loans and investment in developing countries. A former vice-president of World Bank repeatedly announced that “foreign assistance help development”. Considering this perspective and how the two bodies encourage third world countries to follow this approach are reason to believe that both the World Bank and the IMF are main causes of World Debt Crisis.

Let us glance back into history, so as to know what really brought this dept crisis, high rate of poverty and unemployment to the African continent.

Prior to 1960s European countries had directly colonized Africans and having such objectives as slave and gold trade, plundered the natural resources and wealth of this continent .During this period, the people of the colonies, were not permitted to rule or decide independently, as they were being ruled by the colonialist. This was the era of old colonialism .

After the 1960s successive anti-colonial victories led to the independence of several African countries. In this period, the colonial rulers no longer considered direct domination over the wealth of these countries as advantageous. They began to witness the awakening of the colonized people who demanded independence and gradually began to leave the colonies, but retained the economic influence. The economic dependence by the colonies on the colonial rulers led to the continuation of their influence in their former colonies. The president and prime ministers of the newly independent African countries, some of whom were puppets of the colonialists governments continued to protect the interest of their masters (eg France and the African Francophone Countries)

After the collapse of the former Soviet Union, African countries which had enjoyed Soviet financial aid for many years and also had a governmental based economic infrastructure, suddenly faced an economic vacuum and accepted the necessity of establishing fundamental changes in the structure of their economies.

The international Monetary Fund (IMF) and the World Bank during this period, put forward a new programme entitled “Economic Structural Adjustment Pan” for the improvement of African countries economic woes. Those International Monetary Organisation have played only minor roles in regulating African economic equations in the past.

Many of the progressive African leaders considered the active presence of the International Monetary Fund in the political economic scenes of this continent as the beginning of the renewal of colonialism. They believed that western countries, which, during the neo-colonial period indirectly colonised African countries, had delegated such responsibilities to the western monetary organisation, while the western countries were involved with the issue of new regions especially in Eastern European countries, central Asia and Caucasia.

The fact is that the history of neocolonialism (indirect domination) to control the fate of African countries was not successful. The competition between East and West and the presence of progressive leaders in African countries were obstacles towards the fulfilment of the new goals of the colonialists.

When the WB and IMF in the absence of socialist economy took direct control of the African economy, the interests of the colonialists were better served than before. The economic structural adjustment plan was the too to protect such interest. The objective of the plan is to remove the control over the economy by the government and to transfer it to the private sector

The following recommendations have been included in this plan:

(a)    The devaluation of currency;

(b)   The privatisation of pubic companies and industries

(c)    The elimination of subsidies

(d)   The liberation of trade

The plan for economic adjustment and the deadline for its implementation in the African countries had brought about negative effects and genera pubic dissatisfaction. Economic specialists say that the transfer of economy from a government to a private base economy requires a long term plan and the execution of this plan in the short term and without the necessary precautions to secure the interests of the lower income groups will in fact put every African country in the hands of Western capitalists. African leaders, emphasing the necessisity of economic structural adjustment believe that this plan ought to be based on particular geographic, social, economic and political circumstances of each country and a common prescription is not the remedy for all countries.

Vice-President of the World Bank openly announced that the recommended policies by this bank in Africa has failed and the Bank would no longer recommend the economic plan for African countries.

Despite this contession, the influence of the IMF and WB are increasing only in the African continent due to their economic need. Around September 2019, the Administration of President Mohammed Buhari of Nigeria shock the Nation when he requested 30 billion naira credit from the World Bank, only the National assembly stopped him by rejecting to approve his request. In this era, the key decisions in most African countries are made under the supervision of western monetary organisation. Ministers of economic and finance are appointed according to the recommendation of such organisation and leaders of African countries spend most of their time consulting with the representatives of those organisations

Late Julius Nyerere, former President of Tanzania said “IMF is a tool for controlling the ideology and the economy of poor countries by the richer countries” The fact is that the economic independence which could have the most important outcome of anti-colonialism struggles for African countries have not been realized and the economy of this continent is control from outside

            With the coming on board of Asian international infrastructural development bank into African continent we are seeing new hope and all the past was history.

Finally, presently there are not less than seven world bank projects in Borno State (Nigeria) alone.

Baba Ali Mustapha is with the Department of Planning/Research/Statistics, Ministry of Environment, Maiduguri, Borno State, Nigeria

Reference:

Professor Ibrahim Umara of University of Maiduguri, Oral Interview at Danda-Kura Radio International , Maiduguri, Borno State, Nigeria (2019)

New Nigerian Newspaper, No 12, 844, September 21, 2004 Kaduna State, Nigeria

Echo of Islam, published in Tehran , Islamic Republic of Iran (July, 1996)