‘Credit crunch…global financial crisis…economic downturn… recession…correction.’ These are just some of the phrases that have become part of our daily vocabulary in recent months. For the poorest segment of the world’s population however, the daily dramas of
The projections from the world’s leading economic experts continue to spread gloom about how
Despite conventional wisdom, this is no time to be looking to history for the answers. While analysts hark back to the Great Depression or other cataclysmic dips in the economy as a benchmark for what we are currently experiencing, there are no common denominators that can help us draw on the past for a possible solution.
Consider for instance, that the total world population in 1929 was just 1.8 billion. Today there are 2 billion people alone living below the poverty line out of a total population of 6.2 billion. The pressure on the earth’s resources is unprecedented, unevenly distributed and unevenly consumed. In the meantime, since the Great Depression the world has endured two world wars – three if you’re honest enough to include the collective conflicts taking place in Afghanistan, Iraq and Gaza right now - developing nations have broken free from colonisation, and the world’s trade markets have become inextricably linked to eachother as a result of globalisation.
Diseases that are treatable claim the lives of 25 000 children every day and yet, after military spending, the pharmaceutical industry is the second biggest sector in which the wealthiest countries choose to spend their money. Despite the 3 trillion dollar war and a more modest 780 billion dollars spent on narcotics, there are more conflicts around the world right now and more people dying of mostly curable diseases than at any other time in history.
If anything, what the current global economic crisis could teach us is that the path in which the wealthiest nations of the world have lead us down in the last fifty years shows little insight or foresight. If we are to challenge the doomsayers over the impending fate of Africa’s economy, we need to develop solutions of our own, which bring me back to my initial question of how did China overtake us.
It seems fair to start then by assessing the Neoliberal economic policy that the wealthy developed nations have followed in recent decades and inadvertently imposed on the rest of us. Neoliberalism when applied to economics, is supposed to spawn prosperity and free trade for all by creating self regulating markets, privatisation of public enterprises, greater assumed individual responsibility because of reduced spending on social services and broad scale economic prosperity as it trickles down to every level of society – using the principles of capitalism as the key driver.
Neoliberalism on paper - sounds like a great idea, but just about every one of its pillars has collapsed in recent years to now reveal markets that require regulating, bail outs and urgent spending on healthcare in even the wealthiest of countries.
A recent report from the University of Nottingham’s Globalization and Economic Policy Centre (GEP) is accusing
What is important though is that these production subsidies have served to incentivize a nation, boosting exports and GDP. While
Our people starve, while we allow our landmass that can engulf China, the Unites States and Europe collectively to turn barren. Our continent enjoys enough rainfall to irrigate the entire continent three times over and yet 500 million people do not have access to drinking water and entire countries report crop failure due to annual droughts.
South Africa in the last year has shed 400 000 jobs as a result of the recession, but the new incoming President, Jacob Zuma has promised to create 500 000 jobs in just six months. Nobody has asked how many of these newly created jobs will remain after the feverish construction taking place to ready us for the 2010 Fifa World Cup - since this might imply that we live in a forward thinking world.
What all these ironies suggest for me is that the doomsayers may be right about