Date: Sat Nov 29 07:10:58 2014
Globalization: Crony capitalism and its effect on the African nations
Written by Berhane Woldu
Saturday, 29 November 2014 02:17 |
1971 Nixon dismantled the Brinton Woods system deregulated currencies,
ending the gold's role in finical trading. He introduced the flotation
system that expanded the unregulated capital and the formation of
globalization. This gave way to tax inversion, cheap export, low wages,
overseas head quarters and increase corporate profits.
There are two important consequences of globalization. First, it exploits
the developing nations. The developing countries have two-tiered society; a
segment of extreme wealth and privilege, and a segment of huge misery and
despair people. In the developing world it produces vast ignitable ethnic
wealth imbalances. Second, globalization has a political dimension. In the
international dimension the governing structures changes from national
states to break up system with no national boundaries from national economy
to international economy which means an international executive replacing
Colonial Imperials with "New Royally age" and "in effect world government".
Decision making accounts to the transnational corporations the structures
raise decision making to the executive level, rather than elected officials
or governments creating democratic discrepancy and isolation from governing
institutions. The sense of nationalism will be replaced by multinational
companies and interest groups will be the managing directors of the nation's
wealth, politics and economy.
International trade has a positive effect as nations trade. There are many
advantages efficiency, maximum utilization of resources; comparative
advantage, minimizing waste and cost efficiency are the major economic
advantages of trade. Trade has facilitated major social and economic
opportunities. Transfer of technology, innovation, economics of scale and
cheaper goods. Bill Gates Microsoft has contributed much to the world living
standard by introducing computers and providing low cost computers to the
less fortunate.
Nevertheless, Globalization on the other hand has debilitated the world
economy. One cause is the enormous increase in the amount of unregulated,
speculative capital. The figures are really astonishing. In the 1970, about
90% of international capital was used for long-term investment more or less
productive things and 10% for speculation. By 2000, 90% of capital had
reversed to speculation none productive sector of an economy with low
growth. Capital flows are fast and huge scale transaction and short term
speculative money that are main causes of the financial melt down and the
recession of 2008.
Amy Chua in the book 'World On Fire' states that; it was taught that
Globalization with its economic power would transform the world into
modernized, peace loving nations but what has happened instead is the world
has turned into disarray with ethnic conflict, militant groups, nationalism,
expulsions, massacres, confiscations, renationalization, transfer of wealth
from poor countries to rich countries and genocides.
Amy Chua states; in the third world it has introduced false hope led by
American promotion of free election and democratization without the
precondition for democratic governance. In countries where market-dominant
minority and poor indigenous majority the force of democratization and
Globalization collides as globalization enrich the minority; democratization
increases the power of the majority. Where by the majority demands the share
of the wealth "Indonesia for Indonesians" "Venezuela for Pardos" " Yids out
of Russia" "Hutu Power" "Kenya for Kenyans" these charges backlash against
markets, targeting the market-dominant minority's wealth or ethnic cleansing
by majority-supported ethnic violence, as occurred most recently in Rwanda,
Iraqi and Ethiopia. Globalization has been the main ingredient outside the
Industrialized West as an instigator or remuneration for confiscations,
autocracy, and mass slaughter. Kenyan's tiny Indian minority in alliance
with the Kikuyu during Jomo Kenyatta and later with Daniel Arap Moi with his
cohorts Kalenjin constituency jointly owned extensive businesses with major
Kenyan Indian families were the richest; whereby the main cause of the 1982
ethnic riots with anti-Indian violence in the urban centers. "pro-foreign
investment government" Sierra Leone is one good example of globalization
gone wrong. Lebanese entrepreneurial who controlled the country's commerce
and diamond trade were known as the "invisible government" of Sierra Leone.
The government in alliance with western advisers and Lebanese plutocrats
siphoned off the nation's wealth at the expense of the countries
development. By the 1990s Revolutionary United Front (RFU) was formed with
the RFU with its reign of terror destroyed Sierra Leone killing over 100,000
people and displaced over 5 million people took over the diamond mines and
the Lebanese plutocrats left the country. In 2012 the amount of wealth that
was transferred and haulage from Africa was $450 billion dollars.
In Pakistan, Zulfikar Ali Bhutto won the support of the impoverished mass
accusing the "Twenty Two Families" almost all Mohajir immigrants from India
of stealing the nation's wealth. Nationalization happened in many countries
Bolivia, Mexico, Peru, and Zimbabwe with the support of the indigenous
majority against market-dominant minorities. This nationalization was never
against private property rather the wealth of a hated ethnic minority. "The
true owners of the nation" in Zimbabwe the seizures of white-owned farmland
were the quintessential expression of ethnic nationalism directed at
"outsider" market-dominant minority. The White "foreigners" third generation
Zimbabweans 1% of the population yet controlled 70% of the country's tobacco
and sugar farms.
In short globalization concentrates capital in the hand of the few
billionaires and transfers money from poor nation to that of the wealth
nations. In the cases of the Third World Nation's Globalization perpetuates
a market dominant minorities. One needs to pay attention to the monstrous
imbalances that globalization produces and the market disparities. What is
needed is an economic and political system that brings about fair trade,
democracy, equality, diversity, justice and quality of life for all.
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