Neo-Liberalism and Bad Governance


Western led institutions of economic governance (IMF, WB, WTO, etc) that routinely and at times inconsiderately prescribe standard off the rack policies as proven remedies to the poor’s long standing protracted problematic are now confronted with formidable challenges arising from within the core countries of the world system. From the look of things, the multifaceted problems that afflict the rich nations of the West are proving extremely difficult to manage, let alone solve, especially within the logic of the established neo-liberal dogma.
In the heydays of the prevailing neoliberalism, juxtaposed with ‘the end of history’ narrative, the preaching of the high priests of global economic governance (with their sidekicks; the universities, research centers, etc) included plenty of hands-on instructions on systems of ‘good governance’ that were meant to facilitate rapid economic growth. Don’t forget the alpha and omega of these institutions has always been economic growth measured in GDP. To the vicars of neo-liberalism, growth is development and development is growth; but to us simpletons, growth does not necessarily imply development. In fact it is this absurd presumption on the part of establishment doctrine (GDP and its phony impostering) that is instigating vigorous interrogation within the world’s activist-intellectuals community. On top of that, the general absence of ‘good governance’ across the breadth and depth of our world is firing up the global beast (human mass) for the ’long march.’
In the case of ‘developing countries’, bad governance and growth can coexist together, especially within the neoliberal model. Nonetheless, the contradictory dynamics inherent within this amalgam ultimately ruptures, destroying both. For us simpletons, development means ‘overall societal development’ and encompasses, amongst other things, ‘good governance’; unless of course one is talking about only material development, which to us is just another name for growth. The Arab Spring is an example of one such rupture in the making. In the West, the prevailing ‘bad governance’ in economics, politics, culture, etc is being challenged by determined grass root movements, albeit unsystematically. The likes of the ‘Occupy Movement’, ‘the Indignados’ (Spain), ‘the Greek Protests’, etc all belong to this category. For a change, South America’s economic governance has been gradually moving away from the region’s traditional doctrine of ‘growth for growth sake’ or put differently ‘growth with polarization’, towards a more sustainable and equitable model.
If there is to be an African renaissance, we believe, it has to follow trajectories that can ultimately guarantee equitable and sustainable development. The current volatile and unsustainable growth model that is pushed by the self appointed economic pontiffs, religiously followed by the unquestioning devout and widely celebrated by the short sighted, will not bring respite to Africa’s majority. Africa’s major countries like that of DRC, Nigeria, South Africa, Kenya, the Sudan, etc must rethink their unsustainable economic paths that are geared only to mimicking the collapsing neo-liberal model cronically centered around oligarchical accumulation. We believe the challenge of building grass root political movements that can dethrone the existing model and forge new development paradigms on the continent still remains the major task of Africa’s committed intellectuals. We believe, looking abroad to old institutions and their old books is passé.
LIBOR rigging is something one cannot easily dismiss, as it affects millions of contracts that have been agreed upon across the globe. The acronym LIBOR stands for London Interbank Offered Rate. It signals, signifies and underlies, literally all-global interest rates at play. It is set by free market transactions amongst the major banks of the world. It is now clear the banks that set this global interest rate were rigging it behind the scene to their wicked advantage, while the major central banks of the world were intentionally looking the other way. By any measure, LIBOR rigging is very hideous, but there wasn’t much public fury, thanks to the concerted effort of establishment institutions and their paid media that managed to silence critical public inquiry on this grave financial crime. Also this is where the establishment’s long-term strategy of keeping the global beast absolutely ignorant on issues of critical importance comes in handy! For the average person, this is just another run-of-the-mill scandal by the usual culprits- banksters, but to the initiated: ‘…this dwarfs by orders of magnitude any financial scams in the history of markets…’ according to an authority at MIT. Talk about ‘bad economic governance’ of epic proportion!
Here is one from ‘Bloomberg’: “Libor is the fourth scandal to hit the UK’s financial industry in the past 14 months… The country’s biggest banks by assets have already set aside 6.9 billion pounds to compensate customers improperly sold insurance. They are also under investigation for mis-selling interest-rate swaps to small businesses. Separately, HSBC may be fined for failures in money- laundering controls that U.S. Senators say gave terrorists and drug cartels access to the country’s financial system.” So on and on!
Here is another one from the sea of ‘bad governance’! Rich individuals and their families have as much as $32 trillion (twice the GDP of USA) of hidden financial assets in offshore tax havens, representing up to $280bn in lost income tax revenues, according to research by Tax Justice Network. The study estimating the extent of global private financial wealth held in offshore accounts – excluding non-financial assets such as real estate, gold, yachts and racehorses – puts the sum at between $21 and $32 trillion. According to John Christensen of Tax Justice Network: “What’s shocking is that some of the world’s biggest banks are up to their eyeballs in helping their clients evade taxes and shift their wealth offshore. We’re talking about very big, well-known brands – HSBC, Citigroup, Bank of America, UBS, Credit Suisse – some of the world’s biggest banks are involved… and they do it knowing fully well that their clients, more often than not, are evading and avoiding taxes.” See also Alperovitz’s article on page 50. Good Day!