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Africa wrongly integrated into global economic system – Olukoshi

Africa wrongly integrated into global economic system – Olukoshi
By Kabanda Chulu in Accra, Ghana
Wed 25 Aug. 2010, 21:30 CAT

UNITED Nations African Institute for Economic and Development planning director Professor Adebayo Olukoshi has said Africa is wrongly integrated into the global economic system resulting in excessive exposure through experiencing negative impacts whenever a crisis hits the world system.

And Prof Olukoshi said the import substitution industrialization programme was implemented under an ‘ironic’ logic with many imbalances that failed to shape African economies into global markets.

Explaining the crisis and nature of Africa’s economies and their integration into the global economy on Tuesday, Prof Olukoshi said politics of power were always at the centre of any global economic crisis.

He observed that the usage of the US dollar had made the United States an automatic trigger of the crisis.

“The playing ground in the global capitalistic system is not leveled hence stronger members are relatively better positioned to absorb the crisis and they also try to push systemic failures to weaker members.

Look at Africa, despite not being at the epicenter of the crisis but getting the worst impacts because it is wrongly integrated resulting in excessive exposure by experiencing negative impacts whenever a major crisis sweeps through the global economic system,” Prof. Olukoshi said.

“For example, the oil crisis and decline of commodity prices of the 1970s, Africa experienced huge impacts and that time many countries started accumulating debt, currency devaluation resulting in declines of even sectors that were performing better.”

Asked why African countries cannot pursue their own policies despite having skilled economists, Prof Olukoshi said due to the hijacked Washington Consensus, many countries found it difficult to even remove a Central Bank Governor since they received instructions from Washington.

“They give us orthodox policies which they don’t follow and since they have money, they instruct their banks not to lend for production purposes but encourage them to give people to speculate such as playing into our stock markets to create problems because they think that Africa is too precious to be left to Africans hence they continue coming up with various channels to control the continent,” Prof. Olukoshi said.

“Imagine Africa as a single unit has in excess of over US $ 400 billion in reserves but these funds are not working in our countries, but they are being used in market speculation (instead of productive purposes) by investment institutions such as JP Morgan, Sachs, among others.”

And analysing trends in economic structures and productions capacity in Africa for the manufacturing industries, Prof Olukoshi said the idea of establishing light industries was a positive development.

“Import substitution industrialisation programme was good and contributed to growth rates recorded in that period but it was implemented under an ironic logic since these light industries depended on foreign imported inputs and in some instances companies imported basic inputs like water to produce soft drinks, hence failing to contribute to shape Africa into global markets,” said Prof Olukoshi.

Labels: ADEBAYO OLUKOSHI, ECONOMY, GLOBALISATION

posted by MrK @ 11:22 PM