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Neo-liberalism distorts development debate
By
Kuthula Matshazi
AS ZIMBABWEANS
we seem to be confused or better still, polarised in terms of the paradigm
that can inform our development path.
While we have a general understanding that we desire human centred development, the neo-liberal development paradigm gets into our way and distorts this vision.
This neo-liberal development paradigm, which is premised on economic growth, aims to undermine the human centred development progress by unduly seeking to divert public funds to companies as incentives or grants to establish their infrastructure that they use to create largely personal wealth.
The neo-liberal development paradigm, which is currently fashioned around the globalisation project, has spectacularly yielded unprecedented wealth to only about a fifth of the world population.
Meanwhile, human centred development for the other four fifths remains under assault as many more people fall into poverty while the neo-liberal globalisation project intensifies. While numbers from agencies like the United Nations tell us that there has been pockets of improvements in the lives of the poor, what they are essentially saying is that these people are marginally poor than before. Sure, one can argue that then this represents progress, but this should be contextualised.
We are living in a world dominated by increasingly knowledge-based economies and secondly where almost everything is being put up for sale. Now, if the financial situation of an extremely poor person improves by say US$5 a year, and that person is afforded the opportunity to go to school up to grade seven for free, could we surely consider that as empowerment? No, because this person’s US$5 will not take him/her anywhere since most social services are being privatised under the violent neo-liberal system and secondly, in a knowledge based economy, primary education is nothing. Rather than empowering a person, it actually helps to situate a person in a vulnerable social position to be abused by the violent and exploitative neo-liberal system.
The organisation of the world production system turns these illiterate and semi-illiterate people into cheap labour for the neo-liberal global economy. Jobs are de-skilled and given to these semi-illiterates to perform at scandalous rates of pay. On top of that, the automation of production processes results in job losses. The remaining human tasks have been intensified – putting a strain on employees and simultaneously eliminating jobs. The conditions under which these jobs are performed are usually dangerous and sometimes situated in unhygienic conditions. Jobs have become part time and with little or no benefits. Workers and their unions are disciplined through threats of outsourcing.
Having exploited the people, these companies connive to fix prices under the guise of the market forces determining the prices. Having ripped us off, they still enjoy the huge tax holidays and various incentives such as subsidies, which interestingly these corporations oppose when directed to the ordinary people. Such investment focussed towards the people is usually termed as unproductive spending! The profits earned by these companies are often deposited in tax havens outside of the host country. This is a brilliant business model by any neo-liberal standard.
The flip side is that when the people, through their governments, try to create a socially just access to opportunities, through, for example, black empowerment, the business people cry foul. They portray government as creating an unfriendly investment climate.
Yes, the private sector has a big role in the economy, but it becomes a problem when it adopts economic growth as the default model for our development path. Government, as the representative of the people should stand solidly and refuse the businesspeople to view development solely from an economic growth point of view. The reason is that if we view economic growth as the main development paradigm, then we would start chasing economic numbers that would yield benefits for only the few rich individuals at the expense of the majority of the people. A violent and exploitative situation such as that I describe above would surely manifest and entrench itself easily. South Africa is an example, where their economic prosperity does not match the situation of the mainly black citizens.
Granted, economic growth is important but it should not cloud or even eradicate all other development paradigms, especially human centred development. In any case, for economic growth to occur in this knowledge-based economy we need a population that has adequate food, a healthy workforce that is educated and possess economic, social and political rights.
Businesses gloss over economic rights, which is their chief blemish and turn the spotlight to political rights. In essence, businessmen only worry about political rights only in so far as they create a stable environment for their business operations as opposed to granting people real power to meaningfully participate in the political processes and exercise their democratic choices. One might want to read neo-liberals’ viewpoints within this framework.
While I do not use extensive data here to support my arguments, it certainly would not hurt to present a sneak preview.
Canadian scholars James Petras and Henry Veltmyer in their 2003 book titled System in Crisis: The Dynamics of Free Market Capitalism, say that “By 1997, after five decades of development and fifteen years of structural adjustments - a period in which world production grew 600 per cent (and trade three times as fast) – the top quintile received seventy-four times the income of those at or close to the bottom”. Also, they report that the income of the three richest individuals is greater than the combined gross domestic product of all the least developed countries.
Their study shows that education and health indicators, which were high during the 1960-1980 period of state-led development, were now reduced in most countries that were under the neo-liberal policy regime between 1980 and 2000. The year 1980 is significant because that is when neo-liberalism was intensified by United States President Ronald Reagan and British Prime Minister Margaret Thatcher. And in 1982 Mexico fell into a financial crisis, which led to the unleashing of the current devastating neo-liberal driven economic structural adjustment programmes. These International Monetary Fund and World Bank implemented ESAPs have gutted spending on social services and wrecked economies largely in pursuit of generating foreign currency to pay the external debt of client countries.
We hear that for Zimbabwe to get back to economic growth, we need to engage in this poisonous programme. I disagree. As Zimbabwe, let us look at our unique experiences and history and choose our own mode of development, which does not grant the private sector greater powers to dictate the development path. Porte Alegre, a city in Brazil does that successfully and is a perfect current example. Like this city, we should have a bottom up approach where people determine the development path. We need to have an economy that is largely owned by ordinary Zimbabweans and not big companies and a few individuals. These individuals think that they are a Godsend to Zimbabwe and yet if they do not direct neo-liberal economic violence at the ordinary Zimbabweans, they could also perform wonders.
It is a myth that big companies and only certain individuals can create wealth. Small and medium enterprises have a huge capacity to drive the economy of a country and at the same time pay attention to the social needs of their customers and workers. This is opposite to the large companies who are divorced from personal relations with their customers and their workers because of their size and their overarching concern for profit.
Against this background, the government of Zimbabwe, through monetary statement presented by the Reserve Bank of Zimbabwe Governor Gideon Gono, is in the right path towards consolidating the ownership of the Zimbabwean economy through SMEs.
Kuthula Matshazi is a Zimbabwean journalist and writes from Canada. He can be contacted at kuthulamatshazi@yahoo.co.uk
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