News & Analysis
Idea of Turning Africa Into China Unraveling
Many of us are deeply troubled by what is happening in the Ivory Coast. The fundamental issues are being overlooked. The consequences and ramifications of this denouement are also being overlooked. – Ghana Joy OnLine
Dominant Social Theme: There is no reason for concern over the ouster of Laurent Gbagbo. It was the right thing to do. Plus it's a small country and people around the world won't notice.
Free-Market Analysis: We have stayed with the Ivory Coast story because it is not often one gets to watch a meme in the making. But that's how these dominant social themes work. The meme in this case, and it is larger than the Ivory Coast, is that if Africa's teeming countries can become properly managed regulatory democracies then its peoples and institutions can grow wealthy beyond belief. Western power elites will make it so.
Those who understand this sort of analysis also understand that it is not merely theoretical. One can use such meme watching to pick, say, the turning point for gold and silver circa 2001. Those "in the know" were able to pick the turning point almost to the month. These individuals and groups began accumulating gold at US$250 an ounce and now own those same ounces at US$1500. Silver provided the same opportunity.
How does Africa fit in? If one goes along with the promotion now rolling out, one might be apt to grant this perspective – that Africa is the next China. But there are two caveats. One, the Anglo-American power elite that already did this in Japan and China has to have the psychic and economic space to work the same miracle with Africa. Second, African leaders and their peoples have to let it. This second caveat is a big one. The reason the elites are not focusing on South America is because many South American leaders distrust the Anglo-American economic approach. Africa provides less pushback or at least it did.
The reason the Ivory Coast story is so important is because it may presage the end of certainty that Africa is in fact amenable to 20th century-style Western economics. There seems little doubt now that Gbagbo's removal as President of the Ivory Coast was preordained, but by obscuring Gbagbo's role in advocating African independence from the West economically as well as politically, Western powers-that-be have justified their actions abroad but not in Africa.
These are big issues and change is slow. But Gbagbo's ouster may be one of the turning points that we try to identify. The instinct among Africa's corrupt leaders is to do the West's bidding and this has led to an overwhelming flood of vituperative media as regards Gbagbo. The former Ivory Coast president is a history professor with a career built around increasing defiance of French business and economic interests. In the process of his removal, he has been vilified. His Muslim opponent Alassane Ouattara (now president) is a technocrat who worked with the International Monetary Fund. He has been celebrated, uplifted and was, in the end, installed as president by force.
Our point, as dedicated meme watchers is, as always, that in this new century the Internet undermines elite propaganda that was so successful previously. The Anglo-American power elite is desperately trying to whip Africa in shape so it can take its turn in line as the next China but episodes such as those that just occurred in the Ivory Coast don't help. Western elites need a continent-sized evolutionary capitalist environment on which to lay off US Treasuries. This necessity has increased a good deal since US President Richard Nixon abrogated the gold standard way back in 1971.
The first nation to play this role was Japan, which absorbed almost US$1 trillion in Treasuries in return for having fairly open access to the US market to sell goods and services. The money that Japan shipped to American shores mostly funded American military might that in turn provided security to Japan and much of the rest of the world. Of course once can argue about whether this was a good thing as the type of military security that the US provided tended to freeze regulatory democracy into place and empowered regional elites or outright authoritarian leadership.
Japan finally succumbed in the late 1980s to the inflationary bubble that Anglo-American manipulation inevitably entails and has not really recovered since. Anglo-elites, meanwhile, began to groom China with door-opening dilplomacy led by elite representatives like Henry Kissinger who paved the way in the early 70s. With the willing help of China's elite families and communist political structure, China took Japan's place. But now China is gradually succumbing to the same price inflation that laid Japan low. China will have to raise rates again and again, and this will have an effect on its ability to produce the kind of easily disposable consumer goods that the West demands and purchases in quantity.
Enter Africa, supposedly the next China. It is perfect. It is a huge continent of around a billion people, many of whom live on no more than a dollar a day and will be happy to work for very little money in return for a steady income and socialist promises (propaganda) of security. Africa is a kind of black China. Even better, since the culture is not homogenous, its institutions and politicians are eminently manipulatable.
In the 20th century, Gbagbo's manipulated demise would have resonated and then, perhaps, been forgotten. But we have postulated that in the 21st century, the manipulation will not be soon vanish down the "memory hole." The signs are going unreported in larger Western coverage of the Ivory Coast "recovery," but in the past first Ghana and then Gambia, both small states nearby the Ivory Coast have reportedly refused to recognize Ouattara as president.
The wave of adulatory press that has uplifted Ouattara while denigrating Gbagbo is starting to evolve as well. Perhaps the most startling article to date appeared in Ghana's Joy Online. The long but apparently un-bylined post was entitled "Feature: Ivory Coast Crisis" and is a devastating critique of what has just occurred.
Gbagbo, as a kind of professorial rabble rouser, was supposed to have skillfully exploited divisions between the Muslim immigrant North of the Ivory Coast and the Christian South. But the article makes the point that even 10 years ago in 2000 some estimates put the proportion of migrants at 40% of the Ivory Coast's population – which is a mighty large number indeed. Gbagbo didn't have to do much "exploiting." Ivorians were angry at the unrestrained influx and remain so to this day. Ghana's government actually began forcing immigrants out of the country when they reached 20 percent. The Ivory Coast passed no such law.
Nonetheless, there were political ramifications. As a non-Ivorian (both his mother and father were born outside the country), Ouattara was disqualified from the October 2000 presidential election that brought Gbagbo to power. And the article explains that the major fallout of the election was that the migrant population (still called "estrangers" or "strangers" by other Ivorians) felt Ouattara had not received his due. The result eventually was a civil war that led to the break up of the country. The civil war was finally settled in a complex peace deal of March 2007 to be supervised by the UN. In fact the UN predictably did a lousy job and though it was supposed to disarm the opposing sides it did not.
Still, Gbagbo was under pressure from the UN, France and the US – so says the article – to hold new elections. Gbagbo finally agreed to hold elections and to let Ouattara to run even without satisfying the citizenship requirement. "Gbagbo agreed to a new Electoral Commission headed by a Ouattara supporter, ostensibly to balance the Constitutional Council whose membership he had appointed as president." Here's the article's critical paragraph, which corresponds to what we've been reporting:
In France and in the Ivory Coast and virtually every other former French colony, the Constitutional Council certifies and declares election results after the Electoral Commission collates the results. These roles were not changed for the November 2010 presidential election in the Ivory Coast. This fact notwithstanding, the UN, with support from France, the US and other western countries, encouraged the Electoral Commission to declare the election results – in contravention of the constitution and electoral laws of the Ivory Coast, but in the belief that it constituted the certification of election results that the UN was to do!
The article tells us that that in some provinces of the North (where Ouattara had his backing), investigations found that voter turnout was as high as 150%, obviously a mathematical impossibility. The Constitutional Council invalidated the results of those provinces even as the UN was declaring Ouattara the winner. "Thus, two winners were proclaimed and sworn in as president: Ouattara, unconstitutionally by the Electoral Commission, and Gbagbo, constitutionally by the Constitutional Council."
The article then makes another point we've mentioned previously – that the UN should have rerun the election, at least in the questionable provinces. Instead, four months later a column of heavy armor including tanks and mobile artillery rolled toward Gbagbo's big house in Abidjan and after concentrated shelling, Gbagbo was removed by force by the French with UN back-up and turned over to Ouattara's ragtag forces that had apparently raped and pillaged their way down from the North into Ivorian Christian strongholds.
Gbagbo is now an old man, as videos reveal, but he seems to have courage. His home was blown up, but he went downstairs to the basement with his immediate family and continued to be defiant. The French sent him a letter that he was supposed to sign that would authorize the elections as legitimate. He refused. The UN announced he had surrendered and sought their protection. He had not.
Allies and associates were murdered in the ongoing shelling and looting. But Gbagbo stayed in his basement. Eventually, they took him by force. His son and wife were beaten up after their capture. His wife may have been raped. But in the end, the "baker," who is known for softly rolling his adversaries in batter and then leaving them to roast in the oven, has raised the heat all around.
Now The French are trying to cut their military presence by half and the Ouattara regime has taken to making regular announcements on radio stations urging "reconciliation." In fact, there have been reports since retracted of the capture of various Gbagbo associates. The most recent Ouattara announcement was that his "rebel" troops would only patrol with French and UN troops because the rebels were too prone to raping and looting. This means for all intents and purposes that Abidjan remains an occupied city, as Gbagbo apparently predicted to his supporters.
Sarkozy and Obama pressured Gbagbo to allow Ouattara to run on the argument that that was the only way of ensuring peace, the article informs us. And in Ouattara, as the article explains, the French, Americans and other Western powers can continue controlling the Ivorian economy: "In other words, neocolonialism will be writ large." Here's the conclusion:
The granting of full citizenship and enfranchisement of the migrant population in the Ivory Coast is the fundamental issue. Installing Ouattara as president would not resolve this issue, especially since the election result is in dispute. It will only sow the seeds of deep discontent, which will fuel civil strife. To avert this outcome, the granting of full citizenship and enfranchisement should be done properly and then the election should be rerun. The instability in the Ivory Coast is already having refugee, humanitarian, security and economic effects in neighbouring countries, particularly Ghana and Liberia. If civil strife worsens these effects will be greater and will destabilize the entire ECOWAS region.
... We in Ghana will bear the brunt of instability in the Ivory Coast so our president has been right in advising that peaceful means of resolution should be exhausted. The disarmament of the rebels, which was to be supervised by the UN, has been incomplete, leaving the rebels militarily strong. This is the main reason why the rebels have been able to march across the country, take control of San Pedro and other cities and are now trying to take control of Abidjan.
A cease fire must be imposed immediately, otherwise there will be more violence and the Ivory Coast will descend into more chaos, civil strife and then civil war. African leaders should take the lead in arranging for an immediate cease fire. If they don't, a bad precedent will have been set: If there is an electoral dispute one party should secure foreign support and militarily take over. Is that the way we want Africa to go? NO! Elections must surely be held and then results must be declared in line with the constitution and electoral laws of nations. The results must then be accepted by all parties.
As we reported earlier in the week, it may not be easy to pacify Abidjan and even other parts of the Ivorian South. Those who are shooting at French, UN and Ouattara troops are not merely supporters of Gbagbo, they are the husbands, sons and fathers of Christian Abidjan residents. They pick up a gun, shoot, and then put the gun down and return to whatever they were doing. It is a classical insurgency operation of the type that is difficult to quell. There are caches of military supplies throughout Abidjan and armed Gbagbo supporters have fled to Ghana and other neighboring states. This is a recipe for a new civil war.
In closing, we will point out another little reported story that African leaders are attempting to dissociate themselves from The Hague. Over the weekend, Nationmedia.com posted an updated report on, "the frosty relationship between the African Union and the International Criminal Court." We learn it started "when chief prosecutor Luis Moreno-Ocampo, issued an arrest warrant for Sudan's President Omar al Bashir last July." The rift has been exacerbated by the case of the Kenya Six that are now on trial at The Hague over post-election violence in Kenya several years ago. Here's some more from the article:
The Union has stated that it would consider withdrawing from the Rome Statute en masse should Kenya's request for deferral of the post-election violence cases at the ICC fail. As of October 12, 2010, 114 countries were state parties to the Rome Statute of the International Criminal Court. Of these, 31 are African States, 15 are Asian states, 18 are from Eastern Europe, 25 are Latin American and Caribbean, and 25 are from Western European and elsewhere. Thus, African countries constitute the majority based on continental figures.
Were Africa to pull out of that farcical court with its emphasis on vaguely defined "crimes against humanity," it would likely be a deathblow to its credibility. This is of course the same court that Gbagbo may appear before for his "crimes against humanity" – which Ouattara's prosecutors are preparing even now. (Soon, no doubt, we will hear leaked reports about Gbagbo's corruption and graft, even though that's not the point.) It is well known in Africa that the ICC's active cases have targeted the African states. Mr. Jean Ping, the Chairman of the African Union Commission, has reportedly gone on record saying the ICC has double standards.
Conclusion: The 21st century is not the 20th. It is far more difficult for Western powers-that-be to surreptitiously promote power politics in Africa and elsewhere. Even the policy of "lifting up" states such as Japan and China and industrializing them is beginning to founder. Africa is probably the last hope for the West as regards this sort of mercantilist approach. This is no doubt another reason why Western money power seeks a worldwide platform. It has worn out the regional one.
Posted by MetaCynic on 04/21/11 11:38 AM
Couldn't renewed Western meddling in Africa also have something to do with denying China its growing access to Africa's natural resources? It's one thing for the West's elite to build up China as the world's workshop and moneylender to governments, it becomes a bit worrisome for the Anglosphere, however, if China becomes too independent of the West in securing the raw materials for its economic engine.
Didn't China recall thousands of skilled energy sector workers from Libya once the West intervened there? My understanding is that China has a growing presence throughout Africa. The Chinese approach to Africa is different from that of the West. The Chinese come as traders, the Europeans and Americans come as conquerors disguised as benevolent world improvers.
Prior to the industrial revolution in the West, China was probably, for many centuries, the world's premier economic power. The 19th and 20th centuries saw China decay and fall far behind the West and Japan. Now that it too has embraced industrialization, China could be on a trajectory to regain its former world class status. To do so it needs Africa to supply the steady stream of raw materials for industry. The West has arrived to impede that stream whenever China becomes too uppity.
Posted by Not Anti-military Per Se on 04/21/11 11:03 AM
DB "China will have to raise rates again and again...."
This may not be the case. Have they raised rates in Japan? No, low interest rates, with central banking, fiat, income taxation, legan tender and other regulation is a one way street.
In this system money only comes into existence as debt with interest attached which MUST be paid. Bankers do NOT forgive interest. Rates will remain low until interest on debt is paid, which of course is perpetual ie. never.
In Japan it appears that low interest rates actually destroy capital with such great alacrity thru misallocation (and perhaps the bond market per Dr Fekete) that their is no threat of increase in money velocity or price inflation although real inflation (monetary expansion) is ever present. What is left is a diminished overall standard of living and a growing divide between those who benefit from the system (a diminishing number) and those who don't (markedly expanding).
Purposefully subjectating nations has no use for sound monetary policy. Rather, authoritarian control becomes paramont to enforce the consequences of the every expanding chasm between the "haves" and the increasing hoards of "have nots." Propoganda of the ruling elite has its limits, while their ambition apparently does not.
As always Great Praise for the work of The Daily Bell.
Reply from The Daily Bell
This may not be the case. Have they raised rates in Japan?
Sometimes governments do NOT raise rates in a fiat money economy and thus the economy comes in for a "hard landing" rather than a soft one. This is what the Chinese are trying to prevent.
The bubble in Japan collapsed after the 1987 global stock market crash. Japan would have been better off damping the economy BEFORE the crash, as the Chinese are trying to do.
One could argue Japan experienced a sort of hyperinflation in the later 1980s and should have controlled its monetary policy better earlier.
From Wikipedia ...
-- The Nikkei stock index hit its all-time high on December 29, 1989 when it reached an intra-day high of 38,957.44 before closing at 38,915.87. Additionally, banks granted increasingly risky loans.
-- Prices were highest in Tokyo's Ginza district in 1989, with choice properties fetching over 100 million yen (approximately $1 million US dollars) per square meter ($93,000 per square foot). Prices were only marginally less in other large business districts of Tokyo.
And the results of all this inflation (and price inflation)
--By 2004, prime "A" property in Tokyo's financial districts had slumped to less than 1 percent of its peak, and Tokyo's residential homes were less than a tenth of their peak.
--Tens of trillions of dollars worth were wiped out with the combined collapse of the Tokyo stock and real estate markets. Only in 2007 had property prices begun to rise; however, they began to fall in late 2008 due to the financial crisis.
--The time after the bubble's collapse, which occurred gradually rather than catastrophically, is known as the "lost decade or end of the century" in Japan. On March 10, 2009, the Nikkei 225 stock index reached a 27-year low of 7054.98.
There was too much money around, just as in the Roaring 20s in the US. Markets crashed and money ceased to circulate (velocity of money) and money gradually became dearer (deflation) because there was less of it available. Because the economy had been so distorted even the Japanese zero interest rates didn't help.
This is classical Austrian economics. You cite Dr. Fekete (whom we have published); how then would his analysis differ from the above?
Posted by Reader on 04/21/11 05:30 AM
Trade has returned to all the main population centers and the traditional regions of the earth. Africa will certainly benefit.
Posted by Charles Frith on 04/20/11 07:48 PM
It's articles like this that reinforce that The Daily Bell is 9 parts info to 1 part disinfo and run by TPTB.
How about those food price increases. You seem to have backed up seriously on that one.
Reply from The Daily Bell
You mean in Africa? Food prices are a big deal but the article was about pushback against the West by African media and African elites. Sorry you find that to be a PE theme.
Posted by Grendelgb on 04/20/11 07:16 PM
Love this quote 'As the sun peeks over the horizon of the Arab world, dusk is descending on America. In the penumbra, Washington plays out the cards it once dealt itself, some from the bottom of the deck, even as other players are leaving the table. Meanwhile, somewhere out there in the land, you can just hear the faint howls. It's feeding time and the scent of blood is in the air. Beware'
Posted by Cp on 04/20/11 05:03 PM
What you are seeing is an EU not a china. Hint hint, the African Union. Did you notice they were the first to visit Gadaffi? Africa won't unite entirely there will be a union in the North (muslims) and a Union in the south (Christian/tribes). This is what you saw with the Sudan split. The nation states are a thing of the past. The future is "contientent unions" this is what your seeing! North america, south america, EU, africa, etc... Where o where was this predicted?
Reply from The Daily Bell
We've reported on the African Union. But that doesn't preclude the scenario we've suggested. Not that it will come to pass ...
Posted by Michael on 04/20/11 03:53 PM
Once again another interesting article on Ivory Coast. Its been great reading DB's articles on this issue and then comparing them to whats in my local paper and whats on the T.V. Please stay with this and keep us up to date!
Reply from The Daily Bell
Thanks. A different "take" ...
Posted by 4irw4y on 04/20/11 11:08 AM
Posted by Bionic Mosquito on 04/20/11 10:24 AM
DB, you have done great service on this story, certainly including the other calamities in the MENA region, but especially this one.
For the elite to try to bring all of Africa under the tent: talk about a problem of overcoming the tribes! The elite are having a hard enough time of this in Europe...but Africa? This should be interesting.
Posted by Robert Wilson on 04/20/11 10:03 AM
Japanese and Chinese people have a strong worth ethic. I do not see this in Africa. I do not think his continent can be "exploited" by developed countries. It may be destined to be exploited by savage dictators.
Posted by Curious on 04/20/11 09:53 AM
Africa's GDP is what? About a Trillion dollars?
Too small for a billion people...
Posted by Alexander Doty on 04/20/11 08:48 AM
The condition of people throughout Burkina Faso and many other countries in Africa is below subsistence. They go to the capital because they cannot find economic opportunity in their villages. Is assisting such people in a mutually beneficial way so bad?
Reply from The Daily Bell
Don't know what you mean. We've already addressed this comment on this thread ...
Posted by Ananna2022 on 04/20/11 08:28 AM
If this happens, what is the price that this great continent have to pay? The elite will rape and destroy this great continent like it has done to all other countries and continents.
Posted by Alexander Doty on 04/20/11 08:09 AM
I recently visited Burkina Faso at the invitation of a young man who was born and raised there with the usual attachments to a tribally organized village away from Ouagadougou. He has been attempting to convince me to invest in a cooperative of artisanal miners like the ones his parents were during his childhood. The goal is to implement mining infrastructure (tunnels) which are safer than what they have at present in the absence any western interference. The other goal is to keep more of the market price of their findings than is possible under the current system which is intermediated by license holders favored by the authoritarian government. Any comments on this situation?
Reply from The Daily Bell
Doesn't sound like such a bad idea - but we have no knowledge of the situation you are referring to of course. Alternatively, they could hire outside Western expertise for a fee (though that may be what they're doing anyway).
Posted by ScipioNasica on 04/20/11 07:58 AM
Thank you Daily Bell, thank you.
Posted by Alexander Doty on 04/20/11 07:53 AM
The phrase "lifting up" was used in the article in reference to US support for China's economic development. My question is whether this is such a bad thing for Africa. I do not deny the insidious character of much of what the west does in Africa and elsewhere.
Reply from The Daily Bell
This is a good question. We would argue that central banking economies are ultimately terrible for the countries they serve. Look at the state America is in or the rest of the West.
In Africa men hunted and women cooked and gathered food. The weather was fine and the total working day was maybe 4-5 hours, depending on need.
Now in many African states people live on a dollar a day and cannot provide for themselves or their families or plan for the future.
How is this better than what was? And how will more of the same be better still. We would argue the Western paradigm, ultimately, lifts no one up. Almost everyone, every day, in Western economies fears in some sense for their livelihood. It is a rotten system.
Posted by Alexander Doty on 04/20/11 06:26 AM
Would "lifting up" Africa really be such a bad thing? Is Gbagbo's exit something to mourn?
Reply from The Daily Bell
The West has been involved intimately in Africa for perhaps 300-400 years at least. Today a sizable minority of Africans live on perhaps a dollar-a-day. That is certainly true for Kenya, perhaps the most sophisticated African state.
So who is going to do the lifting and how is it going to be accomplished? You are proposing that more of the same - more interference, more armed coups, more Western paternalism, etc. - is going to "lift up" Africa.
You really believe this?