World Bank: Governance Key to Africa Growth … The challenge of governance and leadership in Africa is "particularly acute" and had undermined the continent's improved economic performance over the past decade, the World Bank said Thursday. Tackling this issue was the foundation for the World Bank's new strategy plan for sub-Saharan Africa, aimed at increasing the competitiveness and strength of its economies, and making them more attractive to investment. – Wall Street Journal
Dominant Social Theme: Africa needs the help of wise institutions like the World Bank.
Free-Market Analysis: It is truly astonishing that in the 21st century the World bank – which has inflicted ruin on nation-states across the globe – can confidently propose a pan-continental plan (see excerpt above) for one of the world's largest and most diverse regions – Africa without receiving even a modicum of pushback. Perhaps it is merely the predictability with which the World Bank approaches its destructive mandate that reduces debate. Or perhaps it is the World Bank's inevitable failure when it comes to implementing strategies that actually helps countries.
In any event, the current strategy that the World Bank is proposing for Africa is in keeping with the larger economic illiteracy that informs Western world-spanning institutions generally. The World Bank is an agent of the Anglo-American power elite. Its real job is one of neo-colonialism. It propagates Anglo-American power by supporting "governance" – the various appurtenances of developing nation-states that are supposed to ensure that "investments" are implemented in the intended manner.
Actually, the creation of governance is intended to advance the way the Anglosphere keeps control of the developing world. Western powers-that-be operate via mercantilism; by pulling the levers of government behind the scenes. Without government there are no levers and thus no availability of control mechanisms. It is the World Bank's job, among others, to encourage Western-style regulatory democracy in developing countries to ensure that the West maintains its dominance. This approach, however, is dressed up in fancy language and the implementation of "plans" and "strategies." This article is a very good example of this sort of double-speak.
The Journal begins the article with Obiageli Ezekwesili, the World Bank's Vice President for Africa who was speaking to reporters "at the launch of the World Bank's new 10-year strategy for the world's poorest continent, which grew by an average of 5% over the past decade." Her quote: "All of the better performance over the period of a decade has not been sufficient to tackle deep development problems that challenge the continent." So what is needed? More government and … more money. "The strategy will be financed by half of a $49 billion package agreed in December by the International Development Association, the World Bank's lending arm for poor countries."
We learn that two-thirds of the 30 countries classified as "fragile and conflict affected" are to be found in Africa. And what is the underlying problem? According to the Journal, "The Bank says this is worsened by the fact that public-sector capacity in those countries is exceptionally weak. A clear message from our consultations for this strategy … was that governance and leadership were the most important factors driving Africa's future development," the World Bank said in its strategy report.
So the problem with Africa, in addition to a lack of money, is that it does not have enough government. (And you thought government in Africa was the PROBLEM, silly you!) The report does have the grace to point out that "regulation of labor and land often constrained business and undermined competitiveness," and that "Labor rules are seen by many as one of the biggest impediments to investment in South Africa, the continent's biggest economy."
An even bigger problem is a lack of infrastructure according to the World Bank. "Everything we do to address Africa's infrastructure will help to enable its competitiveness," Ms. Ezekwesili is reported as saying. "Businesses want to set up here with the hurdles to their activities eliminated as much as possible."
The article concludes with the vague threat that The World Bank "would intervene through partnerships, knowledge and technical assistance as well as support expertise and financing." Strangely, the Journal points out that, "The Bank didn't address any of the shortcomings of its previous strategy, the Africa Action Plan." This is probably because the previous plan didn't work. Nor will this plan work.
What will work, if we read all this correctly, is that Africa is going to be targeted for the world's next big monetary inflation. That's the reason for the World Bank's involvement now. Africa is to become, in our estimation, the world's next China. This has two advantages for the power elite. First, it creates an entity that can purchase yet more sovereign debt from the West – yet another buyer of last resort, a function that Japan once served and China as well.
Second, and just as important, the inflationary magic of central banking tends to blow up economies rather quickly, which gives the elite the ability to point to its ruinous system as a miraculous alleviator of poverty. What is not explained of course is that just as printing money-from-nothing can inflate an economy rather quickly, the after-effects are sour indeed. Argentina, Japan and now the US (with China to come) are left raped and helpless following such inflationary episodes, which may last as much as two decades, or even longer.
Inevitably, the economic imbalances that are left behind include massive unemployment, industries that have no outlet (or even purpose) and a ruinous decline in overall prosperity, equity and individual portfolios. The wealth of the nation is revealed as nothing more than monetary inflation and the wealth of individuals and families is suddenly drained away with the overall economic collapse. All this is, perhaps, in Africa's future.
It is fascinating to see what is planned. Already Africa suffers from a plague not just of national central banks but regional ones that administer currencies over as many as 6-8 countries. As we have pointed out in the past, the framework has been laid as well for an "African Union" and a full-on "African central bank." The arrogance of Western elites in this regard is staggering. The continent-building is barely disguised, nor is the contempt. Africa is to be broken open with the nutcracker of international finance. Monetary colonialism will take the place of the 18th century kind. The result will shatter even more lives than before.
Africa does not need more or better "governance." The idea that free-markets can only be built by better government is ludicrous. The only positives that we can see in regard to all this is that Africa may never experience the full force of what the World Bank and its Western elites have in mind. The way things are going, the world economy may collapse before the World Bank is able to implement its governmental and economic reconfigurations. In such a case, Africa might have the ability to go its own way. The pathologies that the West has already inflicted on that bleeding continent might be mitigated over time. As it stands now, the upcoming cure will be, eventually, far worse than the disease.