Economics -- African Trends

African economics
Figure 1.--Most of Africa achieved independence from European colonial power after World War II in the 1960s. In most countries the transition was peaceful. The new colonial leaders knew virtually nothing about economics, but widely believed that theough Governmenment management and socialist policies that they could rapidly develop their economies. Depite massive foreign assistance, virtually every country except South Africa proved to be economic disasters. Not only did the newly independent countries not rapidly develop, but living standards in many countries have actually deteriorated. And a tragic series famines followed one after another in steady sucession. Civil wars and droughts were often involved, but the larger cause has been incompetent leadership, widespread corruption, socialist big government policies, and in more recebnt years Islamic fundamentalism. The people of Africa have, as a result, paid a terrible price. Here is one of the terrible famines. This 1965 wire service photo caption read, "Relief for starving Africans: Thousahds of Africans face starvation as a result of the worst drought in 30 yeaes to hit Central and East Africa. Here a young African holds out his mug which will be filled by relief workers with soup. The child will also be given a blanket. Because of the drought, acres and acres of farmland are barren." A few countries in the 2010s are now beginning to report some economic improvement, primarily as a result of free market reforms.

The African countries include many of the poorest countries of the world. The continent is divided ethnically and culturally by the Sahara Desert. This has affected the political and economic development of the different countries. Most of North Africa was part of the Roman Empire and thus part of the Western world. Economic levels were comparavle to the rest of the Roman Empire. After the fall of Rome there was a brief period of Germamic rule, but the region was then conquered by Arab Islamic armies. We do not know much about the economy during the early period of Islamic rule. We do know that after the onset of the Renaissance in Europe that North Africa appeared a period of economic and cultural stagnation. Much of the region lived off of trade with sub-Saharan Africa in wgivh the slave trade was very important. Another major part of the economy was Mediterranran piracy. While some individuals acquired great wealth, the great bulk of the population livedcin abject poverty. Many in North Africa at the onset of the 19th century lived lives that were little changed since the 19th century. The countries were colonized by the Europeans, in part to end piracy. Each of the countries achived full independence after World War II, convinced that ousting the Europeans would result in affluence. The results have been uniform failure. The reasins vary, but range from war and wasfeful military expenditures, socialist experiments, corruption, medieval religious traditions, bloated beaureacracies, and a failure to adequately develop the populations capabilities through education. Perhaps the key factor has been the failure to develop free market capitalism. Sub-Saharan Africavis somewhat different. Unlike Africa there was little contact with the Europeans until the Portuguese voyages of discovery to find a sea route to the East (15th century). The Europeans found African tribes that ranged from the stone age to the early-iron age in technological development. The primary interaction for the next few centuries was trade. The slave trade proved particularly disruptive. Few Europeans penetratyed into the interior. This changed as the europeans developed modern weapons, especually repeating rifles. The result was the European Scrabble for Africa which colonized almost the ebtire continent. The primary European interest was exploiting resources. This resulted in some infratructure development. Efforts to educate Africans varied from country to country, but was generally limited. This left the sub-Saharan Aftricans countries unprepared for indeopendence when it came after world war II. As in the North, the high hopes of independnce were dashed. These countries since independence have received over $2 Trillion from international doners. Except for Soviet Bloc assistance, this aid has been distributed on a non-ideological basis. The effortvhas been a total failure. [Kokorev] Most Africans or less well off than was the situation when the continent was still in colonial hands. The reasons for this range from civil wars and wasfeful military expenditures, socialist experiments, corruption, bloated beaureacracies, and a failure to adequately develop the populations capabilities through education. As in the north, perhaps the key factor has been the failure to develop free market capitalism. In both north and south, the new leaders of Africa failed to adopt democracy and free market capitalism that had made Europe so prosperous.

Famine

Most of Africa achieved independence from European colonial power after World War II in the 1960s. In most countries the transition was peaceful. The new colonial leaders knew virtually nothing about economics, but widely believed that through Governmenment management and socialist policies that they could rapidly develop their economies. Of course many much better eduacted Europeans also fervently epoused socialism. Depite massive foreign assistance, virtually every country except South Africa proved to be economic disasters. Not only did the newly independent countries not rapidly develop, but living standards in many countries have actually deteriorated. And a tragic series of famines followed one after another in steady sucession. Civil wars and droughts were often involved, but the larger cause has been incompetent leadership, widespread corruption, socialist big government policies, and in more recebnt years Islamic fundamentalism. The people of Africa have, as a result, paid a terrible price. The famines that were once rare have now become endemnic. Millions of people throughoutb Africa are now affected. The situation is worst in East Africa and the sahel. The countries hardest hit vary from year to year. The press tends to focus on drought and try to explain the problem away with climate change. There is little doubt that climate change is a factor, although there is a great deal of doubt how global chage is ocurring and what can be done about it. Drought certainly can lead to a famine. And global warming can cause a famine and lead to a higher frquency and length of a famine. It is unlikely that all these famines could suddenly appear just because of global warming. Press accounts commonly avoid talking about the political dimensiions of famine. many if not most of the great famines of history have a political dimension (the Irish Potato Famine, Stalin's Ukranian Famine, Hitler's Greek and Dutch Famines, the British Bengal Famine, the Japanese Indochina Famine (and smaller famines in the Greater East asia Co-Properity Zone), and Mao's Great Leap Forward). Sometimes such as the case of Stalin, they are politically inspired. In other cases such as the NAZIs in Greece, the Japanese in Indonesia, or the British in Bengal, it was largely a matter of indiference. The African famines seem to have a complex mix of causes, but the political dimension if commonly an important part of that mix. The sharp increase in famines over such a short period since independence (1960s) in no coincidence. It suggests much more is involved other than global warming. One noted economist, Amartya Sen, points out that no substantial famine has ever occurred in a liberal democracy. Too often the political or economic dimensions of fammine are ignored.

The Tragic Economic Failure of Decolonization

The European countries attempted to hold on to their colonies after World War II. The major exception was India which rapidly moved toward independence, especially when the Labour Party won a general election after VE Day (1945). After a series of costly guerilla wars 1940s-50s), Belgium, Britain, and France rapidly moved toward decolonization. All of the countries involved in Africa were unprepared. Here the Belgian Congo as a speciual case. These countries had poorly trained leaders, many of ewhom thought Soviet styled political and economic organization provided for rapid modernization and conveniently oermanent power. This lead to Africa becoming a new front in the Cold war. Few African leaders knew anything about economics and those that did had European educations which suggested that free market capitalism was a failed system and that the future laid with managed, socialist economies. Not one of the new African leaders was committed to free market capitalism. Many were impressed with the Soviet Union and its achievements through Socialism. Neither they are the Soviets for that matter understood at the time that Socialism was a route to ecinomuc disaster. Another appeal for corrupt African leaders that under Socialist systems that they could control much of the economy, providing enormous opportunities for graft and corruption as well as increased personal and political power. A range of other issues, including de-colonization, tribal issues, racism, national differences became mixed in with the economic debacle. The result was that the high hopes of independence were for the most part dashed. Africa experience economic failure on a collosal scale. Living standards in many African countries actually declined after independence. And the more Socialist the government, the greater the fall in living standards. And all this occurred despiye massite amounts of foreign assistance from Europe and the United States. Only now with the beginning of democracy and free market reforms in some of the contries beginning to have some impact in improving living conditions.

Country Trends

We have begun to develop economic pages on African country. There are many common trends among these countries, but every individual country has its own unique story which we are only beginning to develop. Resource development, mining and oil drilling has played a major role in several countries. Africa may be the continent most gnrouly endowed with valuable mineral rsources. We find that many people believe that natural resources are critical to economic development. Africa has, however, shown in spectacular terms that natural resources while important are not central to economic development. And tragically very limited benenefits from these resources have flowed to the people of most of African countries. African leaders with limited economic knowledge and impresed with Soviet propaganda decided to persue socialist paths to development. They believed this was the key to rapid economic development. This is in part because of the popularity of socialism in the popular mind, but also elites are better able to profit from corruption from state agencies and companies. Many new African leaders triumpantly proclaimed the bright socialist future. Not a single leader in Africa embraced free market capitalism. State socialism besides being baced on falty Maxist economic theory also ofered opportunities for corruption on an unpredented scale. A major problem in many countries proved not only to be socialism and corruption, but a lack of support for agriculturea and rural areas and priorities given to urban areas. This often meant the various capitals, in part because here is where poltical threats are most dangerous to the elites and political leadership. As a result, in quite a number of countries, living standards have decline since independence despite massive economic aid from Europe and America. In recent years there has been improvements in some countries, primarily becuse of market reform.

Sources

Kokorev, Vladimir. "SMEs or NGOs: Who can salvage Africa's economy?" AfricaNews.com (October 28, 2010).







CIH






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Created: 7:53 AM 12/9/2010
Last updated: 4:20 AM 5/11/2015