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Opinions of Friday, 6 February 2009

Columnist: Agbodza, Kwami

World Bank Free Market Policy Duplicity

By

Kwami Agbodza

Government Intervention in a depression was never supposed to happen in a free market society; ironically, because depression was not supposed to happen in the first place because the Greenspan liberation of financial markets and the World Bank imposed liberation of African raw materials markets through policy conditionalities had abolished boom and bust. In the midst of a credit crunch and economic depression all Western and Eastern Governments are heavily and actively intervening in their economies to engineer economic growth by halting the onslaught of their national depression or the coming global depression by making credit available. They are doing what the World Bank said we should never do and for which G7 countries were funding coups on the African continent to topple progressive governments. Besides, in the face of essentially the same thing, namely live life - the West is doing the direct opposite and the World Bank is quiet. But the hypocritical deceitful World Bank in Ghana is busy painting a gloomy picture of the Ghanaian economy so that the West and East can continue to spend and recover their economies using African human and physical resources while we in the South live in mass poverty. Economic recovery in the West is upsize government, unbalance the budget and nationalise the economy.

When it comes to policy initiatives, cursory glances at the global newspapers from all over the world tell this same story. According to UK Times of January 19, 2009 report, all including even communist states are doing the same thing:

“The generally accepted figure for the size of the US financial rescue package is some £400 billion, much of which has been in the form of loan guarantees and various other commitments spread over time, although some £180 billion has also been spent in direct cash injections ;

— China's package aimed at stimulating its economy is also worth around £400 billion, primarily tax breaks aimed at bolstering activity in the property industry, but which have also included measures to support the car industry;

— Germany is spending far more than Britain to tackle the crisis, with Angela Merkel's Government proposing to spend some £72 billion on measures including some tax breaks and more spending on the country's infrastructure. However, Germany has spent far less than Britain propping up banks and finance companies, committing just £20 billion so far;

— President Sarkozy's proposals for France include a £22.6 billion rescue package for the economy, including support for banks and carmakers;

— The Netherlands has spent some £29 billion, including a £7.7 billion cash injection for the banking and insurance giant ING and an estimated £3.5 billion taking part in the part-nationalisation of the Benelux-based Fortis bank;

— Other European countries that have provided capital injections for financial companies include Belgium and Ireland, which has promised £1.6 billion cash injections for both Bank of Ireland and Allied Irish Bank;

— The Japanese Government last week passed a budget containing some £36 billion of measures that are aimed at jump-starting the national economy.”

The solutions to depression are public debts and/or printing money; they are simply spending their way out of depression. But these are not all. There is talk of the nationalisation of banks and not privatisation. Do Ghanaians remember GCB, ADB and SSB? Interest rates in countries like UK are near zero as in the US. In America the bailout figure quoted by the Times has been overtaken by the Obama figure and is now at least $800 billion.

The Ghanaian and African problem of economic depression – called underdevelopment in our case - now threatens to be a global problem not to mention the high-profile suicides in UK and Germany amongst others. Noam Chomsky put the World Bank duplicity in his own words: “It is a worldwide crisis and it is very serious. It is striking that the ways that Western countries are approaching the crisis [entirely contradict] the model that they enforce on the Third World when there is a crisis. So when Indonesia has a crisis, [or] Argentina and everyone else, they are supposed to raise interest rates very high and privatize the economy, and cut down on public spending, measures like that. In the West, it is the exact opposite: lower interest rates to zero, move towards nationalization if necessary, pour money into the economy, have huge debts. That is exactly the opposite of how the Third World is supposed to pay off its debts.  That this seems to pass without comment is remarkable.” What is also remarkable is that the approach they force on us in the Third World normally goes with illegal regimes.

The NDC Government is a constitutionally elected government. It has the backing of millions of Ghanaians to take both strategic and operational decisions that are in the national interest just as elected officials in USA and UK are also making decisions in the interest of their electorate. Like Americans who voted for change, Ghanaians too voted for an NDC Government to solve the problems that deny them life and happiness. So the issue is not whether Ghana is broke (NDC Transition Subcommittee on Economy) or not broke (CPP-NDC Minister of Finance designate Kwabena Duffour/GSS) or the mischievous World Bank twisting the facts (NPP Minority in Parliament). For whatever the case may be all our lovely children must be educated, all our wonderful wives must continue to have babies to reproduce the next generation to prevent an ageing or dying population, we must all eat nutritiously to live, we must all live worthily in proper and decent electrified homes, we must all drink clean abundant water, all our daughters must stop being beasts of burden, chop bar maids and sex toys in Accra, Kumasi and elsewhere, we must all be able to pay our bills, we must all have full employment of our talents, we must all continue to govern ourselves in an established just and free society. In short, Ghanaians must assert their right to life and human happiness to recall Kwame Nkrumah. If Ghana spends more than it earns in revenue, it is not the case for the Majority Poor; there is simply no money to spend because of income poverty. So which Ghana is spending more than it earns and who are they spent on? According to Botchwey on the question of earnings and expenditure with respect to oil revenues, “the estimates we have on a cumulative basis will be about $20 billion, about a billion dollars per year, which is 10 percent of the budget, and it is insignificant. It is not going to solve our problems; it might even aggravate our problems.” Pity Botchwey and the World Bank did not realise this when they were planning to sell our strategic assets and push them through as illegal policy conditionalities. Pity because however much oil revenues will aggravate our problem, certainly at $1 billion a year the aggravated problems will be better than without oil revenues.

We therefore call on the Government of Ghana not simply to reject World Bank’s advice as Alliance for Accountable Governance (AFAG) are saying, but to disband the entire World Bank outfit from Ghana. The World Bank must be stopped from stationing spurious country directors on our soil their purpose being inimical to our national interest. From 1983-2008, the World Bank has masterminded the creation of an unsustainable liberal underdeveloped Sub-Saharan economy in Africa to the extent that countries like Malaysia poorer than Ghana in 1957 are now many times richer than Ghana. Ghana is in a national depression when you look not at cooked statistics but the real lives of the Ghanaian Majority; but the World Bank and its allied institutions continue to tell us for example economic growth was 6.2% in 2008. What is required is an interventionist Government - the engine of economic growth and development - that serves Ghanaians because contrary to the freemarket mantra and lies the State is the engine of economic growth, not the private sector. And Ghanaians should not mislead themselves or be misled thinking that Western countries have the money to fund the credit crunch; what they have is what we also have as a Sovereign nation – a Central Bank that can print money and economic balls. The bailouts billions are not already sitting in cash cupboards.

The untenable idea that elected officials must only create an enabling environment, not for the republican Sovereign Electorate that elected them and then fold their arms, for a private foreign firm like Newmont or Anglo-Gold Ashanti or Tullow or Vodafone Ghana to make vast repatriateable profits was always immoral and obscene in any country where the majority is poor. The private sector has no logical and inherent right in economic theory or economic science to lead anything in any society. President Mills and the NDC are wrong to continue to pursue this misguided policy of handing over economic leadership to the private sector when that policy globally whether in the Auto or Banking industries to name the two most prominent has been failingly discredited. If the private sector had any leadership qualities, it failed spectacularly. Elected Government like constructed markets are the product of societies as part of the fulcrum to decide the fundamental economic questions of what to produce, how to produce, when to produce, for whom to produce and why to produce. Creation of wealth is not enough. Its distribution and enjoyment is equally important.

We therefore reject the Botchwey position “that as a nation we need to discuss this debate dispassionately and leave the World Bank and IMF out.” That is something we must never do dispassionately because he Botchwey was instrumental in the unconstitutional and anti-democratic imposition of the World Bank ongoing view on Ghana with disastrous anti-Ewe effects. That view is the reason “the matters which the World Bank Country Director, Ishac Diwan had put out in the economic outlook on Ghana recently is not a secret, the issues have been known, it has been in the public domain for a long time,” and yet nothing has been done to address sustainability in the public finances. And certainly, income from the sale of strategic assets, they both must have known is not a sustainable income stream, nor is simply recovering the economy and adjusting and stabilising it for foreign interests as happened under Botchwey. We cannot simply “forget who is saying” what. Who is saying it matters especially when they are the same people who have been fraudulently telling you to do things that fail to promote wealth-creation. Why TV3 thinks Kwesi Botchwey is worth quoting in these matters is astonishing. The truth is that the economic position – the anti-African Washington Consensus of downsizing government, balanced budgets and liberalising the economy- that the World Bank and Kwesi Botchwey championed has now collapsed on a global scale in the full view of all of us. The West is upsizing government, unbalancing budgets and nationalising the economy.

The unelected unmandated Finance Minister of the illegal PNDC regime Dr. Botchwey says that “most people today have forgotten what the economy was in 1982 when we started. People queued to buy uncooked kenkey, there were bush fires, most of the banks were bankrupt and inflation was running at 120%, we had large arrears of debt; we owed Nigeria almost $600 million of oil we had bought. One million Ghanaians were deported into Ghana from Nigeria and Cote d’Ivoire at the height of the economic crisis...stabilizing the macro-economy was very important, at that time, balancing the budget and providing incentives for people to work...at that time the cedi was not convertible and we had to establish the interbank market, introducing the Forex Bureau, and capital market. We had to establish a new prudential environment for the banks to function. We also laid the foundation for liberal economic development in those years.” Limerick Amofa Baffoe in his article of 26/1/09 in defence of PNDC rescue of Ghana’s economy was silent on its unconstitutionality for which we Ewes because of Rawlings generally today bear the brunt with some Akans even calling us cockroaches and evil people.

The question is who gave Dr. Botchwey, who considers himself a consummate patriot, the mandate to do all these things? We mean who mandated him to lay foundation for liberal economic development in those years? Ghanaians did not mandate him. It was illegal. These things he enumerates were unconstitutional however good they may have been. Dr. Kwesi Botchwey, we are told once taught at Harvard Centre for International Development, but now teaches at Tuft University a course titled “Managing Economic Reform in Low Income countries” in which he still dispenses his now discredited anti-democratic unconstitutional policy proposals that still-dazed Ghanaians have not recognised yet. That course must certainly soon be binned and when “the old dogs sit in the background and offer advice”, such advice must be promptly rejected. It is worthy of note that the Agona Fanti Botchwey never lasted in a democratic NDC 4th Republic Ghana in which the elected government was then alert to covert unconstitutional World Bank manipulations. The Anti-Ewe Anti-Rawlings economic regime that non-Ewes and other Fantes like Kwesi Botchwey imposed on Ghana under the guidance of the World Bank was only possible because the PNDC regime was illegal. Wrong though the December 1981 coup was, what motivated Rawlings was the progressive streak in him that enabled him to identify with ordinary people and wash gutters with them and worry when they cannot afford beans and gari.

I had been wondering since 2008 whether I am the only non-high profile Ghanaian Economist unlike the Dr. Abbeys et al angry with the World Bank for its on-going economic deceit of such “mammoth proportion” - to use a term by the UK Liberal Democratic Spokesman Vince Cable. The anger is over the set of policy proposals they ant-democratically imposed on Ghana which their main G7 sponsors have now reversed for themselves even if it means piling on debt and printing money on a gigantic scale. I say anti-democratically because the World Bank imposed it on us through the barrel of the illegal PNDC gun and their longest-serving unelected (1982-1992) apologist Kwesi Botchwey who has recently lept to their defence. But we are now been told “the debate about the economy...must be depoliticised.” In which country does Botchwey know where the economy has been depoliticised? Was it depoliticised under his PNDC watch? Who does he suppose will manage economic reform in low income countries? Is laying of foundation for liberal economic development a depoliticised process when it is done through the barrel of the gun? Rawlings and we Ewes are demonised daily in Ghana today over PNDC/NDC with some calling for our physical extermination when it is non-Ewes and the World Bank who conceived the real destructive underbelly hatchet job knowing Rawlings and the so-called Dzelukope Mafia did not know any economics.

And this is what angers African economists like I. For a while now we have been saying that the Free market is not essential for economic growth; it never has been. The private free market is the engine of the current economic depression on a global scale. Economic growth is the result of vision, mission and STEEPLE-based planning. Without proper planning and SMART plans accompanied by a financial strategy an economy cannot and will not grow. Without planning society cannot be transformed through development. What people must eat and drink and wear, where they must live, those most basic essentials of human happiness are not the products of market accidents. Markets themselves, including free markets whatever free may mean, are products of proper planning and do not drop like manna from God even if there are Watchers fasting and praying for the nation. The Agriculture that will produce both food and raw materials for development are not the products of markets but firms that plan and the planning is done by human beings. And there is no logical basis in economic science to assert that firms of human beings must only be private firms that are motivated by greed and profit. And there is no logical basis for asserting in economic science that every firm must be a private firm with no place for public firms, social firms, mutuals, co-operatives amongst others. And creativity resides in human beings even if uneducated who are everywhere whether in the civil sector, the private sector or the public sector. Contrary to the deceitful doctrines of the World Bank and private free market corporation economics, privatisation and the private sector hold no monopoly over creativity, entrepreneurship, innovation and innovativeness. There is an abundance of these in the civil sector or the public sector just as in the private sector.

The Free Market is only one of many institutions that society uses to reproduce human life but is by no means the most important. And yet Free Market Institutions like The Heritage Foundation, the American Enterprise Institute, the Adam Smith Institute, The Cato Institute, and The Institute of Economic Affairs do not entirely tell the economic truth. Some even go as far as falsely claiming that “Government”- big government- is the problem as a basis for downsizing government and handing over vital services to the private sector without any form of competition before or during provision. The pervasive practice under NPP of awarding contracts without bids is now legendary; in some cases DCEs did exactly that. Downsizing government has only led to private corruption.

Nana Biakoye’s target for epithets, instead of the World Bank, was misdirected at Mrs. Chinery Hesse:”key part of 50 Cent Kufuor’s axis of evil...nation-wreckers, coffers-looters, thieves, brigands, and immoral satanic creatures that wasted 8 solid years of Mother Ghana’s time, this Mrs. Chinery Hesse woman should be prepared to receive a huge dose of strokes.” And yet it is Ishac Diwan’s World Bank and Dr. Botchweys who unconstitutionally laid the liberal economic foundations of an unsustainable economy dependent on donor funding and one-off income streams that must first receive the huge dose of strokes. Not the Mrs Hesses if it is appropriate to use such language in a democracy. The enabling transnational institution behind the wicked, devilish, immoral, psychotic, schizophrenic, illogical, satanic, fatal, death-inducing, destructive, unsustainable and incredible policy stance of Ghanaian Majority poverty is THE WORLD BANK – The International Bank for Reconstruction and Development (IBRD). Rather than reconstruction and development it specialises in the re-destruction and underdevelopment of Ghana and Africa and is genuinely frightened by the economic democratic aspirations of Majority Ghanaians who simply want to assert their right to life and human happiness in a just and free society.

To conclude, I am saying that the World Bank in 2009 continues to be deceitfully duplicitous in policy promulgation as the West fails to follow its own advice to Ghana; that Agona Fanti Kwesi Botchwey and the World Bank under the cover of Rawlings’ illegal PNDC are responsible for the current non-wealth creating donor-dependent unsustainable liberal economy for which Ewes generally have been unjustifiably targeted for extermination by some Akans; that President Mills’ NDC Government must reject (pa, gbe, kwa) all World Bank advice and be a pro-active interventionist Government for wealth creation for life and human happiness of all Ghanaians; that the State, at the heart of which is the Ghana Police Service, Ghana Armed Forces and other security services and statutory bodies, is the engine of economic growth; that an unelected private sector motivated by greed and profit only is not the engine of economic growth and in the case of private foreign firms are rather the engine of socioeconomic exploitation, environmental degradation, anti-competitive practices, economic depression, economic corruption and poverty-induction; that the Government of Ghana our beloved nation must show economic leadership and vision and plan long term; that the leading economic agent in a democratic Ghana is the elected government not an unelected interfering World Bank or the Private Sector; that an enabling environment must be created for all sectors of the indigenous economy civil, public and private.

GHP Background: Ghana is not broke – Dr. Kwabena Duffour, 28/1/09 How P (NDC) Rescued the Nation's Economy from Near- Collapse, 26/1/09 Don't follow World Bank's advice - pressure group to gov't, 26/1/09 Stop the “poli-trickal”economic analysis - Kwesi Botchwey, 26/1/09 Transition sub-committee on economy postpones press conference, 20/1/09 Reuters: Ghana "broke" after spending spree, 18/1/09 Minority hits back at critics over the economy, 15/1/09 What are the Bretton Woods institutions up to? 14/1/09 WB paints gloomy picture of Ghanaian economy, 7/01/09 www.timesonline.co.uk

Note on Writer: Kwami Agbodza is a member of the CPP. He is an economist trained in London. He has lectured economics in Ghana, UK and South Africa. He has also served in the past as Regional Secretary of CPP UK & Ireland, Regional Education Secretary of The Greater Accra Regional CPP Branch, member of the Regional Executive of The Greater Accra Regional CPP Branch, the CPP Chairman of The Ablekuma Central Constituency. Kwami does not believe in Freemarkets, because the assumptions required for a freemarket society to subsist can never hold and will never hold. He insists that the Government of Ghana has grounds in economics to reject any policy position of The World Bank whose policy prescriptions have failed to reconstruct and develop Ghana and will never. He finds it unacceptable that the World Bank continues to refer to Ghana in derogatory and racist terms either as a pupil or a candidate whereas Ghana is a Sovereign State. Finally, Kwami believes that all World Bank/IMF-placed foreigners in the Ministry of Finance, Bank of Ghana, and such strategic institutions must have their visas revoked and leave Ghana with immediate effect and that Ghanaians at home and abroad are capable of managing their own economic affairs especially when they are paid the same salary levels these foreigners get.