 The Impact of the US, the World Bank and IMF on Sub-Saharan Africa Since 2000Lynne Ciochetto, Usha C. V. Haley and George T. Haley Chapter 6 in China versus the US, World Bank and IMF in Sub-Saharan Africa, 2023, pp 157-210 from World Scientific Publishing Co. Pte. Ltd. Abstract: The impact of the US, the World Bank (WB) and International Monetary Fund (the Bretton Woods Institutions (BWIs)) on Sub-Saharan Africa (SSA) since 1945 has been dominated by politics and economics. The recent addition to the mix has been the US contribution to the current climate crisis through its accumulated carbon emissions. The size of the US economy has translated into global political influence. The US is one of the world’s largest markets, the world’s largest aid donor, one of the largest military weapons exporters and — until recently — US corporations dominated the international economy. The US government has always been open about the fact that its priority is to serve US interests, in particular corporate interests. US influence extends to its dominance of the international development sector through the BWIs, the aid donors (the Development Assistance Committee) and the western lenders that meet as the Paris Club. This group is collectively known as ‘the Washington Consensus’ (Williamson, 2004). The BWIs have been the main source of loans, aid and policies for international development and the main source of SSA’s funding since the early decades of independence. At the time when nations became indebted to the BWIs in the late 1970s, neoliberal political and economic ideology was adopted by the US, the BWIs and other members of the Washington Consensus. All further loans and aid from the BWIs and the US became conditional on adopting neoliberal policies. These included market deregulation, cuts to tariffs and subsidies, privatisation of state assets and reducing the size of government. The policies were promoted as a means of stimulating economic growth and enabling debt repayment. The policies have favoured Western interests, in particular the expansion and profits of foreign companies. Market deregulation has enabled the transfer of vast amounts of funds and resources out of Africa. These policies were reinforced by unequal trade policies, where local subsidies were cut and producers had to compete with Western agricultural products that were subsidised. These neoliberal policies undermined the political and economic sovereignty of governments in the region, and social and economic development stagnated for over two decades after their introduction. Though the policies failed to achieve their objectives — stimulating economic growth and enabling debt repayment — they have remained after 2000 as part of loan, aid and debt relief programmes in SSA and elsewhere. Neoliberal policies were economically beneficial to lenders and foreign corporations. Deregulation increased foreign ownership of African resources, enabled higher profits and facilitated the illegal flow of finance out of the region. These flows increased in the economic boom after 2000, further depleting the region of much-needed finance. SSA has remained burdened with debt and debt servicing despite a decade of strong economic growth. The global financial crisis was another event brought on by neoliberal policies, the deregulation of the US financial sector. It too led to social and economic stagnation in SSA when its export markets contracted. The policies and practices of the US/BWIs have also had an environmental impact in SSA, particularly in the failure to uphold environmental policies. The most significant regional impact of the US in the contemporary era is its contribution to climate change. The WB has funded dam projects that have destroyed large areas and displaced populations, encouraged resource extraction which has caused widespread pollution and devastation, and promoted policies that accelerated deforestation. Keywords: Sub-Saharan Africa; China; Development; Neo-Colonialism (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wsi:wschap:9781783266685_0006 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in World Scientific Book Chapters from World Scientific Publishing Co. Pte. Ltd. |
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