What do you think is responsible for the political and economic stagnation in many postcolonial states - Essay Example

What do you think is responsible for the political and economic stagnation in many postcolonial s Obtaining independence, many postcolonial states received an opportunity to transform their political and economic systems and improve the structure of the government and social life. Two processes have changed the political and economic map of the world and created new challenges and opportunities for enterprises in the periphery of the global economy. Legitimatization has mainly drawn on the prescriptions of neo-classical economics. Deregulation of domestic economic life, less state intervention in economic activities, and fewerobstacles to international trade: these are the main tenets of neo-liberal policy. Earlier experiments in free market economics have usually led to the revival of regulatory efforts in order to secure social and political stability and the continued legitimacy of the state. Failing this they have generated social revolutions or else 'free' markets have been maintained under the cover of armed dictatorship. The main agents responsible to the political and economic stagnation in postcolonial states are local political figures and state leaders concentrated on productivity issues and creation of wealth at the expense of local populations and exploitation of natural resources. Sandbrook & Barker (1995) and Tordoff (2002) state that African countries suffer from so called 'neopatrimonialism' or personal rule, promoted and introduced economic and political irrationalities in these postcolonial states. Tordoff (2002) claims that "managerial bourgeoisie" and "class as relations of power in Africa" (pp. 94-95) are the main causes of economic stagnation in this region. From political standpoint, this immediately raises the problem of subjectivity; the ability to be a subject, the capability to act in a social context. Following Haynes (1996): "The 'luxury' of multi-party democracy cannot be allowed because, it is argued, the resources and energy used to contest elections and fight political battles between parties detract from the development effort" (p. 43). On the one hand, increased commercialization of agriculture causes economic destabilization and stagnation. As the number of commercial transactions increases and the prevalence of household production decreases, opportunities are created for small enterprises, either in rural areas, which leads to an increase in non-agricultural activities, or in urban areas, due to the migration fuelled by increased efficiency of agriculture, land shortage, etc. (Hoogvelt 2001). The increase in informal enterprise is a part of an industrialization process which both creates openings for manufacturing enterprises but also increases the opportunities for trade in their products. Tordoff (2002) suggests that a large part of the problem is to be found in the business environment created before independence. Following Sandbrook & Barker (1995) a transition in Zimbabwe calls for the establishment of a neutral framework for different kinds of enterprises, what has been called 'good governance,' rather than sector specific efforts. Sandbrook & Barker analyze what this would imply for Zimbabwe, focusing on a number of regulations still in force which directly work against the interests of entrepreneurs. However, the structural disadvantages of small enterprises are such that continued efforts to ameliorate the by now well-known problems of small entrepreneurs are needed. However, these tasks do not need to be carried out by central government agencies, and should be entrusted to local governments and non-governmental organizations (NGOs) both of which can more easily tailor support measures to the manifest needs of their clients. "African states are not, in any real sense, capitalist states. Productive economic activities are impeded by the political instability, systemic corruption and maladministration associated with personal rule" (Sandbrook & Barker 1995, p. 1). The development of enterprises has been discouraged by policies which favoured the development of a white-dominated, modern, capital intensive manufacturing industry. The small enterprise sector was particularly discriminated against in the pre-independence era. As a result of these policies and incentives during the period of the sanctions, the growth of the white and formal manufacturing sector has been quite unusual for Africa (Hoogvelt 2001). It produces a wide range of goods reasonably efficiently, which are then distributed throughout the country. It is, therefore, extremely difficult for new small-scale or micro- enterprises to find a niche in the market and to develop. Further, financial, marketing and transportation services are tailored to the needs of the formal manufacturing and the commercial agricultural sector. Specific actions in the field of deregulation were announced concerning price controls, investment, labor and wage regulation and transport and other rules and guidelines which tend to impede growth. It was also noted that the requirement of permits for road transport operations has discouraged single owner-operated trucking and that zoning regulations and licensing requirements for small businesses inhibit the growth of the small scale sector. In brief, verbal support for the enterprises is strong, but in practice policies are not very favorable and projects have a limited impact/outreach (Hoogvelt 2001). Political and economic stagnation in post-colonial states are caused by deregulation policies. Deregulation in the framework of economic liberalization should also concern the regulations hindering the development of the national enterprises. In most of the post-colonial states, export and import regulations are very complicated for example in the case of trade with South Africa. Secondly, as mentioned, obtaining land is very difficult (Mohan & Brown 2000). Corruption of power and authoritarianism lead to political stagnation in post-colonial states (Haynes 1996). Following Tordoff (2002): "because democracy and authoritarianism overlap in many African countries they are not so much alternatives as uncomfortable bedfellows" (p. 224). In the long run, therefore, development strategies, which include the active participation of producers in managing their own mutual affairs call for political and not only economic reforms. Attempts to circumvent this obstacle by creating specific organizations among the receivers of some kind of assistance cannot really solve this problem: first, because they exclude those who do not benefit directly, and include only a part of a given cluster or network, and secondly, because the membership is in such cases usually oriented toward individual benefits (ultimately to the detriment of local competitors) rather than collective improvement (Haynes 1996). Economic transactions and political relations are, embedded in the bifurcation of economic cultures itself. Because the bifurcation as such is a universal characteristic of industrialization processes, it cannot be done away with. Indeed, it appears rather that the bifurcation, which signifies that some companies have taken the lead, is a necessary prerequisite for industrialization. At the very least, there is no known industrialization process in which this has not happened and the appearance of the bifurcation, in itself, should therefore be seen as a positive sign. On the other hand, it appears that this bifurcation is the main obstacle to industrialization. However, it is reasonable from the viewpoint of Third World development to ask the question: was there something common in all these experiences, that made it possible for local economic systems in the now industrialized countries, first, to sustain experiments in mass production, then to support the development of mass production methods (e.g. by crafting the machines used in the new factories), and all the while, retain a growth dynamic of their own leading to a variety of innovations (Leftwich 1993). If local cultures have similar dynamics everywhere, why do these dynamics lead to industrialization in some cases and not others One answer can be the extreme competitiveness of local economic cultures in the South as compared to that of the earlier North. Unrestricted competition leads to small margins, less room for experiments and risk taking, hampers the formation of networks both strong and weak, and consequently hinders growth (Mohan & Brown 2000). Economic and political stagnation is caused by inadequate integration of the post-colonial states into the global economy. Clapham (2000) underlines that they are local in the sense that their system characteristics are based on local needs, resources and other local circumstances but not, of course, in the sense that they are somehow unconnected to the rest of the world. In using the term system, critics indicate that each local economy should be understood as a self-regulating entity. In the case of the global system this is hardly controversial, in the case of local systems, which are then seen as quite distinct from the global system, this proposition is contentious. However, these local systems embody economic dynamics very different from those of the global economic system, and the most significant part of that is that growth takes a different form in local systems (Hoogvelt 2001). The reasons for this vary: during hard times, local production of simple consumption goods may become feasible, because imports are impossible or prohibitively expensive and new ventures crop up. During good times, opportunities for starting all kinds of locally oriented enterprises in carpentry or dressmaking, etc. obviously increase. In normal times again, population growth at least creates increased needs for simple consumer products, and during hard times again, unemployment provides incentives for self-employment (Hoogvelt 2001). Following Haynes (1996) this does not mean that uncertainties cannot be overcome, or at least reduced, either through vertical integration, if in a networked rather than in-house form, or looser co-operation arising spontaneously or taking commercial initiatives, government initiatives or active associations as the point of departure. In reality, post-colonial governments do not pursue systematic procurement policies which support such improvement efforts there are, particularly among small- and medium-sized enterprises, and in sectors which are for historical or other reasons particularly disadvantaged, as well as otherwise create a level ground for competition. For instance, the political-administrative system at municipal and state level is inert in Brazil and India. In any country, the government is the largest, if not the most lucrative and quick-paying customer (Hoogvelt 2001). Also, governments can and should pursue policies which reduce uncertainty, by increasing the information available, avoid economic shocks (such as delaying devaluations of currencies and other financial measures until they assume catastrophic dimensions), and ensure adequate infrastructural conditions. structural adjustment and deregulation will merely expose the weak, local economic systems to the full force of global competition, with severe consequences. In other cases, hopefully, where technological and organizational capabilities are better developed. Following Haynes (1996): "The route out of economic stagnation lies in disengagement from the global capitalist system via self- sufficiency, socialism and increased trade with "progressive" states" (p. 11). In sum, the political and economic stagnation in many postcolonial states is caused by inadequate economic policies introduced by these states and political corruption which prevents independent manufacturers and enterprises to adapt to the global economic system. Inadequate legislation and state control reduce productivity and limits economic growth. A government consultancy structure and a number of donor funded projects aim at improving the capabilities of government agencies in this regard. Post-colonials states should reform local government practices, adjusting them according to the situation and problems of free market and liberal economy. An absence of network connections between global and local systems seemingly appears everywhere as a core of underdevelopment. Local political institutions in each state appear to operate primarily within that system rather than creating connections between them. Even relatively simple commercial transactions tend to materialize within systems rather than between them. The main connections which can be observed are established through people who sell their labor power in the global/modern system but spend the proceedings on products of the local system, and in the provision of raw materials and inputs which are prepared in the global system and used in the local system. Bibliography 1. Calvert, P. & Calvert, S. 2001, Politics and Society in the Third World, Longman; 2 edition. 2. Clapham, C. 2000, Africa and the International System, Cambridge. 3. Haynes, J. 1996, Third World Politics, Wiley-Blackwell. 4. Hoogvelt, A. 2001, Globalization and the Postcolonial World, Palgrave Macmillan. 5. Tordoff, W. 2002, Government and Politics in Africa, Bloomington, Indiana University Press. 6. Leftwich, A. 1993, 'Governance, Democracy and Development in the Third World', Third World Quarterly, 14 (3), pp. 605-24. 7. Mohan, G. and Brown E. et al. 2000, Structural Adjustment: Theory Practice and Impacts, London, Routledge. 8. Sandbrook, R., Barker, J. 1995. The Politics of Africa's Economic Stagnation. Cambridge University Press. Read More