In a 2008 ISS monograph on Africa in 2025 (Africa in the New World - how global developments will impact by 2025, no 151), I wrote how corporate economic influence is often more powerful than politics, many states and numerous governments. This trend, I predicted, will accelerate, at least in the West, where the balance of power is shifting away from governments.
Following the recent global recession in large parts of the world and the accelerated shift of power and economic weight from West to East, some disagreed. Critics argue that the rise of the ‘Chinese model' of state led, economic liberalisation, whilst holding democratization in abeyance, presented an alternative road. They believe this also applies to Africa, where more than one African government has been overthrown at the behest of corporate interests. This is, I believe, to take a short-term view of the path of global development.
In his powerful 2008 account The Ascent of Money: A Financial History of the World, (Penguin Press) Harvard professor Niall Ferguson details the rise of money, credit and banking and the associated global decline in ideology, indeed of politics, as citizens in places such as the United States become consumers. These citizens are focused on their iPhone and instant gratification, while government policy is based on opinion surveys, reflecting short term political pandering to local fads and voter gratification.
Actually no country demonstrates this trend better than China - an avowedly communist country more nakedly capitalist in its pursuit of a better life for its subjects than any in the West. In his revealing book on super elites, Superclass - the global power elite and the world they are making (London: Little, Brown, 2008) David Rothkopf presents a fine account of the increased influence of a global cabal of the rich and powerful without national ties and often no loyalty other than the pursuit of profit and power. This is the Davos man (for very few are women) - a term first coined with some disdain by Samuel Huntington several years ago as a reflection on internationalists that no longer had national roots.
One of the unintended consequences of globalisation has been the rise of transnational corporations and financial institutions that are more powerful and richer than most countries. They have empowered an international elite that share common values and interests and often set the global agenda.
I think it is time to rename the Davos man: for behold, the rise of the FIFA man. FIFA, an organization more powerful than government, is the demonstration of commercial interests able to trump national law. More blatantly than any of the traditional ‘evil' multinational corporations, generally presented by ‘big oil' such as BP or Shell, or arms manufacturers such as BAE Systems (now the world's number one arms producer), FIFA is able to instruct governments to build and invest in infrastructure worth billions of dollars literally irrespective of local development needs. In the run-up to the Soccer World Cup in South Africa FIFA president Sepp Blatter and his team strong armed the South African government to spend, amongst others, R8,4 billion (US$1,1 billion) on building five new soccer stadia and upgrading another five. This is a tab generally to be picked up by the South African taxpayer as the blowing of vuvuzela's hide the sound of the FIFA cash register. The FIFA Soccer World Cup 2010 will be the most lucrative yet for the Association.
The extent to which globalization is driving development is evident when one considers that, according to South Africa's Standard Bank, Global Gross Domestic Product (GDP), in nominal terms, has increased from US$32,1 trillion in 2000 to US$61,2 trillion in 2008, i.e. almost doubling. Simultaneously, world trade, also in nominal terms, has increased from US$13,1 trillion to US$32,1 trillion over the same period - an increase of 245 percent. Clearly, trade growth has outstripped GDP growth by a substantial margin. Meanwhile, global exports have tripled.
So what do we make of this? Quite simply, it is business, jobs, trade and money that drives the world, and that is also evident in Africa. China, now Africa's number one trading partner, together with India, Brazil and others such as Turkey, presents us with tremendous opportunities to trade our way out of the deep hole that post-liberation politics have dug us in. We will need to trade and govern ourselves out of this mess and stop whining and blaming others.
In this process international assistance will play an important part, for the market is no answer if we are to defeat malaria, or provide the infrastructure that will enable African trade. Hence the need for development assistance to support success and trade and for Africans to pursue strong institutions and not strong leaders.
Written by: Jakkie Cilliers, Executive Director, ISS Head Office, Pretoria