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Thoughts on a Pandemic, Geoeconomics and Africa’s Urban Sociology

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The global economic shock triggered by the coronavirus pandemic is unprecedented in scale and severity. How will African governments survive this financial crisis, given that many are heavily indebted and poorly equipped to deal with a pandemic of this nature? What kind of economic stimulus measures are required to ensure that people don’t sink further into poverty?

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Thoughts on a Pandemic, Geoeconomics and Africa’s Urban Sociology
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So far, Africa is well behind the curve in terms of the coronavirus infection. At the time of writing, there were 1,388 confirmed cases on the continent out of just over 320,000 confirmed cases globally. Four North African countries – Egypt, Algeria, Tunisia and Morocco – had 679 cases, which represented about half of the total cases in Africa. South Africa alone had 240 cases, and there were 479 reported cases across 39 African countries.

It is as yet unclear why the numbers in Africa are so low, although several South Asian countries close to China have similar low numbers. Candidates include high temperatures, low international travel (Africa accounts for only 2 per cent of global air travel), limited testing, and the youthful population, which could be infected but not exhibit symptoms.

The so-far-so-good numbers notwithstanding, African countries are not taking chances, and are adopting the same measures as elsewhere – outlawing large gatherings, closing schools, restricting air travel, and so on. These actions are welcome because they have raised awareness in a way that messaging alone would not have, proof positive that actions speak louder than words.

We need to get a better sense of the actual infection rate. Are the low numbers real or a result of under-testing? Establishing definitively whether the virus is spreading locally or not is imperative.

Living arrangements in many urban settings will make it difficult for infected people to isolate themselves. If there is already community transmission, then the best strategy is containment. If or where there is none, then decongesting the urban areas by encouraging people to temporarily relocate to their villages should be considered. It seems to me that this can be established by purposive sampling of people and population clusters with the highest exposure to international travel, such as airlines, airports, international hotels, and tourism hot spots. This is critical.

Medical resources are a huge survival factor. Patients who are put on ventilators have a high survival rate, but these are in short supply. As I write, Germany has lost 94 people out of 25,000 (one per 265), while France, with 16,000 cases, has lost 674 (one per 24). Both countries have similar demographic profiles, but Germany has two and a half times more intensive care beds (29 per 100,000 people) than France (11.6 per 100,000 people). This implies that if 100 patients need intensive care beds at once, Germany could save all of them, but France could lose 60. Italy’s capacity is about same as France’s, at 12.5, but the U.K’s, at 6.6, is less than a quarter of Germany’s. This is a huge and somewhat startling difference between countries that we in the global South see as more or less equally developed.

Living arrangements in many urban settings will make it difficult for infected people to isolate themselves. If there is already community transmission, then the best strategy is containment. If or where there is none, then decongesting the urban areas by encouraging people to temporarily relocate to their villages should be considered.

Most sub-Saharan African countries have less than one bed per 1,000 people, and less than 2 intensive care beds per 100,000 people. Because of our youthful population, we may not need as much capacity as Europe’s older population. Still, if one per cent of the population gets infected and 5 per cent of the infected population needs hospitalisation, this translates to a requirement of one bed per 2,000 people, which is more than half the total bed capacity in many countries. If 10 per cent of those hospitalised need critical care, this translates to a requirement of 5 intensive care beds per 100,000 people. We simply don’t have them. And there isn’t much lead time to scale up bed capacity. Moreover, with global supply chains and international trade severely disrupted, and demand surging everywhere, we can expect procurement of medical equipment to be a challenge during the crisis.

Countries will have to plan how to respond with the resources available. They need to make contingency plans on how they will mobilise facilities quickly if required. For example, one or more hospitals in a catchment area could be designated as coronavirus response facilities and trigger points when non-coronavirus patients would be evacuated to other facilities. In countries with a diverse mix of public and private hospitals, it may be necessary to pool and centrally coordinate utilisation so as to ensure maximum availability and optimal resource allocation. A class-based health system, such as the one we have in Kenya, is a luxury we may no longer be able to afford.

Africa and the 2020 global financial crisis

The global economic shock triggered by the coronavirus pandemic is unprecedented in scale and severity. While the 2007-08 global financial crisis was very severe, and its aftershocks are still reverberating, Africa was not severely affected. The impact, as measured by GDP growth, was less than that felt in all other developing regions, except Asia (due to the China effect).

Chart 1.

Chart 1.

Africa also recovered faster (see Chart. 1). There are two reasons for this. First, the shock was financial, and Africa was – and still is, for the most part – the least globally integrated region financially. Second, Africa’s public finances were in very good shape prior to the crisis, with low debt and low deficits, which made governments well-positioned to roll out aggressive stimulus packages. Third, China’s aggressive stimulus package kept the demand and prices of primary commodities buoyant.

Typically, economic shocks are either external or domestic, seldom both. This shock is both, and the two dimensions are mutually reinforcing. It has two global dimensions: trade and finance.

The trade shock is already affecting Africa through export earnings. Oil-dependent economies, such as Angola and Nigeria, are already looking at oil prices below $30 (down from $70 at the beginning of the year). If these prices persist, they will seriously impair government revenues and the servicing of external debt. Countries that are heavily dependent on tourism and fresh produce exports (notably, those in East Africa), are looking at heavy losses too.

We noted that Africa survived the global financial crisis bullet largely unscathed in part because of low global financial integration. This is no longer the case. After 2007, several African countries entered the sovereign bond market, known as Eurobonds. Before 2007, only two sub-Saharan African countries – South Africa and Seychelles – had floated international sovereign bond markets. Today there are more than 20 countries that have issued Eurobonds with an outstanding value of over $100 billion.

In addition, many countries have also borrowed heavily from foreign banks in the form of syndicated loans. Kenya is a good example. It has $10 billion of foreign commercial debt divided equally between Eurobonds and syndicated bank loans. A decade ago, Kenya had no foreign commercial debt. Commercial debt now accounts for a third of the country’s foreign debt.

These bond-issuing countries are now heavily dependent on global financial markets to finance their budgets, and more importantly, to refinance the bonds when they mature. How they will fare depends on how markets react to the crisis in the coming months.

Typically, economic shocks are either external or domestic, seldom both. This shock is both, and the two dimensions are mutually reinforcing. It has two global dimensions: trade and finance.

After the 2007-08 global financial crisis, the markets, awash with liquidity released by central banks, and facing recession and low interest rates in mature markets, turned to emerging and frontier markets for higher returns – “hunting for yield”, as they call it. If the markets do the same, then the financially exposed countries may weather the crisis unscathed. But given the systemic nature of the underlying economic crisis, money could well take “flight to safety”, in which case defaults will loom large.

Where things go from there will depend on how much external financial support from international finance institutions – bailouts if you like – will be available. The International Monetary Fund (IMF) has announced that it could make up to $50 billion available quickly to low-income and emerging market countries. This is not much – it’s less that the IMF’s 2018 bailout package to Argentina ($57 billion). Besides this, the IMF can lend its members normal loans of up to a total of a trillion dollars. (A trillion dollars is in the order of 1.2 per cent of global GDP) Although the IMF uses a complicated formula for each country’s quota, I will use pro rata to illustrate how the IMF might allocate bailouts. On a pro rata basis, Nigeria could borrow $4.5 billion, Kenya could borrow $0.8 billion and Ghana could borrow $0.5 billion. By way of comparision, Kenya’s lapsed precautionary facility was $1.5 billion, while the facility recently extended to Ethiopia is $2.7 billion. If every emerging market needs a bailout as a result of the financial crisis, there won’t be enough to go round.

There is, however, another source of financing that is yet to be talked about, namely, moratoria on bilateral and multilateral debt service. Historically, the multilateral agencies (i.e. World Bank, IMF and African Development Bank-AfDB) are treated as preferred creditors whose debt is non-negotiable. In reality, countries in distress do build up arrears. In terms of substance, a moratorium on repayment translates to the same thing as extending new budget support loans. China, which is now taking the lion’s share of debt service for many countries, could demonstrate that it is indeed a friend of Africa by giving African countries some breathing space on debt repayments.

Economic stimulus measures, and why they may not work

Africans who are following economic developments globally and seeing Western governments rolling out economic “stimulus” measures are wondering whether African governments will be able to do the same. It is worth reiterating the fact that this is an unprecedented economic shock. That Western countries are doing their thing does not mean they’ve got it right. In fact, one may recall that economic pundits predicted that Africa would be the worst hit by the 2007-08 global economic crisis. Early on in the current crisis, none other than Bill Gates said that special attention should be paid to Africa, warning that if the coronavirus spreads here, more than 10 million people could die. The United Nations Secretary-General, Antonio Guterres, has made a similar dire prediction.

I do not mean to downplay the threat, but Mr.Gates seems to have been blindsided by Afropessimism and was not prepared for the fact that his home state in the United States would become one of the epicentres of the pandemic well ahead of Africa. I am not disputing that Gates’s prognosis is wrong, as much as I hope he is wrong. I am pointing out that he, among other Americans, not least the Commander-in-Chief, underestimated the threat to the United States.

Kenya has $10 billion of foreign commercial debt divided equally between Eurobonds and syndicated bank loans. A decade ago, Kenya had no foreign commercial debt. Commercial debt now accounts for a third of the country’s foreign debt.

Until recently, the UK was out on its own pursuing a “herd immunity” strategy that delayed intervention. If the great transatlantic powers can get the public health response wrong should be reason enough to be circumspect about their economic responses as well. Everyone is flying by the seat of their pants.

Consider economic stimulus measures. Economic stimulus measures are of two types: fiscal and monetary. In fiscal measures, the government borrows and spends. In monetary measures, central banks inject money into the economy using open market operations while simultaneously lowering interest rates. Fiscal measures work directly – once the government has spent the money, its in circulation. Monetary measures work indirectly – central banks inject the money into the banking system and hope that businesses and consumers will borrow and spend. We call both of these demand management tools because they increase purchasing power in the economy.

Injecting money into the economy is predicated on supply response, and herein lies the problem with this crisis. First, people who are social distancing or in lockdown are not going to go out to spend. Second, social distancing and lockdown also disrupt supply. For example, commercial aviation is grinding to a halt. Moreover, we don’t know how long this will last. The instinctive reaction of people to economic uncertainty is to save rather than spend, hoard rather than consume, what John Maynard Keynes famously named the “paradox of thrift”.

Unsurprisingly then, Western governments are progressively moving away from generic demand management to social safety net-type interventions. The UK has announced a wage subsidy scheme where the government will pay 80 per cent of the salary of employees who are unable to work if companies keep them employed. That looks uncannily like a suggestion I floated weeks ago – an interest-free lifeline fund to protect jobs (see tweets). There is also a proposal by House Democrats to give cash transfers to middle and low income families, starting with $2,000, and subsequent transfers based on how the crisis unfolds.

Will African governments be able to do this? Obviously, having floated the idea, it follows that I am convinced it can be done – at least on a limited scale. Let’s see how the numbers stack up.

Under normal circumstances, fiscal stimulus usually entails deficit spending to the tune of between 1 and 2 per cent of GDP. Kenya’s current GDP is in the order of Sh10 trillion ($100 billion), so a stimulus would be between Sh100 and Sh200 billion (between $1 billion and $2 billion). The average monthly wage, as reported in the Government’s 2019 Economic Survey report in the formal wage sector was Sh60,000 ($600) in 2018, while the minimum urban monthly wages ranged from Sh7,200 (US$72) to Sh27,000 ($270), with an average of Sh16,800. (Data on wages in the informal sector, which accounts for 85 per cent of the 18.5 million non-farm workforce, are not collected, but if they were, they would look like the gazetted minimum wage figures rather than wages in the formal sector.) The weighted average of the two is Sh23,300, which we can adjust for inflation to Sh25,000 (US$250).

At an average of Sh25,000, a one per cent of GDP jobs lifeline can pay 4 million workers – a fifth of the workforce – for one month. Obviously, we are looking at more than a month, probably three to six months. It would cover 1.3 million for three months and 660,000 workers for six months. These numbers are very significant. And, of course, the lifeline would not have to be 100 per cent of the pay. A 50 per cent lifeline increases the potential coverage to 2.6 million and 1.3 million workers for three and six months, respectively.

Injecting money into the economy is predicated on supply response, and herein lies the problem with this crisis. First, people who are social distancing or in lockdown are not going to go out to spend. Second, social distancing and lockdown also disrupt supply.

Trouble is, Kenya’s budget deficit is already way past the red line. The red line is 5 per cent of GDP. At the onset of the 2007-08 financial crisis, the budget deficit was running at below 3 per cent, which meant that the government had a headroom (referred to as fiscal space) of 2 per cent of GDP before reaching the red line. We are currently operating in the 7 per cent to 8 per cent range.

The deficit in the last financial year was 7.9 per cent. The target for this year was 6.3 per cent, but it’s projected at 7.6 per cent. The difference between 3 per cent and 7 per cent of GDP may not look that big but consider the following: When the deficit was 3 per cent, revenue was 18 per cent of GDP, government was spending 17 per cent more than its income. With revenue now down to 15 per cent, a 7 per cent of GDP deficit means that the government is spending 46 per cent more than its income.

We have been at it for six years. We are already on borrowed time. Already, the government’s domestic borrowing target this financial year has been revised upwards by more than Sh200 billion (US$2 billion), from Sh300 billion ($3 billion) to Sh514 billion ($5.14 billion) to plug in the gap left by planned foreign commercial borrowing of 200 billion ($2 billion) that, for whatever reason, the government has not raised. We also have to take into account that the Kenyan government is taking a hit on the revenue side, so the deficit is widening as it is, unless it cuts spending drastically – and it’s not good at that. An extra one percent of GDP domestic borrowing could just be the straw that breaks the camel’s back.

At an average of Sh25,000, a one per cent of GDP jobs lifeline can pay 4 million workers – a fifth of the workforce – for one month…A 50 per cent lifeline increases the potential coverage to 2.6 million and 1.3 million workers for three and six months, respectively.

Where does that leave us? Well, the prudent thing to do is to finance the lifeline within the existing deficit by re-allocation. The alternative is to go the monetary route – look at how banks can finance it. The most direct route is to allow banks to temporarily trade government bonds for cash with the Central Bank of Kenya in transactions known as repurchase agreements (REPOs). The drawback is that the banks will be exchanging low risk assets for high risk ones, and the non-performing loans (NPLs) ratio is already in alarm bell territory.

We go back to fiscal. All it requires is the political resolve to mothball development projects – after all, budget absorption will also be affected by lockdowns and social distancing. And infrastructure is not that urgent. And we may not require as much as Sh100 billion. My intuition tells me that half that amount – if well-targeted – will make a huge difference.

Africa’s urban sociology

Four years ago, I wrote an op-ed on the urban sociology of Africa, which is enjoying a small revival in the wake of a mass exodus from the city of Nairobi to rural homes. In Kenya, “home” means rural origin; we call urban residences “houses”. The article opened with an anecdote about how the disappearance of the entire population of Brazzaville following the outbreak of political violence in 2007 puzzled the humanitarian relief sector in the UK (where I was at the time) as it was gearing up for an emergency that never was. The frantic search for a displaced population in distress in the environs of Brazzaville was fruitless. The people had simply gone “home”. I wrote:

After a brief hiatus in the fighting following a truce that did not last, the residents began to trickle back carrying the usual rural goodies – bananas, yams, live chicken and so on. The international humanitarian agencies’ initial puzzlement is understandable – the idea of the population of Brussels or Copenhagen doing a vanishing act is inconceivable. [But] in Nairobi, as in Brazzaville, we travel light, and with an exit plan.

The migration in Kenya has already begun. It was inevitable. Many of the small businesses that urban residents rely on – eateries, hair salons and barber shops, metal and furniture workshops, motorcycle taxis – have already cratered, and it is early days yet.

But there is fear that, as most of our old people live in rural areas, retreating there will expose them to the virus. This then underlines the importance of aggressive tracing and testing to establish whether indeed we are still ahead of the curve or it’s a case of under-testing. If the virus has not yet spread, then it is better for those who cannot support themselves in the city to leave sooner rather than later. If we accept that it is impossible to practise effective social distancing in congested urban neighbourhoods, and informal settlements in particular, then surely the best way people can protect themselves is to go home where they have more space. If a person needs to be isolated, most rural homesteads will have a room that can isolate an infected person, or if not, a hut can be constructed in a day.

Watch: The Political Economy of Coronavirus: Dr David Ndii Speaks

A tricky thing about the pandemic is that its devastating economic effects come not from its virulence but from its contagiousness – its ability to spread without symptoms, more like HIV than Ebola. Emerging scientific evidence suggests that it has been spreading faster in cold weather, which means that it could oscillate between the Northern and Southern hemispheres for a couple of seasons until global “herd immunity” is achieved. National isolation and social distancing may become the new normal for a while.

How economic globalisation, the North-South development-underdevelopment paradigm, and Africa’s rural-urban socio-economic dynamics emerge from this, only time will tell.

David Ndii
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David Ndii is a leading Kenyan economist and public intellectual.

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Africa’s Pandemic Response Calls for Reclaiming Economic and Monetary Sovereignty

More than 600 economists and academics from around the world call for Africa to acquire monetary sovereignty in order to revive its development after Covid-19.

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Africa’s Pandemic Response Calls for Reclaiming Economic and Monetary Sovereignty
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While Africa has, so far, been spared from the worst public health effects of the COVID-19 pandemic, the subsequent economic shutdown has brought Africa’s economic deficiencies and structural vulnerabilities into sharp focus.

As a resource-rich continent, Africa has the capacity to provide a decent quality of life for all of its inhabitants. Africa is capable of offering universal public services, such as healthcare and education, and guaranteeing employment for people who want to work, while ensuring a decent income support system for those who cannot work. However, decades of colonial and postcolonial socio-economic dislocation exacerbated by market liberalization have forced African countries into a vicious cycle involving several structural deficiencies, characterized by:

  • A lack of food sovereignty;
  • A lack of energy sovereignty;
  • Low value-added manufacturing and extractive industries.

This unholy trinity produces a very painful downward pressure on African exchange rates, which means higher prices for imports of vital necessities such as food, fuel, and life-saving medical products. In order to protect people from this type of imported inflation, African governments borrow foreign currencies in order to artificially keep African currencies “strong” relative to the US dollar and the euro.

This artificial “band-aid” solution forces African economies into a frantic mode of economic activity focused exclusively on earning dollars or euros to service this external debt. As a result, Africa’s economies have been trapped into an austerity model, often enforced via conditions set by the International Monetary Fund (IMF), as well as the constant pressure from other creditors to protect their political and economic interests, which further encroaches on the economic, monetary, and political sovereignty of African countries. Conditions imposed by the IMF and international creditors usually focus on five problematic and unfruitful policy strategies:

  • Export-oriented growth;
  • Liberalisation of foreign direct investment (FDI);
  • Over-promotion of tourism;
  • Privatisation of state-owned enterprises (SOEs);
  • Liberalisation of financial markets.

Each one of these strategies is a trap disguised as an economic solution. Export-led growth increases imports of energy, high value-added capital equipment and industrial components, and encourages the grabbing of land and resources, but only increases the exports of low value-added products. And, of course, not all developing countries can simultaneously follow such a model. If some countries want to achieve a trade surplus, there must be others willing to run a trade deficit. FDI-led growth increases energy imports, and forces African countries into an endless race to the bottom in order to attract investors via tax breaks, subsidies, and weaker labor and environmental regulations. It also leads to financial volatility and significant net resource transfers to rich countries, with some taking the form of illicit financial flows. Tourism increases both energy and food imports, while adding substantial environmental costs in terms of its carbon footprint and water use.

Most SOEs were privatised in the 1990s (e.g. telecoms, electric companies, airlines, airports, etc.). Further privatisation will devastate whatever little social safety nets remain under public control. Financial market liberalisation typically requires deregulating finance, lowering capital gains taxes, removing capital controls, and artificially raising interest rates and exchange rates – all of which guarantee an attractive environment for the largest financial speculators in the world. They will flock in with a rush of “hot money”, only to “buy low and sell high,” then flee, leaving behind a depressed economy.

Finally, all free trade and investment agreements aim at accelerating and deepening these five strategies, pushing African economies deeper into this quagmire. This flawed economic development model further exacerbates Africa’s “brain drain”, which tragically, in some cases, takes the form of death boats and death roads for economic, health, and climate migrants.

These five band-aid policy solutions tend to be attractive because they provide temporary relief in the form of job creation, and give the illusion of modernisation and industrialisation. However, in reality, these jobs are increasingly more precarious and susceptible to external shocks to the global supply chain, global demand, and global commodity prices. In other words, Africa’s economic destiny continues to be steered from abroad.

The COVID-19 pandemic has exposed the roots of Africa’s economic problems. Therefore, the post-pandemic recovery will not be sustainable unless it addresses pre-existing structural deficiencies. To that end, given the impending climate crisis and the need for socio-ecological adaptation, economic policy must be based on alternative principles and proposals.

We call on all African states to develop a strategic plan focused on reclaiming their monetary and economic sovereignty, which must include food sovereignty, (renewable) energy sovereignty, and an industrial policy centered on higher value-added content of manufacturing. Africa must put an end to its race-to-the-bottom approach to economic development in the name of competition and efficiency. Regional trade partnerships within the continent must be based on coordinated investments aimed at forming horizontal industrial linkages in strategic areas such as public health, transportation, telecommunications, research and development, and education.

We also call on Africa’s trading partners to acknowledge the failure of the extractive economic model and to embrace a new cooperation model that includes the transfer of technology, real partnerships in research and development, and sovereign insolvency structures — including sovereign debt cancellation — that preserve output and employment.

African states must develop a clear and independent long-term vision to build resilience to external shocks. Economic and monetary sovereignty do not require isolation, but they do require a commitment to economic, social, and ecological priorities, which means mobilizing domestic and regional resources to improve the quality of life on the continent.

This means becoming more selective when it comes to FDI, and export-oriented, extractive industries. It also means prioritising eco-tourism, cultural heritage, and indigenous industries.

Mobilising Africa’s resources begins with a commitment to full-employment policies (a Job Guarantee program), public health infrastructure, public education, sustainable agriculture, renewable energy, sustainable stewardship of natural resources, and an uncompromising dedication to empowering youth and women via participatory democracy, transparency, and accountability. It’s time for Africa to forge ahead and aspire to a better future in which all of its people can thrive and realize their full potential. This future is within reach, and it starts with Africa reclaiming its economic and monetary sovereignty.

Signed:

Fadhel Kaboub, Denison University, Ohio, USA
Ndongo Samba Sylla, Dakar, Senegal
Kai Koddenbrock, Goethe-Universität, Frankfurt
Ines Mahmoud, Tunis, Tunisia
Maha Ben Gadha, Tunis, Tunisia

See the full list of signatories here, and add your name here.

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The Fate of the Human Experiment Depends on the Outcome of This Struggle

Noam Chomsky’s keynote speech at the Progressive International’s inaugural summit.

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The Fate of the Human Experiment Depends on the Outcome of This Struggle
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Returning to the major crises we face at this historic moment, all are international, and two internationals are forming to confront them. One is opening today: the Progressive International. The other has been taking shape under the leadership of Trump’s White House, a Reactionary International comprising the world’s most reactionary states.

We are meeting at a remarkable moment, a moment that is, in fact, unique in human history, a moment both ominous in portent and bright with hopes for a better future. The Progressive International has a crucial role to play in determining which course history will follow.

We are meeting at a moment of confluence of crises of extraordinary severity, with the fate of the human experiment quite literally at stake. The issues are coming to a head in the next few weeks in the two great imperial powers of the modern era.

Fading Britain, having publicly declared that it rejects international law, is on the verge of a sharp break from Europe, on the path to becoming even more of a US satellite that it already is. But of course what is of the greatest significance for the future is what happens in the global hegemon, diminished by Trump’s wrecking ball, but still with overwhelming power and incomparable advantages. Its fate, and with it the fate of the world, may well be determined in November.

We are meeting at a remarkable moment, a moment that is, in fact, unique in human history, a moment both ominous in portent and bright with hopes for a better future.

Not surprisingly, the rest of the world is concerned, if not appalled. It would be difficult to find a more sober and respected commentator than Martin Wolf of the London Financial Times. He writes that the West is facing a serious crisis, and if Trump is re-elected, “this will be terminal.” Strong words, and he is not even referring to the major crises humanity faces.

Wolf is referring to the global order, a critical matter though not on the scale of the crises that threaten vastly more serious consequences, the crises that are driving the hands of the famous Doomsday Clock towards midnight – towards termination.

Wolf’s concept “terminal” is not a new entry into public discourse. We have been living under its shadow for 75 years, ever since we learned, on an unforgettable August day, that human intelligence had devised the means that would soon yield the capacity for terminal destruction. That was shattering enough, but there was more. It was not then understood that humanity was entering a new geological epoch, the Anthropocene, in which human activities are despoiling the environment in a manner that is now also approaching terminal destruction.

The hands of the Doomsday Clock were first set shortly after atomic bombs were used in a paroxysm of needless slaughter. The hands have oscillated since, as global circumstances have evolved. Every year that Trump has been in office, the hands have been moved closer to midnight. Two years ago they reached the closest they had ever been. Last January, the analysts abandoned minutes, turning to seconds: 100 seconds to midnight. They cited the same crises as before: the growing threats of nuclear war and of environmental catastrophe, and the deterioration of democracy.

The last might at first seem out of place, but it is not. Declining democracy is a fitting member of the grim trio. The only hope of escaping the two threats of termination is vibrant democracy in which concerned and informed citizens are fully engaged in deliberation, policy formation, and direct action.

That was last January. Since then, President Trump has amplified all three threats, not a mean accomplishment. He has continued his demolition of the arms control regime that has offered some protection against the threat of nuclear war, while also pursuing development of new and even more dangerous weapons, much to the delight of military industry. In his dedicated commitment to destroy the environment that sustains life, Trump has opened up vast new areas for drilling, including the last great nature reserve. Meanwhile, his minions are systematically dismantling the regulatory system that somewhat mitigates the destructive impact of fossil fuel use, and that protects the population from toxic chemicals and from pollution, a curse that is now doubly murderous in the course of a severe respiratory epidemic.

Trump has also carried forward his campaign to undermine democracy. By law, presidential appointments are subject to Senate confirmation. Trump avoids this inconvenience by leaving the positions open and filling the offices with “temporary appointments” who answer to his will – and if they do not do so with sufficient fealty to the lord, are fired. He has purged the executive of any independent voice. Only sycophants remain. Congress had long ago established Inspectors General to monitor the performance of the executive branch. They began to look into the swamp of corruption that Trump has created in Washington. He took care of that quickly by firing them. There was scarcely a peep from the Republican Senate, firmly in Trump’s pocket, with hardly a flicker of integrity remaining, terrified by the popular base Trump has mobilized.

This onslaught against democracy is only the bare beginning. Trump’s latest step is to warn that he may not leave office if he is not satisfied with the outcome of the November election. The threat is taken very seriously in high places. To mention just a few examples, two highly respected retired senior military commanders released an open letter to the chairman of the Joint Chiefs of Staff, General Milley, reviewing his constitutional responsibility to send the army to remove by force a “lawless president” who refuses to leave office after electoral defeat, summoning in his defense the kinds of paramilitary units he dispatched to Portland Oregon to terrorize the population over the strong objection of elected officials.

Many establishment figures regard the warning as realistic, among them the high-level Transition Integrity Project, which has just reported the results of the “war gaming” it has been conducting on possible outcomes of the November election. The project members are “some of the most accomplished Republicans, Democrats, civil servants, media experts, pollsters and strategists around,” the Project co-director explains, including prominent figures in both Parties. Under any plausible scenario apart from a clear Trump victory, the games led to something like civil war, with Trump choosing to end “the American experiment.”

Again, strong words, never before heard from sober mainstream voices. The very fact that such thoughts arise is ominous enough. They are not alone. And given incomparable US power, far more than the “American experiment” is at risk.

Nothing like this has happened in the often troubled history of parliamentary democracy. Keeping to recent years, Richard Nixon – not the most delightful person in presidential history – had good reason to believe that he had lost the 1960 election only because of criminal manipulation by Democratic operatives. He did not contest the results, putting the welfare of the country ahead of personal ambition. Albert Gore did the same in 2000. Not today.

Forging new paths in contempt for the welfare of the country does not suffice for the megalomaniac who dominates the world. Trump has also announced once again that he may disregard the Constitution and “negotiate” for a third term if he decides he is entitled to it.

Some choose to laugh all this off as the playfulness of a buffoon. To their peril, as history shows.

The survival of liberty is not guaranteed by “parchment barriers,” James Madison warned. Words on paper are not enough. It is founded on the expectation of good faith and common decency. That has been torn to shreds by Trump along with his co-conspirator Senate Majority Leader Mitch McConnell, who has turned the “world’s greatest deliberative body,” as it calls itself, into a pathetic joke. McConnell’s Senate refuses even to consider legislative proposals. Its concern is largesse to the rich and stacking the judiciary, top to bottom with far right young lawyers who should be able to safeguard the reactionary Trump-McConnell agenda for a generation, whatever the public wants, whatever the world needs for survival.

The hands of the Doomsday Clock were first set shortly after atomic bombs were used in a paroxysm of needless slaughter. The hands have oscillated since, as global circumstances have evolved

The abject service to the rich of the Trump-McConnell Republican party is quite remarkable, even by the neoliberal standards of exaltation of greed. One illustration is provided by the leading specialists on tax policy, economists Emmanuel Saez and Gabriel Zucman. They show that in 2018, following the tax scam that was the one legislative Trump-McConnell achievement, “for the first time in the last hundred years, billionaires have paid less [in taxes] than steel workers, school teachers, and retirees,” erasing “a century of fiscal history.” “In 2018, for the first time in the modern history of the United States, capital has been taxed less than labor” – a truly impressive victory of class war, called “liberty” in hegemonic doctrine.

The Doomsday Clock was set last January before the scale of the pandemic was understood. Humanity will sooner or later recover from the pandemic, at terrible cost. It is needless cost. We see that clearly from the experience of countries that took decisive action when China provided the world with the relevant information about the virus on January 10. Primary among them were East-Southeast Asia and Oceania, with others trailing along, and bringing up the rear a few utter disasters, notably the US, followed by Bolsonaro’s Brazil and Modi’s India.

Despite the malfeasance or indifference of some political leaders, there will ultimately be some kind of recovery from the pandemic. We will not, however, recover from the melting of the polar icecaps, or the exploding rate of arctic fires that are releasing enormous amounts of greenhouses gasses into the atmosphere, or other steps on our march to catastrophe.

When the most prominent climate scientists warn us to “Panic Now,” they are not being alarmist. There is no time to waste. Few are doing enough, and even worse, the world is cursed by leaders who are not only refusing to take sufficient action but are deliberately accelerating the race to disaster. The malignancy in the White House is far in the lead in this monstrous criminality.

It is not only governments. The same is true of fossil fuel industries, the big banks that finance them, and other industries that profit from actions that put the “survival of humanity” at serious risk, in the words of a leaked internal memo of America’s largest bank.

Humanity will not long survive this institutional malignancy. The means to manage the crisis are available. But not for long. One primary task of the Progressive International is to ensure that we all panic now – and act accordingly.

The crises we face in this unique moment of human history are of course international. Environmental catastrophe, nuclear war, and the pandemic have no borders. And in a less transparent way, the same is true of the third of the demons that stalk the earth and drive the second hand of the Doomsday clock towards midnight: the deterioration of democracy. The international character of this plague becomes evident when we examine its origins.

Circumstances vary, but there are some common roots. Much of the malignancy traces back to the neoliberal assault on the world’s population launched in force 40 years ago.

The basic character of the assault was captured in the opening pronouncements of its most prominent figures. Ronald Reagan declared in his inaugural address that government is the problem, not the solution – meaning that decisions should be removed from governments, which are at least partially under public control, to private power, which is completely unaccountable to the public, and whose sole responsibility is self-enrichment, as chief economist Milton Friedman proclaimed. The other was Margaret Thatcher, who instructed us that there is no society, only a market in which people are cast to survive as best they can, with no organizations that enable them to defend themselves against its ravages.

Unwittingly no doubt, Thatcher was paraphrasing Marx, who condemned the autocratic rulers of his day for turning the population into a “sack of potatoes,” defenseless against concentrated power.

With admirable consistency, the Reagan and Thatcher administrations moved at once to destroy the labour movement, the primary impediment to harsh class rule by the masters of the economy. In doing so, they were adopting the leading principles of neoliberalism from its early days in interwar Vienna, where the founder and patron saint of the movement, Ludwig von Mises, could scarcely control his joy when the proto-fascist government violently destroyed Austria’s vibrant social democracy and the despicable trade unions that were interfering with sound economics by defending the rights of working people. As von Mises explained in his 1927 neoliberal classic Liberalism, five years after Mussolini initiated his brutal rule, “It cannot be denied that Fascism and similar movements aimed at the establishment of dictatorships are full of the best intentions and that their intervention has for the moment saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history” – though it will be only temporary, he assured us. The Blackshirts will go home after having accomplished their good work.

The same principles inspired enthusiastic neoliberal support for the hideous Pinochet dictatorship. A few years later, they were put into operation in a different form in the global arena under the leadership of the US and UK.

The consequences were predictable. One was sharp concentration of wealth alongside of stagnation for much of the population, reflected in the political realm by undermining of democracy. The impact in the United States brings out very clearly what one would expect when business rule is virtually uncontested. After 40 years, 0.1% of the population have 20% of the wealth, twice what they had when Reagan was elected. CEO remuneration has skyrocketed, drawing general management wealth along with it. Real wages for non-supervisory male workers have declined. A majority of the population survives from paycheck to paycheck, with almost no reserves. Financial institutions, largely predatory, have exploded in scale. There have been repeated crashes, increasing in severity, the perpetrators bailed out by the friendly taxpayer, though that is the least of the implicit state subsidy they receive. “Free markets” led to monopolization, with reduced competition and innovation, as the strong swallowed the weak. Neoliberal globalization has deindustrialized the country within the framework of the investor rights agreements mislabeled as “free trade pacts. ”Adopting the neoliberal doctrine that “taxation is robbery,” Reagan opened the door to tax havens and shell companies – previously banned and barred by effective enforcement. That led at once to a huge tax evasion industry to expedite massive robbery of the general population by the very rich and the corporate sector. No small change. The scale is estimated in tens of trillions of dollars.

And so it continues as neoliberal doctrine took hold.

As the assault was just beginning to take shape, in 1978, the president of the United Auto Workers, Doug Fraser, resigned from a labor-management committee that was set up by the Carter Administration, expressing his shock that business leaders had “chosen to wage a one-sided class war in this country – a war against working people, the unemployed, the poor, the minorities, the very young and the very old, and even many in the middle class of our society,” and had “broken and discarded the fragile, unwritten compact previously existing during a period of growth and progress” – during the period of class collaboration under regimented capitalism.

His recognition of how the world works was somewhat belated, in fact too late to fend off the bitter class war launched by business leaders who were soon granted free rein by compliant governments. The consequences over much of the world come as little surprise: widespread anger, resentment, contempt for political institutions while the primary economic ones are hidden from view by effective propaganda. All of this provides fertile territory for demagogues who can pretend to be your savior while stabbing you in the back, meanwhile deflecting the blame for your conditions to scapegoats: immigrants, blacks, China, whoever fits long-standing prejudices.

Returning to the major crises we face at this historic moment, all are international, and two internationals are forming to confront them. One is opening today: the Progressive International. The other has been taking shape under the leadership of Trump’s White House, a Reactionary International comprising the world’s most reactionary states.

In the Western Hemisphere, the International includes Bolsonaro’s Brazil and a few others. In the Middle East, prime members are the family dictatorships of the Gulf; al-Sisi’s Egyptian dictatorship, perhaps the harshest in Egypt’s bitter history; and Israel, which long ago discarded its social democratic origins and shifted far to the right, the predicted effect of the prolonged and brutal occupation. The current agreements between Israel and Arab dictatorships, formalising long-standing tacit relations, are a significant step towards solidifying the Middle East base of the Reactionary International. The Palestinians are kicked in the face, the proper fate of those who lack power and do not grovel properly at the feet of the natural masters.

To the East, a natural candidate is India, where Prime Minister Modi is destroying India’s secular democracy and turning the country into a racist Hindu nationalist state, while crushing Kashmir. The European contingent includes Orban’s “illiberal democracy” in Hungary and similar elements elsewhere. The International also has powerful backing in the dominant global economic institutions.

The two internationals comprise a good part of the world, one at the level of states, the other popular movements. Each is a prominent representative of much broader social forces, which have sharply contending images of the world that should emerge from the current pandemic. One force is working relentlessly to construct a harsher version of the neoliberal global system from which they have greatly benefited, with more intensive surveillance and control. The other looks forward to a world of justice and peace, with energies and resources directed to serving human needs rather than the demands of a tiny minority. It is a kind of class struggle on a global scale, with many complex facets and interactions.

It is no exaggeration to say that the fate of the human experiment depends on the outcome of this struggle.

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The Violence in Ethiopia

The imminent and existential danger to Ethiopia is not Abiy Ahmed and an oppressive government. It is violent ethno-nationalism.

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The Violence in Ethiopia
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The deadly violence that rocked Ethiopia this summer following the death of artist Hachalu Hundessa has been a subject of much speculation and contention. The facts as we know them are that immediately following the assassination close to 250 people died and thousands were jailed, mostly in the regional state of Oromia and Addis Ababa.

What is contested, and less clear, is the nature of the violence, its perpetrators, and victims. Two prominent narratives have emerged following the crisis to explain what unfolded. One holds that the violence was a brutal government crackdown on Oromo protesters grieving Hundessa’s death. The other describes the events as targeted attacks by armed Oromo youth against ethnic and religious minorities. While both narratives contain elements of truth, ignoring one or the other is either ignorant or intentionally misleading.

recent Africa Is a Country article highlighting the poor coverage by Western media of the situation in Ethiopia, for example, makes no mention of ethnic and religious violence, aside from denouncing media outlets that reported it. Rather, the author’s objective is to “set the record straight” by showing that the underlying cause of violence and instability in Ethiopia is the consequence of a political struggle between an oppressive government and Oromos who have been and continue to be marginalised.

Such a viewpoint is erroneous and polarising in the current political climate. To advance a narrow agenda, it glosses over human rights violations and the brutal killing of innocent bystanders by non-state actors.

To provide more context, the agenda I speak of is tied to the Oromo struggle for greater autonomy and recognition. That struggle, which paved the way for Abiy Ahmed to assume power as the first Oromo Prime Minister two years earlier, now seeks his departure. At the heart of this reversal is the Prime Minister’s consolidation (rather than actual dismantling) of the ruling ethnic-based EPRDF coalition into the Prosperity Party, which has, nonetheless, left intact Ethiopia’s unique system of federalism based on ethnic majoritarianism.

The night of Hachalu Hundessa’s murder, the Ethiopian government quickly shut down the internet, while a social media whirlwind erupted abroad as Oromo activists insinuated that Hundessa was killed because of his support for the Oromo cause.

Leaving that aside, the EPRDF had always been a highly centralized institution in practice, and the mere symbolism of this move, in addition to the Prime Minister’s rhetoric about unity, have left some Oromos feeling betrayed. Furthermore, fractionalisation among Oromo elites, including within the former Oromo Democratic Party (ODP) faction of the EPRDF (now Prosperity Party), which recently ousted key leader and Defense Minister, Lemma Megersa, has divided and weakened the movement.

Within this broad movement, one vocal part led by diaspora-based Oromo elites and recent returnees has galvanised the energy and anger of many Oromo youth behind a perspective of anti-Ethiopiawinet (anti-Ethiopian-ness). The “us versus them” mentality pits Oromo nationalists against an enemy that has been described manifestly and repeatedly by the terms Abyssinian and Neftegna (“rifle bearer”). Though prominent Oromo activists stand behind their use of these terms, those who are familiar with the context know that these labels are loaded with ethnic connotations.

The night of Hachalu Hundessa’s murder, the Ethiopian government quickly shut down the internet, while a social media whirlwind erupted abroad as Oromo activists insinuated that Hundessa was killed because of his support for the Oromo cause. Accusations that “they killed him” were recklessly thrown around and left open for interpretation. Within hours of the assassination, allegedly at the behest of Oromo leaders like Bekele Gerba, targeted attacks against non-Oromos unfolded.

In towns like Shashamene and Dera in the Oromia region, several accounts of killings and looting targeting Amharas and other minorities by Oromo youth have been independently verified, in addition to accounts of police and federal forces injuring and killing civilians. Witnesses describe how perpetrators relied on lists detailing the residences and properties of non-Oromos and circulated flyers warning bystanders to not help those being targeted (or risk reprisal), indicating a significant level of organization.

Minority Rights Group International, accordingly, sounded the alarm, warning that these actions bear the hallmarks of ethnic cleansing. Despite this and concerns from Ethiopians throughout the world, Oromo activists and other prominent human rights groups, such as Amnesty International, have remained largely silent about these attacks while condemning the government’s violent response to Oromo protestors.

Government figures provide an ethnic breakdown of the July causalities with the majority of those killed being Oromos within the Oromia region, followed by Amharas and other smaller ethnic groups.  Yet, rather than disproving, as some claim, that targeted attacks by Oromo mobs occurred, this highlights what scholar Terje Ostebo describes as the complexity and inherent interconnectedness between ethnicity and religion within Ethiopia.

According to Ostebo, “the term Amhara, which is inherently elastic, has over the last few years gradually moved from being a designation for Ethiopianess to gaining a more explicit ethnic connotation. It has, however, always had a distinct religious dimension, representing a Christian.” Hence, in parts of Oromia some Orthodox Oromos were referred to and referred to themselves as Amhara. For example, one Oromo farmer interviewed by local journalists reportedly said, “we thought Hachalu was Oromo” after watching the singer’s televised funeral rites that followed the traditions of the Ethiopian Orthodox Tewahedo church.

The “us versus them” mentality pits Oromo nationalists against an enemy that has been described manifestly and repeatedly by the terms Abyssinian and Neftegna (“rifle bearer”).

According to investigations undertaken by the church, a large number of its parishioners (at least 67 confirmed cases) were among the July causalities—a troubling trend, which also includes a spate of church burnings and attacks on Christians that brought large numbers of Orthodox followers out into the streets in protests last year.

To be clear, the violence that occurred was not only ethnic and religious violence. Growing state violence in Oromia and SNNPR has been and continues to be of great concern. As Oromo activists have made clear, it is necessary to end the abuse of force and ensure accountability for these crimes. Yet, when concerns and demands for accountability for non-state violence are raised, these same advocates deny, ignore or dismiss them as part of a propaganda campaign to discredit the Oromo movement. In effect, this dishonesty, itself, has discredited the movement and lost it support by many Ethiopians—both non-Oromo and Oromo.

The recent political turmoil lays bare that the future of an Ethiopian state is hanging by a delicate thread. The polarization that exists today goes beyond disagreements on institutions and policies to the very question of whether we can continue to co-exist as a multi-ethnic nation. Regional elections in Tigray, slated for this week despite the disapproval of the national House of Federation (HoF), and its aftermath may bring these tensions to a boil, again.

As unrest, violence and grievances continue to mount, it is clear that Ethiopia is far from consolidating its transition to a stable democracy. The government continues to curb freedom of speech, jail political opponents and is responsible for violence against civilians. But, if history teaches us anything, it is this: the imminent and existential danger to Ethiopia is not Abiy Ahmed and an oppressive government. It is violent ethno-nationalism.

This post is from a new partnership between Africa Is a Country and The Elephant. We will be publishing a series of posts from their site once a week.

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