[PEN-L] Ghana water privatisation
Does anyone know how well founded this campaign is. WDM, World Development Movement, is a well organised campaigning non-charity that came out of Oxfam and it has had some legal and political successes. But I am wondering whether to send it to a Quaker friend of mine, who has just come back from Ghana after a well intentioned visit to promote a youth exchange. I do not want to burden him with a contentious obligation, if it does not grow naturally out of the concerns of the people there. WDM is so well organised, including about raising money for its campaigns, it is just possible that is extremely valid but a bit artificial as far as the consciousness of the local people is concerned. On the other hand I could well imagine that the very opposite is the case ... Any comments please? http://www.wdm.org.uk/biwater/index.htm Chris Burford London
Re: [PEN-L] Ghana water privatisation
- Original Message - From: "Chris Burford" <[EMAIL PROTECTED]> Does anyone know how well founded this campaign is. In my view, it's one of the hottest water fights underway anywhere in the world (alongside Bolivia, Nicaragua, Philippines, South Africa, Uruguay, Indonesia). One key leader, Rudolf Amenga-Etego, won the Goldman prize last year, and really deserved it. I only saw them up close for a week in May 2001, but have run into the Accra comrades at many other anti-neoliberal events. Superb people with a fascinating political lineage... Cheers, Patrick *** http://www.zmag.org/sustainers/content/2001-05/23bond.htm May 23 2001 Ghana's hydro-class struggles ACCRA -- Notwithstanding the horrific soccer stadium disaster in which at least 165 people were killed in a police-incited stampede on May 9, the past week offered signs of genuine hope in Ghana. I've been privileged to witness a careful regrouping of the country's former revolutionary student/community movement, which is strengthening its political base by addressing two key areas of economic and social strife: the legacy of structural adjustment and water privatisation. As was the case recently in Bolivia, Ecuador and South Africa, Ghana's capital city and rural areas could witness rising protest in coming months. The combination of neoliberal economic policies and the commodification of water could well drive ordinary Ghanaians to the streets. That would be bad news for a vociferous US ideologue of neoliberalism, Thomas Friedman of the New York Times, who visited Accra in late April and declared that Africans want free markets, penetration by multinational corporations and the Clinton Administration's African Growth and Opportunity Act of 2000 (AGOA). "While the protesters in Quebec were busy denouncing globalization in the name of Africans and the world's poor," wrote Friedman on April 24, "Africans themselves will tell you that their problem with globalization is not that they are getting too much of it, but too little." Friedman cited just one Ghanaian, George Apenteng of the Institute for Economic Affairs, which is funded by transnational corporations, including Kaiser Aluminum and Unilever. A far better informant would have been Charles Abugre, director of ISODEC, the Integrated Social Development Centre, whose 68 staff do top-quality radical analysis, publishing, development projects, community organising, Africa-wide and international networking, and unrelenting advocacy. "AGOA is not having a positive effect in Ghana," says Abugre. "We see it merely as an instrument for opening Ghana's markets in the name of promoting US investments. For Friedman to argue that AGOA will be the means by which we can penetrate the US market is a delusion. The main effect of AGOA is to link aid to economic reform, by which is meant the dismantling of state regulatory environment. There are no benefits, and the costs include clear manifestations of deepening structural adjustment and deregulation." ISODEC and its allies in the African Trade and Development Network are campaigning to roll back AGOA. Abugre calls for vigilance from US-based Africa solidarity activists. "We are protesting AGOA in civil society groups across Africa and are placing it on the agenda of the Organisation of African Unity and UN Economic Commission for Africa. AGOA is simply another way of undermining Africa's ability to mobilise domestic resources for development, and of enforcing an anti- developmental trade regime." Two decades ago, Abugre and several of ISODEC's other leaders were amongst those responsible for giving Flight Lieutenant Jerry Rawlings a social power base of enormous importance--to their great regret. For after taking control of the students' June 4 Movement and gaining state power in a December 1981 coup, Rawlings did a vicious political U-turn within months, forcing the lead activists into exile, jailing thousands, and killing hundreds. The final straw was the young leftists' defeat after a national debate in late 1982 over whether Ghana should turn to the International Monetary Fund (IMF) for a structural adjustment loan programme. Though public opinion was clearly with the student movement, conservative opportunists emerged and helped Rawlings turn right, though he retained his nationalist demagoguery. (The story of Ghana's revolutionary moment and its squashing is well told by Zaya Yeebo in his book, Ghana: The Struggle for Popular Power, published in 1991 by New Beacon Books of London.) During the 1980s-90s the IMF and World Bank ran roughshod over Ghana, helping open the country's doors to Western governments whose aid schemes nearly invariably failed. US administrations became friendlier, capped by a visit from Bill Clinton in 1998. Formal democracy was finally restored in 1992 (Rawlings was then elected twice amidst a mediocre field and boycotts by opposition parties due to blatant vote-rigging). Amidst the chaos and underdevelopment, Ghana was officiall
Re: [PEN-L] Ghana water privatisation
These are abridged notes about an FDI reprot on Ghana in 2002. Look towards the end. 1. It appears that although Ghanian per capita GDP dropped by about a third the numbers of people in poverty declined. The national poverty line dropped from 40% to 31%. It is also evident that steady growth experienced by Ghana since 1984 did not translate into a commensurate level of human development ( the human development index remained nearly unchanged). This raises the question: why growth did not spill over into development and, in particular, what was the role of free market reform and FDI promotion in precipitating this poor development outcome. 2. Apart from the high peak of FDI flows in the mid nineties, which was due namely to a bout of privatisation in the primary sectors, the levels of FDI declined significantly afterwards and any above average performance can be ascribed to a shift in property of already existing capital stock rather than net additions caused by an expansion of economic activity. More importantly, if one considers the trends in FDI apart from this bout of privatisation, it appears that on average, the non market friendly period of pre 1984 is just the same, if not higher, than the post 1984 market friendly period. I understand that a shift in property in the primary sectors is not in itself a kernel for development unless it leads to an expansion in economic activity, viz. industrial activity. However, one notices that local industry did not expand. If anything, industry shrunk (see share of industry/manufacturing in Ghana) 3. Moreover, it appears that the revenues generated from privatisation had no lasting effect on growth (recent recession), and in all likelihood they went to service a growing budget deficit and external financial constraints/requirements. A closer look at macro data indicates that the 2000 recession was caused by a decline in ODA levels (delays in disbursements as well). Thus irrespective of higher revenues from privatisation, as a ratio from GDP these privatisation revenues remained low. One also asks what are the institutional drawbacks that make privatisation a one time gain, e.g. absence of progressive taxation. 4. Overall and as a ratio from GDP, ODA remained significant to this economy. Evidently it is this latter component that needs to be addressed- quality and targets for investments. Recall that national savings remained extremely low (about 6% of GDP); so growth must have been generated through external savings. What else would explain the high ratio of investment (nearly a quarter of GDP). And if so, when inflation was brought under control and fiscal restraint was being exercised under the dictate of the Bank and the Fund, also growth was proceeding at a steady pace, why havent private flows picked up. This crucial question is answered in the sense that more market reforms are needed to boost the process. But the initial flaw lies in the savings investment nexus. No one is going to feel comfortable in a situation where investments are fuelled by additional borrowing and savings do not pick up. That is a recession waiting to happen. So the point is in how to allow a genuine process of high internal savings high investments. The already existing framework for foreign investors guarantees the principal right of high returns and repatriation, so the flaw is more endemic on the macro level and this is a completely forgotten point. 5. There is no significance of the contribution of FDI to growth. The most recent empirical results from the literature show no effect of FDI on growth or, at best, the results are inconclusive. In the case of Ghana the ratio of FDI to GDP is less than one percent. Additions to capital stock over time have to be comparable to these low ratios. However, Ghana, was one of the highest recipients of ODA in Africa (about 600 Dollars per head on average). Also a big chunk of public investment, which is more than four times the size of private investment, is determined by ODA. Also note that in Ghana, private investment since the nineties remained steady and the rise in total investment is principally fuelled by public investment. Therefore, this significant component of investment is not given the consideration it deserves. I think that one should talk about the stylised facts of high foreign capital flows to GDP ratio and low savings to GDP ratio. This may indicate that Ghana experienced a significant consumption leakage, hence reducing private savings. It may be that the government is not growth maximizing and that ODA flows are channeled into raising consumption either directly, or through shifting resources currently earmarked for investment. Consequently public savings could fall with falling tax receipts or by a change in the composition of government expenditure. Indeed, foreign capital lowered domestic savings in this instance. Als
