The African Growth
and Opportunity Act

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AGOA: A Step Forward Back to Slavery
By Romerico Foz

The African Growth and Opportunity Act (AGOA or HR 434) is  economic blackmail being dangled by global big business (represented largely by multinational corporations based here in the US), in collaboration with the International Monetary Fund and the World Bank. According to the provisions of the bill, prior to a release of any development loan package, which is desperately needed by most African countries,  the countries must first and foremost agree to the terms set forth in their "structural adjustment program".

This neo-liberal approach to development of the IMF-WB tandem secures the business interests of large corporations and countries engaged in international trade. It places profits above all else and disregards indigenously grown values such as freedom and sovereignty. AGOA is a binding means for these global big businesses to legitimize the exploitation of Africa’s natural and human resources for their greater profit to the detriment of the majority of Africa's citizens. TransAfrica President Randall Robinson is accurate to call AGOA the "Africa Recolonization Act".

Implementing AGOA would mean complying to the following:

1) To cut government spending as an austerity measure;
This will further deprive vital health and education services of desperately needed funding. Increased tuition fees will lead the youth out of school, eventually producing a new generation of illiterates and unskilled workers. Higher health and medical services translate to higher mortality rates.

2) To reorganize government and reduce budget expense;
Massive human resources in the government will be displaced and will be forced to work at any wage where employment is possible.

3) To increase interest rates to neutralize inflation;
Due to astronomical rates, needed capital becomes inaccessible. Small businesses will be closed and their employees will be laid-off. Small farmers on the other hand will be forced to sell their lands to work as tenants, or worse, to become unemployed.

4) To eliminate regulations on foreign ownership of resources and businesses, creating the climate for foreigners to invest;
Government corporations will be sold to foreign investors, thus shifting control of the entire sector's economy to foreign hands. Government therefore compromises its own labor and environmental laws

5) To eliminate tariffs levied on imports;
Foreign goods directly compete with domestic goods, making it harder for the latter to rival their better equipped and richer suppliers. This will eventually lead to local business closures and massive lay-offs.

6) To cut government subsidies on basic goods in order to reduce government spending;
This triggers the prices of basic commodities needed for survival to rise, and results in civil unrest.

7) To implement an export-oriented industrialization program as a formula of growth and development, and refocuses production for imports rather than for domestic use and consumption. These lead to the country eventually becoming import-dependent on food and other commodities.

Food security is threatened and the manufacturing sector are encouraged to extract valuable mineral resources for foreign utility and exploitation. This will lead to other effects:

  • The law of supply and demand brings down prices of commodities as more countries produce more, which causes local producers to lose money.
  • The best lands are for cash crops, and poor lands are for food crops. These practices will cause soil erosion.
  • The men concentrate on earning cash for the family while women are domesticated to take care of food.
  • Overexploitation of forests and mineral resources leads to environmental destruction.

8) To join the World Trade Organization (WTO) to broaden potential markets;
The WTO is an international organization dominated by the world’s largest corporations and countries. It was created in 1995 to serve as the forum to negotiate international trade agreements and to monitor and enforce these agreements. Therefore, it becomes the primary vehicle of global big business to pressure member countries to open up their respective economies for their legitimate exploitation. What then, will Africa become from all of these?

The net effect would be to surrender one nation’s self-determination in particular, and sovereignty in general. Thereby allowing global big business to freely intervene in government political management and to wantonly exploit natural and human resources at their whims and caprices. Therefore, it becomes reminiscent of the times when the so-called powers-that-be removed from the people its supposed inalienable rights and turned them into slaves.

The song they are now playing is not new to our ears. They are trumpeting economic recovery and development in exchange for our dignity as nations. AGOA is actually not meant to promote "economic recovery and development" in Africa.

Kim Scipes, from the University of Illinois at Chicago is right when he said: "This development, when viewed from the perspective of the vast majority of the people, deserves to be called ‘detrimental development.’" AGOA is then a step forward for the economic interests of global big business.

And for Africa...back to slavery.

The views expressed in this article are those of the author and do not necessarily represent those of Kalamu Magazine.

(Romerico Foz, a business instructor from New York, is one of the founding directors of the Philippines-based Freedom from Debt Coalition, and is an independent contributor to Kalamu —IPOAA's predessor — Magazine).

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