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The resumption of international banking transactions and dealings on the foreign exchange markets was a ticklish operation, rather like turning on a global electrical circuit after a total blackout. It'd been timed very carefully for Monday noon (GMT) so that Europe would take the first strain before the American markets had opened and after the Far Eastern markets were closed.
The heads of the national banks (the central bankers had been readying for this all week in Washington, and on Sunday they had met till late in the evening at the HQ of the Bank of International Settlements in Basle. At the end of the meeting, there was no communique or spokesman's lead, for their objective, was to avoid as far as possible any heightening of the drama which might lead to panic. The chief executives of the private international banks had all left Washington on Thursday immediately after the end of the Bank/Fund meeting (the newly privatized "Supersonic" had put on a special Concorde to Paris via London which, for once, had every seat taken. They were like tennis champions readying to defeat a challenge to their title from a new, fast-rising star. Their sole interest was to keep their position as number one and they could not have cared less about what the spectators thought or saw. But the spectators around the world----the general public---felt that it was their money that was being toyed with and they insisted on watching the match. So massive TV coverage of the financial centers was laid on, and linkups were arranged worldwide.
As a drama the event was a failure: electronic money is more fungible and less visible than even the old bank notes, to say nothing of gold. The traditional drama of a bank shutting its massive oak doors to indicate that is out of business is now replaced by a little click as the computer is turned off. The fairly photogenic check for some millions of pounds or the million-dollar bill has been replaced by a coded message visible only on a specific electronic screen. That ultimate financial crime---default by a sovereign borrower---has been robbed of all horror, dignity, and menace: it is simply announced by the IMF in some such terse telex message to all banks as "Block Mali account 344290."
For the first hour millions of televiewers, including addicts of the early breakfast shows in Eastern America, found themselves watching a game they did not understand, with scores they could not even read. But for bankers and governments, this had two good effects---it dampened public interest, so reducing the danger of panic, and it enabled them to get on with amputating Africa with the minimum damage to the Western financial system.
This was, finally a very successful operation. The day had started with the IMF listing the defaulters. The first news, horrifying but not unexpected was that all the member states of the Organization of African Unity (OAU) refused to pay their official debts and would instead make their repayments to the UN's World Development Bank and Fun in Singapore. This was immediately recognized in the West as a formal declaration of intent to default on all loans. It could have easily led to panic, but by the time the public announcement was made the IMF had already taken charge of the defaulted debts and relieved the banking system of immediate responsibility. Thus, to avoid panic, private debt was deprivatized and made a public, international liability. Any punishment for past imprudence in lending was assigned to the defaulting borrowers, who found that all their assets in the West had been confiscated.
The big bankers had agreed among themselves to say as little as possible to the public when the business resumed. Behind an advertising barrage of bromides about their service to their domestic customers, bankers all over the West sought to hide the nature of their rather humiliating rescue from the debt trap that they had set themselves.
Once more it fell to SCAN to sum up and make intelligible the tangled events of a very long day. Its anchorman, Dellen Garcia, was refreshingly candid about how differently events had turned out from the way television planners had expected. "The high drama we had all expected is off the streets and in the cathode-ray tube ---not the one you are looking at now but the little green-eyed monster that dominates the desk of every banker or financial wizard. But in the privacy of the electronic circuits that are now our international banks, things turned out rather better than we had feared.
"There were no bank failures in the industrialized world---that was all taken care of by the International Monetary Fund with its paper gold. There were no bank failures, so far as we have heard, in Africa, though we suspect that is being taken care of by paper currency at the printing press.
"We heard yesterday that the British Commonwealth may leave Britain; today it has been announced that the Organization of African Unity will leave Washington taking the Inter-American Development Bank with it. So West and Africa are drawing apart, isolating themselves from each other. But for the moment it appears to have proved possible to pull some of the world apart without total disaster.
"Still, there are some threatening clouds on the horizon. At two points on the Mexican border early this morning armed raiders, believed to be Nigerian nationals, overpowered the US frontier guards and before reinforcements could be brought up a convoy of some 20 or 30 cars with Texas plates had broken through from Mexico into the open US countryside. But then Texas is a big state and what harm will a few extra blacks do there?471Please respect copyright.ＰＥＮＡＮＡx5e9EDD17X
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The ending of the freeze may have been a painless operation, but governments and bankers knew the Washington settlement had large and very real costs attached to it. They were being felt even before the end of 1984. Prices of goods coming to Europe from Africa jumped by about 1/3, partly due to predicted scarcities, but mainly because they went through black market channels since the great overseas business houses and the overseas banks had been closed in Africa and their managers often brutally expelled at a day's notice. On the other side of the ledger, exports to Africa from Europe through official channels had fallen to almost zero, which was driving unemployment to record levels while inflation was also taking a sharp turn upwards. In Britain, two great trading institutions, the Crown Agents and the Government's Export Credit Guarantee Department, had already been put out of business.
West Germany had always regarded its prosperity as dependent on a large trade surplus, and on finding Africa blocked as a market it had turned immediately and instinctively to the Eastern markets, where it found the Soviet Union more than willing to follow up the overtures made by Dr. Schauble in Washington.
In the United States, the longest recession ever was being further prolonged and inflation was rearing its double-digited hands again as US markets were eliminated. American businesses throughout Africa were seized, and supplies ranging from Dahomeyan chocolate to Libyan oil were cut off.
The looking costs were apparent to Africa also. The first meeting of the UN Committee on Restructuring and Development was held in Cairo in mid-March, two weeks before the special General Assembly was due to open in a converted factory block in the industrial park outside the Kenyan capital, Nairobi. The committee Chairman, Jebat Gana, opened the meeting by reading out a forecast of the future proposals for Africa hurriedly prepared by the UN secretariat. The report gave an uncharacteristically realistic account of what lay in store for the Dark Continent.
First and foremost, there was no chance of an immediate return to the development and growth of the 1960s and 1970s because there would be no money to invest. Any idea that the money previously set aside for debt service could now be used for investment was quite incorrect because debt services had for some years been financed by newly borrowed money. Even supposing there was some modest amount of capital left over to buy capital goods for development, the existing suppliers in the West were the only available sources for such goods, and the IMF powers (as the West was now named in these documents) would only accept "new money," which had been earned by exports since March 1, 1985. (A note was appended pointing out that for the purchase of arms, there were numerous alternative sources of credit.)
The cutoff of development funds would principally affect the modern sector, which had already been suffering from diminishing investment for several years. African industrialization, agri-business, and communications, starved of funds for a decade, were on the verge of collapse. In Africa south of the Equator, the modern sector had been a favorite of the planners until the negative flow of funds in the 1980s made it impossible to continue. As a monument to this great leap forward, there were factories designed by the most innovative architects scattered all over the continent. These sleek modern buildings, sitting like marooned ocean liners in the wide open spaces, were half-filled with the first half of orders for the most modern technology---orders which were never completed because of the drying up of funds. In the cities, slightly more staid buildings were fully equipped with older, more conventional machinery now working at 1/3 capacity, with 1/4 of the labor force, because spare parts could not be obtained. But it was not only for industrial goods that the modern sector---the rapid-growth sector---was dependent on the West; there was a stark warning in the report also of the growing dependency of the overpopulated, under-employed cities on food imported from the West. These cities were the source of manufactured goods that sold on world markets, and the state had dipped into the funds so earned to buy, quite cheaply, cereals and other food that was overproduced in the West. The people of the cities, including governments, had become used to this imported food and would deeply resent adjusting their diet or their expenditure to eat indigenous food and pay more for it to their local farmers. The experts warned of a continuance of the already very severe overall food deficit, with the towns being forced to buy imports because the local farmers, reverting to tribal farming practices, would not sell their precious crops to the authorities at the official prices which were always set artificially low to appease the volatile city dwellers.
If North America and Europe were going to carry out their threats to cease food aid completely and only sell food at market prices then, the report warned, almost all the cities of Africa (except South Africa) would soon be in a state of siege.
The Committee on Restructuring was compelled to face up to the fact that for the whole of the 1980s, the "developing" countries of Africa had been regressing. As a result, their economies and social systems had become increasingly fragile and seemed hardly capable of surviving the challenge of economic giants in the West. President Kalingba, who spoke next, provided little comfort.
Some 18 months earlier he had asked the Economic Commission for Africa (ECA) to make proposals for reducing African dependence on the West while increasing self-reliance and internal trade. He had commissioned the report because it had become apparent to him that all the austerity and sacrifice he had imposed on the Central African Republic at the IMF's demand was only going to save the Western banks' balance sheets, it was never going to enable his country to resume its self-sustaining growth nor even to restore the standard of living of the average C.A.R. citizen to its former level, which was anyway only 1/5 of that enjoyed by the hated Republic of South Africa.
The response from the radical but highly respected economists at ECA, which Kolingba now put before the Committee on Restructuring, was a set of proposals that applied to most of the middle-income countries of Africa.
All foreign-owned assets (including land and plantations) should be nationalized and either integrated into the existing system or given to workers and peasants. Kalingba explained that he would favor the first option on the grounds of efficiency. Once these assets had been properly nationalized and integrated (which would take 18 months) it would be possible to reappraise the national product and the markets for it.
Kalingba had told ECA in advance that his objective was to reduce the proportion of exports to the West (except oil), and increase dramatically the proportion of food retained in the country, or exported to other countries in Africa. ECA had responded that it would be possible to make the C.A.R. virtually self-sufficient in food, instead of the world's 2nd largest importer of cereals. Similarly, it would be possible to change the balance of markets for the C.A.R.'s manufactured goods from the existing 93% sold to the West and 7% to Africa to one more in favor of Africa. But, ECA warned, these changes would take at least two to three years to effect and in the interim, the C.A.R.'s balance of payments with the trading world as a whole would be wrecked.
There was a long silence as Kalingba pronounced this gloomy conclusion, broken by Amir Jamal of Tanzania asking bitterly whether this meant that the Central African Republic would therefore do nothing. "On the contrary," said Kalingba. "I now have no choice but to confiscate the assets of the West as they are confiscating ours; I will gladly trade with my neighbors if only because I can no longer trade equally with the West. But it will be at an immediate and heavy cost, for our economies in Africa have been perverted by the rich traders of the West to their advantage so that today they are not naturally complementary. To make them so is the only long-term hope for us, but it cannot be done by the stroke of a pen."
The President pointed out the actual situation in West Africa at that moment. There was a surplus of winter vegetables, destined for the "snow belt" market; a surplus of bananas, destined for Europe and North America; and a surplus of cane sugar for a world market that was glutted with beet sugar. Yet the peasants who grew these export crops did not have enough to feed their families and surely there was no surplus to feed the cities. Plans were being made all over Africa for diversifying agriculture out of cash crops and into subsistence products plus a small market surplus, but it would be at least two seasons before such plans could mature and be productive. How could a nation survive in the next 18 months with no reserves of food, no money to buy food in the traditional markets, and hardly even a willing seller, let alone giver, of such food anywhere in the world?
Jamal was quick to respond that in Tanzania there had been a successful return to traditional agriculture. He was cut short by Captain Mayo, President Ayotunde's Chief of Staff, saying that every African knew their traditional agriculture, organized on a tribal basis, was very successful and suitable for the tribes but wholly insufficient to feed the cities, or to support the burgeoning population growth, or indeed to cope with the modern sector in a country like Nigeria. Furthermore, as Amir Jamal should have known all too well, traditional agriculture had not remained untouched by the green revolution, whose techniques in the hands of uneducated farmers had already begun to destroy the ecological base of Africa's light soils.
The Government of Nigeria, he went on, had always seen the danger of a premature confrontation with the industrialized world, and had tried to prevent it, even at the recent IMF meeting. But, President Ayotunde had a strategy to deal with this situation, based on the assumption that the West could be made to recognize its interest in maintaining at least the modern sector and so the cities in the developing world. They were, after all, the illegitimate children of the West, who had a certain call on their natural parents and could prove useful if the industrialized world wanted to keep some contact with the other 4/5 of humanity. President Ayotunde, who had lived for two years in England, was convinced that the British people, for example, were not unanimously behind their Government's policies, and could be persuaded to support Africa for reasons of self-interest and sentiment.
After these vague generalizations, Captain Mayo put forth his President's master plan. Mayo proposed that a campaign be launched immediately using all the most modern means of communication (not for nothing was President Ayotunde a graduate of the British Army's Signals College) to convince the West of its interests and obligations to Africa's modern sector. A letup in the economic pressure on Africa, particularly some food supplies to the cities, might just make the difference in the next six months between pulling through and disaster. But if it was to be successful this appeal to pity must be backed by the threat of terror. But not a terror that mindlessly destroyed life and property, but rather one that sapped the foundations of the affluent society. If the West did not respond to the first appeal then Africa's capacity to inflict damage must be demonstrated. It was the view of President Ayotnude that this could be done most effectively by using the millions of emigres from Africa who still provided the essential underclass for the affluent world. If this worldwide proletariat could be organized first to withdraw their collaboration from their oppressors, and then to derange the electronic robot system that was beginning to replace them, it should be possible to bring the sophisticated plutocracies to their knees, or at least to their senses.
Since Japan and most of Mediterranean Europe were determined to maintain some links with Africa, and even West Germany sought refuge from isolation by her traditional policy of a Drang nach Osten, this left the United States and Great Britain, the joint authors of the Washington settlement, in an exposed position. In addition, Britain had wholly alienated black Africa by her Simonstown deal with the Republic of South Africa, while the United States was in the process of fighting a war against West Africa, North Africa, and the Horn of Africa who were seeking refuge from poverty in the world's richest nation. President Ayotunde therefore proposed that the hostility of Africa and their campaign of reprisals should be directed mainly against the United States and Britain.
This powerful plan of campaign was very well received, both for its practical proposals and because it showed that Africa had a leader of sufficient stature and ability to stand up to the almighty industrialized West. India's PM Rajiv Gandhi congratulated the Nigerian on presenting a plan that did not challenge the West where it was strongest---in the economic or weaponry spheres---but where it was weakest---in its social dependence on an underclass.
Kalingba listened to the long discussion that followed and saw all the dangerous divisions that lay just beneath the surface---between Asian powers bent on remaining in Africa and all the others who had washed their hands of the Dark Continent; between the newly industrializing countries and the peasant communities; between the proletarian revolutionaries and the moderate persuasionists. But he was convinced that the Nigerian proposal could be used to bring them all together as a pressure group against the West. Practically, he proposed that the campaign of persuasion should be organized by the Brothers of the Spear with regional Committees in Nigeria, Kenya, and the Central African Republic. This was accepted.
At the end of the day the President of the C.A.R. and his old friend, Jebat Gana, felt that the West, from a position of great weakness, had held together in agreement on a policy that called for some compromise with the West, but compromise backed by a knife at the enemy's vitals. Reports that had been reaching Kolingba throughout the past week of thousands of Egyptians, Nigerians, and other Africans getting through the frontier cordons into the United States seemed to indicate that in North America, thousands of miles away from the Dark Continent, the knife was already being sharpened.
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