Political Economy
of the Revised Washington Consensus
by Bernard Founou Tchuigoua

The forces prevailing in the first Washington Consensus had obliged vulnerable South States to give up their project of building self-sufficient production systems at the national or regional level, with a view to resolve the crisis of models accumulation generally current after the Second World War at the centre (Welfare State and parliamentary democracy), in the Soviet system (industrialisation and Welfare State without democracy) and at the dynamic periphery (industrialisation without institutionalisation of social rights or democracy for the people). The Consensus legitimised the policies of forcing the opening of economies, privatising public services, giving priority to profit over social needs, relating the allocation of resources to a market dependent upon private profit criteria, all within the framework of deflationary policies. The States, either weak at their social basis or debilitated by over-indebtedness, had to implement structural adjustment programmes (SAP)ordered by the International Monetary Fund (IMF) and the World Bank, both of which would be also monitoring the implementation. Thus, these two institutions directly shared the power of the States. The most dramatic example of the impact of the consensus has been the social and political disintegration of third world countries. It has been the result of the decrease in the capacity of the State to play its principal role, which is essential for effecting positive change and regulating the inevitable conflicts that ensue. In view of the above, the main criteria in the approach to review the Washington consensus has been to look at the relationship between economy and society. Given this disaster, the Consensus has been revised. According to the main actors, we are supposed to be living in the post-adjustment period. Is this a beginning in the resolution of the development crisis, or is it a simple arrangement for a problem that has not changed? In the present paper we state that there is not a qualitative change; the revised consensus does not envisage a world development that is not polarised, as necessitated by an international order that would be compatible with the intended projects of national or regional construction at the periphery. This implies a revaluation of the State. In the first part of this document we wish to prove that globalization unequally affects the ability of the States to regulate; in the second part we affirm that central States are more imperialist than globalist; and in the third part we say that the revised consensus does not propose any alternative to structural adjustment.

1. States capacity to regulate is unequally affected by globalization.

Do globalized markets rule unilaterally in central States? The revised consensus answer has been ambiguous. It does not question the tenet that the State is there to serve the market, as established by the World Bank in its famous 1997 Report, in which it acknowledges that the State is necessary to a market undergoing the process of becoming self-regulated and it forces the State to conform to its requirements. It is also stated in the report that "the factors influencing the efficiency of the State vary considerably from one country to another, because even when they have equal incomes, the size of the country, its ethnique composition, its culture and its political regimes give each State a unique character" 1. For the World Bank, although the State is subject to local conditions, the market is homogeneous in the sense that it is shaped the same way from one market economy to another. Its point of view is untenable, since even at the time when it used to make a difference between centrally planned and market economies, every economist knew that each major capitalist economy has created its own forms of organisation, production, labour relations, banking relations with industry, industrial and agricultural policies, etc. Furthermore, it must be recognised that the factors affecting the efficiency of the market are as numerous as those affecting the efficiency of the State and that there are no preconditions that would make the latter be at the service of the former. The World Bank uses a paradigm of the generally accepted economic thought, that is, to compare the relationship between the market and the State with the relationship between a natural phenomenon and a human construct. Two consequences, one theoretical and one political, result therefore: first, that laws as exact as those of natural sciences could be derived therefrom by economic analysis, an attempt that was already questioned by Samir Amin in 1970 2. Second, these laws would be imposed to society, and in particular to the political sector. In this regard, the World Bank feels that a globalized economy constitutes a protection from the arbitrariness of the State by limiting its royal rights in regards to taxation of capital so that its monetary and budget policies can be sanctioned by financial markets 3. R. Heilbroner and W. Milberg 4 reject this idea, that converts economics into a science without history and makes it contingent upon the political and moral options of economists. They rightly consider that a useful economic analysis owes its validity to the political economy on which it is based, and that for economists who choose capitalism without trying to make economics into a science whose laws can be formalised by virtue of the inspiration of natural sciences, the State must play a more important role than in the fordist and keynesian models; that the essence of the crisis of contemporary economic thinking resides in its denial of the legitimacy of the public sector role in capitalism; that the new economics should be based on "the recognition of the need for an increase of substantive leadership by public authorities in the management even of capitalism", and that, besides, it must assume that the nature of the balance between public and private sectors must be the same as "the role of the former, that was more considerable during the post-war period". As a consequence, States should monitor financial markets, not vice versa. This is a view questioned by the globalization extremists.

Capitalist economic globalization concerns two distinct processes, one being the flow of goods and resources across the borders, and the other, the structures that manage international networks of activities and transactions. Ultra-liberals say that globalization ought to lead to a globalized economy without borders, or even to the free circulation of goods, production factors and financial assets. The production of public goods, such as ownership systems and macroeconomic stability, needed for the functioning of this economy should be set by world institutions policies, to be adapted locally by the States. Economic performance should be dependent upon companies response to market stimulus and to the efficiency of global regulations. That is globalism; an ideology of globalization. This Utopian character of globalization has never guided the work of globalization strategists, neither before nor after the consensus revision. They are happy with a mutilated and polarised globalization, reproduced by the economic and non-economic means available to powerful States.

Transnational corporations are not as countryless as they appear. Drucker, an ultra-rightist 5, differentiates multinational and transnational corporations. A multinational is a national company with branches cloned from the matrix company. A branch makes almost everything it sells, and it employs almost exclusively managers from among its expatriates. "On the other hand", he writes, "a transnational corporation is only an economic space, the world; even if the sale, maintenance and legal servicing are locally ensured, pricing, financial management and research depend on the world market. Managerial jobs can be held by nationals from other countries. Transnational innovation areas are not set in advance. It is well known that nearly 40% of world trade comes from transnationals". We wish to make some critical comments about this giant company globalist approach, as follows:

- Firstly, mergers and acquisitions that lead to the creation of gigantic companies place the power in a triad, and geopolitical elements are taken into account for these mergers. There is practically no company that does not matter to its State. In general, transnational corporations continue to enjoy privileged relations with their States. "If Hoecht, the giant among German chemical industries, wants to become the leader of world pharmaceuticals, it can for whatever reasons channel its activities towards the United States of America or towards certain European countries. Its management would be comprised by executives from various nationalities, although Germany or Europe would continue to be the mother country of this multinational" 6. Meanwhile, it should be noted that the privatisation of a public enterprise rarely implies the loss of national control of capital, and never in favour of an outside transnational corporation, for instance, South Korean chaobols. One of the Gulf war aims was to eliminate Kuwait from the process of acquisition of European companies. At the periphery, namely a quarter of the world, privatisation functions almost exclusively to the benefit of foreign transnational corporations. In Côte d'Ivoire, the ambiguity of the relations between the Hydro Quebec Group (HQI) and French groups (SAUR, Compagnie Nationale des Eaux, Lyonnaise des Eaux, EDF) that benefited from the privatisation of water and electricity distribution could signal a collusion for a negotiated sharing of the African market" 7. This is not a unique case.

- Secondly, central States are in connivance with their multinational companies in a dynamic of international relations where geostrategic considerations often lead them to pursue short term profit goals. At the empirical level, a linear globalization process does not exist, as demonstrated by a comparison with the nineteenth century, even if the context is different. When measured by the foreign trade/gross domestic product ratio, the global integration of central economies today is down in comparison with 1913 for Japan (15% versus 27%), barely higher for France (35% versus 30%) and Great Britain (47% versus 42%). The jump is spectacular only for the United States, only to attain a 20% nowadays. In comparison with the GNP, foreign investment levels of the main investor countries are much lower than in 1914 for the Netherlands (41% versus 82%), Germany (20% versus 60%), and higher for France (5% versus 4%), Germany (5% versus 3%) and the United States (3% versus 2%). There is no convergence of prices, in spite of the overall deflationary policies. Attention is drawn to the fact that allowing circulation of labour in Europe does not mean that there is any mobility for workers across the borders. A Swiss specialised agency survey on the immigration intentions of Eastern European workers confirms our thesis that the workforce only emigrates massively and definitely when it loses its links with the land without having achieved urbanisation.

2. Regulatory powers have always been available to central States.

Real globalization affects central States differently than those at the periphery. It is wrong to state that, in any capitalist system, globalization implies a de facto surrendering of all the States to the market. The reproduction of the centre/periphery polarisation is not mainly due to the so called market laws, but rather to decisions taken by States so powerful that they belong to the group of monopolists in key areas. It is the ability to generate new technologies, organise new monetary systems, benefit from financial flows, control the access to the world natural resources, manufacture and hold weapons of mass destruction, prevail in the instances of political management crises that transfer weight to the countries at the periphery 8. US behaviour shows that central States always wield a lot of power. After the decline of American hegemony, economists had come up with analytical tools which assumed that, to resolve the crisis, a triad would formulate a collegial political policy based on a keynesian approach at a global level. The Reagan administration would favour an approach reserving the taking of major initiatives exclusively to the United States. In fact, according to its team analysis, the United States were in a position to use their macroeconomic policy to influence world growth by forcing the other economies to adjust to them. This approach seemed to them even more realistic, given that the US economy of the 80's was more dependent on international transactions than in the 50's, that empirical data showed that the US economy remained the most powerful in the world and that the impact of US economic policies was greater than ever 9. This analysis must be complemented with that of North-South relations. This was also a negative US response to the claims of third world middle classes. Knowing better how world economy worked, they took advantage of the energy crisis in order to present their important claims relating to a world economic order that would promote the industrialisation of the South. The establishment of a neoliberal economic order was the cause of and resulted in the defeat of the South 10. The current belief that launching South-South co-operation is possible legitimises the Malaysian analysis assigning the blame for the Asian financial crisis to a strategy of destabilisation of the so called emerging economies, as well as to the Asian and Latin American unilateral decisions to control capital movements. China did not accept the neoliberal thesis in this regard.

The revision of the consensus is only an acknowledgement of an existing situation, namely, that at the centre, the State's regulatory power had just taken back stage while neoliberal policy was the rule. At the macroeconomic level, since 1980, the margin of manoeuvre of the keynesian budgetary policy to support economic growth through demand has been undermined but it continues to obtain rather indirectly. Public expenditure continues to be greater than a third of the GNP in all major developed capitalist countries. It is over 40% in Great Britain, nearly 50% in Germany and Spain and over 50% in France. Personnel still constitutes three fourths of the budgetary expenditure in Japan and France, almost two thirds in the United States and more than half in Germany. If the GNP from 1980 to 1997 in the United States, leading country in the neoliberal rhetoric, has been multiplied by 2.6, total public expenditure has been multiplied by 3.2.

The support of competition and productivity through technological innovation has remained constant. The State always intervenes most actively in the area of research and development; therefore, any reduction in military research expenditures does not entail a sudden decrease in research and development. Public expenditure for research and development in all countries is much higher than the total for development assistance. The share of public expenditure allocated to training is never below 10% in Germany. In other words, the economic systems of the central countries are simultaneously reinforced when opening to the world market.

At the social level, the Welfare State is retreating, but it is still far from becoming history 11. The share of expenditure allocated to health and financed by the State is approximately 75% in Europe and over 40% in the United States. This is due to the ability of societies to resist a globalist ideology that allows transnational corporations to wield the weapon of dislocation, as though economic borders no longer existed. This weapon is only effective in the South countries. However, the most active among them have to spend in order to set up infrastructures, and the economies of the least developed are such a disaster that a decrease in public expenditure can cause the collapse of the State or its paralysis. Thus, the market imposes its laws: decrease in education levels, decrease in access to health services, appearance of new epidemics or resurgence of old ones. In particular, negative economic growth together with an increase in social inequality, to the benefit of a 5 to 10% minority, breeds abject poverty.

As regards to the areas of co-operation within the triad, Europe and Japan support the growth in the United States. The relative strong growth of the United States economy, free of any inflationary pull, and with an unemployment rate that is 50% lower than in Europe looks like the product of a successful neoliberal social and economic approach. Does the Consensus allow the export of this growth model? Yes, if we forget the new form of integration of the United States economy into the world economy. No, if we take into account the main new developments revealing this approach as more kindred to Keynes than to Ricardo or Friedman. Developed countries as a whole consider that North America and the European Union should be protected at all costs from the destabilising process of crisis accumulation. This is the framework in which European and Japanese support of American economic growth approach should be regarded, as the approach is based on the concept of priority to work and jails, and not on social equity. It is linked to the Japanese growth crisis by a savings transfer mechanism. Historically, the United States hold a low savings rate, whereas in Japan it is very high. Japan holds a third of world savings and the highest currency reserves in the world, estimated at over 200 billion dollars. The main transfer mechanism is constituted by the establishment of a interest rate incentive differential. I Ramonet writes: "Since public bonds yield 1.68% in Japan and 5.42 in the United States, it is more profitable not to deposit your savings in the island...but mainly in the United Sates...According to the Department of Commerce in Washington, over a billion dollars leaves Japan every day. Others estimate the amount up to 1.6 billion dollars. The Japanese have invested 269 billion dollars in US Treasury Bills (as compared to 258 billion for the British), which helps maintain the international liquidity of the United States." 12. How long will this system work? According to F. Clairmont, "Japan is adrift, in a Pacific area where the wheels of the capitalist economy lay bare in a spectacular manner, unprecedented since the Great Depression in the 30's: collapse of the banking system, irrational allocation of resources, ecological disasters, feverish speculation, explosion of inequality and poverty, overproduction and underconsumption, excessive savings and gross insufficiency of socially redeeming investment, multiple devaluations, etc. All the stratagems of economic war are present! The collapse of East Asian economy is surely possible" 13. There is a lot at stake: would the United States be ready to give up their hegemonistic aims for the sake of saving world economy from a crisis that could end up in a real geopolitical chaos? It is not up to the market to decide. The manner in which Asian economic and financial crisis will affect the relationship between the State and the market will be exceedingly important in the future. Helen V. Milner asks: "Will the pressure by the international finance actors basically change the relationship between the public powers and the economy in Asian countries? Will the crisis lead to more convergence in the economic practices of Asian institutions and those of the West? Will the famous industrial policies adopted by many Asian countries disappear? These questions are particularly important for China and other developing countries searching for models that would best promote development 14.

The acceleration in the building a monetary Europe shows as well that central States have never lost their margin for manoeuvring. The European monetary system, conceived to protect the EEC from the erratic fluctuations of the dollar after 1972, produced favourable results at the end of the 1970's, which encouraged the creation of a monetary serpent. The question of whether its success will last is a subject of discussion. First of all, there is no evidence that a process is taking place in which national systems are to be substituted for a European productive system. Secondly, there exists a great deal of mistrust in regards to current major mergers and acquisitions. Finally, there is a risk of finding a contradiction between a deflationary economic policy and a high unemployment rate, combined with the ageing of the population. Europe will have to go further and encourage a world development perspective to avoid being surrounded by a group of States rendered unstable by poverty or nationalism.

In conclusion, the neoliberal management of the crisis obliges central States, including the United States, to struggle for the autonomy of their decisions relating to the market; but at the same time, they aim to consolidate co-operative relations within the triad, with a view to forming a block against the more important and dynamic South States.

3. The revised consensus does not offer any alternative to the supremacy of market over State.

G. Myrdal 15 realised that world economy can function without a State and all its established institutions when he created the concept of a "soft" State to describe a State without real power to manage an industrial project in any Third World country. I. Wallerstein was the one who introduced the concept of zones without States in world economy 16. In such a situation, neither social progress nor political improvement last on a long-term basis, because of a lack of economic potential needed to support them 17. Facing neo-liberal globalization, a Third World State is "soft" because of several internal and external factors inherited from pre-colonial, colonial and post-colonial times as well as from ongoing changes, in particular in the field of technology. However, we want to emphasise here the issue of the impact of adjustment on the State and that of the debt-crisis as consequences of externally imposed policies. Thus, the concept of conditionality has to be discussed.

Conditionality represents a series of measures imposed on a country so that it may be eligible for external economic assistance within a framework of independent economies. From this perspective, conditionality is not tied to North-South relations (Europe had to compromise to benefit from the Marshall Plan and the IMF was effective in controlling the evolution of Europe and Japan's trade balance until the emergence of the dollar crisis). The specific aspect of conditionality in North-South relations refers to three theories.

The theory of world economic relations, as explained by Ricardo and the Neo-Classics, does not distinguish between self-centred economy and peripheral economy and does not rest on a multidimensional approach. It does not allow an understanding of non-economic functions of conditionality in structural adjustment. The second theory has its origin in Marxism and nationalism. It explains exploitation mechanisms between countries and analyses political practices applied in economic relations. It established the widely accepted distinction between centre and periphery and the imbalance between self-centred and open economies. In other words, world economic relations are framed by political and strategic relations. Conditionality favours a humanist concept of the world system. The cultural current is multi-disciplinary as well. It is based on the theory that our world is made of fiercely opposed cultural systems that cannot share the common idea that the human being represents the synthesis of a stable species, capable of constantly changing and adjusting, culturally as well as socially, and capable of building world-wide interdependent and mutually supportive societies. Samuel Huntington 18 wrote a synthesis on this theme in his book entitled "The shock of civilizations" (Le choc des civilisations) which became an international best-seller. According to the author, individualism, free-thinking, democracy, autonomous Nation-States are characteristics of the Western countries. This approach allows to conceal, through economic conditionality, different ways of interfering in the South countries, even if they have a sound industrial basis. A Western State is thus free to use a dual policy by being barbaric with the outside world, and civilised at the national level, free to discuss the sexual mores of a Head of State and at the same time, to kill (or have kill) peoples of other nations, by creating a national Welfare State and at the same time imposing negative political conditions or an agricultural recession on other countries. In Fourth World countries, this meddling may lead to a crisis of the State and even to a meltdown, and make management of the debt-crisis impossible.

Conditionality has turned into interference since the 1980's. After the Second World War, the dominant theories of development were centred around the vicious cycle of poverty and lack of surplus and skills needed for investment. The model of public development assistance used by the OECD reflected this trend. Transfer of savings and technologies was meant to break this cycle. Multilateral development institutions and bilateral development agencies had three main tasks : at the trading level, the risk of non-reciprocity to benefit South-made goods was recommended, as well as the creation of mechanisms for the reduction of price fluctuations of commodities. But no mechanism had been planned to counter damages to terms of exchange or uneven exchanges. At the financial resource level, assistance was to supplement national savings to help investment rise to full use of resources. At the technical level, members of the OECD were to allow acquisition of equipment and of public and private enterprise management tools. Naturally, the IMF was supposed to grant economic assistance in case of a deficit of the trade balance. Currency adjustment replaced that system in the 1980's. In the face of the debt-crisis, it created the conditions necessary to benefit from external financial and technical support. Post adjustment offers an extension of these conditions.

Conditionality is not the same within each phase. During the developmental phase, when bilateral transfers depended heavily on foreign policy, those of multilateral institutions were supposed to be neutral vis-à-vis economic and political options and diplomacy, and American influence in the Bretton Wood institutions was less visible than on the crisis. But as far as adjustments are concerned, conditionality has become the norm. External assistance is conditional to reforms whose outcome is the opening of trade and free monetary flows. It is wrong to affirm, as Burside does in a publication of the World Bank and the IMF, that "the main orientations of a country depend first and foremost on social factors and internal policies". In this regard, the author, who writes that, in a worst-case scenario, conditionality would only play a supplemental role, contradicts himself when he says elsewhere that "external assistance promotes economic growth and reduces poverty in the developing countries that adopt action-oriented policies leading to an increased growth power : opening of trade, strict budgetary measures and inflation-fighting measures" 20. In fact, if talks on development assistance continue, assistance itself does not decrease. This is one of the realities of post adjustment. Loans on favourable terms, which were maintained around 0.35% of the GNP by lending countries between 1970 and 1990, decreased by 16% between 1992 and 1996. In real terms, such assistance decreased by 8% for the recipient countries. It is combined with measures yielding short-term benefits or humanitarian assistance that give a totally negative impression of the Fourth World. In principle, direct private investment should be substituted for public loans. In reality, the Fourth World does not benefit from it : developing needs are overlooked in favour of speculation.

In times of structural adjustment, a "soft" State slides towards a meltdown. The Washington consensus was based on the hypothesis that the post-war peripheral State intervened too much. It was in reality a "soft" State. The post-war economic State machine related more to a world model application which underlined the absence (or the weakness) of private national bourgeoisie, rather than a common will to apply economic planning. The world, as well as multinational enterprises, supported the "soft' State. Foreign technical assistance played a major role in public finance management. The above-mentioned hypothesis justified the introduction of structural adjustment programmes in Africa when the establishment of a national State was at best just beginning. Programme implementation blocked almost everywhere the establishment of a national State by introducing fragmentation, which led to the State's meltdown. The economic aspect of such a meltdown found its roots in a post-colonial State with a weak financial basis, as its fiscal returns came not from development of productivity, but from annuities.

Policies derived from the first consensus were most strictly enforced in heavily indebted peripheral States and, consequently, in all African countries. They led almost everywhere to the total sovereignty of market over State and cancelled all attempts at creating sustainable growth based on the development of agriculture and industry. Growth at the sector level, especially in tourism, at best emphasised the extroversion. It is probably in the agricultural sector that the outcome of such policies is best reflected. Liberalisation of trade in agricultural products and currency devaluation have reduced the high taxes that burdened farmers since the colonisation era, but an adjustment of the terms of exchange of these products benefited the middleman more than the farmer. Moreover, agricultural growth with adjustment was more intensive than extensive. Structural adjustment programmes did not permit agricultural subsidies in a sphere where developed countries themselves have become champions. Social policies were virtually absent as far as social transfers from rich to poor population strata did not exist, and where a welfare and pension system benefited only 5% of the population. Efforts were directed mostly towards education, but did not appear in industrialisation or agricultural development programmes.

The revised consensus recognises that the market cannot operate adequately without support from the State, which must have a strong financial basis, strong institutions and an efficient techno-bureaucracy. It is only after a fifteen-year struggle against the State that Western countries realised that the liberal economic reforms that had been recommended did not exist! Thus, democracy-oriented programmes based on proper government appeared in the foreground, beside self-adjustment measures recommended under certain conditions. In today's world, a State supportive of a goal-oriented market must be supported by a large social foundation, represent a legitimate Government and offer its people social services. In Africa, the problem is greater because it affects both economic development stricto sensu and the establishment of the national State, which means that industry and agriculture must be shielded from competition from developed economies. Revision of the consensus is based on a logical abandonment of commercial preferences and the drying up of development assistance. Moreover, national construction is hampered by the emergence of open or latent armed conflicts caused by internal turmoil, or stemming from geo-economic or geo-political problems. Conflicts in the Horn of Africa and in the Great Lakes Region, and even in Angola, arise from attempts at controlling access to oil and mining resources in Africa and the Middle East, and also from rivalries between Great Powers. Developed countries must abstain from fomenting or supporting armed rebellion with the sole purpose of controlling the natural resources of a continent.

The debt crisis becomes more and more difficult to manage. Taken globally, the Third World debt has become a vital source of surplus that is transferred to developed countries. From 1972 to 1995, the amount of debt-servicing was $2.632.500 million out of a gross amount of $4.526.281 million (50%) 22. The debt of countries such as Mexico, Brazil and Indonesia weighs heavily on the stability of the international financial system. But thanks to debt-refinancing, the fluctuation of stocks provides an important gain in speculation. The greatest initiative regarding debt-servicing in the framework of a revised consensus is that of debt-relief measures of the Heavily Indebted Poor Countries with low Income (HIPCI's), which was announced at the end of 1996. For the first time, creditors agreed on the principle according to which they would consider the public external debt of a country as a whole, so that its financial situation could be remedied and would not hamper its development. A country is classified as indebted when the debt represents more than 200% to 250% of its GNP, after deduction or cancellation of loans on favourable terms, or if debt-servicing represents more than 25% of the country's exports.

Bilateral debt could be reduced by up to 80%; parts of the multilateral debt could be reduced too, since this debt-relief measure would be financed by grants from members of the OECD, but would have strict conditions attached to it. To be eligible for debt-relief initiative, the recipient country would have to have used socio-economic policies satisfying to the IMF and the World Bank, for a period of three years. The country would then be under observation for another three years. In principle, the first three years would be considered as a purge, in retrospect. What are the consequences of such initiative? The World Bank and the IMF projected in 1997 that by the year 2002, thirteen countries (or ten African people out of a total of thirty-seven) would have benefited from it. It is a rather whimsical projection. If the institutions really meant to help heavily indebted countries to regain their autonomy from private interests, they would have (i) recognised that States and enterprises have played a major role in South countries' becoming indebted and that corruption was systematic between 1974 and 1980, and (ii) that most of the countries have already paid up their debt, through debt-servicing and other less visible mechanisms; (iii) that major banks have received such high profits that they are shielded from any suspension of payments; (iv) that most States are not able to meet their debt payments and that efforts undertaken by civil society are hampered by the debt crisis. On that basis, States would have defined the objective of the world financial system in relation to the self-development needs of South countries and would have changed the rules of procedure of the Club of Paris and the Club of London to allow the indebted countries to reorganise themselves just as well as the creditor countries did. Negotiations would have been more balanced and in a spirit of common liability in the face of the debt crisis.

Since such a solution was rejected, countries will continue having to give priority to debt-servicing instead of education and essential social services. The wide gap between politics and speeches on debt-servicing of heavily indebted countries is explained by the countries' non-existence in the stability of world's financial system.

In conclusion, the message in the post-adjustment phase is clear: there is no longer a global or regional intervention framework on the part of developed countries. They only act on a case by case basis. One wonders if the World Bank will keep issuing its early reports on world development, since at present there is no recommendation to be made concerning transfer of resources, and since countries are classified according to their stand with regard to Anglo-Saxon neo-liberal culture instead of their economic structure at the (per inhabitant) GNP level. The structures used by centres constitute a vast network, of which big institutions are the only visible part. "These structures, according to André Guichaoua, cover an assembly, whether informal or institutionalised - of politico-financial policy makers set up in a network, with acknowledged leaders, implied rules and constraints created by beneficiary countries that are impossible to break (clubs, round tables, external help, conferences of money lenders, consultative groups, special meetings of ministers of co-operation of the OECD, special meetings of friendly countries or implicated countries)" 23.

After a fifteen year struggle against the strengthening of post-colonial and newly formed States, the role of the State cannot be rehabilitated simply because of the rediscovery of said role. It is hard to believe that central States, which kept on controlling their economies and co-operating with one another, ignored the principle that a self-regulating market would spread havoc and lead to structural instability. In fact, the SAPs were needed to integrate underdeveloped countries in a new phase of globalization. In accordance with the revised consensus, each Government is considered able to make the necessary adjustments to be accepted in the system. We do not speak of a new world system. In a system based on human and social development, States have the obligation to control markets, not the opposite. This control, as the G7 now acknowledges following the Asian initiatives, should not function only in financial markets. The whole world economy must cater to international development. Its major objective will be to eradicate centre/peripheral polarisation in all fields, by instituting a polycentric world system through adequate regionalisation. A global economy cannot exist without a total revaluation of polarisation. Only if standards of living in the world were put on a par and became the major objective of central countries policies (which are now members of the OECD) would a global economy devoid of State Groups or Supremacist States be possible. Values of social justice, democracy and ecological agreements would have to balance those of efficiency and competition. Another type of globalization based on such principles would mean that profit was not the sole incentive of productivity. The State would make it its priority to protect the weakest and most vulnerable in the social strata. And this will be impossible to achieve if preference is given to private production interests and resources are distributed according to market prices without regard for cultural, historical, ecological diversity etc...

Regionalisation based on geographical distribution rather than according to culture and history should be a major component of another type of globalization. Europe-centred concepts are first and foremost based on cultural rather than economical concepts. This is why the European Union admitted Greece, but not Turkey, as a member; and South Africa under the apartheid regime belonged to OECD but not to the Africa Group. Implicitly African and East Asian concepts rightly favour geographical proximity. Naturally, in a regionalisation based on geographical criteria, members' admission is not based solely on economic factors. Principles of democracy, social justice must absolutely have priority in members countries. Merging regionalisation and globalization would finally allow the establishment of a multipolar world system responsible for economic, strategic and ideological problems. The balance between planning and market could not exist as a matter of fact. These two entities should co-exist according to balanced rules which are constantly shifting.

Bernard Founou Tchuigoua, Director of Research
Third World Forum
P.O. Box 3501 Dakar
Tel. (221) 821-1144
e-mail: bfounou@syfed.refer.sn


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