POLICY BRIEF: STRUGGLE FOR JUSTICE AND EQUALITY IN THE AFRICAN UNION

Africa

By Oleg Giberstein

Policy Brief

The African Union
Secretariat of the Union/The Commission

Topic: How Exogenous Forces Prepared the Ground for the Rwandan Genocide 1994: An Appeal for more Justice and Equality on the International Stage and an Outcry against Neo-Colonialism

Recipients: Federal Government of the United States of America, World Bank, International Monetary Fund

Author: Oleg Giberstein
In the name of Jean Peng, Chairman of the Commission

I) Executive Summary
In 1994, one of the worst crimes against humanity of the past century took place in Rwanda with the slaughter of over 800,000 innocent people. Largely, these killings have been attributed to “tribal violence” (Jefremovas, 2002: 30) and elite rivalries (Jean, 2007: 5-6). However, it is the purpose of the African Union to demonstrate that exogenous factors are largely responsible for these events. The development of the international coffee trade and policies of the international financial institutions, namely the World Bank and the International Monetary Fund, influenced the odds against the Rwandan people. In the context of these events, it becomes clear how colonialism created an awful starting position for Rwanda in the first place, and how decisions related to the lives of Rwandan people were made not in Rwanda but in the cities of their former colonizers. Eventually, this all added up to create and motivate the internal forces that were beyond the exertion of the genocide. This policy brief is an appeal to reform the system of international governance in order to give African people a stronger voice on the international stage. Only after such a step will it truly become possible to prevent catastrophes like the Rwandan genocide and to stop the spread of neo-colonialism.

II) History, Context and the Implications for Rwanda
The first part of the following section will present how colonial forces encouraged ethnic hatred and created the situation in which Rwanda became a loser of the world economic system. In the second part, the functioning of the International Coffee Organization will be explained and it will be shown how little control Rwanda had over its own future. The last part then deals with the collapse of the international coffee price and its effect on Rwandan society. It will become clear how a fatal combination of “colonial history and global economic integration” caused the genocide (Robbins, 1999: 293). However, for more detailed historical background, the reader should use other literature like The Rwanda Genocide from Christina Fisanick (2004).

The Legacy of Colonialism
The legacy of colonialism lies heavily on the shoulders of the Rwandan people. While ethnic hatred and local elites indeed played a sad role in the genocide, one has to go back in time in order to properly understand the motivation behind such actions. Historical evidence proves that ethnicity had never played a decisive role in pre-colonial Rwandan history (Robbins, 1999: 294). Yet, using “‘modern scientific’ methods like the measurement of nose and skull size”, the colonizers established a system of “rigid ethnic classification” soon after arrival (Uvin, 2004: 49). As the Belgian colonial minister stated, Tutsis possessed a “natural refinement of feelings” which the Europeans rarely found “among primitive people” (Jean, 2007: 4). The Hutus, on the other hand, were seen as “indicative of the inferior Negro” (ibid. 4).

Although just one example of many across Africa, this classification demonstrates how the colonizers used racist theories to enforce their strategy of ‘divide and conquer’. Hatred among the ethnic groups, which were not properly separable by physical appearance only and were even used to ethnic “intermarriage[s]” (Robbins, 1999: 294) started to grow fast. Later, identity papers indicating ethnicity, introduced by the colonizers, (Uvin, 2004: 49) were helpful for the ‘Genocidaires’ in 1994 to detect Tutsis. The root of hatred is easily planted but is hard to fight.

Shortly before the colonizers ended their physical ownership of Rwanda in 1962, they “began favoring the Hutu over the Tutsi […] in the name of democracy” (ibid. 49). Thousands of Tutsi were murdered and “more than 100,000 others” fled the country (ibid. 49). The process of constructing ethnic hatred had been finalized. The Hutu now had reason to fear the return and vengeance of the Tutsi who had fled , while the Tutsi had lost their dominant position in Rwanda and many now faced diaspora and life in refugee camps. The Rwandan genocide had already evolved away from the scenario of ‘usual’ tribal violence.

The colonizers’ offenses soon moved beyond the scope of ethnic hatred. As Rwanda does not possess any valuable resources, the colonizers discovered coffee as a way to “extract wealth from the region” (Kamola, 2005: 6). In fact, all parts of the agricultural sector were forced to “shift their activities from subsistence or food crops to export crops, such as coffee” (Robbins, 1999: 294). Thus the region shifted to economic dependence on a single primary commodity. In 1990, shortly before the collapse of international coffee prices, Rwanda was dependent on coffee and tea exports, which “brought in 85% of the nation’s foreign currency,” a perfect example of dependency theory (Kamola, 2005: 14). At this stage, it is relevant that soil used for coffee production becomes “useless for most other crops” (Robbins, 1999: 296), a situation which would prove fatal for the people of Rwanda.

b) The International Coffee Organization
The international importance of coffee is frequently underestimated: it “stands next to oil as the most valuable commodity” of the Southern Hemisphere and is “worth roughly U.S. $10 billion per year” (Bates, 1997: 3). It is not uncommon that the rise and fall of the coffee price has decided the destiny of regimes and governments, ranging from Latin America to Africa. This political dependency is crucial if one wants to understand the relevance of the International Coffee Organization (ICO).

Founded in 1963, the ICO included virtually all coffee exporting countries and all significant importing countries, “comprising 99 percent of the world coffee market” (Kamola, 2005: 14). The main driving force behind it was an alliance of “northern firms” and “southern governments” that acted as a kind of cartel to control prices (Bates, 1997: 161). Initially, large American coffee roasters like General Foods or Procter & Gamble were in favor of the agreement, as it helped them produce “more accurate profit predictions” (Kamola, 2005: 14), whereas for countries like Brazil and other big coffee exporting countries it was a way of increasing revenue (Bates, 1997: 11). In order to convince America, the largest coffee importer, that higher prices for its consumers would be beneficial, the National Coffee Association came into play. This interest group, who would later play the decisive role in the breakdown of the ICO, successfully advocated to US legislators the need for such organization (ibid. 132) . With the entrance of the United States of America into the market, other countries of the non-Communist world were essentially forced to join the ICO as well if they did not want to face various market exclusions (ibid. 133). A new trade-regulating organization had been created.

Ironically, while the collapse of the ICO later proved to be disastrous for Rwanda, the country suffered from its very foundation. African countries found themselves “locked […] into small and inflexible market shares during a period” when they would have been able to expand and maybe “out-produce” some of their competitors (Kamola, 2005: 15-16). However, once again, the decisions were not made in favor of or even with any regard to the African continent — in this particular case, to Rwanda.

This also becomes evident if one considers the distribution of votes on the executive committee of the organization. Brazil, as “the largest exporter”, was given 332 votes; America, the biggest importer, had 400 votes (ibid. 15). Rwanda, on the other hand, where coffee exports accounted for about 80% of revenues, received 6 votes (ibid. 15). The country found itself caught in a neo-colonialist structure within the world economic system and did not have any say in decisions that were essential to the everyday life of its population.

Eventually, a number of factors combined in the 1980s to finish off the International Coffee Organization, which had up to that point been an effective institution (Bates, 1997: 25). Bates describes how “consumer preferences” started to shift, making fixed production and export quotas an increasingly undesired system, at least from the perspective of the coffee roasters (ibid. 172). Furthermore, the European food giant Nestlé entered the American coffee market. Buying its coffee in the “nonmember markets of Eastern Europe,” the company was able to put significant pressure on its American competitors (ibid. 173). Not surprisingly, the National Coffee Association reversed its stance and immediately started advocating the rupture of the ICO, a position that was in line with the zeitgeist of neoliberalism and the “Washington Consensus” (ibid. 173-174). In 1989, the International Coffee Agreement, which had to be re-negotiated every 5 years according to ICO statutes, collapsed due to the pressure of the US government and the National Coffee Association, which had stood behind it. While Rwanda had no voice in the process of decision-making, it felt the consequences immediately.

c) Impact of the Collapse of the International Coffee Organization on Rwandan Society
International coffee prices crashed dramatically within months. The impacts of this development “were felt at every level of Rwandan society” (International Panel, 1998: Internet). Evidence for this is provided by the ICO itself. Between January and December 1990, the “prices paid to growers in exporting Member countries” fell from 90.92 US cents to 47.25 US cents (ICO: Internet). The “averages of ICO indicator prices” fell from 126.69 US cents in 1989 to 45.89 US cents in 1992 (ibid.). There had been significant fluctuation in prices prior to 1989 as well. Yet in the time between 1977 and 1989, the ICO indicator prices average had only fallen three times, to slightly below 100 US cents. After 1989, it remained extremely low, pending somewhere between 40 and 70 US cents, until 1994, when a new International Coffee Agreement was signed. The time between 1989 and 1994 was also the period in which Rwanda faced the greatest political instability — which eventually peaked with the genocide.

Various data illuminate the link between fluctuating coffee prices and political instability in Rwanda Rwandan receipts from coffee exporting, the decisive source of income, “fell from $144 million in 1985 to $30 million in 1993” (Uvin, 2004: 53). Considering that in the same period of time, Rwanda had to deal with the invasion of the Front Patriotique Rwandais (RPF) and therefore heavily invested in its military, the country soon reached the brink of collapse. Hereby it should be noticed that Rwanda had been enjoying the reputation as “the Switzerland of Africa” (International Panel, 1998: Internet). It was seen as a “model developing country” and even one year prior to the genocide, authors were praising its “good governance” (Uvin, 1998: 46).

The African Union does not deny that problems had begun before the collapse of the ICO, among them a drought in 1989 (International Panel, 1998: Internet). Nevertheless, between 1965 and 1989, Rwanda had an average GDP growth of 4.9% as well as a “record low inflation” (compared to other Sub-Saharan African countries) of just 4% (Kamola, 2005: 20). Rwanda could have solved these problems had not a majority of its income disappeared literally from one day to the next.

As Rwandan farmers began losing their income, they desperately tried to grow food crops, but these attempts generally failed (Robbins, 1999: 296). As previously mentioned, coffee crops make the ground useless for other crops. Famine broke out across the country. In 1988, Rwanda had produced a total of 678 000 bags of coffee (ICO: Internet). Until 1995, this number had fallen down to 329,000 bags (ibid.). In an attempt to improve the conditions, Rwandan president Juvénal Habyarimana introduced massive, debt-financed subsidies (Kamola, 2005: 21). In order to receive further aid, Rwanda needed to seek more support from the IMF and the World Bank.

III) Failure of the International Economic System
The international financial institutions failed to support Rwanda and in fact critically worsened its situation. The first section points out that in the way that governance is organized, the institutions cannot represent African interests. The second section will specifically focus on the negative impacts of IMF and World Bank policies in Rwanda.

a) The Unequal Distribution of Power in the International Financial Institutions
The influence of the IMF and the World Bank on the lives of billions of people around the world is immense. Murilo Portugal comes to the conclusion that in terms of power, the IMF is second only to the UN Security Council (2005: 77). Having this in mind, one can only be worried about the degree of unaccountability, lack of transparency and misrepresentation that can be attributed to the international financial institutions. These problems result from a flaw in the system that places “control of the institutions in the hands of a small group of industrial countries” (Buira, 2005: 8). On the other end of this two-class society of creditors and debtors lie developing countries that become “subject to policies and rules made by others” (ibid. 8).

Despite being part of the second biggest continent in terms of population, African countries only hold a combined 5.7% of the total votes in the World Bank executive (ibid. 10). The industrial countries hold a total of 60.8% (ibid. 10). It is also remarkable that since the creation of these organizations, the presidents and directors have always been Europeans and Americans (Gros, Prokopovych, 2005: 72-73). The current structure dates back to the immediate aftermath of the Second World War (ibid. 72).

This is further exemplified by the organization of the IMF executive council. The board consists of 24 directors. Five countries have one director; the other countries are split into 19 constituencies, each represented by a further director. The average size of these constituencies is 11 countries: only the two African constituencies include 20 and 23 member states (Portugal, 2005: 96; IMF: Internet). Rwanda, part of the 23-state constituency, has 1051 votes; as a total, the whole group has 29,855 votes, which is 1.35% of the total vote (ibid.). Belgium, the former colonizer and by no means a world superpower, has 46,302 votes; the United States holds a total of 16.77% of the vote (ibid.). One can conclude that African countries, not to mention Rwanda on its own, do not have any significant influence on the decisions of the IMF and World Bank. All this is based on a system of basic votes and quotas, which are especially decisive for the number of votes per country. The quotas are assigned according to a number of complicated and opaque variables that are supposed to portray “size” and “importance” of an economy (Buira, 2005: 11). Yet this structure is deeply flawed, biased and based on outdated information.

Consequently, countries that are most dependent on the international financial institutions (IFIs) and have an “intensive care” relationship with them have the least power (Woods, 2005: 151). The following case provides strong evidence of this neo-colonial relationship:

“In Ghana, a decision by the government, approved by Parliament, to provide modest protection to local industry was quietly shelved in 2003, after the local representative of the IMF apparently objected. Interestingly, this decision complied with the rules of the World Trade Organization (WTO), but not those of the IMF.” (Gros, Prokopovych, 2005: 73)

Once again this proves the influence of the IFIs, even on a relatively prosperous nation like Ghana. Yet, the IFIs’ approach to solving problems with neoliberal Structural Adjustment Programs, as it became popular in the 80s, had disastrous implications in large parts of Africa. As Gros and Prokopovych point out, “dependent countries would have no choice but to agree to SAPs or face collapse”; at the beginning of the 1990s and without much own fault, Rwanda had found itself in such state of dependency (Ibid. 20).

b) How Structural Adjustment Programs of IMF and World Bank worsened the Situation
In its typical orthodoxy, IMF and World Bank identified structural economic problems as the main source of the dependency crisis. The solutions were “rigid and harsh policies” enforced with the intent of giving Rwanda an “economic shock therapy” (International Panel: Internet). Namely, the applied policies were “privatization of state enterprises,” reduction of state size, various economic liberalizations and elimination of subsidies (Kamola, 2005: 16). The most fatal blow to Rwanda turned out to be the devaluation of the Rwandan Franc. Although completely opposed by the Rwandan government, this measure was pushed through by the IFIs; the Rwandan Franc was devalued by 40 percent in 1990 and shortly after by another 15 percent (International Panel: Internet; Kamola, 2005: 17).

Subsequently, living expenses skyrocketed (International Panel: Internet). At the same time, since real incomes were in free fall, people could not afford to buy food. All over Rwanda, the situation was turning from bad to worse. For example, inflation, which had been so low compared to other parts of Africa (as mentioned above), rose to 19.2% (Chossudovsky, Goland, 1996: Internet). Foreign debt, in 1976 at a paltry $49 million, rose to $1 billion in 1994 (Kamola, 2005: 17). Simultaneously, the education and health system more or less fell apart, child malnutrition was going up “dramatically” and the number of malaria cases increased by 21%; all of this began with the introduction of SAP measures (Robbins, 1999: 296). Tens of thousands of people, especially the young, were pushed into unemployment and left without hope or perspective (Newbury, 1998: 91). Many of these “embittered and desperate” young unemployed were later the pool from which Interahamwe (Hutu militia) members, the most dedicated killers during the genocide, were recruited (ibid. 91). One should also keep in mind that all of this occurred in the context of an ongoing war. World Bank and IMF constructed the SAP program as conditionality for loans, yet they excluded all “‘non-economic variables’ [like the war] from their calculations and simulations” (International Panel: Internet). Once again, neither organization proved to be very flexible in their operations.

Eventually, it becomes clear that Rwanda has been coerced into disaster from all sides without any possibility to make its voice heard. A combination of the colonial legacy, the structure of the global economic system and the Structural Adjustment Programs of the IFIs created a context for the Rwandan genocide. Endogenous forces were the conductors and the triggers, but none of them would have played a comparable role had there not been the massive influence of exogenous forces. In the Rwandan genocide, neo-colonialism has raised its ugly head.

IV) Policy Proposals
Give Africa a Greater Voice: End Neocolonialism Now
In 1993, one year prior to the genocide, Riccardo Petrella, a “former European Union official”, published an article warning of the horrific power of “economic warfare” and predicting “unprecedented slaughter” in the future (Depelchin, 2005: 143-144). His forecasts came true sooner than anyone could have expected. Once again, “military, economic and political relations” between Africa and the rest of the world had brought “a great deal of poverty” to the African continent (ibid. 143). Besides vaguely advocating for an end to poverty, the African Union suggests a number of policy changes that would have an immediate impact.

More representation, transparency and democracy are needed in the international financial institutions which have such a huge impact on the lives of so many Africans. The World Bank and the IMF must start admitting responsibility for “poorly conceived policies” and at the same time go beyond fighting only the “symptoms” of poverty (Gros and Prokopovych, 2005: 15, 18). From the amount of failures these two organizations have by now produced, it is about time to start questioning their policies.

The UN Economic Commission for Africa (ECA) published the African Alternative Framework to Structural Adjustment Programs (AAF-SAP). This alternative framework has pointed out that SAPs do not fight the root causes of poverty, and at the same time the “social cost[s]” of these policies are far too high (ibid. 32). It is about time for a flexible, individual approach which concentrates on helping the poor instead of trying to change some illusionary structural problems. The ‘one-size-fits-all’ thinking ought to stop. Each problem is different and an economic situation can never be seen without the wider political and social context. Development is not just higher economic growth: it has to be seen as the improvement of general live conditions for the impoverished.

More concretely, African countries need a larger say on the international stage. Past experiences like the Rwandan genocide have proved that nobody will protect the interest of African countries if they are not able to do so themselves. Everyone agrees that a “pro-poor” approach is possible and that Africa will be able to tackle its own problems if only it gets a proper representation in the international financial institutions (ibid. 72). Upon the foundation of the IMF, John Maynard Keynes had imagined the IMF to be an “independent international institution” (Kelkar et al., 2005: 69). Currently, it is run by the large industrial nations and is far too often not representing only the interests of these countries and groups active in them.

Eventually, the system of quotas and basic votes that determines the total amount of votes in the decisive, executive committees has to change. The technical details of such change have been suggested frequently enough, yet the African Union would already be pleased to see an independent commission taking on the mission of reform and change (Buira, 2005). Only if African countries have more votes on the executive committees, as well as more directors representing them, will the continent have enough means to battle the neo-colonialist policies and influences of the global economic system. If this does not happen, slaughter will continue as history continues to repeat itself.

V) Bibliography

Bates R.H. (1997) Open-economy politics: the political economy of the world coffee, Princeton/ NJ, Princeton University Press

Buira, A. (2005) Reforming the Governance of the IMF and the World Bank. London, Anthem Press

Depelchin, J. (2005) Silences in African History: Between the Syndromes of Discovery and Abolition. Dar es Salaam, Mkuki na Nyota Publishers

Chossudvosky, M. and Galand, P. (2004) The Use of Rwanda’s External Debt (1990-1994) [Internet] Available from http://globalresearch.ca/articles/CHO403F.html [Accessed March 3, 2009]

Fisanick, C. (2004) The Rwanda Genocide. Farmington Hills/MI, Greenhaven Press

Gros, J.G. and Prokopovych, O. (2005) When Reality Contradicts Rhetoric: World Bank Lending Practices in Developing Countries in Historical, Theoretical and Empirical Perspectives. Dakar, Codesria Monograph Series

International Coffee Organization, Historical Data [Internet] Available from http://www.ico.org/historical.asp [Accessed March 3, 2009]

International Monetary Fund (2008) IMF Executive Directors and Voting Power [Internet] Available from: http://www.imf.org/external/np/sec/memdir/eds.htm [Accessed March 3, 2009]

International Panel of Eminent Personalities (1998) Rwanda: The Preventable Genocide [Internet] Available from http://www.africa-union.org/Official_documents/reports/Report_rowanda_genocide.pdf [Accessed March 03, 2009]

Jean, M. (2007) The Rwandan Genocide: The True Motivations for Mass Killings [Internet] Available from http://emoryprof.googlepages.com/Moises.pdf [Accessed March 3, 2009]

Jefremovas, V. (2004) “Socioeconomic Conditions, Not Ethnic Hatred, Led to the Genocide” in Fisanick, C. (ed.) The Rwanda Genocide, Farmington Hills/MI, Greenhaven Press

Kamola, I. (2005) The Political Economy of Violence: The International Coffee Market and the Genocide in Rwanda [Internet] Available from: http://www.allacademic.com/one/prol/prol01/index.php?cmd=Download+Document&key=unpublished_manuscript&file_index=3&pop_up=true&no_click_key=true&attachment_style=attachment&PHPSESSID=a6ed43ac2eee8d9853e57a9d242f63fb [Accessed March 3, 2009]

Kelkar, V. L., Chaudhry, P.K., Vanduzer-Snow, M. Amd Bhaskar, V. (2005) “Reforming the International Monetary Fund: towards Enhanced Accountability and Legitimacy” in Buira, A. (ed.) Reforming the Governance of the IMF and the World Bank, London, Anthem Press

Newbury, D. (1998) “Understanding Genocide” in African Studies Review [Internet] 41 (1), April 1998, pp. 73-97. Available from http://www.jstor.org/stable/pdfplus/524682.pdf [Accessed March 3, 2009]

Portugal, M. (2005) “Improving IMF Governance and Increasing the Influence of Developing Countries in IMF Decision-Making” in Buira, A. (ed.) Reforming the Governance of the IMF and the World Bank, London, Anthem Press

Robbins, R.H. (1999) Global Problems and the Culture of Capitalism. Needham Heights/MA, Allyn & Bacon

Uvin, P. (1998) Aiding Violence: The Development Enterprise in Rwanda. West Hartford/CT, Kumarian Press, Inc.

Uvin, P. (2004) “Rwanda’s Lack of Resources and Extreme Poverty Provided the Breeding Grounds for Genocide” in Fisanick, C. (ed.) The Rwanda Genocide, Farmington Hills/MI, Greenhaven Press

Woods, N. (2005) “Making the IMF and the World Bank More Accountable” in Buira, A. (ed.) Reforming the Governance of the IMF and the World Bank, London, Anthem Press

Courtesy of Robinson Library

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