Greed vs Grievance in Africa (By Nkanyiso Sibanda)

Introduction

Africa has been plagued by conflicts ever since people carved tools out of stone. Some of the conflicts have persisted until the current 21st century times. These conflicts have inexorably claimed incalculable human lives, caused (and continue to cause) enormous human torments, damaged societies, weakened the already weak economies and are harming the environment. They have produced colossal human tragedies and humanitarian crises that are of concern to the international community and contributed to global and regional insecurity. 21st century modernity promised peace and saw most of the world inclining towards a peaceful order, but Africa instead witnessed a resurgence of old wars, continuation of war or emergence of new wars even. Armed insurgencies have become an increasingly significant element of African politics … (Boas and Dunn, 2007:2). Most of these wars have been intra-state civil wars rather than inter-state. Two phenomena have been recently utilized to explain and analyze conflict among rational choice analysts: greed and grievance (Murshed and Tadjoeddin, 2007:1).

According to Collier and Hoeffler (2000), much of the academic debate on the economic causes of contemporary armed conflict has become polarized around the ‘greed versus grievance’ dichotomy. It juxtaposes ‘loot-seeking’ with ‘justice-seeking’ or more generally, the significance of the economic versus socio-political drivers of civil wars. For an African, is exciting to discuss the merits of the argument that we, Africans, start wars either because we are or some of us are greedy or aggrieved.

I will briefly discuss the ‘greed versus grievance’ model of analyzing and understanding conflict with particular reference to Africa. Two contemporary conflicts[1] on the African continent will be analyzed. Political motivations involved in these conflicts will also be discussed with particular attention being paid to the ‘greed versus grievance’ model as a useful (or not) analytical tool for understanding these conflicts. The conclusion will stress that while the ‘greed versus grievance’ approach to the study and understanding of contemporary African conflicts has received a lot of attention, it does not offer a complete insight in understanding contemporary conflicts in Africa. There is growing recognition of the analytical limits that the theory imposes on what are in reality, highly complex systems of social interaction (Ballentine and Nitzschke, 2003:2) It is useful but incomplete. The weaknesses of the model will be highlighted and emphasis will be made that while the model may not adequately offer a complete understanding of African conflicts, it does shed some light on some of these conflicts and therefore the model can not totally be dispensed with. Instead, it should be utilized with attention being given to other surrounding complex and historical factors that characterize conflicts.

‘Greed versus Grievance’
The ‘greed versus grievance’ theory is trendy in political science discourses as an analytical tool for understanding conflict. The theory postulates that countries with an abundant natural resource base are more prone to violent conflict than those without. It also forwards that insurgent groups are more likely motivated by control over resources than by actual political differences with government authorities, ethnic divisions or other factors typically viewed as root causes of civil war (Ganesan and Vines, 2004:1). Paul Collier (2004), a strong proponent of this theory says, “ethnic tensions and ancient political feuds are not starting civil wars around the world – economic forces such as entrenched poverty and the trade in natural resources are the true culprits.” Civil wars or conflicts in Angola, Nigeria, Democratic Republic of Congo (DRC), Liberia and Sierra Leone are habitually cited as examples of this dynamic.

greed
According to Murshed and Tadjoeddin (2007), greed refers to and reflects elite competition over valuable natural resources. It is an excessive desire to acquire or possess more than what one needs or deserves, especially with respect to material wealth. Collier (2004) asserts that where there is greed, there is elite competition over valuable natural resource rents, concealed with the fig leaf of collective grievance. Greed is proxied by the availability or abundance of capturable natural resource rents (ibid). The greedy behavior of rebels due to the availability of capturable natural resources like diamonds causes conflict. The capturing and looting of the resources however has to be augmented by the opportunity to do so.

Changes in the global economy, particularly the increased interconnectedness of certain markets has certainly provided new opportunities (to get rich) for leaders of guerrilla movements (Boas and Dunn, 2007:10). In many cases, primary resources such as diamonds, gold, ivory, coltan and other precious minerals (and relatively easily transportable) are the desired goal (ibid).These goods are frequently smuggled out of the conflict zone and entered into the regional and global markets via neighboring territories (ibid). In some African conflicts, it has been argued that for some actors, the goal of the armed conflict is not necessarily the defeat of the enemy in battle, but the continuation of fighting and the institutionalization of violence for profit (Keely, quoted in Boas and Dunn, 2007:10).Youth are manipulated to fight on behalf of the interests of competing and corrupt elites.

grievance
Grievance argues that relative deprivation and the hurt it produces fuels conflict (Murshed and Tadjoeddin, 2007). It gives ground for remonstrance or resistance. In the context of civil war or rebellion, grievance is sometimes described as justice seeking motivation (ibid). Identity and group formation are central to grievances. An individual’s utility may be related to his identity, specifically the relative position of the group he identifies with in the social perking order (Akerlof and Kranton, 2000). Grievance is divided into three categories namely; relative deprivation, polarization and horizontal inequality. These will in turn be discussed briefly...

Relative deprivation
Tedd Gurr (1970) defines relative deprivation as the discrepancy between what people think they deserve, and what they actually believe they can get. It is, in short, the disparity between aspirations and achievements. Thus, where one goes to school to get an education in the belief that they will get a good job, they will become frustrated if they do not get the good job. This at times leads to occasional mass political violence in some societies. Gurr’s (1970:24) hypothesis is; ‘the potential for collective violence varies strongly with the intensity and scope of relative deprivation among members of a collectivity.’ This lays down the notion of relative deprivation as the micro-foundation for conflict. Relative deprivation is considered to be a major cause of civil war…(Murshed and Tadjoeddin, 2007:16).

Polarization
According to Esteban and Ray (1994), polarization is a concept that is related to relative deprivation. In terms of this concept, when two groups exhibit great inter-group heterogeneity combined with intra-group homogeneity, polarization occurs. Ethnic polarization is a significant explanatory variable for civil war onset (Montalvo and Querol, 2005).

Horizontal Inequality
Horizontal inequality between groups, classified by ethnicity, religion, linguistic differences, tribal affiliations among others, is a significant cause of contemporary conflict. Horizontal inequality overlaps with relative deprivation as well as with polarization. It is different from vertical inequality which is inequality within an otherwise homogenous population (Stewart, 2000:251).

Murshed and Tadjoeddin (2007) forward that on horizontal inequality, one can distinguish between;
Discrimination in Public Spending and Taxation
Unfair allocation of public spending and unfair tax burdens may lead conflict.
High Asset Inequality
Societies with high natural resource inequality like in Zimbabwe (where land was unevenly owned) are very prone to conflict.
Economic Mismanagement and Recession
Countries that have experienced conflict have also been characterized and suffered prolonged economic mismanagement and growth collapse. Where there is economic mismanagement and retarded growth, the likelihood of conflict is high.
Grievances Related to Resource Rents
Some grievances result from natural resource rents where local populations feel that they are not getting a fair share of the rents. For example in the Niger Delta region of Nigeria.

‘Greed versus grievance’ on contemporary conflicts in Africa
Having briefly explained the ‘greed versus grievance’ theory, focus will now shift to whether the theory can be a useful analytical tool for contemporary conflicts in Africa. Here, because an examination of all the contemporary conflicts in Africa is beyond the scope of this essay, attention will be given to the conflicts in the Niger Delta and Sierra Leone.

Internal armed conflicts in resource rich African countries has resulted in some political science pundits such as Paul Collier (2000) and others (like Berdal, 2003), suggesting that the theory of ‘greed versus grievance’ can be used as an analytical tool in understanding conflicts in Africa. An influential World Bank thesis states that the availability of portable, high value resources is an important reason why rebel groups form and civil wars break out, and that to end the abuses, one needs to target rebel group financing (Ganesan and Vines, 2004). To assess whether the ‘greed versus grievance’ theory is a useful analytical tool in understanding contemporary conflicts in Africa, it is imperative to briefly highlight some of these conflicts and appraise whether the theory is a useful analytical tool in understanding these conflicts or not.

The Niger Delta Conflict…
The Niger Delta covers an area of about 70,000 square kilometers and accounts for 7.5% of total land mass in Nigeria. It covers a coastline of 560km, about two-third of the entire coastline of Nigeria (Nkoro, 2005). It has nine out of the 36 states that make up the Federal Republic of Nigeria[2]. The predominant occupations of the people in the Niger Delta are farming and fishing (Obi, 2001). Since the advent of oil exploration over four decades ago, the region has become the bread-winner of the nation, which is the main source of foreign exchange earnings for the nation as a whole (Nkoro, 2005). The region’s oil resources accounts for 90% of the nation’s export earnings (ibid). However, the Niger delta is the least developed place in the country in physical and socio-economic terms.Historically, the conflict in the Niger Delta region can be traced down to the federal system of government that is being practiced since independence, which from the very beginning was at variance with the expectations of many minorities in the nation (Nkoro, 2005). Nkoro (2005) argues that the federal constitution that was drafted suffered from two fundamental and destabilizing setbacks. The first was the classification of the country into unequal regions. The second is the political and demographic domination of the people in the Niger Delta by those from the northern, western and eastern regions, being the majority ethnic groups. While scholars such as Obi[3] may not agree that the ‘greed vs grievance’ theory may be applied to explain the conflict in the Niger Delta, a pragmatic approach shows that the theory can in fact, help explain the conflict in the region.The Niger Delta is the richest and yet the poorest and most underdeveloped region in Nigeria. This paradox is the product of the deep-seated neglect and marginalization of the area by the government and oil companies in supporting critical human development, infrastructure, and provision of basic social amenities. It is a paradox of poverty in the midst of plenty. 70% of the people in the Niger Delta region live below poverty line … (Nkoro, 2005). There is a high rate of unemployment among the youth with over 2million youth being unemployed, while 40% of the people are illiterate (Ibid). Furthermore, according to 2007 World Bank report[4], GNP per capita in the Niger Delta region is below the national average of US$280. Similarly, health indicators are low and they lag far behind the country average (ibid). Pollution and continuous flaring of gas from oil prospecting and production have created health hazards and render fishing and other farming activities almost impossible[5]. Serious damage has been done to the aquatic and marine life of the communities. There is high mortality from water-borne diseases, malnutrition and poor sanitation. The quantity and quality of housing infrastructure are less than expected in most of the region. Only about 20% to 24% of the rural communities and less than 60% of urban communities in the region have access to safe drinking water (Nkoro, 2005). Transportation is often difficult and expensive (Ibid).This has resulted in the local people forming militias that often stage violent protests against the government and the oil companies in the region. The local people feel aggrieved by the government. This, because while their region is the richest in the country, it is however the poorest and most underdeveloped. Their land was taken away and there was little or no compensation. The area is polluted and their way of livelihood[6] has been disturbed. On the other hand, government officials do not do much with their plight because the officials benefit from oil deals with the oil companies[7]. This is a case of ‘greed versus grievance.’ The protests in the Niger Delta are a result of the environmental destruction caused by oil production and the ensuing disintegration of traditional lifestyles and social structures (grievance). Now that the environment has been destroyed and traditional lifestyles can no longer be maintained, many of those involved in the violence are motivated more by the desire for a ‘share of the pie’ and are seeking to enrich themselves in the modern market economy (greed) (Boge and Spelten, 2005:3). There is also greed on the part of government officials that continue to offer fuel extraction rights to oil companies because they benefit somehow from this and grievance on the part of the local people because, despite owning the land, they are marginalized and they do not benefit from the proceeds of their wealth. Infact, their land and water which was their source of livelihood has been taken away and there was little or no compensation at all. However, ‘greed and grievance’ alone, while helpful in giving and insight into the conflict, ignores other historical factors that have shaped the conflict. The theory limits one to the actors in the conflict and ignores the geography of the actors. It is useful, but incomplete and certainly can not be ignored or dispensed with in analyzing the conflict.

Sierra Leone
The Sierra Leone Civil War began in 1991, initiated by the Revolutionary United Front (RUF) under Foday Sankoh. The RUF launched its first campaign into eastern Kailahun (Sierra Leone) from Liberia on March 23, 1991. Diamond industry was a primary cause of the war (Hirsch, 2000:33). Although endowed with abundant natural resources, Sierra Leone was ranked as the poorest country in the world by 1998[8]. With the breakdown of all state structures, wide corridors of Sierra Leonean society were opened up to the trafficking of arms and ammunition. Recreational drugs also eroded national and regional security as well as facilitated crime within the country, precipitating illegal trade with both Liberia and Guinea. While RUF rebels controlled the diamond trade, the people remained among the poorest. The 1999 Lomé Agreement failed to bring peace as it effectively institutionalized rebel control of the diamond trade by putting rebel chief Foday Sankoh in charge of mineral resources. Civil war resumed as UN forces sought to wrest control of the diamond fields, but found themselves instead being held hostage by the rebels. With a rebel take-over of the capital imminent, British forces unilaterally intervened in May 2000 to evacuate British subjects and safeguard the Freetown airport for UN use. Within days, the British took effective control of the government and organized an offensive against the rebels. The rebel leader was captured, the peace process resumed.

While the ‘greed versus grievance’ dichotomy does not offer a completely useful analytical tool in the Sierra Leone conflict, it is not completely useless either. Decades of government neglect of the interior followed by the spilling over of the Liberian conflict into its borders eventually led to the Sierra Leone Civil War. The people in the interior were aggrieved by the government’s neglect and took advantage of the Liberian war to take to arms against the government. However, the grievances later became greed as the rebels became more interested in controlling the minerals rather than ensuring peaceful and democratic governance of the country. Clearly, just like in the Niger Delta scenario, the locals were aggrieved and wanted justice and equity. Greed on the part of the rebels came to play and they preferred rather to loot the diamonds and enrich themselves.

Yet again, the greed versus grievance is porous as a useful analytical tool for the conflict. While it explains that the people in the interior were aggrieved by the way Sierra Leone was being governed, that while it was rich, they were neglected and the because of this hurt, they decided to take to arms and while it also explains the rebels greedy motives, the theory ignores the complex and dynamic historical processes that characterize Sierra Leone. Thus, while the theory is useful, it does not offer a complete analytical understanding of the conflict.

The same can be said too with reference to the 2000 violent land invasions in Zimbabwe. The majority of the blacks were historically marginalized and removed from the fertile healthy soils by the colonizers. They were not allowed access to the fertile healthy soils while the colonizers enjoyed the agricultural proceeds of these soils. They were aggrieved in this respect. However, when the government realized that it was fast falling out of favor with the population, it allowed an invasion of all white owned commercial farms under the guise of ‘redressing past injustices through land redistribution.’ A closer analysis shows conversely that the government used the land as a political weapon to remain in power. Government officials allocated themselves the best commercial farms in Zimbabwe and became even richer than before; greed. Ordinary Zimbabweans took part in the farm invasions as they believed or were made to believe that farm invasions were a means of redressing past injustices; grievance. While the ‘greed versus grievance’ theory can certainly offer an insight into understanding some contemporary African conflicts, it however ignores some important aspects of conflicts hence while it is useful, it is incomplete.

Conclusion
Although examination of the nexus between resources, revenues and civil war is critically important, the picture presented in the just discussed ‘greed versus grievance’ theory is distorted by an overemphasis on the impact of resources on rebel group behavior and insufficient attention to how governments mismanagement of resources and revenues fuels conflict and human rights abuses (Ganesan and Vines, 2004). The theory is a useful entry point into debates about the causes of conflict (Murshed and Tadjoeddin, 2007:24). In areas where there are large quantities of capturable natural resources, greed may be a key factor for the onset and duration of conflict. However, without group formation for which historical grievances are important, violent collective action can not take place. In short, grievances can be present without greed but it is difficult to sustain greedy motives without some grievances.

The ‘greed versus grievance’ theory is useful for analyzing contemporary African conflicts but clearly, it is insufficient. This is evidenced by the fact that while some societies such as Zimbabwe, have conditions pre-disposing them to conflict,[9] they do not descend into conflict (ibid). Other factors must be taken into consideration such as the opportunity for conflict as well as a decline of the social contract (Murshed, 2002) or poor state institutions.

While the theory is compelling, it does have weaknesses[10] and one of these is that ‘greed is often not the determinative motive for rebel group behavior’ (Ganesan and Vines, 2004:2). For example, in the resource rich Angola, the war began about 20 years before UNITA rebels began financing themselves with illicit diamond sales and ended while diamonds were still available. Had greed been the motive, the war could have continued for much longer. A missing element in the theory is the role that governments of resource rich countries play. Often, government control of resources and their revenues goes hand in hand with endemic corruption, a culture of impunity, weak rule of law and inequitable distribution of public resources (Ganesan and Vines, 2004:2).

Boas (2007) argues that the myopic nature of the ‘greed versus grievance’ theory does help explain why and how some conflicts are sustained. It however rarely tells much about why conflicts start in the first place. It would be a mistake to assume that contemporary conflicts in Africa started as competition over valuable natural resources. Focusing excessively on material factors of conflicts may lead to one sided explanations and understandings of conflict.


Bibliography

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[1] Discussing all the contemporary conflicts in Africa is beyond the scope of this paper (3 000 words). If such an attempt were made, the paper would be very light and shallow in detail.
[2] These are Abia, Akwa-Ibom, Bayelsa cross-River, Delta, Edo, Imo, Ondo and Rivers states.
[3] In a class presentation at Bjorknes Privatskole, 11.11.08.
[4] www.worldbank.org/nigeria.
[5] It should be remembered that fishing and farming were the primary sources of livelihood for the local people.
[6] Agriculture and fishing.
[7] A practical case of aforementioned is that of the Ogoni community in Niger Delta of Rivers state whose case is being spearheaded by the movement for the survival of Ogoni people (MOSOP) and the late human right activist Ken Saro-Wiwa. They pointed, like other communities in the Niger Delta region that their land has been devastated and degraded, their atmosphere has been polluted, water contaminated, trees being poisoned and that their flora and fauna have virtually disappeared, these as a result of the activities of oil companies in the area. To intensify this ugly issue, there are no infrastructural amenities in the locality such as electricity, portable water and access roads. Thus, on August 26, 1990 the Ogoni people issued a bill of right which was sent to the federal government of Nigeria, demanding political freedom that will guarantee political control of Ogoni affairs by Ogoni people, right to the control and use of Ogoni economic resources for Ogoni development, adequate and direct representation as a right in all Nigerian national institutions and the right to protect Ogoni environment and ecology from further degradations.However, their demand was turned down, thus, MOSOP was mandated by Ogoni people on August 26, 1991 to make representation to united nations commission on human and people rights and European community, alleging that the Nigerian government has denied them their demand. MOSOP was also mandated to alert the organizations that federal republic of Nigeria has refused to pay them oil royalties and mining rents amounting to an estimated $20billion for petroleum mined from Ogoni land over three decades ago. On January 4, 1993, they followed this up. This eventually led to the execution of Ken Saro-Wiwa on the 10th of November, 1995 (Nkoro, 2005).
[8] http://www.aneki.com/poorest.
[9] Such as horizontal inequality, polarisation and natural resource endowment
[10] As has been discussed in the essay.

Impact of the financial crisis on Africa (by Nkanyiso Sibanda)

INTRODUCTION
The global financial crisis, which was brewing for a while, really started to show its effects in the middle of 2007 and into 2008. It is, at its core, the result of a speculative bubble in the housing market that began to burst in the United States in 2006 and has now caused ruptures across many other countries in the form of financial failures and a global credit crunch (Shiller, 2008). The crisis has set in motion some changes that affect consumer habits and values among other things. Stock markets have fallen, large financial institutions collapsed or were bought out, remittances have been reduced, import and exports have slowed down and governments in even the wealthiest nations have had to come up with rescue packages to bail out their financial systems. Advanced economies are suffering their deepest recession since World War II (Kato, 2009). Just like the crisis of the 70s, which ‘was not uniform in time or intensity’ (Cox, 1987), the same can be said of the current global financial crisis. It has differing intensities on countries depending on the depth and intensity of their involvement in the global economy.

Major emerging market economies such as China, India, and Brazil are now expected to experience much lower growth than in recent years, dragged down by falling export demand, subdued capital inflows, and lower commodity prices (Kato, 2009). World economic growth is generally expected to slow down significantly in 2009 as a result of the global financial crisis. In order to analyse how the crisis will impact Africa, it is important to understand what globalisation is and how it has dissolved national borders and economies, resulting in the ripple effects of the crisis engulfing even the African continent in one way or another. This is because the financial crisis can not be simply attributed to monetary issues or sub-prime mortgage problems alone, or any other form of credit crunch, but mainly to the spread of contagion effects due to ‘financial’ globalization (Murinde, 2009). In other words, a reference to globalization is necessary in order to understand how the financial crisis, which did not begin in Africa, is infact, impacting Africa.

GLOBALIZATION
Globalization is a fashionable concept in the social sciences, a core dictum in the prescriptions of management gurus, and a catchphrase for journalists and politicians of every stripe (Hirst and Thompson, 1999:1). While the term is a relatively recent one, what it describes is not new at all. It emerged as a buzzword in the 1990s, but the phenomena that it describes are not entirely new (Keohane and Nye, 2000). According to Keohane and Nye (2000), globalization refers to the shrinkage of distance on a large scale, and can be contrasted with localization, nationalization or regionalization. Scholte (2005:59) identifies globalization as the spread of the transplanetary – and in recent times also more particularly supraterritorial – connections between people. It involves the reductions of barriers to such transworld social contacts (Scholte, 2005:59).

Because of globalization, people have become more able to engage with each other wherever they are on the planet. It has had effects on communication, movement of people and goods, production processes, markets, consumption as well as world economics. The hallmark of globalization is increased international trade and financial flows (Palley, 1999). It has enhanced inter and intra state dependence and interdependence. The increased international trade and financial flows have in turn produced an increase in economic dependence (Palley, 1999). What happens in one part of the world has the potential to affect directly or indirectly what happens in another part of the world, more particularly if it occurs on a large scale. According to Pillay (1997), the Asian crisis showed that world economic interdependence is so advanced that an occurrence in one part has the potential to threaten another part of the world through various expanded global transmission mechanisms such as international trade.

Globalization has led to numerous globalized items including, among others, a globalized economy. It has resulted in the intertwining and integration of the Global Financial System. Here, distinct national economies were subsumed and rearticulated into one system by international processes and transactions (Hirst and Thompson, 1999). The economy has thus become borderless (Ohmae, 1995). It is no longer confined to largely politically defined and circumscribed landscapes of nation states. With the speed and volume of transactions in the global capital market, national governments cannot control exchange rates or protect their currencies, and political leaders increasingly find themselves at the mercy of people and institutions making economic choices over which they have no control (Ohmane, 1995). Because of this, when a crisis strikes, entire regions can now be pulled down, with the ripple effect reaching to other countries and other continents as well.

Whereas the science of economics emphasizes the efficient allocation of scarce resources and the absolute gains enjoyed by everyone from economic activities, international political economy emphasizes the distributive and reverberative consequences of economic activities (Gilpin, 2002). The current Global Financial Crisis[1] is a case in point. Because of the resultant integration of the Global Financial System as a result of Globalization, the contagious Global Financial Crises has affected, directly and indirectly, every economy in the world. Its effects have spread to and are still spreading to other countries. It has caused, and is still causing a slowdown in growth in most developed and developing countries. The integration of financial markets has accentuated the rapid flow of capital across borders as well as magnified the contagious effects of a financial crisis, with wide implications for transmission of financial policies on the domestic economy and internationally (Hussain et al, n.d.).

The fragile financial links that African economies have with the rest of the world have limited the impact of the systemic banking sector crisis in advanced economies on the continent. However, Africa is and still will be hard hit by the effects of the ensuing slowdown in global economic growth (Kato, 2009).

FINANCIAL CRISIS
Having described and conceptualised ‘globalization,’ it is also important to describe and conceptualise what is here meant by ‘financial crisis.’ It is essential to note from the outset that there is a distinction between a crisis and a cyclical downturn. According to Cox (1987), the economy must undergo some structural change in order to emerge from a crisis; in a cyclical downturn, the same structure contains the seeds of its own revival. Crisis signifies a fundamental disequilibrium; the cyclical downturn, a moment in the diachrony of equilibrium (Cox, 1987). Based on this assertion by Cox, it can be concluded that the world is going through and recovering from a financial crisis.

According to Mishkin (2006), when a financial system is unable to cope with the problems raised by asymmetric information, it is unable to fulfil its crucial function of allocating capital efficiently from savers to those with productive investment opportunities. As the system breaks down, asymmetric information problems intensify and multiply until there is a full-blown financial crisis in which the financial system becomes inoperable and economic activity collapses (Mishkin, 2006). History has shown that financial crises originate from the good times that precede the collapse – good economic performance of markets and high economic growth with low inflation levels. This can also be said of the current global financial crisis.

The current global financial crisis has its roots in a banking practice called sub-prime lending or sub-prime mortgage lending in the USA (Shiller, 2008). It is traceable to a set of complex banking problems that developed over time, caused specifically by housing and credit markets’ mis-match, poor judgement by borrowers and/or the lenders, inability of home owners to make mortgage payments, speculation and overbuilding during the boom period, risky mortgage products (financial innovations with concealed default risks), high personal and corporate debt profiles and inactive/weak central bank policies (Central Bank of Nigeria, 2008).

Like bubbles breaking through the surface of a volcanic swamp, swelling and swelling until they burst, so assert bubbles regularly formed in the financial markets, in shares, in housing and certain commodities such as oil (Gamble, 2009:1). More and more individuals were sucked into the spending spree, spending and borrowing escalated and consumers, whatever their income and ability to pay, were bombarded with offers to take out more loan and accept credit cards (Gamble, 2009:1). This ultimately led to a burst resulting in the current financial crisis. According to Shiller (2008), it was the bursting of the housing bubble that brought the whole global financial structure crashing down in 2008 and plunged the world into recession.

GLOBALIZATION GOES WRONG - THE GLOBAL FINANCIAL CRISIS
When emerging market countries open up in an effort to globalize, they have high hopes that globalization will stimulate economic growth and eventually make them rich (Mishkin, 2006). The current global financial crisis has however shown that globalization can, and has infact spread the effects of the crisis to other parts of the world such as Africa, that had no bearing in the commencement of the crisis. Because of globalization, the spiralling effects of a depressed world economy, global demand and prices for commodities that are depressed, capital flows are declining and economic growth prospects have slowed down throughout the region (IMF, 2009).

As is characteristic of past financial crises, the current global financial crisis took place after a period of world wide economic boom, which was based on speculation and dubious lending practices. One of the main reasons for this was the collapse of the US sub-prime mortgage market. The mortgages had a high credit risk but the banks hid this by bundling them with more secure mortgages (Balchin, 2009). When sub-prime mortgage holders started defaulting in their payments, the banking industry was affected and it filed for bankruptcy. The nature of the global economy meant that the debt on these loans was tied up in investment programs and securities around the world (Balchin, 2009). When the sub-prime mortgages went under, so did the investments and as a result, ordinary businesses across the world, with no direct connection whatsoever to US subprime, started facing economic difficulties (Balchin, 2009).

IMPACT ON AFRICA
International relations of production mediated either by the market or through the internal transactions of multinational corporations, have spread to most parts of the world (Epstein and Braunstein, 1999) as a result of globalization. Analysing the impact of the financial crisis on Sub-Saharan Africa does not as yet give definite results. This is because the growth forecasts of the IMF and the World Bank have constantly been revised downwards since October 2008. The April 2009 IMF/Global Economic Outlook predicted a Sub-Saharan growth rate of 2%, compared to the 5% of 2008 (Holmquist, 2009). This implied a negative growth rate in per capita terms for Africa. It can be observed that the current financial crisis is slowly turning back the clock on progress achieved during decades of reforms that have geared economic policy toward ensuring that Africa is a more attractive destination for private capital (World Bank, 2008). The crisis has triggered quick depreciation of currencies and major declines in stock market prices with foreign investors in securities and equities selling off large shares of their holdings (World Bank, 2008).

According to the International Monetary Fund (2009), sub-Saharan African countries have so far been resilient to the global financial crisis. Some African countries’ currencies have continued functioning properly despite pressure on capital markets, currencies as a result of the crisis. The relative stability reflects several factors—among them, the limited though increasing, integration with global financial markets, minimal exposure to complex financial instruments, relatively high bank liquidity, limited reliance on foreign funding, and low leverage in financial institutions (IMF, 2009). However, it is evident that the secondary ripple effects of the slowdown have crept into and are still slowly creeping onto the continent as the world wrestles with one of the worst financial crises in history. The Nigerian stock exchange fell by 37 per cent this year, representing the steepest quarterly decline in more than a decade and the sharpest decline in the world (IMF, 2009). Last year, 2008, the Johannesburg Stock Exchange ended with a 25.7 per cent loss (IMF, 2009).

The World Bank Chief Economist for Africa, Shanta Devarajan, forwards that the impact of the financial crisis on Africa will be three fold – a slowdown in private capital flows, which will adversely affect economies that had been relying on these flows to finance much needed investment; commodity prices are falling, which hurts exporters but helps importers and; the flow of remittances into Africa is going to slump.

The global financial crisis has affected every economy on the African continent directly and or indirectly. It has already caused a significant slowdown in many countries. Currently however, Africa enjoys relative stability as compared to its richer and more developed counterparts, although the effects of the crisis are slowly creeping in. As a result, it has been spared a lot of the primary effects of the initial financial crisis but is suffering and will still suffer the secondary effects of the crisis. In general terms, the short-term effects of the crisis on many African countries have been mitigated by the fact that most countries on the continent are relatively de-linked from the global financial system (Balchin, 2009). Moreover, the nascent banking systems in many African countries, typically characterized by simplistic structures, conservatism, prudent financial management regulations, controls on foreign exchange and very limited exposure to subprime loans and credit default swaps, have shielded the continent’s financial structures from the full effects of the crisis (Balchin, 2009).

Towards the end of 2008, Benedicte Christensen, deputy director of the IMF’s African Department remarked that there is ‘no systemic risk that can be seen in any African country in terms of banking.’ This relative stability will however likely not last as the brunt of the recession reverberates through the continent. This was expressed at the 119th meeting of the International Conference Centre in Geneva (CICG), Switzerland organized by the Inter-Parliament Union (IPU) (Central Bank of Nigeria, 2009). While Africa has not suffered the direct primary effects of the crisis, she has however not been immune to the after-effects of the turmoil.

The impact of the financial crisis is however not uniform across all African countries. It is varied transversely on the continent depending on each country’s exposure to and involvement in the international financial system, each country’s production and export structures as well as each country’s capacity to use policy tools to cushion it from the adverse effects of the crisis (Balchin, 2009). The impact is much more significant in countries whose economic ties with the international system are much more than those whose ties are not as strong. According to the IMF (2009), African countries with financially more developed markets such as Nigeria, Botswana, Ghana, were the first to feel the effects of the crisis. Weaker financial linkages with the rest of the world may have limited the impact of the systemic banking sector crisis in advanced economies on Africa, but the continent has not been spared the secondary effects of the ensuing slowdown in global economic growth (Kato, 2009).

There are several ways through which the global economic crisis is going to or has already impact/ed on Africa. According to Kato (2009), these ways include, but are not limited to,
· Reduction in demand for exports from Africa, as a result of lower global growth, which will push commodity prices down and curtail the flow of remittances from abroad.
· The reduction of capital inflows because of the reduced and tightened global credit, curtailing the availability of trade finance. In some instances, this has caused donors to reduce their aid to Africa.
· The resultant economic slowdown has affected the quality of the credit portfolios of financial institutions and imposed losses on other financial assets, such as deposits with troubled foreign correspondent banks or capital repatriations by troubled parent banks – which are often foreign owned.
· The resultant slowdown in trade has reduced government revenues, subsequently worsening the fiscal position in many countries. Most African governments are unable to meet heightened expectations of their populations for progress in reducing poverty and investing in infrastructure.

Before the onset of the Global Financial Crisis, Sub-Saharan Africa had enjoyed significant growth. This was, with the exception of some countries, as a result of internal and external factors such as relative peace, formation of regional peace and economic agreements. Macias and Massa (2009) forward that several factors contributed towards attracting investors to sub-Saharan Africa - many countries strengthened their macro-economic performance and reformed their economies, leading to fiscal consolidation, reduced deficits, lower inflation rates and an improved business environment. Second, political stability was realised in a number of countries and democratic transitions were embarked upon in many countries where it did not exist before; third, the vast natural resource endowment of some countries attracted the rapidly growing emerging markets, especially from China (Macias and Massa, 2009). On the other hand, external factors like debt relief and commodities boom added to the attractiveness of sub-Saharan Africa (Macias and Massa, 2009). These factors made the continent an attractive destination for foreign investors in search of high yields.

African countries are bearing the brunt of the crunch since they are financially not well insulated. According to Macias and Massa (2009), growth in Sub-Saharan Africa dropped from 6.9% in 2007 to 5.5% in 2008; in January 2009, the International Monetary Fund once more cut its forecast for growth for this year by 1.6 percentage points to 3.5%. They assert further that in April 2009, the International Monetary Fund revised again its forecast, leading to a new projection for Sub-Saharan Africa growth in 2009, equal to 1.7%. The initially huge capital inflows that were coming to Sub-Saharan Africa dropped sharply from the third quarter of 2008. This was as a result of reduced capability and propensity to invest on the part of foreign investors. Although Foreign Direct Investments have continued, the pace has slowed down markedly.

The crisis has also led to and resulted in the tightening of domestic financial markets as well as increasing the risk premiums that African countries face in global capital markets. Some African countries are experiencing difficulties in obtaining funds from international capital markets (United Nations, 2009). For example, Kenya, Nigeria, Uganda and Tanzania, have all cancelled plans to raise funds in international capital markets (United Nations, 2009). The resultant failure by countries to access money from international markets is a serious setback for Africa as the money would have been used to finance infrastructural development and boost growth. Because of the decline in global economic growth, opportunities for trade and investment have become scarce. This has inevitably had an effect on Africa’s traditional sources of development (IMF, 2009). For example, commodity prices on which numerous African countries depend for foreign exchange took a big hit – the price of crude oil fell by more than 50 per cent between February 2008 and February 2009 (United Nations, 2009). The prices of Africa’s raw materials such as copper, cotton, sugar and coffee have also declined noticeably.

Portfolio equity flows have slowed down and in some instances, reversed, consistent with sharp falls in stock markets in South Africa, Nigeria, Kenya, Mauritius and Cote d’Ivoire. According to Holmquist (2009), the main channels through which Africa is affected by this crisis are trade, extraction industry (mining, forestry etc) foreign direct investments, remittances, tourism, loss of access to international markets and aid.
Remittances and flow of aid
Analysing the impact of the global economic crisis on Africa’s remittances is not easy. This is because the remittances are still not well and clearly measured (Holmquist, 2009). This is as a result of official and unofficial avenues of sending remittances to Africa. In 2007 however, Sub-Saharan Africa received almost $12 billion in remittances and this number represents the recorded official figures alone (World Bank, 2008). With informal flows, the amount was certainly much higher than the official figure. Nigeria, Kenya, Sudan, Uganda and South Africa received the highest volume of remittances while in smaller countries such as Lesotho, remittances represent up to a quarter of the GDP (Devarajan, 2008). Remittances are significantly higher for Africa as compared to other continents. They have generally been counter-cyclical, increasing when the receiving country experiences adverse events (Devarajan, 2008).

Remittances from the US have slowed down (Devarajan, 2008). The world bank (2009) indicated that remittance inflows to Africa could fall by anything between 1% and 6% this year, from last year. Remittances to Africa had been rising steadily since 1995, increasing by about 11% between 2006 and 2007. In 2007, Sub=Saharan Africa took in $19 billion in remittances (Makoye, 2009). This, according to the World Bank, was equivalent to 2.5% of gross domestic product. However, the global financial crisis has hurt the capacity of migrants to send money leading to a fall in the amount of remittances received.
Poverty
The global financial crisis will very likely touch the lives of many Africans, further impoverishing many and leading to the deaths of thousands of children, according to a United Nations study (UN, 2009). Reduced growth in 2009 will cost the 390 million people in sub-Saharan Africa living in extreme poverty around $18 billion, or $46 per person, warned the report by the UN Educational, Scientific and Cultural Organization (UNESCO, 2009). Countries that have been dependant on remittances will face a significant reduction in remittances from their citizens in the diaspora. The World Bank (2008) has predicted that remittances will drop between 5 to 8 per cent in 2009.

The reduction in the flow of remittances from Africans in the diaspora is likely to push many Africans even further below the poverty line. This is because remittances had become a source of income for many families and homes. Capital inflows, tourism receipts and remittances are all declining in parallel, and trade financing is drying up (Ali, 2009). This will significantly impact negatively on growth and will further increase poverty. This likelihood was spelt out in the International Monetary Fund’s World Outlook report in 2008 (International Monetary Fund, 2008). Here, it was stated that a fall in world growth of just one percent could result in a 0.5 percentage point decline in Africa’s gross domestic product (Balchin, 2009). Already, the IMF is predicting that growth in Sub-Saharan Africa will slow from close to 5.25 % in 2008 to approximately 3.2 % in 2009 (Balchin, 2009).
Exports, Imports and growth
The global financial crisis has impacted negatively on Africa’s imports and exports. This will reverse decades of growth that the continent was experiencing. The IMF (2009) is already predicting that growth in sub-Saharan Africa will slow from close to 5.25 percent in 2008 to approximately 3.25 percent in 2009. This is because there is now less demand for raw materials as countries struggle to contain the negative economic effects of the crisis. This is as a result of the slowdown in global growth, coupled with a decline in global industrial production. The export of raw materials has been one of the main drivers of growth in numerous African countries. Demand for raw material in developed and developing countries had seen a growing demand in raw materials. However, the crisis has resulted in less demand for raw materials which in turn has led to the falling of commodity prices. According to Ali (2009), African economies will likely suffer about $578 billion in lost export earnings over the next two years. This represents 18.4 per cent of GDP and five times the aid to the region over the two year period.

African countries that export oil will suffer the most. This is as a result of falling demand for oil. Between July and December in 2008, oil prices fell by 69 per cent. In 2009, the expected decline is 42 per cent while in 2010, it is likely to be 43 per cent (Ali, 2009). Angola’s growth is projected to decline from 20.9 percent in 2007 to 7.6 percent in 2009 (World Bank, 2007). East Africa will grow at a rate of 6 percent in 2009, down from 8.4 percent in 2007 (World Bank, 2007). In Zambia, the fall in copper prices resulted in a significant drop of export receipts for Zambia and a considerable reduction in its foreign exchange reserves (IMF, 2009). Since the second half of 2008, the volume of reserves generated by the mining sector dropped by 30% from $649 million during the first half of 2008 to $454.5 million during the second semester of that year (World Bank Global Economic Prospects, 2009). In Burkina Faso, export growth dropped from 6.9% in 2007 to 3.5% in 2008, following the fall in cotton production an the decline in lint cotton export (World Bank Global Economic Prospects, 2009).

Slowly but surely, the global financial crisis is taking its toll on Africa. After many years of significant growth, the IMF (2009) observed that growth fell from nearly 7 per cent in 2007 to under 5.5 per cent in 2008 (See figure 1.2 below). The growth effects were felt mainly in oil and other commodity exporters as well as middle income countries (IMF, 2009). The African Development Bank (2009) has stated that in 2009, real GDP growth is expected to slow from 6.2 per cent in 2007 to 4.6 per cent in 2009. According to the Bank, Southern Africa will be hardest hit as its growth rate is going to slow down to as low as 4.0 per cent in 2009. Angola, an oil producing and exporting country, will see its growth fall to 6 per cent from 8.4 per cent in 2007. According to the African Bank (2009), countries’ fiscal balances are expected to deteriorate as tax revenues decline.

Foreign Direct Investment (FDI) has significantly reduced because capital inflows to Africa have slowed down. This is affecting development in African countries that relied on such external funds to finance projects as well as fund infrastructure construction (Balchin, 2009). In Mozambique for example, FDI related to expansions of hydro-electric mining projects has been delayed or suspended (Balchin, 2009). All this will slow down African Countries’ progress in meeting their Millennium Development Goals.


Furthermore, the fall in export revenues is likely to have negative spillover effects in terms of reducing government revenues, thereby worsening the already tenuous fiscal position in many African countries (Ali, 2009). The tightening of global credit as a result of global credit as a result of the crisis has also led to an enormous reduction in private investment flows and bank financing, resulting in reduced capital flows and a curtailing of the availability of trade finance (Ali, 2009).

Impact on the banking system
The low level of African economies’ integration into the global financial system insulated the continent from the primary effects of the crisis. As a result, Africa found itself shielded from the impact of the 2007 subprime and the summer 2008 banking crisis that affected the very foundations of international financial markets (African Development Bank, 2009). Although low integration into the global financial markets has mildly shielded Africa, the crisis continues to exert significant pressures on money, currency and capital markets. Despite the pressure from the crisis, money, currency and capital markets continue to function normally (IMF, World Economic and Financial Surveys, 2009). Currently, there is no country in Africa that has announced a bank rescue plan at the magnitude that was observed in many rich first world countries. Few banks and investment firms in Africa have held derivatives backed by sub prime mortgages (or ‘toxic assets’) (IMF, World Economic and Financial Surveys, 2009). African banks have not engaged in complex derivative products and are not heavily dependent on external financing (IMF, 2009).

The banking sector dominates African financial systems, and the role played by financial markets is weak and sometimes non-existent. Exchange control regulations regulate borrowing from financial banks (IMF, 2009). Off balance sheet exposure is not widespread in Africa, in contrast to industrialized countries that have complex financial sucurization instruments such as the ones that triggered the sub-prime crisis (African Development Bank Group, 2009). The contagion effects of the crisis on banking in Africa may be enhanced by the presence of foreign banks in some African countries such as Madagascar, Swaziland and Mozambique. The headquarters of these banks are in the first world countries where the crisis hit the most. The losses suffered by the parent banks however was not passed down to their African branches. Some branches of foreign banks in Africa infact saw considerable gains in their market capitalization. For example, Swaziland Nedbank, Bank of Africa Benin and Standard Bank of Ghana saw their market capitalization increase between July 2007 and January 2009 (African Development Bank, 2009).

According to the World Bank (2009), inflation will fall from about 11.5 % in 2008 to 10.5 % in 2009 and to about 7 % in 2010, as a result of the decline in commodity prices and global demand. In comparison with the other rich developed world, the decline is gradual in Africa because of incomplete pass through of the previous surge in international oil and food prices.
Tourism
The financial crisis has resulted in a drop in incomes of people in developed and emerging countries. These are the countries where Africa gets the majority of its tourists from, who bring the much needed foreign currency. In many countries such as Egypt, Seychelles and Kenya, tourism represents a notable share of government revenues. However, because of the crisis, tourist arrivals have declined. In the beginning of the year, Kenya announced a decline of between 25% and 30% in tourist arrivals (African Development Bank, 2009). Kenya Airways posted a 62.7% drop in profit for the half year at the end of September 2008 (African Development Bank, 2009). Egypt announced a cancellation of hotel reservations while Seychelles announced a 10% fall in tourism revenue (African Development Bank, 2009).

CONCLUSION
In what started as a localized crisis in the US, the credit/financial contagion has spread to the real economy and there is now a strongly synchronized global economic contraction unfolding (UN, 2009). Just like every other continent, Africa is not spared. The initial conventional wisdom was that African countries were unlikely to be hard hit but unfortunately, events on the ground show otherwise. The global financial crisis is threatening years of growth that Africa was experiencing.

Africa’s hard won economic gains are now at risk. It has resulted in a slowdown in investments, remittances, exports, prices of raw materials which in turn has resulted in a reduction in export earnings. The crisis has also negatively affected tourism which accounts for government revenue in some countries in Africa. The slow down in growth as a result of the crisis has been accompanied by a reduction of fiscal revenues and of public expenditure.The IMF (2009) notes that after hitting first the advanced economies and then the emerging economies, a third wave from the global financial crisis is now hitting the world’s poorest and most vulnerable countries. There is increased risk to Africa’s exports, foreign investment, credit, banking systems, budgets as well as to the balance of payments. According to the African Bank (2009), fiscal deficits are expected to worsen because of the decrease in export revenues as well as the need to increase social spending and safety nets and to provide fiscal stimulus required to mitigate the worst consequences of the financial crisis.


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[1]Herein refferred to as the financial crisis.
[2] Unedited.

The "failed state" in Africa (by Nkanyiso Sibanda)

INTRODUCTION

From the Failed States Index[1] for 2009, it is evident that countries characterized by famine, gross Human Rights violations, disputed elections and poverty were either certified or re-certified as ‘Failed States.’ Over the past couple of decades, a variety of euphemistic neologisms have been created to explain certain anarchic and dysfunctional situations in countries such as Somalia, the Democratic Republic of Congo, Sudan, Zimbabwe and many other peripheral third world (mostly African) countries.

A ‘failed state’ is most readily identified by the existence of rampant corruption and criminality in the state apparatus, massive human rights violations, rigged elections, predatory elites with protracted monopoly on power, an absence of the rule of law, severe ethnic divisions and sectarianism, deep economic crises and a significant refugee problem caused by political persecution, among other factors (Gebremariam, 2008). They are often ravaged by ethnic and or religious conflict, civil unrest, corruption, violent crime, state repression, high levels of poverty, disputed and violent elections, inequality and disease; the majority of the population often has no respect for the government; forces of law and order often do not extend throughout the entire territory (Jones, 2008).

For an African, whose country is ranked second in the failed states index for 2009, it is worthwhile to investigate if the ‘failed state’ concept is a valid analytical approach in discussing a variety of African countries’ security situations. These states are also afflicted by chronic, deep-rooted and heightened levels of political and social instability and protracted economic decline. The approach to the discussion here will be of a critical nature. I will argue that the term ‘failed state’ is infact quite misleading when it comes to the discussion of a variety of African countries’ security situations. It is ‘…simply a Western construction whose basis is the atomistic social ontology. It isolates the object from the wider social and historical contexts and presents it as the atomistic agents within global capitalism’ (Dolek, 2008). The ‘failed state’ ideology ignores the colonial processes that plundered (and continues to do so) Africa’s resources, divided Africa’s peoples along ethnic, religious and other grounds, resulting in what exists now on the African continent. I will also show that the ‘analytical and explanatory basis of the concept is profoundly flawed’ (Jones, 2008).

I will begin my discussion by tracing the origins of the term ‘state.’ The universally accepted Weberian definition will be used to define a state. This is because conception of the state is essential in order to understand and unalyse ‘state failure’. The discourse on failed states, for the most part, rests on the idea of ‘statehood’; it juxtaposes ‘successful’ (without ever explicitly using that term) and ‘failed’ states, bringing the two into sharp contrast, thereby highlighting the defining characteristics of the latter (Huria, 2008).

Focus will then shift to the term ‘failed state,’ tracing its rise to prominence to the end of the cold war while the September 9/11 attacks only catapulted its recognition. The discussion will show that there is not one universally accepted definition of ‘failed state.’ The spotlight to the African context will follow and the historical colonial processes that shaped the African continent will be highlighted. Emphasis here will be on the exploitation of Africa’s wealth by the colonizers and the division of Africa’s peoples along ethnic, religious and other lines. The legacy of such mineral exploitation and division of Africa’s people by the colonizers is manifested by the poverty and insurgencies that so plague the African continent today. The weapons used in these insurgencies come from some former colonial powers in the West, who later label such poverty stricken war torn countries as ‘failed states’.

In the conclusion, I will mark that the ‘failed state’ is nothing but a fallacy, constructed by the core first world countries. The analytical and explanatory basis of the concept is significantly blemished. The current challenges facing the so called ‘failed states’ in Africa were architectured by colonizers and coming up with the term ‘failed state’ is simply a way of legitimizing first world countries’ interest and intervention in Africa. While it is true that Africans have to move from continually blaming the former colonizers for their problems today, the profound effects of colonization and the way it was done can not be overlooked.
STATE

In his lecture, ‘Politics as a Vocation,’ Weber (1919) defined a “state” as a territorial entity which claims a monopoly on the legitimate use of physical force, which it may nonetheless elect to delegate as it sees fit. Although primeval, this definition is accepted and used in modern day academic discourses to define and understand what a state is. Weber (1919) emphasizes four aspects of the modern state: territoriality; monopoly of the means of physical violence; legitimacy and impersonal bureaucracy with emphasis on the judicial. Without social institutions claiming a monopoly of the legitimate use of force within a given territory, Weber argues, a condition of anarchy would quickly ensue and it will be doubtful whether a state exists or not. In raising the question of why the dominated obey, Weber draws attention to an elementary activity of the state, the endeavor to legitimate the structure of domination. Today, while most Western states fit Weber’s influential definition of the state, in some other parts of the world, states do not fit this definition (Jackson and Rosberg, 1982:19).

THE ‘FAILED STATE’...PROBLEMATIQUE

Although the rhetorical and policy adoption of the term ‘failed state’ happened with the end of the cold war, the concept has been around for quite a long time (Boas et al, 2005). The term ‘failed state’ is just a most recent in a long list of modifiers that have been used to describe or attempt to explain why states residing outside of the geographical core of Western Europe and North America do not function as expected (Boas et al, 2005). The concept became popular with the end of the cold war and more especially with the September 9/11 attacks. Even as the foremost murmurs concerning the so-called ‘failed state’ began to be audible around the time of the Clinton administration, this notion was brought to the fore by Robert Kaplan’s 1994 article, ‘The Coming Anarchy.’ The article sought to warn Western governments of the approaching ‘threats’ to global security from the ‘regressive’ developments in West Africa and most of the developing world – “the withering away of central governments, the rise of tribal and regional domains, the unchecked spread of disease, and the growing pervasiveness of war” (Huria, 2008).

Madeline Albright, the then Secretary of State in the Clinton administration, coined the concept and it appeared in the US National Security Strategy Report submitted to Congress by Bill Clinton in May 1997, A National Security Strategy for a New Century. The case of Somalia, where the national state wholly ceased to exist, played a crucial role in shaping analysts’ thinking about states and state “failure” (Call, 2006). As an analytical concept however, it remains surprisingly elusive, and attempts to explain the phenomena remain unclear at best (Gourevitch, 2005). Dolek (2008) notes that there has emerged a lot of literature on ‘the failed state’ which literature produces diverse categories of polities about peripheral countries. These include 'weak state', 'rouge state', 'collapsed state', 'collapsing state', 'disintegrating state', 'captured state', 'quasi-state' among others. These all depart from the Weberian conception of an ideal state. These definitions about the ‘failed state’ are made with reference to 'successful counterparts' existing in the rich, industrialized, powerful core countries.

What, exactly, is a failed state?
Scholars of the phenomenon do not all seem to have the same thing in mind when using the term ‘failed state.’ Many definitions consist of numerous examples and these have no clear statement of principle to show what they have in common. When one looks at the vocabulary produced to define the notion of 'state failure', it can easily be understood that there is neither a single term to refer to such phenomenon nor a single definition for the concept in question (Dolek, 2008). More theoretically-developed definitions are typically brief, or avow ideology that seems to lead to the conclusion that a state has failed in certain respects, but not necessarily across the board.

While there is no single definition of failed states, an assessment of the current literature and usage of the term however reveals certain common assertions in all the available definitions. The phrase has been used to describe a regime or government that is incapable of meeting the most elementary functions of governance (Gebremariam, 2008). Other synonyms for the term ‘failed state’ include ‘weak state,’ ‘fragile state,’ ‘collapsed state,’ ‘rogue state’ among others. Jones (2008) refers to a ‘failed state’ as one which is unable to perform a set of functions taken to be characteristic and definitive of what constitutes a properly functioning state: to maintain secure boundaries, ensure the protection and security of all the population, provide public goods and effective governance, maintain law and order throughout the territory.

Robert (2008) presents ‘failed states’ as: states that are tense, conflicted and dangerous. They generally share the following characteristics: a rise in criminal and political violence; a loss of control over their borders; rising ethnic, religious and linguistic hostilities; civil war; the use of terror against their own citizens; weak institutions; a deteriorated or insufficient infrastructure; an inability to collect taxes without undue coercion; high levels of infant mortality and declining life expectancy; the end of regular schooling opportunities; declining levels of GDP per capita; escalating inflation; a widespread preference for non-national currencies and basic food shortages leading to starvation. Somalia tops the list of ‘failed states’ for 2009, followed closely by many other African countries.

According to Huria (2008), euphemistically called failing, fragile, weak, quasi, or crisis states, ‘failed states’ are states whose governments are believed to have weakened to such an extent that they are unable to provide basic public goods like territorial control, education and healthcare, and legitimate institutions to their people. She further writes, most accounts of failed states center on the ‘erosion of state capacity’ or their inability to perform the basic functions of state responsibility like ensuring peace and stability, effective governance, territorial control, and economic sustainability (Huria, 2008).

‘Failed states’ are seen as those that are mired in or at a risk of conflict and instability; where the persistence of violence causes state structures to become ineffectual. Says Wyler (2007), “countries can also be hampered by poor governance, corruption, and inadequate provisions of fundamental public services to its citizens; may lack effective control of their territory, military, or law enforcement – providing space where instability can fester (for instance the Pakistan-Afghanistan border); and are usually also among the poorest countries in the world, including Bangladesh and many in Sub-Saharan Africa.”

Those that support the ‘failed state’ theory argue that for a state to be recognized as (a successful) one, it has to conform to the Weberian model of a state. This means that it has to maintain a monopoly on the legitimate use of physical force within its borders. “When this is broken (e.g., through the dominant presence of warlords, militias, or terrorism), the very existence of the state becomes dubious, and the state becomes a failed state” (Chomsky, 2006:17). According to Zartman, (1995:5), state failure occurs when "... the basic functions of the state are no longer performed" in a proper way. State failure is a label that encompasses a range of severe political conflicts and regime crises exemplified by macro-societal events such as those that occurred in Somalia, Bosnia, Liberia, and Democratic Republic of Congo (Zaire) in the 1990s (Marshall, 2007).

“What is more, there have been developed even more radial approaches to the 'state failure' by utilizing the terminology of psychoanalysis. Largely found with the thesis of 'New Barbarism', these approaches defend the view that the 'state failure' occurs as a result of the internal cultural/racial characteristics embedded in the African countries. As opposed to the ideal Western ones, the failed states represent the 'abnormal' or 'deficient' polities that are irrational, violent and even barbaric. This simply means that the 'state failure' occurs due to the existence of a 'serious illness' or 'mental or physical disorder' that should be cured by the intervention of a doctor, i.e. the Western countries. In other words, those 'failed states' are in a serious condition of mass trauma which should be treated through a whole-scale intervention. This kind of intervention, perceives the "... recipient populations as irrational and emotionally immature and therefore implicitly incapable of determining their lives without outside professional intervention” (Dolek, 2008).

Before Australia’s intervention in the Solomon Islands in 2003, Prime Minister John Howard said: “We know that a failed state in our region, on our own doorstep, will jeopardize our own security. The best thing we can do is to take remedial action and to take it now. . . . I recognize that the action we are proposing represents a very significant change in the way we address our regional responsibilities and relationships” (ABC Online, 2003). Evidently, the term has been used by some core countries to intervene in the affairs of poor third world countries.

FLAWS OF THE CONCEPT

Literature on ‘failed states’ has grown rapidly and the term is widely used to characterize certain third world countries faced with ‘serious’ social, economic and political challenges. However, the analytical and explanatory basis of the concept is profoundly flawed (Jones, 2008:181). The concept presents problems when it comes to the manner of characterizing and explaining the nature and production of conditions leading to the label of ‘failed state.’

The discourse on failed states has come in for criticism from various countries in the South. The term and the discourse are both seen by many as another of the several pretexts employed by the West, particularly the US, to intervene (militarily or otherwise) in the affairs of the Third World (Huria, 2008). According to Jones (2008), an adequate critique of the ‘failed state’ ideology reveals and emphasizes the term’s role in legitimizing intervention by outside forces. These pretexts, have changed from ‘rogue states’, ‘spreading democracy’, ‘regime change’, and the ‘war against narcotics’, to the current discourse on ‘failed states’ (Huria, 2008).

The idea underpinning most of the ‘failed state’ discourse is that states in the developing world are incompetent and, therefore, incapable of governing themselves. This is evidenced by the conflicts that so plague them as well as the anarchy and lack of respect for the law. The conflicts in these countries are not seen as conflicts between legitimate actors in the political realm, but regarded as chaos and anarchy that ‘impartial’ third parties, namely western states, can ‘fix’ with their policies (Gourevitch 2005).

The DRC, Niger Delta, Sudan are classic examples of how external meddling by great powers can lead to and has infact led to the destabilization of the state. It is incorrect to treat states as isolated entities that alone are responsible for what goes on within their boundaries. This is because in today’s globalized world, states increasingly find themselves enmeshed in transnational structures that include among others, foreign economic actors and the aid system, to whom they become accountable (Huria, 2008). Decisions in these states are not made by state governments, but a host of other transnational actors also (Huria, 2008).

Mohammed Ayoob, in an attempt to explain the security predicament of the Third World, focuses his attention on the evolution of the modern nation-state. He argues that while European states developed into nation states over a period of four to seven centuries; countries in the global South are expected to complete this ‘nation-building’ process in the course of a few decades, “that too, by simultaneously undertaking all the stages of nation-building i.e. standardization, penetration, participation and distribution with all its inherently contradictory pulls and pressures. As a result, many Third World states with highly plural and diverse societies, are not yet politically and socially cohesive units” (Behera, 2002:19).

Many academics have also pointed out that the concept is not a very useful analytical tool since it is vague and imprecise and tends to place a wide range of dissimilar political crises into the same investigative category, (Gourevitch 2005:4). It is also described as a sort of catch-all framework. Practically every problem of governance that faces the developing world today is included in these criteria, including uneven economic development, deterioration of public services, demographic pressures, and human flight, among others (Huria, 2008). The term assumes that all states are alike, constituted and function the same way and this is infact not true (Boas et al, 2005). Contemporary states are the result of unique historical processes and while some may fail to provide an environment of human security, they may be efficient providers of regime security (Boas et al, 2005). Problems therefore emerge when the term is used to focus on the analysis of the state and its institutions when in many instances, power relations that matter for regime security are private and informalised (Boas et al, 2005).

Another of the weaknesses of the term ‘failed state’ is its failure to make recourse to the historical processes that resulted in the current ‘failed African states.’ Historical injustices, orchestrated by the colonizers, played a significant role in condemning African countries to poverty and underdevelopment which countries are now labeled by Western thinkers as ‘failed states.’ While some of the present day ‘failed states’ in Africa were being plundered and robbed of wealth by colonialists, present day ‘successful states’ were benefiting from such plunder and robbery. It is undeniable that the African continent has never recovered from the looting, plunder and partitioning based on race that it was subjected to during the colonial era (Mangorera, 2002). The colonizers made conscious and deliberate efforts to exacerbate Africa's isolation in the global economy. Africa became the source of resources for the growth of the ‘successful’ and rich colonizing countries. It was subjected to decades of imperial domination and unprecedented asset stripping, which significantly contributed to some of the ‘failed states’ such as Zimbabwe, and others that are seen today. Colonialism retarded Africa's growth. The colonialists amassed Africa’s wealth and built rich empires while the generality of the African states bore the brunt of poverty which resulted from such plunder.

The concept offers an ahistorical account of the weakening of states. It ignores the colonial processes that plundered (and continue to do so) Africa’s resources, divided Africa’s peoples along ethnic, religious and other grounds, resulting in what exists now on the African continent. The discourse glosses over the historical processes that might have led to their weakening like, for instance, their colonial legacy, great power intervention during the Cold War, and so on. It places the responsibility for state failure squarely on the shoulders of the state itself and ignores any external responsibility. A good example can be seen on the case of the DRC and in Sudan, where external interests in natural resources have led to the perpetuation of conflict in the two countries.

Africa is plagued by a plethora of wars that have ravaged the continent's resources, inevitably leading to dire poverty and humanitarian crises. Somalia, the Democratic Republic of Congo and the Sudan, which have persistently had leading positions in the Failed States index, have been in war for many years. Angola was plunged into more than three decades of civil strife as Jonas Savimbi's rebel Unita movement and government forces fought to control the mineral rich country. A flourishing ‘diamond-for-guns’ market, a product of the rich and potent Western conglomerates, fuelled a war that stalled the development of one of Africa's potentially rich countries. The search for peace in the Democratic Republic of the Congo has been agonizingly elusive (Mangorera, 2002). In Sierra Leone years of civil war left the country one of the poorest in the world. Burundi continued to be strife-torn for a long time and the Nelson Mandela-led peace initiative remained unachievable as the fragile peace agreements persistently collapsed. Insurgencies have been a key determinant of a failed state and in recent history, Africa has had more insurgencies than any other continent in the world, hence the reason why its countries make up most of the ‘failed states’ in the Failed States Index.

Jones (2008) writes –
The current condition of structural crisis in so many of Africa’s neocolonial states must be situated historically in the imperial history of global capitalism. An approach informed by global political economy directs attention to the interaction between local and global social forces and processes, understood in their historical specificity. This requires careful attention, first, to the political economy of the colonial social order in the context of colonial capitalism; second, to characteristic patterns of the postcolonial state, society and economy after independence, which tended in many cases, to give rise to factional struggles and authoritarian rule; third, to the ways in which such ‘internal’ social tensions and contradictions in the post-colonial state – the specific historical legacy of colonialism – have been reinforced by the global political economy, both the geopolitics of the Cold War and the contradictions of global capitalism.

African countries are the ones mostly and readily susceptible to the label of ‘failed states.’ This is evidenced by the way they dominate on the Failed States’ Index. The 'failure' of African states and the demise of territorial nationalism should come as no great surprise if one subscribes to 'primordialist' or 'ethno-symbolist' theories (Grooves, 2008). For thinkers such as Anthony Smith and John Armstrong, nations have their roots in a cultural basis of "cohesive power, historic primacy, symbols, myths, memories and values" which have persisted through time (Smith, 1991: 52). When colonialists and their administrations drew African borders, which borders frequently separated, subsumed or assumed indigenous identities- an overwhelming legacy remained. Post-colonial states such as Burundi, Rwanda, Nigeria and Kenya spanned a mosaic of ethnic groups which provided little cultural basis for a united nation; simultaneously, ethnic groups spanned the post-colonial states (Grooves, 2008). Nationalist leaders therefore had great difficulty maintaining the discursive energies mobilized during the struggle for independence because their territorial nationalism was inauthentic; it was not underpinned by a culturally-united ethnic community, but by a myriad of ethnic communities (Grooves, 2008).

After colonialism, attempts to build the nation were weak and susceptible to cooptation by ethnic groups as they strove to access state patronage. Various state leaders struggled to define homogenous, 'legible' identities through centrally planned administrative policies - in Tanzania, for example, Julius Nyerere attempted to move all rural inhabitants into villages as he sought to create a 'modern state'. However, such policies proved futile and often damaging (Scott, 1998). For thinkers such as Smith and Armstrong, whilst a culturally-underpinned nation might build a successful state, a state faces great difficulties if it is not underpinned by an authentic nation. The former President of Mozambique, Samora Machel, summed up a popular conclusion when he declared that "for the nation [and, one might presume by extension, the state] to live the tribe must die" (in Mamdani, 1996).

Drawing on the case of Kenya, Lonsdale (1994) forwards that far from being historically-rooted entities which have always existed; 'tribes'-and dynamics of ethnic competition-were largely a response to the new institutions and rules imposed by the colonial powers. For Bayart (2005:31), "the ways in which Africans have adopted the territorial frameworks handed down by the colonizing powers is one of the salient characteristics of the continent's recent history. The imported state was immediately taken over by autochthonous peoples" because it represented the obvious (and often only) means by which to access colonial power structures. The 'formation' and mobilization of ethnic identities thus represented a strategy by which to gain access to the state's resources and this has led to insurgencies and conflicts which are a feature of some of the ‘failed states’ in Africa.

The concept of state failure in Africa is descriptive, citing such traits as failure to perform basic functions such as education, security, or governance, usually due to fractious violence or extreme poverty as characteristic features. It does not give the historical and social processes through which these states have become 'weak,' hence failed, while others have gained 'strength' and become successful. Within the context of African 'failed states,’ there is neither reference to the colonial processes of subordination through which a neo-colonial dependent state structure has been inherited, nor is any critical attention paid towards the 'perpetuation' of the conditions of underdevelopment in the African continent especially with the introduction of neoliberal policies to those already weak African states. The role of historical injustices should be scrutinized when the ‘failed state in Africa’ is deliberated upon. However, it is not.

According to Boas et al (2005), another weakness of the term, predicated as it is, on the existence of the prototypical state, is built on a faulty assumption of uniformity in state organization, structure and behavior. To say something has ‘failed’ is a normative judgement that is only helpful and meaningful in comparison to something else; in this case, that something else is the existence of a Westernized, ‘healthy’ state that, unfortunately, has little relevance to most of the states in question because it has never existed there (Boas et al, 2005). Comparing ‘failed’ African states is to neglect history, demography, culture and economics and their relationship to regional dynamics and patterns.

CONCLUSION
The concept of ‘failed state’ has been produced as such to categorically represent post-cold war polities. The category of the ‘failed state’ and associated terminology is thus widely used in the characterization of specific conditions of crisis in the Third World (Gruffyd, 2008:3). It is a label that encompasses a range of severe political conflicts and regime crises as exemplified by macro-societal events such as those that occurred in Somalia, Liberia and the Democratic Republic of Congo in the 1990s (Liu, 2005). That the concept lacks a precise definition means there is a multitude of definitions based on goals and interests of whoever is defining the concept at the time. It has been used by some core countries to justify intervention (military, humanitarian and other types) and invasion of some of the countries thus labeled, ‘failed states.’

The concept falls short of a functional analytical and explanatory phenomenon for understanding African states in crises. According to Liu (2005), in the third world peripheral countries, the notion of ‘failed states’ is problematic since many third world states collapsed after decolonization simply because they were Western constructs in the first place. Gourevitch (2005) asserts that the concept is fundamentally flawed, both as conceptual category and as explanation. This flawed nature of the concept can not be solved by more precise definitions and clearer explanatory theories. It does not however mean that there is no truth in the ‘failed state’ theory. Rather, the characteristic flaws of failed state discourse reveal a truth, but it is a truth about Western political thinking and not third world political reality (Gourevitch, 2005). “‘Failed states’ as such do not exist. Rather, they manifest the inability to give meaning to third world political conflicts and disenchantment with its own state institutions” (Gourevitch, 2005). It is a representation that enables certain policies which serve the economic, political and security interests of those who employ it.

States in the developing world are relatively new entrants into the international system, and it is only natural that they face challenges in the process of state building (Huria, 2008). The present discourse on failed states is an attempt by the West to make sense of the challenges that states in the South are grappling with. While state weakness is a reality in Africa; there is need for a debate and a set of criteria that are more holistic than existing ones – recognizing that ground realities in the ‘Third World’ are vastly different from those in the West; and that are willing to take into account the disparate histories and socio-economic backgrounds of these states to develop more apposite policy solutions to deal with state weakness (Huria, 2008).

The failure to refer to the historical and social processes, through which these states have become 'weak,' hence failed, while others have gained 'strength' and become successful is a material overlook when the term is used. While specific combinations of local, regional and international forces and conditions have led to devastating social crises in Africa, none of these outcomes can be explained through the prism of ‘state failure’ (Jones, 2008). One of the most important methodological flaws of the ‘failed state’ discourse is its inability to identify historically specific social forms and conditions, and their global relations. By offering a beguilingly simple, richly descriptive, pseudo-analytical approach, the ‘failed state’ discourse obfuscates the historical social relations of crisis while legitimizing the reproduction of imperial social relations (Jones, 2008). For the term to bear much water, it is peremptory to refer to the colonial processes of subordination through which a neo-colonial dependent state structure was inherited. Attention should be paid towards the 'perpetuation' of the conditions of underdevelopment in the African continent, particularly the neoliberal policies that were introduced to those already weak African states (for example, the Economic and Structural Adjustment Programme (ESAP) in Zimbabwe).
Therefore, “'failed state' is about nothing, but a mere construction on the basis of the atomistic social ontology which isolates the object from the wider social and historical contexts and presents it as the atomistic agents within global capitalism” (Dolek, 2008).








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[1] See bibliography.