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Neo-Liberalism and its Wrong Path

By Mesfin Getachew
Tigrai Onlne - December 19, 2013

The forceful imposition of neoliberal political economic philosophy upon countries especially after the cold war has become our recent history. The spread of the new liberalism (neo-liberalism) has dramatically increased with Japanese American Francis Fukuyama’s labeling of the situation “Liberalism is the last in  history” and has swiftly ignited  it’s the ideology in different continents and countries.

I think we don’t need any evidence that Africans especially before 30 or 40 years was forced to swallow this ideology and granted with all the terrible consequences of the ideology. This makes the continent to have a lagging economy that is moving like with the speed of a tortoise. Looking the reality of the continent even though it has rich accumulation of natural resource, most Africans live in acute poverty. The civil wars and regional conflicts in most of the countries are the consequences of neoliberal imposition.

However, African countries who have understood the worthless academic prophecy of Fukuyama have put aside his baseless ideology and are continuously searching for paths of developing in their own ways so that they escape from the continued political and economic influence of neo-liberal institutions. With their effort it has also become possible for them to show even to the neo-liberals that it is feasible to bring development without their ideology. Nowadays the impact of neo-liberalists is there with a mere reason of “Why countries get out of our ideology?”.

They are also asking the developed countries who are the proponents of the ideology to put perquisites of accepting and following neoliberal thinking (which wasn’t successful in their country-Remember the international Financial crisis) among the developing countries when granting aids.  And Ethiopia is one of them.

Our country, though we don’t have oil reserve resource, is one of the three fast developing countries after China and India by registering 10% economic development for the last nine consecutive years. However, although the proponents of neo-liberalism and their financial institutions didn’t deny the continued economic development of our country, they intentionally underestimate the level of the country’s economic development and provide their deliberate advices for the better and continued economic development. The main agenda of their advice is about selling or privatizing giant institutions like Bank, Tele Communications and the like for bringing better economic developments.

What this clearly implies is that unless Ethiopia adopts the neoliberal political economic system, there would be no economic development in the country. As we all could see, the main theme of neo-liberalist is a fundamentalist view of “leaving everything for the market and the private investors with no interference of the government on the economy except keeping law and order. What neo-liberalists want to see in any country is to have a powerless government. It advocates pushing the government out of developmental activities and empowering few private investors to control the entire nation’s wealth and making the large masses of the society observers.  This is why they are continuously initiating governments to sell the above mentioned institutions which can have their own great roles bringing economic development.

I don’t think that our country could possibly adopt the neoliberal philosophy for three main reasons. Firstly, since it wasn’t made for us it couldn’t fit with our sizes. By this I mean that the philosophy wasn’t designed to be applied in a country like Ethiopia. So, how could it be functional in Ethiopia? Secondly, it is because of the reality that there are a number of activities that that the private sector couldn’t play in our country. And thirdly the thinking that “other countries couldn’t develop out our neo-liberal ideologies and even if they, their development wouldn’t be successful” forgets the reality that the ideology is confused and is working with lots of scratches within it proponents and has no benefits at all. Now let’s look the three points and find out the rationale behind why the government didn’t want to sell or privatize those institutions.

It is true that the neoliberal political economic philosophy couldn’t go with the reality of our country. It is also evident that the democracies that are built out of neo-liberalism in Africa and other continents are doing nothing except conflicting over the issue of rent seeking and were not successful in building national consensus in any issues.

Contrarily, the developmental democratic rule in our country is securing fast economic development and will continue in the future. With this it is possible to make national consensus and is also possible to build a system that will continue to improve. Therefore, in my belief considering the above mentioned things the neoliberal system couldn’t possibly fit for Ethiopia.

In the aspect of democracy, though our democracy didn’t escape from influence of the neo-liberalists, it is going with its own ways. It is known that liberalism was struggling only for individual rights and never thought for group rights. The following philosophy that emerge from it, neo-liberalism, has put the question of individual right in a great dilemma. This makes the ideology to only focus on individual rights. The late Prime Minister of UK, Margaret Thatcher’s once saying “there is no public; everything is made and established by individuals” can be mentioned as a one particular instance.  This means that the thinking has forgotten the inseparable relationships between individual rights and group rights.

The reality however is that unless the group rights of individuals living in different social classes are respected, they couldn’t be free individually. Let me explain this by taking the struggle of women gender equality. If the individual rights of individuals is respected, but if they are suffering from sexual discrimination they couldn’t possibly be individually free. Therefore, it is crystal clear that they could secure their rights of gender equality not being individually but when they become in groups.

In a country like Ethiopia, especially where there are more than 75 nations, nationalities and peoples; where it is full of people who had been struggling to answer their questions, the activity of respecting individual rights should not be individual basis and should rather be in a groups.

Here, I hope my dear readers understand me that there is no respect for individual rights. What I’m saying is individual right and group rights have their own identities and are the two sides of the same coin where one can’t exist without the other. This shows that if we try to apply the neoliberal thinking in our country as it is it would be a tricky hard task.

In fact neoliberals believe on the market fundamentalism of “leaving everything for the market and investors”, it wouldn’t be surprise that they are asking our governments to sell all the giant governmental and public institutions.  This is because they have the habit of looking everything according to its own ideologies. Here we shouldn’t forget living locally or we should also consider the related proverb “birds of the same feather flocks together” as we couldn’t shout and flock with their languages and them.

Though I’m going to say something about the crisis of the market fundamentalist neo liberalism in the later pages, it couldn’t fit for our country even if it may work in some countries. The reality however, is that we have seen its “unsuccessfulness” in several occasions. Moreover, it will good for these proponents of the ideology and their financial institutions to know about the reasons why the developmental governments and the public didn’t want to sell their giant companies, although they know it clearly.

To economically develop and make their future visions  true countries like Ethiopia that have people in the in the track of development should base on their local finance, knowledge and energy than relying on foreign resource aid.

When we see our country’s economic development in this regard, we found at its infant and young stage. Even though the private sector has significant roles on the country’s economic development, we can’t possibly say that it is strong enough. And since it is a developing country investor, its capacity will be improving through time.

Therefore, in many occasions there the private sector can’t fully perform, the government will intervene in a limited ways so that no market gaps will occur. This will play significant roles in filling market gaps and fastened economic development process. 

At this particular moment in our country where 85% of the population is predominantly rural, the private sector couldn’t potentially build schools, clinics and other infrastructures and give it to public because of different psychological and individual reasons. And the absence of these services are the issues of existence and are beyond the market gap issues as the government is struggling to fulfill them at its most.

The government needs finance to perform those institutions and the above big companies must be with the government and the public to generate financial income. And the money that is generated from these institutions contributes a lot to lead the people to development paths and had been playing these roles for many years.

Thus, because our private sector can’t fully cover the market gap as neo-liberalists hope it, these institutions should be under the control of the government and public as they are contributing to overthrow the acute poverty that had been with us for centuries and to the success of our millennium development projects.

With the policies and strategies of the developmental states leadership, it was possible to mobilize the great masses of the population and assured making poverty just a history. I don’t think that the neo-liberals themselves will deny this fact. They are becoming witnesses of the reality that our country is a model for fast economic development among many sub Saharan countries.

Thus, if the fact is so, “what is the thing that the proponents of neo-liberalism and their institutions asking us to do?” “Why do they intend to ask selling the governments big institutions while they are assuring that these institutions are supporting the economy and bringing fast economic development? The best way to answer these questions is to have look the late history of neo-liberalism. As we all can understand, the ideology reaches here today by embezzling and accumulating the wealth and resources of African and other poor nations during the era of colonization. As to my understanding, neo liberalism didn’t care about the development of Africa and its countries. It is rather the cause for its failures by forcefully imposing principles which are against the philosophies, cultures and national identities.

The ideology didn’t regret by the previous problems that it creates upon many countries. It is rather interested to control the resources and wealth of the poor countries like the times in the colonial era. It strives to assign its own investors in those poor countries and buy the institutions that the government is selling as the system leaves everything for the investor and the market. I think this is the alpha and omega of their intentions. The ideology creates few richest wealthy men and drown s the lives of millions of poor. Nowadays, the ideology is found to be unwanted and destructive. And this forces the Africans to oppose neo liberalism and look for new development paths that goes with their history, culture, and reality of a country and are becoming successful.

The main reason that makes the proponents and the financial institutions of the ideology angry is the withdrawal of the old system and its substitution by new African ideology. The new African ideology denies the embezzlement of the wealthy bourgeoisies.  It didn’t pave suitable ways for taking the cheap labor and surplus natural resources of the continent. That is why the neoliberals hate it at their most level.

Though neo-liberalism is getting outdated and can’t bring any changes, it is struggling to elongate its existence. Their trial however is, indirectly, like what they said “for Ethiopia to develop fast, it should sell its biggest institutions. Everyone could see that this really is an indirect way of modern colonization.

Therefore, since colonization is colonization in what so ever ways, I don’t think that the idea will be acceptable. To my understanding, the ideology of neo liberalism is outdated one which was tested and failed in Africa and also had been experiencing many occasions of failures even in countries that ignite the ideology.

In fact, the neoliberal thinking is also becoming cursed in among countries who were the proponents of the ideology. Since the ideology basis it s interest on few private investors, the social identity of the ideology is only this part of the society. And because the system neglects the masses of the society, the governmental base and the democratic system stands only for this segments of the society.

It is enough to mention the Americans grievance “for Justice” during the time of international crisis. A person who have watched the process of people in front of the Wall street commercial center shouting “we are in this demonstration to save the lives of 99% of the middle income population from 1% riches” can really understand the loss of the neoliberal ideology in securing socio economic justice and the price they paid for it.

In contrary, when I see the absence of such questions in the developmental democratic states and the successfulness of its ideologies, I think shows the loss of neo liberalism.

We have seen internal and external political losses in addition to the failures of the ideology because of liberated market fundamentalist view with no involvement of government in the market. What is the most surprising thing to me is Fukumaya’s description of the situation calling the ideology as “the last in history” though it wasn’t the last even in the countries of the proponents. That is amazing!

In the previous years, because of the problems created by the banks and corporation of these neoliberal proponents, the world was drowned in the biggest financial crisis. However, what the governments strived for  as a solution was to subsidized these few investors instead of helping the mass public come out of crisis. This measure of the governments resulted them with increment of unemployment, increase in the tax allocation people who were initially deprived of social justice, exclusion of many people out of pension scheme and other troubles.

Voices like “Make  the richest pay the taxes”, “create us employment Opportunities”, “the middle income population didn’t got an equitable share of public properties” were heard across horizons. This has clearly showed us that neo liberalisn is not acceptable in its proponent countries let alone being acceptable in other countries. The possibility of bringing development out of neoliberal thinking is practically experienced; one by looking the advancement of countries, and two by  observing the failures of the ideology of neo liberalism in home countries that invented the philosophy. Yes, it is possible!

We have also observed that countries following their own paths of development had become able to establish a dramatically growing economies like in Ethiopia and other BRIC countries such as Brazil, Russia, India, and china.

Therefore, if they have seen that Ethiopia has followed its development track by considering the realities and identities  of the people and be able bring  fast economic development with the paths stated, what type of  advice is the neoliberals offering us about selling the biggest institutions? We couldn’t accept such type of unhelpful advices simply because we have overthrew the old system that they used to control us. So, we will not accept and adopt a philosophy that is only made to destroy us because it wasn’t worked for them too.


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