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The global financial crisis: Lessons and responses from Africa

Global South should break free from failed neoliberal policies, says noted thinker.

Demba Moussa Dembele is director of the Forum for African Alternativesby the Pambazuka News

As the international financial crisis points to the collapse of laissez faire economics and discredits market fundamentalism, Africa and the global South should break free from failed neoliberal policies and the institutions that have promoted them and define their own paths to development, writes Demba Moussa Dembele, director of the Forum for African Alternatives.

The crisis provides fundamental lessons, says Dembele, the first being that markets do not have self-correcting mechanisms, and that market failures are not less costly than state failures.

Secondly, "the collapse of the neoliberal dogma is a major blow to the international financial institutions. What is even more devastating to them is the reversal of most of the policies they had advocated for decades in Africa and in other 'poor' countries under the now discredited SAPs (structural adjustment programmes). The IMF and the World Bank are supporting fiscal stimulus - expansionary fiscal policies - in the United States, Europe and Asia."

Thirdly, its clear that the state remains a central player in solving crises caused by markets, and is not the sole cause of economic and social problems in Africa that neoliberal policy has categorised it as. Dembele notes that many development agencies do not have Africa's best interests at heart...

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  The global financial crisis: Lessons and responses from Africa, by Demba Moussa Dembele, Pambazuka News, March 19 2009

Posted: May 14, 2009

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