csillagkohó’s Reviews > Economic and Monetary Sovereignty in 21st Century Africa > Status Update

Keynes envisioned an international currency, the "Bancor", "composed of a currency basket of thirty of the most important currencies" via which the exchange rate should be fixed. "Financial stability would be achieved through eradicating the possibility of currency speculation and sudden capital flights: the Bancor only serves as unit of account among central banks, and is not accessible to private agents."

🌵 "In Tunisia [according to Slaheddine el-Amami] 'a zoologist who might be interested in the pasturing of camels will be ridiculed. The growing of cactus is paralysed by the prejudice that it is a symbol of underdevelopment. A tree as noble as the date palm is totally ignored.'"

"Total US debt has risen towards 110% of GDP in 2019, and will continue to rise. Contrary to the liberal belief, this is not a problem. It shows, however, that there can be no reasonable economic development without a permanently greater financial commitment on the part of the state if companies refuse – for whatever reason – to take on debt."

"The ECB's behaviour during the Greek crisis was so preposterous that, unsurprisingly, its legality has been called into question. It is interesting to note that the ECB itself commissioned external legal opinions to examine the lawfulness of its actions, but has repeatedly refused to release these to the public, citing 'attorney-client privilege'."

"In many ways, the 2010 Irish bailout provided the blueprint for all future 'rescue programmes', whereby the European political-financial elites rewrote the history of the financial crisis, transforming a crisis of the markets into a crisis of public spending, and then used this narrative to push through policies designed to re-engineer European economies according to an even more radical neoliberal framework."

"It is unhelpful to debate endlessly the degree to which low development indicators are caused by domestic or external politics, when these are best understood as a class relation that has been systematically isolated from the influence of elected governments."

In general, "the transition from producing primary goods to more advanced goods is incredibly difficult. But it is especially impossible if there is no domestic financing structure that provides credit for local enterprises." CFA zone countries have not developed an actual banking system: insofar as it exists, it's aimed at "financing trade flows and capital repatriations", not at savings or local investment.

The CFA franc is systematically overvalued which means its main beneficiaries are "a) import supplying countries – historically Europe, lately China, Maghreb states and the US and b) the upper classes of CFA franc countries who enjoy cheaper luxury imports. The losers are: a) workers and b) small and medium enterprises which produce for domestic as well as export markets." GDP/capita has plummeted in all CFA states.

In Zimbabwe, "externally oriented capital accumulation under sanctions-induced asphyxiation fuelled hyperinflation. Without inflationary foreign currency subsidies, capital accumulation in mining, agriculture, and manufacturing would have grounded to a halt. It is well established that inflation is beneficial to manufacturers, producers, and exporters because wages, taxes, and mortgage debts never keep up with it."

"European merchants frequently used, imported, manufactured, and counterfeited African forms of currency. However (...) Toby Green has argued that the rejection by European merchants, colonial administrations, and financial payment systems of monies and currencies historically used on the African continent, led to the devaluation of African wealth within global capitalism."