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The PARPA: Towards achieving results - May 2002

4. Conditionalities
 
One of the most notorious inconsistensies in the working out of the 'PARPA' or the PRSPs has to do with the sense of property. According to the institutions of the Bretton Woods system, strategies are defined by the governments without any conditions imposed by the donors. It is a fact that the Mozambican experience in the working out of the 'PARPA' has shown that no conditions had been imposed for its elaboration. The Government launched the process, made the studies of what was possible, and presented its Action Programme for the Reduction of Absolute Poverty to the IMF and the World Bank. If it is true that there are no conditions, it is however a fact that there are conditionalities.13 Wolfensohn referred to them as "the tension between the sense of property of the process on the side of the country, and the prerequisites of the IDA and the IMF when having to verify if the content of the strategies designed by the country provide a valid basis for the concessionary loans of these institutions as well as for the forgiving of the debt14 ".

4.1 First conditionality

first conditionality imposed [upon the poor countries] concerns the sui generis determination by the Bank and the IMF that there are good governments and bad governments; the former, in turn, would be classified as countries which could qualify for total debt forgiveness. If the lords of debt forgiveness decide that a country has a bad government, then the debt is not forgiven; as a consequence, the necessary support for poverty reduction is not made available. But what is a bad government? Obviously, it will be a government where there is corruption and capital drainage by the governing йlites towards superfluous consumption in any part of the world; in other words, goverments which act against their own constituents. But the Bretton Woods institutions also believe that this applies to any government that does not liberalise agricultural prices, does not accept the free circulation of capital, or does not accept as a given fact that markets lean towards perfection and regulate themselves. In conclusion, a government that, in spite of not being corrupt, is guilty of the sin of not accepting the neo-liberal norms, is considered a bad government and its external debt is not forgiven.15

The application of the World Bank model for rural development arises out of a value judgement of a country’s performance. The model was published in1997 and has been serving as a guide for the PRSPs of countries where the poor population is basically rural.16 It comprises the following elements:
  • strong and competitive private agriculture, showing a certain amount of sympathy for family agriculture and implicitly recognising the importance of technological development;


  • guarantees that there are no distortions in the products, inputs and financial markets, allowing them to operate freely and having no discrimination against agriculture in the fiscal policy;


  • public investment in economic and social infrastrutures, in health, nutrition, education and family planning;


  • adoption of decentralised and participative methods that do not discriminate against women.
Independently of the greater or lesser validity of each of its components in the specific context of each country, the problem with this model is that it stipulates what should not be done (market distortions), which methods should be adopted (participative and non-discriminatory), where they should invest the funds which are to be employed (infrastructure and human capital) and on which actor should one be

It is clear that this was not a lapse, but stems from the neo-liberal postulate that the market (if perfect) will place the capital where returns will be assured and will incline towards growth; this will not require the adoption of any other measures, except to let the market operate without distortions.

4.2 Second conditionality

The second great conditionality relates to the insistence that the markets are exempt from social relations which are being established by means of capital. The consequences in the application of this theoretical presupposition during the formulation stages of the PRSPs, are three. First, starting with the principle that, in whatever sector the investment may have been made, it will result in multiplying effects which will contribute towards the reduction of absolute poverty. Second, that there is a perfect inter-sectorial mobility of capital which will, sooner or later, benefit the poor, provided that opportunities present themselves and that there are ‘good projects’. Third, that the financial market rests exclusively on the perfect convertibility between assets and capital, whether they belong to the poor or to the rich.

However, in practice it has been shown that none of these normative premisses is in keeping with reality. In this area, the case of Mozambique is a clear example. The Country has been able to attract investments, particularly for the energy resources sector. The ventures related with the production of aluminium, iron and steel, the utilization of natural gas and cheap hydroelectric energy, added to the recently signed agreement concerning titanium, are obvious examples of the lack of the so-called multiplying effects for the poor at short and medium terms. The special conditions required by the investors relating to exemptions of payment of rights, fiscal and customs facilities, and the export of capital, added to the reduced number of jobs created, leads us to predict that the multiplying effects will still take many years to reach the 70 per cent of people who live in absolute poverty. Mozambique is not an exceptional case; several times already it has been established that a rather long ‘time lag’ exists between investments and their results; for this reason, in the decades of the 1970s and 1980s one would speak of ‘safety nets’ in order to minimise the negative effects upon the most disadvantaged strata of the population. However, in the decade of the1990s all of this has been abolished, and the mere mention thereof has become tabu in the preparation of the PRSPs.17

At the time when capital was developed at national level, this was steered towards the sector which would produce the greatest profit in the shortest time; this makes it therefore improbable that it would have any direct influence on the poor. In other words, the desirable mobility between the energy sector and the agrarian sector, where most of the poor are found, is not a proposition. In their turn, the few investments which are known in the Mozambican agrarian sector are related to the felling and commercialisation of indigenous forests; however, these [projects] are neither being accompanied by industrial processing nor by initiatives in the realm of silviculture. In the agricultural area, with the praiseworthy exception of sugar cultivation and industry, which benefits from protective measures, not a single important investment has been made to-date. It became necessary to institute protection in order for the sugar sector to attract investment. In other instances, where good ideas existed but there was no protection, as in the case of cashew farming, no investments were made.

In contradiction to the third presupposition in the working out of the PRSPs, there is an enormous difficulty in establishing the connection between the savings of the poor and the investments of the rich. In contrast to the rich, the assets of the poor cannot always be totally converted into capital, and there is a set of assets which is indispensable in order to guarantee social reproduction and, as such, are retained in reserve.18 This comprises the house, the land, the work implements and tools, the bicycle and other [assets] which, by their nature, are essential to the productive activities of the rural family, but these cannot constitute collateral or any other guarantee for the attainment of credit. Given this fact, and in the face of the limitations derived from the presupposition that there is complete convertibility between assets and capital, the poor will hardly be in a position to access the savings of the rich and vice versa. In conclusion, a dual financial system is developed, on the basis of which it is impossible to start the formation of capital at national level; this results in an increase of dependency, leading even to exclusively foreign capital investment, to the detriment of domestic [capital].

4.3 Third conditionality

The third great conditionality is tied to the presupposition that development leads inevitably to the nuclearisation of the family and to a commercialisation of individual relationships. Just because in the countries of the North the settlement patterns led to urbanisation and an increasing commercialisation of inter-personal relations, sometimes even within the bosom of the family, it cannot be accepted as a given that the same phenomenon will happen in developing countries. The social dynamics and high population growth rates which are not accompanied by job creation, the limitations to the transit of people between African countries and the absence of concentration of land ownership (at least for now), the negative experiences of hyper urbanisation in the North and the functional relationship of African societies with the land, are factors which, possibly, will influence the adoption of a less concentrated settlement pattern. Thus the latter would become more dependent on social relations.

On the other hand, the appearance of a capitalist class based on relationships of kinship via the State, found today in the entire continent, leads us to believe that development will lead to a reinforcement of family and group interdependencies in place of the nuclearisation of the family. As has happened in Japan, the relationships at the core of the extended families of the African йlites come out strengthened by the State’s action in the formation of a capitalist class. This process is intensified as globalisation increases. It is a group defence phenomenon, in the face of a common challenge, with which the citizen identifies his- or herself .19

One of the most important theoretical implications of bringing this presupposition into question is that one accepts the existence of collective rationalities in parallel with the individual rationality. In my view, this does not mean setting one [type of] rationality against the other, or to establish a hierarchy of succession, or even to question the insertion or not of the economy in society, as was done by Polanyi. Rather, it means to work out in detail this other rationality, as well as the interactions which will be established among them as the development process unfolds.

In the normative context, the practical implications became obvious during the decade of the 1990s, in the issue of the land. The structural readjustment based its land policies on the evolutionary theory of land tenure rights. This theory purports that when both the population and market activities increase, land availability will decrease; this [situation] will lead to an increase in conflict and, as a consequence, a better definition of land tenure rights is required. It stipulates, in its normative component, that property rights should be guaranteed by the State by means of individual title deeds. Once the land has been individually titled, the transaction costs decrease whilst the economic efficiency of the enterprises increases; in this way, the land market will be developed, which will result in the convertibility between land and capital, which in turn will lead to an improvement in the financial markets.20

Empirical evidence collected in the 1990s has shown that the application of this theory on the African continent revealed unforeseen configurations; above all, the very theoretical presuppositions were thus brought into question. Individual rationality is not only not exclusive, but it also gives rise to disadvantages for the poorest [persons] and for women who are heads of households. It has also been established that there is no positive correlation between the titled land and credit disbursements, and that the land market that flourished had been so distorted by the State’s intervention, that even the very food security of the poor was brought into question, as well as the much desired political and social stability.21 The market does not go through the convertibility between assets and capital exclusively; but it also goes through the convertibility between the latter and the systems of social obligations. Despite this the World Bank continued to insist on individual title deeds as a condition for the eradication of absolute poverty.22

4.4 Fourth conditionality

The fourth and last great conditionality in the elaboration of the PRSPs is tied to the imposition of structuralist positivism on a global scale; usually, this phenomenon is known as globalisation. But not only is one forced to follow a positivist logic, but what Pascal called sprit gйomйtriqueis also required; this is related to the need for economists to use only a reduced number of variables, to create hypotheses on the basis of repetitive correlations, and to have as a given that human beings act in accordance with precise and repetitive programmes.23

Today, in the universities, we discuss with our students the whole issue of the problems surrounding the post-structuralist analysis, the need to incorporate change into normative models, the inclusion of cultural explanations into the analytical models, and the integration of the unpredictable or of ‘chaos’ through the interaction of the effects in the postulates. Then it becomes obvious that, in the under-developed areas of the world, there is a joint action of the logical frameworks, the ramifications of the problems, and the deductive participative methodologies.

Going back to Pascal, the esprit de finesse, defined as “The capacity to perceive the presence and the importance of an infinite number of variables, many of which can neither be measured nor defined; ... [the capacity] that knows how to recognise the high frequency of associations of the non-linear type, ... which excludes strict relationships of causality and ... which perceives itself and knows how to bear in mind ... the irrational in the human adventure 24”, is denied not only to the governments, but also to the intellectuals, the professionals, as well as to the citizens who participate in the elaboration of the PRSPs.

This crusade for the hegemony of a single way of thinking, elaborating and of acting, is intimately related to the so-called consultation process of civil society and the universal model of democracy which accompanies the PRSPs. The institutions of the Bretton Woods system say that the PRSP or the ‘PARPA’ must be accompanied by a consultation process which is as wide as possible .25 The European Union donors send out their officers to see whether the consultations are really taking place, and how they are taking place; international civil society26 organises seminars and commissions studies debating what should be said in the consultations and to guarantee that the poor, the real poor, are being consulted.27

There are methodological discrepancies concerning four points. First, regarding the nature of the consultations. The insistence on consultations arises from the series of criticisms about the quantitative methodologies’ exclusively monetary measurement of poverty. In order to counterbalance this, qualitative methodologies were adopted; these would allow for the capture of the perception and the experience of poverty by the affected populations at local level.28 Our own criticism is directed at the binomial which was created between the quantitative methods (monetary measurement) and qualitative methods (deductive participative approaches). There are quantitative methods which also allow for the measurement of the living experiences of the poor by the poor themselves, who do not per force reduce everything to monetary quantifications; in the same way, there are qualitative methods which are not as dependent upon an ideological discourse of the interviewee as the participative ones.29 Strictly speaking, what is at stake is the non acceptance of an a-logical theoretical reasoning in the formulation of the problems, as well as an attempt to find methodologies which will be more easily capable of integrating the opinion of the poor in the structure of the ‘sacrosanct’ logical-deductive thinking pertaining to Western philosophy of science.

Second, there is nothing to prevent the World Bank, or any other institutions from engaging in any consultation which they may deem necessary30; however, the consultations may neither legitimate nor replace the negotiation processes with the governments, as well as those [negotiation processes] between the governments and civil society and the private sector within the country. Wanting to replace negotiations at national and international level by a joint musing exercise is the manifestation of a positivistic arrogance concerning the options to be considered.

Third, the consultations cannot be used as an argument that the PRSPs do not have to be approved by the respective national parliaments. To argue that the ‘PARPA’ is a matter that concerns the executive and not the legislature, even though it may be fitted into some type of legal framework, is to narrow the rights of a democratic institution of national sovereignty. This way of thinking is a demonstration of the esprit gйomйtrique, whereby the debt is treated merely as an accountancy problem, and its political and social dimensions are thus excluded at the present moment and for the future generations.

Last, the consultations are being imposed as a palliative for the discussion of a deep problem which is related to governance and with the democratic system. The World Bank insists that the question of governance is limited to decentralisation, transparency and the absence of corruption; these being in the name of economic efficiency and the reduction of transaction costs. However, the problem of governance in countries where political parties are far removed from being the vehicles par excellence for the citizens’ political intervention, is far more complex than what a less attentive reading can understand. In such countries, governance is intimately related to the right of action, but not exclusively via the State, with a proliferation of a corporate culture in civil society—in other words, with the relative roles of participative and representative democracies.

Footnotes:
  1. IMF&IDA. 2000. Poverty Reduction Strategy Papers—Progress in Implementation. mimeo.
  2. ibid. p. 5.
  3. In this respect see the abovementioned article by David Dollar.
  4. World Bank. 1997. Rural Development: from vision to action. Washington.
  5. Kanbur, R. 2001. Economic Policy, Distribution and Poverty: the nature of disagreements. Cornell University.
  6. Negrгo, Josй. 2000. Cem Anos de Economia da Famнlia Rural Africana, Promйdia.
  7. In this respect, look at the social conscience in the face of ‘affirmative action’ in South Africa, and the social tolerance towards black capitalism. The social projection upon specific individuals is evident in day-to-day expressions such as “he/she is one of us”or “we are going to get there”.
  8. Platteau, Jean-Philippe. 1996. The Evolutionary Theory of Land Rights. Development and Change, Oxford.
  9. Negrгo, Josй. 2002. Political Economy of Land & Resources, Pan-African Programme on Land and Resources Rights, CASS & American University of Egypt. For the first time in the history of Africa, African ‘absentee landlords’ appeared, because of the World Bank’s disastrous intervention in the area of land during the decade of the 1990s.
  10. Deininger, Klaus and Feder, Gershon. 2002. Land Institutions and Policy: Key messages of the Policy Research Report, preliminary version presented in Kampala.
  11. Cipolla, Carlo. 1993. Introduзгo ao Estudo da Histуria Econуmica, Ediзхes 70.
  12. ibid. p. 22.
  13. Persons, groups or institutions which have an interest,a responsibility,a commitment in and for a specific topic or action programme, as mediators, implementers, beneficiaries / affected [persons], financial backers or simply listeners”. in: GoM. 2001, p.93.
  14. By civil society is understood any organisational formation of citizens, which is subjected to a structure which is generally recognised by them, and to which they adhere through their own and free volition. This definition seeks to capture Gramsci’s sense of Civil Society, by incorporating the associativism of class or of professional groups such as trade unions and the leaderships of cooperativism.
  15. Palha de Sousa, Cйsar. 2002. PARPA / PRSP process and civil society involvement in Mozambique, Cruzeiro do Sul.
  16. See Oppenheimer, J. & Raposo, I. 2002. A pobreza em Maputo, MTS/Depart. Cooperaзгo, Lisbon.
  17. Among the quantitative methods outside of the ‘money metrics’, there stand out those methodologies which are related to ‘network analysis’; and among the qualitative methods which are based on analytical theoretical systems we can mention, for example, those which are followed by economic anthropology.
  18. “We have fought for years so that we would at least be heard, and are we now going to refuse being heard?!”; this was a comment made in Kampala during a week of consultations by the World Bank with the African Continent, regarding whether this initiative should be supported or sabotaged. In turn, it was argued against the indispensability of the World Bank having to consult the poor and the landless, because this would mean that the World Bank would be recognised as a global government, and this would exonerate the governments from their functions as negotiators at national level.
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