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What does the ‘international rules-based order’ mean for Africa?

No previous rule-taker has improved their lot by taking the rules of the international system as they are. Perhaps it’s time for Africa to start ignoring economic orthodoxy.

On July 5, 1852, former slave and abolitionist Frederick Douglass was invited to give an Independence Day oration to an anti-slavery society. His speech “What to the Slave is the Fourth of July?”, was a tour de force on how meaningless all the symbols of freedom were in the presence of slavery. The speech highlighted the unfailing blind spots of privilege and power under which inequality appears normal and the disadvantaged are presumed to accept and maybe even enjoy their station.

In the spirit of Douglass, I thought I would ask some obvious questions about the international system – the rules-based order we are all expected to defend against those who would upend it. In these pages, I have consistently argued that the system has underdelivered for the continent and is content with an Africa that occupies a peripheral role.

Africa’s contribution to the system is perceived as marginal and its presence largely as a beneficiary of the system – a taker. But this could not be further from the truth. The price of the current global economic and political system was paid for in African blood and gold. African troops fought alongside colonial powers in a war that was not theirs across the European and African theatres during the Second World War. Former colonies involuntarily “supported” the war effort with their natural resource endowment.

At the end of the Second World War, the leaders of the winning side decided that they needed to establish structures that would prevent another such global conflagration. These structures were built around the most likely sources of friction between nations.

The United Nations was created to maintain international peace, especially the Security Council, which would prevent military aggression. The IMF and the proposed International Trade Organisation were meant to check what US treasury secretary Henry Morgenthau called “economic aggression”. The World Bank was created to help rebuild the nations destroyed in the fighting.

Rules that perpetuate dominance
Around these institutions emerged a consensus on what the United Nations Association of Australia has defined as “a shared commitment by all countries to conduct their activities in accordance with agreed rules that evolve over time, such as international law, regional security arrangements, trade agreements, immigration protocols, and cultural arrangements.” This is what is referred to as the rules-based international system.

African colonies were present and Liberia, which had become independent in 1847, was a founding member of the United Nations, having previously been a founding member of the League of Nations. There is no established global institution which has not had an African presence at its founding, or does not derive legitimacy from its African membership, but the benefits of belonging to the system have disproportionately accrued outside of Africa.

Over the last half century, the combined economies of the US and Europe have enjoyed primacy. The rules of the system have evolved to allow the rise of new powers, but the rules have disproportionately evolved to retain the trans-Atlantic dominance. Today, the combined economies of the US and Europe account for about 35% of world GDP measured in terms of purchasing power parity – and that is a decline from a more dominant position two decades ago.

It is thus understandable that the US and its allies in Europe, Canada, Japan and Australia would react with concern to the emergence of an actor who threatens this established order by demanding that the rules change. The beneficiaries of the system are willing to accommodate new players only in so much as they retain a position of rule-takers. China’s rise – even without its increasingly muscular foreign and internal security policies, threatens the system as is.

President Biden has made defence of this system and competition with China the fulcrum of his foreign policy. And he has sought to build a coalition of defenders of the “rules-based order”. Listening to his speeches, one gets the impression that he believes that outside of China, Russia, North Korea and Iran, the benefits of his approach are self-evident to all other countries – including Africans. This is the unfailing blind spot of privilege I mentioned before. This foreign policy appears to accept as normal the rule-takers’ perennial role and even asserts that it is acting in the interest of rule-takers. This, of course, is ridiculous.

African interests and those of other rule-takers often align more with China than they do with Europe and the US. It is inconvenient, but it is true. The inequality of the international “rules-based order”, that has effectively confined African economies to sources of raw materials and markets for finished products means that the continent’s economies will be amenable to Chinese actions that threaten to disrupt the system.

No advantages for rule-takers
What exactly is their stake in defending the system? Take the pandemic recovery for example. According to Indermit Gill and Akihiko Nishio of the World Bank, “Growth in advanced economies is expected to reach… the highest rate in nearly 50 years – powered by rapid vaccination and unprecedented fiscal- and monetary-policy support since the beginning of the pandemic. Almost all advanced economies will go back to their pre-pandemic per-capita income levels in 2022.”

In the 74 poorest countries in the world, however, “growth will be the slowest in more than two decades (except for 2020), reversing years of progress in poverty reduction… By 2030, one out of every four people here will still be living below the international poverty line.” For these countries what does defending the “rules-based order” even mean? And to what end?

In a 2019 IMF working paper, The Return of the Policy that Shall Not Be Named: Principals of Industrial Policy, the authors show that between 1960 and 2014, less than 10% of economies (16 out of 182) reached high-income status. The 16 that did were divided into three groups – those that joined the European Union, those which discovered large quantities of oil and the Asian Tigers.

The Asian Tigers, however, achieved that status by being rule-breakers and ignoring economic orthodoxy. Their success seems like the only replicable path for African countries, since non-European countries cannot physically move to Europe and natural resource endowment is unevenly distributed. The success of the “Asian Miracles” with industrial policy against the advice of the “system” remains an uncomfortable story and an invitation to rule breaking.

Literally no previous rule-taker has improved their lot or changed their station by accepting the system as is. Unless rule-makers adjust the system, they will find that despite their differences with China, the Chinese narrative will find ever-increasing resonance in Africa.

W. Gyude Moore is Liberia’s Former Minister of Public Works with oversight over the construction and maintenance of public infrastructure from December 2014 to January 2018. He is now a Senior Policy Fellow at the Center for Global Development.

Original Article was published by African Business on August 5, 2021