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Capitalism - Africa - Independence, State-led Development, And Import-substitution Industrialization

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Between 1960 and 1975, the new African leaders pursued industrialization in order to overcome the colonial inheritance. Rooted in the anticolonial struggle, some of their programs were socialist (as in Ghana and Algeria), some more explicitly capitalist (as in Kenya). Others, such as that in Ethiopia, were more difficult to define. In practice, however, most African countries shared a commitment to modernization and industrialization. Many followed the model of Import-Substitution Industrialization (ISI), in which governments took control over national industrialization by protecting domestic industries from foreign competition. Rooted in modernization theory, the goal was for the state to mobilize enough investment in domestic industry to achieve the "big push" thought necessary for self-sustaining economic growth. State-led development became the norm in the 1960s.

Ghana and Algeria provide two examples of the socialist variant of ISI, with a high percentage of state-owned enterprises and a professed commitment to labor rather than capital. In Ghana, Kwame Nkrumah implemented a Seven-Year Development Plan (1957–1966) designed to develop domestic industry, infrastructure, and social welfare. Nkrumah mobilized investment capital export taxes, foreign borrowing, and the sale of electricity produced by the new Volta hydroelectric dam. Nkrumah's government took control of the country's major industries as well as the agricultural sector, but he also provided state-sponsored social services such as education and health care. In Algeria, after a nationalist revolution between 1954 and 1962, the country's first leader, Ahmed Ben Bella, pursued an orthodox Marxist program, setting out to smash the middle-class traders and bureaucrats. A military coup in 1965 brought a new leader (Houari Boumédienne), who declared a fusion of socialism, Islam, and Arabic culture. Although Boumédienne left education and cultural matters in the hands of politicians who emphasized Algeria's Islamic heritage, his economic vision was secular, technocratic, and socialist. Between 1966 and 1971, the state nationalized 90 percent of the country's industries, beginning with oil and gas and then extending to industrial production. The idea was to nationalize Algeria's natural resources and use the profits to develop state-owned industrial enterprises. Ultimately this vision failed to achieve its goals, and Boumédienne's socialist program gave way to the increasing "Islamicization" of Algeria.

Kenya and South Africa provide illustrations of a more capitalist road to national development. In Kenya between 1963 and 1978, President Jomo Kenyatta supported the African bourgeoisie with government intervention into agriculture, trade, and production. This program was not uncontested; a number of prominent trade unionists, including Bildad Kaggia and Fred Kubai, argued for a radical socialist alternative. Kenyatta purged these elements from the ruling party (the Kenyan African National Union, or KANU) and pushed ahead with a program of state-managed capitalism, although one of its most famous architects, Tom Mboya, referred to it as "African socialism." While there was an element of redistribution, the core of the Kenyatta-Mboya program is better understood as corporate capitalism, under which the state partnered with labor and capital (domestic and foreign) in the pursuit of capital formation and industrialization. Import-Substitution Industrialization provided the model, with protected home markets for consumer goods and agreements with foreign firms to import essential capital-goods inputs. By the late 1970s, Kenyatta had built up strong agricultural and industrial sectors. South Africa pursued capitalist development through ISI from an early date (the 1940s), with impressive economic results. Industrialization there, however, was racialized, and the post-1948 apartheid state ruthlessly exploited the black population, stripping them of the most basic human and political rights. This strategy worked economically until the 1970s, when the economy faltered and African resistance intensified. International sanctions exacerbated the downward trend in the 1980s, and apartheid finally met its end in 1994, when national elections brought the African National Congress to power under Nelson Mandela. Thirty years after Kenyatta had set out to Africanize the Kenyan economy, South Africa's black majority government faced pressures for similar Africanization, but the state-led option was no longer on the table.

In Ethiopia, the emperor Haile Selassie presided after 1935 over the conversion of feudal lands into private holdings, especially in the southern part of the country. Land sales accelerated between 1960 and 1974, producing concentration in the south, with farms as big as 200,000 acres. Using ISI as a model, the state invested in agricultural commercialization along capitalist lines; in industry the government attempted to develop textile and beverage production. These policies triggered the development of an agrarian bourgeoisie during the 1960s, as well as a small industrial sector, but these were dependent on foreign capital and insignificant in relation to subsistence agriculture, which remained under the domination of the big landlords. Peasant and student resistance to the landlords emerged during the 1970s under the slogan "land to the tiller." Grievances paralleled a wave of army mutinies, resulting in a revolution that swept away the emperor's government in favor of a Soviet-backed regime that ruled between 1974 and 1977. In the end, the ruling military council gave way to an authoritarian regime under Haile Meriam Mengistu, which allied with the Soviets in 1977 and pushed through a collectivization program in the countryside. This program succeeded in revolutionizing the social basis of power in the rural areas, but Mengistu's authoritarianism produced widespread resistance, and the regime finally fell in 1991.

Selassie's state-led development programs produced some significant successes during the 1960s, with growth in gross domestic product and comprehensive social welfare programs. As the decade progressed, however, it became clear that the gains would not be sustainable and that Africa had entered a period of economic stagnation. The oil shocks of 1973 and 1979, and a wave of drought in 1975 and 1976, worsened the crisis considerably. Flagging economic performance fed into a wave of unrest and military coups, including those in Algeria (1965), Ghana (1966), and Ethiopia (1974). As the 1970s progressed, stagnation worsened and African governments became less democratic; the decade witnessed the rise of one-party states presiding over a deteriorating economic climate.

During the 1970s, it seemed that "the African state had not been up to its 'historic mission' of ensuring capitalist accumulation"; as Thandika Mkandwire noted, the question for African analysts was whether this was a temporary phenomenon, which could be solved while retaining Africa's links to the world economy, or a permanent structural problem solvable only by delinking from the global system. In the 1970s several prominent dependency theorists, including Egypt's Samir Amin and Nigeria's Bade Onimode, took up the latter position in arguing for a radical program of African autonomy and self-sufficiency.

In the late 1970s the dependency school lost ground to a more reform-minded version of structuralism, which argued that developing nations could achieve capitalist development while retaining their links to a reformed world economy. UNECA exemplified this stance with its 1976 report entitled the Revised Framework for the Implementation of the New International Order for Africa. The Revised Framework led to the Lagos Plan of Action (LPA) of 1980, which emphasized external factors—especially the continent's reliance on raw materials exports—as the main causes of Africa's economic stagnation. On this issue the LPA agreed with the dependency argument that declining terms of trade, which reflected the neocolonialist exploitation of the continent, posed a serious threat to African economic development. As a result, the LPA's goals for Africa emphasized regional and continental self-reliance and self-sustaining development, to be achieved through a greater focus on industrialization and economic cooperation. Exports would be pursued, but they would be subordinated to domestic industrial development.

The Lagos Plan of Action also placed gender on the development agenda, arguing that women were central to the development process and that their interests had to be considered in the design and implementation of development programs. This stance provided a welcome corrective to modernization theory, which insisted that women were impediments to development and should be confined to the domestic sphere. This view had been challenged in the 1970s by the Women in Development (WID) paradigm and the proclamation of the UN's International Decade for Women (1975–1985). In 1976, the Association of African Women for Development called for the integration of women into development programs. The LPA took up this call by demanding more support for women in agriculture and industry. Although they praised the LPA's stance as a step in the right direction, critics argued that the plan did little to facilitate a significant shift in African women's economic and political power. This criticism formed part of a larger movement during the 1980s to recognize issues of gender inequality in the design and implementation of development programs. This approach argued that development must address issues such as the sexual division of labor and power over reproduction if African women were to benefit from economic growth.

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