When Nelson Mandela walked out of prison, rich countries and banks handed him and the people of South Africa a bill for £28 billion.

The apartheid government had borrowed money to crush dissent, and its victims were expected to pay it back. At the time, many people argued that this was morally repugnant and legally dubious: under international law, this was odious debt. The banks who lent money to the apartheid regime, or otherwise invested in South Africa, deserved to lose out.

But the new democracy was threatened with punishment by the markets: refusing to pay the apartheid debt would send “the wrong signals”. So the new government accepted the dominance of the markets, and agreed to pay the debt.

The South African government abandoned its mandate to use the state to progressively lift people out of poverty, and accepted the logic of the market: public infrastructure was run down and privatised, unemployment rose and inequality grew.

Twenty years later, apartheid is still not over for many South Africans, including the miners of Marikana. They have replaced racist domination with the domination of the markets – and the latter are a more formidable enemy.

A few decades previously, in the 1960s, a wave of anti-colonial struggles lead to many new African states declaring independence. They set out to rebuild after more than a century of colonial barbarity, including a holocaust in the Congo, genocide in Namibia and countless other atrocities.

These new African states had many problems: as Frantz Fanon pointed out, colonialism had been psychologically devastating, and in many cases, the leaders of the new states took over the colonial administration and ran their countries like their former masters. But, slowly and painfully, democracy grew in Africa, and governments nationalised industries, and provided education and healthcare to improve people’s lives.

The former colonial powers risked losing power and influence, and resorted to all sorts of dirty tricks, including the assassination of the democratically elected Congolese leader Patrice Lumumba in 1960, with CIA and MI6 support. The West had a strategic interest in the enormous mineral wealth of the Congo – including uranium for nuclear weapons. Lumumba was determined to achieve genuine independence, and use this wealth to improve people’s lives. He represented a threat to Western interests.

The country has never recovered, and is still racked by conflict and civil war for control of its resources.

The financial crisis of 1973 provided the perfect opportunity: rising oil prices meant African countries were forced to borrow heavily to continue investing in infrastructure, at a time when new oil wealth in the Middle East, deposited in Western banks, meant there was plenty of money to invest.International banks acted like loan sharks, and corrupt African leaders were encouraged to take out massive loans. Much of this money travelled straight back to the West in the form of arms purchases or equipment needed to build infrastructure.

African countries fell into a debt trap, and by the 1980s, many were unable to service their debt. People starved as governments were forced to service loans rather than tackle poverty. The IMF stepped in, and offered bail out loans in exchange for the countries agreeing to submit to rigorous Structural Adjustment Programmes.

These programmes had three main elements: austerity, privatisation and liberalisation.

African countries were urged to restrict wages, and cut spending on health and education. They needed to privatise their industries, and liberalise their economies – remove barriers to Western companies.

The result has been an unparalleled looting of African resources. Neoliberal colonialism means that foreign companies extract wealth from Africa, pay off a tiny local elite, and syphon off the rest of their massive profits. Africa produces gold, diamonds and platinum. It produces cobalt, which we need for our mobile phones and tablets, and huge quantities of oil. It exports mountains of food while people starve, and people are forced off their land for a cut flower industry that air freights flowers via Amsterdam for the living rooms of Europe.

There is a huge net flow of wealth out of Africa.

And now this super exploitation is coming home to Europe. Ever since the financial crash of 2008, global capitalism is in crisis – and the only way it can sustain itself is by brutally forcing its way into places we’ve previously protected. In Britain, with a drip feed of stories about crisis, the Tories are trying to manufacture consent for the wholesale privatisation of the NHS. In Greece, all pretense of democracy and consent has been stripped away.

What is happening to Greece is familiar to people in Africa, Latin America and elsewhere. It’s a neoliberal offensive to destroy the victories we’ve won in the past 70 years.

We need to counter the narrative being built up that there is a moral imperative for Greece to pay its debts. As this excellent article points out, Greek debt is illegal, illegitimate and odious. There has been a concerted effort to paint the Greek people as lazy, corrupt scroungers living the high life at the expense of the European tax payers. The reality is that the banks worked with the Greek elite in the same way that they did in Africa, and they are using the crisis to destroy the country and seize its assets.

Debt bondage is social control: whether it’s entire nations, bonded labourers in India, students in the West, or people struggle to get a mortgage to buy a home.

We need to stand with the people of Greece and against the banks, and demand a cancellation of this odious debt.


This work is licensed under a Creative Commons Attribution-NonCommercial License.
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Walton Pantland

South African trade unionist living in Glasgow. Loves whisky, wine, running and the great outdoors. Walton did an MA in Industrial Relations at Ruskin, Oxford, and is interested in how trade unions use new technology to organise.

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