What Africa is learning from the Greek debt crisis

If you can’t pay attention to the Greek debt crisis, you might be interested to know that the issue is captivating a lot of people across Africa.

The blog Africa is a Country asked its contributors to answer the question: What can Africa learn from the Greek crisis?

Grieve Chelwa, a doctoral candidate at the University of Cape Town, in South Africa, answered it this way:

1. Greece’s experience with the troika (IMF, European Central Bank and the European Commission) is yet more confirmation of what we in Africa have been saying about how punitive austerity measures are. The Greek economy has contracted by about 25% since the Troika began effectively calling the shots in Athens around 2010. The austerity pill was administered for far longer in most parts of Africa, starting around the late 1970s and running all the way through to the 1990s. Only the heavens know the magnitude of the wreckage that this left in its wake.
2. The second lesson is that international creditors are the enemy of democracy. The Troika, which really has been weighing heavily on the side of creditors, tried to bully the Greek government into not consulting with its people, as democracy requires, over further austerity proposals. In a blatant display of elitism, Yanis Varoufakis, the outgoing finance minister, was once asked: “How do you expect common people to understand complex issues“?

Austerity in Africa imposed under the "structural adjustment programs" of international agencies like the IMF and the World Bank, caused a lot of suffering in many African nations, slashing spending on health care, education and agriculture.

“We in Africa,” Chelwa said in an interview, “we are pretty excited to see that Greece had politicians who were brave enough to say, ‘you know what, if we’re going to agree to any further terms, any further conditions, we are going to have to consult our people.’ This is something that didn’t happen, for example, in the case of Africa.”

“So that’s what we’re really happy about here,” he says. “But at the same time, we’re sad because we were never consulted when we were going through the same thing.”

He says that consultation is key to getting the people to buy-in to any new austerity measures. “The people need to be involved, because, whether we like it or not, down the line, they bear the burden.”

The other big lesson, Chelwa says, is for modern African governments, who have benefitted from a wave of debt forgiveness over the last decade. “As we accumulate new debt, we have to be really careful and cognizant of the fact that when stuff goes really bad, it can go very bad. So we have to think really carefully how we accumulate this new debt, in terms of what sort of burden we’re leaving for those who come afterwards. Our children, and our children’s children.”