Journal of Social Development in Africa (1990) 5,1, 83-93 Book Reviews Africa's Adjustment and Growth in the 1980s, World Bank/UNDP, Washington DC 1989 (38pp, US$4,95), and The Challenge of Hunger in Africa. A CaU to Action, World B ank/EBRD, Washington DC, 1988 (18pp, US$4,95). Any doubts a reader might have about whether economics could be an exact science are likely to be strengthened by reading the former of these documents. Published by the World Bank, it is, not surprisingly, an apologia for the policies of economic 'structural adjustment' currently favoured by the Bank. It sets out to outline economic trends in sub-Saharan Africa 1985-7, with some reference to the figures that were available for 1988 at the date of publication, and to some of the broader context. Within this context it then tries to draw some conclusions about the effects of adjustment. , However, the fluctuations in the exportprices of primary products, on which these countries largely depend, and in exchange rates, make aggregating figures for a group of countries a dubious process. The authors admit that taking Nigeria's figures atl980orl987 exchange rates would give two very different aggregate pictures for the whole of sub-Saharan Africa. Both, we may conclude, would be, in different ways, misrepresentations of how people are affected, even in Nigeria. The fluctuations in prices of primary products, with oil as a special but not unique case, severely limit the value of any comparison of figures fron only two or three successive years. The authors recognise this point and make some reference to trends since 1970, arguing that the fluctuations in oil prices since then obscure underlying trends. Thus export volumes, export income, and terms of trade aggregated across the region all show a decline in the period 1980-87, but an improvement compared to 1970. Even here the dangers of aggregating are apparent, since terms of trade for the group of poorest countries dropped 40% in the 1970s and remained at that low level since 1980. The report, naturally, concentrates on where it can detect growth in terms that interest its sponsors. The report notes that, despite the prices having dropped less than those of other underdeveloped countries since 1975, Africa's share of the world market in non-oil primary product exports has dropped since 1970. If this is meant as an argument for adjustment, the authors have clearer ideas about what adjustment will do for national economies than for people. For example, while they report that real producer prices of agricultural products have risen with adjustment, they note with less emphasis that this increase has favoured non-food crops. While agricultural exports increased quite rapidly in the era of adjustment, 1985-7, per capita food production merely ceased to decline over this period, a drop in 1987 cancelling gains in the previous two years. As for financial concerns, they report that aid flows have increased to those countries with strong adjustment programmes - but does this mean any more than that those who pay the piper are more generous when their tune is played? Debt service burdens were reduced on aggregate over 1986-7, but not for the poorest countries. Terms of trade have improved for the countries without adjustment programmes, while they have continued to deteriorate for those with adjustment It is worth examining not only what is presented, but how it is presented. For example, a little reading between the lines, and use of a pocket calculator, show that, from the figures given, poorestcountrieshavesuffered the greatest loss in unitprice for their exports and in bulk of exports - so one of the prime prescriptions, reducing export prices, does not work for them. A table compares how several economic indicators have been affected by adjustment programmes, and 84 Book Reviews divides countries which have not suffered strong shocks such as famine, drought or war from 'all countries'. Comparing those which suffered such shocks with those which did not may not give rigorously exactresults, but it is clear that adjustmentprogrammes reduce the ability to weather the effect of shocks on GDP and gross domestic investment. While countries suffering such shocks show the least decline in per capita consumption over the period 1980-7, and better GDP growth than those with reform programmes and shocks, or with no adjustment and no shocks, and possibly even better than those with adjustment and no shocks. They also seem to have done better in terms of export volume than those with strong shocks and strong adjustmentprogrammes, or than those without such adjustment which suffered no shocks. The second document, The Challenge of Hunger in Africa, although it is subtitled A Call to Action, does not offer a clear course of action to ensure food security at all. It lists a wide range of possible actions, without detailed guidance on which might work in which circumstances, and comes down to admitting that food relief programmes may well be necessary during periods of 'structural adjustment'. For proof that' adjustment' offers long term solutions, we must look elsewhere, perhaps to Africa's adjustment and growth, but we would search there in vain. On the contrary, figures now available for the OECD countries (quoted in Westlake, 1989), where there is long experience of ' adjustment', shows that those which have 'adjusted' have done less well in terms of employment, output and consumer prices. A worrying implication of this publication is that food relief may be offered to countries in difficulties on condition that 'structural adjustment' is accepted. But if the adjustment results, as seems likely, in increasing acreage and investment given over to export crops, rapidly dropping export prices and export volumes either decreasing or not increasing to match decrease in unit prices, will the apostles of 'adjustment' continue to give food relief to these basket cases? Reviewed by Brian MacGarry, Silveira House, Harare. Reference Westlake Melvyn (1989) "Economic Eye" in South magazine, July 1989, p 17. Planning for Basic Needs: A Soft Option or a Solid Policy. A Bask Needs Simulation Model Applied in Kenya, Rolph van der Hoeven, Gower, AMershot, 1988 (38Opp, £25 hbk). This book by Rolph van der Hoeven is yet another piece of important research to be published under the International LabourOrganisations's (ILO) World Employment Programme (WEP) since its pathbreaking conference in 1976. The ILO Mission to Kenya had, in 1972, stated that: "We identify the main problem as one of employment rather than unemployment By this we mean that in addition to people who are not earning incomes at all, there is another - and in Kenya more numerous - group of people, who we call the 'working poor'". However, at the 1976 WEP Conference, it was realised that just the employment strategy by itself was not enough, but that (p31): "employment issues are intimately connected to the wider issues of poverty and inequality, and ii is in this context that they need to be examined". Van der Hoeven's intention is not to provide a defence of the BNA, but rather to show how it car be used as a basis for planning the development of a particular developing economy: Kenya. He. therefore develops a Basic Needs Simulation Model and applies it to Kenya. In order to sell the model, he has to convince people that BNA is a viable option. He therefore considers the various criticism! Book Reviews 85 against BNA. He considers a serious objection to be provided by Deepak Hall (1983) who argues that basic needs policies lead to more state influence, and arrives at an erroneous conclusion that state involvement is anti economic growth. The 1976 WEP Conference Report stated that (p53): "A major strategic choice is that between an essentially public and an essentially private productive sector. It should be noted, however, that this has little to do with the controversy between planning and the price mechanism." This statement in a way cushions the proponents of BNA against the neoclassical group as represented by Hall. In developing the model, Van der Hoeven separates basic needs into those provided through public services and those provided through private consumption. Basic needs like education and health are provided through public means while others like nutrition are "exclusively a matter of private expenditure." He, therefore, sees no contradiction between the creation of a 'public sector' in the national economy and the BNA, but is also clearly against the centralisation of decision-making powers in the economic sphere. On this point, there appears to exist nothing but an apparent disagreement between BNA and Hall's school. The message from the proponents of BNA is really that it is only by decentralising government actions that the needs of the poor are satisfied in the best possible way. A major weakness of BNA is its failure to, as it were, incorporate a class analysis. As a result, the approach is concerned more with a large group called 'the poor'. This is, however, an attempt to fill an intellectual and ideological gap left by the demise of growth and employment creating strategies. It therefore attempts to integrate the growing demands for progressive transformation in countries like Kenya with the overall development requirements. For the BNA group, the growing socioeconomic problems of developing countries are caused by an incorrect organisation of economic processes, and not by the contradictions in the existing mode of production. As a strategy of development, BNA is, however, a significant improvement on the the limited growth orthodoxy framework. As Van der Hoeven puts it, BNA is concerned more with the supply side of the problem, and can therefore contribute positively to the process of adjustment The difficulty is, therefore, how to move from this theoretical level to a practical approach that can effectively deal with the complex socioeconomic development problems that bedevil many developing countries. In the third chapter, he brings us to the ground when he gives a useful overview of the Kenyan economy's development history. bi Chapter 4 Van der Hoeven zeros in on the input and output indicators of performance, which basically form the basic needs subsystem. To complete the system the demographic subsystem is added in Chapter 5, focusing on such variables as fertility, mortality, migration, labour force participation and population projections for differ :nt age groups. In both subsystems major basic needs variables and demographic variables are determined using both accounting and econometric approaches. Both demographic and basic needs variables do have an effect on other parts of the model. As Chapter 5 reveals, such interaction results in changes in the skill composition of the labour force, labour productivity, value added share in gross output, and changing patterns in consumption. An equilibrium in the factors and goods market is a necessary requirement in the model. The supply of products is determined by the production function while demand is a result of factors such as government demand, private demand, exports and imports, which are expressed in an accounting identity. Equilibrium should obtain in the goods market. But since the economy is a system, equilibrium must obtain in the forex, labour and capital markets as well. This is in conformity with the general equilibrium approach, which the author discusses in Chapter 9. 86 Book Reviews The quantitative description of income distribution (log-normal distribution) should not detrac from understanding this important issue, along with social accounting and poverty determination. The results of the model simulation is contained in Part 111 of the book, and seeing that any mod« should be tested against the empirical world, the inclusion of this section serves the purpose well. Th main structure that could be levelled against the model, is its exclusion of a model of economic growtf explicitly including GDP which should reveal the effects of basic needs and demographic subsystems The advantage of the book is that it follows a quantitative approach whose mathematical clarit enhances understanding and possibilities of forecasting and performing sensitivity analysis. In conclusion, the book makes interesting reading and is a must for all scientists with th development of the Third World at heart. One wishes a "structural adjustment" programme could se economic problems through the Van der Hoeven telescope. Reviewed by K Mlambo and M Ncube, Department of Economics, University of Zimbabwe, Harare References ILO (1976) Employment, Growth and Bask Needs: A World-Wide Problem, Report of th Director-General, Geneva. ILO (1972) Employment, Incomes and Equality: A Strategy for Increasing Employment in Kenya. MkandawireT (1985) The Informal Sector in the Labour Reserve Economies of Southern Africi ZIDS Working Paper No 1, Harare. A Fate Worse Than Debt A radical new analysis of the Third World debt crisis, Susan Georgi Pelican Original, Penguin Books, London, 1988 (290 pp, £4,50). "Unlike most writings about debt this is fun to read". George says this, about one of her own reference; but it certainly also applies to her book. Connoisseurs of good rhetoric will like the book for its sty] and wit. This book looks at the important international debt problem with erudition and even sometimes premonitory tone. At the same time, there is a good dose of sarcasm, a modicum of the feminist touc and plenty of juicy anecdotes that add the needed pep and spice to this otherwise serious topic. Nej vignettes, or evenmanyasurprise fact, are told withafresh'c/w/gra/i' making the book really enjoyabl< The script is packed and takes the reader step by step in unravelling the intricacies of the topic. Th language is personal and adorned with colourful adjectives. I particularly enjoyed George's dire< dialogue with the reader. The book needs to be savoured slowly, to better retain all the importar information in it. George is the queen of the fitting metaphors and one-liners in our trade. These are often humoroi and related to a vast universal literature - from Churchill, "never before have so few been so wrong wit such a devastating effect on so many" (referring to foreign debt), to Hemingway, "never send to kno for whom the debt tolls; it tolls for thee". There are also references to the Prophet Mohammed, Hatnle Hammurabi, Ricardo, Auden and Dante. In the Introduction, George gives us an insight into the human dimensions and tribulations of writin a book like this one. The book is then divided into three parts ->each proceeded by a convenient or page overview - and a Philosophical Afterword. I found the author's major original input to the del problem mostly in Parts II ("The People and the Planet") and III ("Now What"). In Part I ("The Playe, Book Reviews 87 and the Problem") the stage is set. We are exposed to a good many of the intricacies and details of a debt situation many of us may already be familiar with. A question I found unanswered though is, why does the World Bank make huge yearly profits on soft loans below the commercial rates- when any other lending institution cannot make it lending below these rates? Chapter 10 ("Debt and the Environment") shows us convincingly how environmental issues become totally marginal when governments face huge debts. As a result, a process of ecocide often follows, with absolutely no sense of solidarity with the future. There is also a chapter. Chapter 13, on "The View from the South". One wonders if this is a coincidence or a bad omen. This chapter misses reviewing the Marxist viewpoint/s on the debt crisis, which I think would have been indispensable to show the full spectrum of approaches to the problem. A challenging corollary to the book is the need to provide political and economic counselling (along the lines of that discussed and proposed in the book) to Third World countries and governments negotiating with the World Bank or the IMF. How to set up such an international consulting body (something that the World Food Assembly, to whom the book is dedicated, had proposed two years ago) still remains an untackled challenge to radicalised development professionals that agree with the book's theses. Also, in my opinion, the book softly endorses or is too condescending with the "human face antipoverty adjustment" movement which I think is delaying the more lasting structural changes needed to revert the further pauperisation of the poor in the world. In the introduction to Chapter 14, the "3-D Solution" to the debt crisis, there is an excellent geopolitical overview of US policy towards debt that I thought was very enlightening. George also effectively introduces anew optic on the debt problem, namely that indebted countries have actually two major problems: to pay back and to obtain new money. She does not believe debt should be cancelled. Unconditional writeoffs would reward the Mobutus and Pinochets, penalising the more prudent countries and leaders, and would give the West a perfect excuse to cut-off all aid (see Moore Lappe, 1983), and would drop the credit worthiness of debtor countries to zero. The author tells us that Third World social and political creativity, through grassroots movements, is the big unwritten story of this decade, and she gives numerous examples of this and places great hope on this encouraging development The real centrepiece behind this development is that debt could be used to promote democracy and real development, if the cards are played right. No crisis, not even one of debt, is a crisis for everyone. The elite of debtor countries still profit from IMF adjustment programmes. The unemployment these programmes create also allows local employers to pay their workers less, especially when privatisation is part of the deal. Oppression and injustice, then, lie behind debt-induced poverty. The upper classes are sheltered from Fund-generated misery. In short, debtors •re governed by people who benefit from the present arrangements. Our author also introduces the concept of "Creative Reimbursement" in cash and in kind. The questioniswhethertbe applicability of thisconceptisutopicorrealistic. Itis also noted thatwhatmatters is not just the money that can be saved by not servicing the debt, but how and for what the money saved is used. Other new concepts include "pre-1980 (discounted) commodity dollars", and a new "special