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The United Nations, the Bretton Woods Institutions and African Reconstruction

De
169 pages
The United Nations and the Bretton Woods institutions were established in the immediate post-World War II period to preserve and promote international peace and security, cooperation, free trade in goods and services in the world as a factor of reconstruction and development after the overwhelming effects of the war. What is the relationship between Sub-Saharan Africa and the United Nations and the Bretton Woods institutions? What are the roles of these institutions in African reconstruction and development?
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Lang Fafa DAMPHAThe United Nations,
the Bretton Woods Institutions
and African Reconstruction
The United Nations,
The United Nations and the Bretton Woods institutions
were established in the immediate post-World War II period the Bretton Woods Institutions
to preserve and promote international peace and security,
cooperation, free trade in goods and services in the world and African Reconstruction
as a factor of reconstruction and development after the
overwhelming effects of the war.
At the time of establishing the UN and the Bretton
Woods institutions, Sub-Saharan Africa, except the Union of
South Africa, Ethiopia and Liberia, was under colonial rule.
However, the African States that emanated from European
colonisation joined these global institutions immediately after
their successive independences to form part of the international
politico-economic system.
What is the relationship between Sub-Saharan Africa and
the United Nations and the Bretton Woods institutions?
What are the roles of these institutions in African
reconstruction and development?
Lang Fafa Dampha was born in the Gambia in 1965.
He studied at Nokunda Primary School, then at Muslim
High School in Banjul. He lived and worked in Paris
as an immigrant between 1989 and 2009. He obtained
a B.A. in Literature and Civilisation at the University
of Paris VII Jussieu, and a Ph.D. in English Studies at
the University of Paris IV Sorbonne in 2007. Between
December 2007 and November 2009, Lang Fafa taught Legal English (Law
and Politics – UK/USA) at the University of Paris 2 – Panthéon Assas,
and Economic English at the University of Paris 8, Saint Denis. He returned
to Africa in November 2009.
ISBN : 978-2-343-04585-6
16,50€
The United Nations, the Bretton Woods Institutions
Lang Fafa DAMPHA
and African ReconstructionThe United Nations,
the Bretton Woods Institutions
and African Reconstruction









































© L’Harmattan, 2014
5-7, rue de l’Ecole polytechnique, 75005 Paris

http://www.harmattan.fr
diffusion.harmattan@wanadoo.fr
harmattan1@wanadoo.fr

ISBN : 978-2-343-04585-6
EAN : 9782343045856 Lang Fafa DAMPHA





The United Nations,
the Bretton Woods Institutions
and African Reconstruction
L’Harmattan



By the same author

1. Nationalism and Reparation in West Africa, L'Harmattan, April
2013
2. Afrique subsaharienne : mémoire, histoire et réparation. L'Harmattan,
June 2013.
3. African Aliens (novel), L'Harmattan, July 2013.
4. Attitude (novel), L'Harmattan, December 2013.
















Acknowledgement

My sincere thanks to all those who have contributed directly or indirectly
to the writing of this book.

Special thanks to Mr. and Mrs. Alan and Anne Trevarthen and Mr Marc
Solère for their encouragement and assistance.

I also thank my colleague Dr. Moustafa Traore for his constant support
and solidarity.

I thank my mother, Mba Maty, and my wife, Isatou Njie Dampha for their
love, protection and encouragement.
This book is dedicated to the memory of my late beloved
paternal grandmother, Mba Fatou (Keba) Jammeh. The
upbringing you gave me contributed to the person I am
today. Thank you Mba Keba; rest in Heaven.
The ideas and intentions behind the creation of the international
economic institutions were good ones, yet they gradually evolved over the
years to become something different.
Joseph Stiglitz, Globalisation and its discontent




Table of Contents

Introduction ........................................................................................ 11
Chapter 1 ........................................................................................... 19
The concept of reconstruction and development in
SubSaharan Africa ................................................................................. 19
The United Nations and African reconstruction ...................... 25
The structure and functioning of the United Nations .......... 36
The Security Council and the veto right ................................... 45
The reform of the Security Council ......................................... 56
Chapter two ........................................................................................ 71
The Bretton Woods institutions and African reconstruction..71
The World Trade Organisation .................................................. 72
The Doha Development Agenda and the Bali Agreement.77
The International Monetary Fund and the Wold Bank ......... 97
The Structural Adjustment Programme (SAP) ................... 109
The structure and functioning of the International
Mometary Fund and the World Bank...................................117
Conclusion ........................................................................................ 133
Bibliography .................................................................................. 147
Index ............................................................................................... 161
Introduction
Colonial Africa was heading to become independent Africa
at the dawn of the 1940s, thanks to the struggles led by African
nationalists openly opposed to Colonialism they considered as
occupation and economic and political exploitation. African
Nationalism continued to speak out and strengthen itself in this
period, especially towards the beginning of the Second World
War, because the colonial powers were facing serious setbacks.
The compulsory participation of African soldiers in World War
II to fight for the liberation of their European colonisers,
especially that of France and the United Kingdom from the
aggression of Nazi Germany, renewed Africa’s anti-colonial
struggle and gave it more strength.
However, it was only after World War II that a wave of
anticolonial struggles in Sub-Saharan Africa, starting with Osagyefo
Kwame Nkrumah's Gold Coast (Ghana), reached such an extent
that the colonialists were forced to hand Africa back its freedom.
This circumstance was partly the result, as we have just noted,
of the Nazi invasions, which paradoxically taught the colonialists
that the African peoples too, aspired to a separate and free
identity, as had been clearly stated in the Atlantic Charter in 1941
signed by the British Prime Minister, Winston Churchill and the
United States President, Franklin D. Roosevelt. Article III of the
Charter states that the West, especially the United States of
America and the United Kingdom, consider "… the right of all
peoples to choose the form of government under which they
will live […] to see sovereign rights and self-determination
restored to those who have been forcibly deprived of them."
(Reader 676)
Hitler's invasion of Europe that led to World War II, during
which, as we have just seen, Sub-Saharan Africa was forced to
fight to defend its colonial masters from the aggressions of Nazi
Germany, dramatically changed the world. The devastating
consequences of this war, that engendered both economic and
11 1political insecurity in the world, brought the Allies to establish
the United Nations in San Francisco in 1945. The American
village of Bretton Woods in New Hampshire also became the
birthplace of the global financial and trade institutions. The
agreements signed on July 22, 1944, called "Bretton Woods
Agreements" paved the way to the post-war financial system and
international trade. The main objective of this agreement was to
establish the foundations of a global monetary policy, while
promoting reconstruction and economic development in the
countries affected by World War II. The creation of a monetary
system capable of supporting post-war reconstruction was
therefore at the centre of the Bretton Woods Agreement.
However the pioneers of the agreement under the leadership of
the United States also wanted to contain the spread of
Communism in Europe. Like those of the United Nations, the
decisions taken by the 44 States present at the signing of these
agreements were against the Axis countries: Germany and Japan
mainly. The Bretton Woods Agreement gave birth to three
intergovernmental institutions: the International Monetary Fund
(IMF), the World Bank, and the General Agreement on Tariffs
and Trade (GATT), transformed to the World Trade
Organisation (WTO) in 1995.
Thanks to the dynamism of two renowned economists, John
Maynard Keynes of the United Kingdom and Harry Dexter
White of the United States of America, the agreements led to
the decision to abandon the gold standard in force since World
War I in favour of the gold exchange standard. The new system
chose the Dollar as the main currency at the expense of the
Pound Sterling, which had been the principal currency before
the agreements. From then on the prices of other currencies
were pegged to the Dollar, and the reserves of the central banks
were no longer to be in gold, but in currencies. After an interim
period of painfully maintaining fixed parities, the United States
unilaterally abandoned the convertibility of the dollar into gold
on 15 August 1971. The system of floating exchange rates was
1 The Allies or Entente Powers were the countries at war with the Central or Axis
Powers (Germany, Japan and Italy) during the Second World War (1939–1945).
12 thence established on March 19, 1973, leading to the Jamaica
2Accord, made at the meeting that took place in Kingston,
Jamaica in January 1976. Its purpose was to revise the IMF's
Articles of Agreement to reflect the new realities of floating
exchange rates. The Interim Committee of the IMF
consequently put a definitive end to the monetary system of
fixed but adjustable exchange rates.
The Charter of the United Nations was written from the
goals and principles of the Atlantic Charter, which had adopted
3eight principles from the Fourteen Points of President
Woodrow Wilson. The principles of the Atlantic Charter were
intended to guide the joint action of Great Britain and the
United States in World War II. Both signatories of the Atlantic
Charter put their aspirations on a "better future for the world"
on the principles of the condemnation of all territorial
annexation, the principle of self-determination of all peoples,
international cooperation, free trade, freedom of the seas, arms
reduction and the condemnation of the use of force; the text
also denounced "Nazi tyranny". The Atlantic Charter thus
became the basis of the UN Declaration, signed on 1 January
1942 by the representatives of twenty-six countries at war with
Germany and the other Axis countries, and subsequently the UN
Charter, signed on 26 June 1945 in San Francisco.
2 A global agreement, concluded in 1976 that ratified the end of the Bretton
Woods System by allowing the price of gold to float with respect to the U.S. dollar.
An amendment to the agreement in 1978 allowed for the creation of Special
Drawing Right, which is a form of international reserve assets, created by the
International Monetary Fund (IMF) in 1967, whose value is based on a portfolio
of widely used currencies.
3 In his speech to Congress on War Aims and Peace Terms on January 8, 1918,
President Woodrow Wilson of the United States of America proposed a 14-point
programme as a benchmark for world peace to be used for peace negotiations after
World War I. He directly addressed what he perceived as the causes of the World
War and called for the abolition of secret treaties, an adjustment in colonial claims
in the interests of both native peoples and colonists, a reduction in armaments,
and freedom of the seas. He also proposed the removal of economic barriers
between nations, the promise of "self-determination" for those oppressed
minorities, and a world organisation that would provide a system of collective
security for all nations as a way of ensuring world peace in the future. The 14
Points were designed to weaken the Central Powers and inspired the Allies to
victory.
13 The United Nations Organisation (UNO) or simply the
United Nations (UN) was thus founded in 1945, when the bulk
of Sub-Saharan Africa, with the exception of Liberia, Ethiopia
and the Union of South Africa, were still under colonial rule. It
was, as we have indicated, a response to international problems
caused by the two World Wars, especially the second one, and an
attempt to succeed where its predecessor, the League of
4Nations had failed. The initial goal of the UN was "[...] to save
succeeding generations from the scourge of war, which twice in
our lifetime has brought untold sorrow to mankind." (UN
Charter, Preamble). The Charter also proclaims "to reaffirm
faith in fundamental human rights, […] in the equal rights of
men and women and of nations large and small […] to establish
conditions under which justice and respect for the obligations
arising from treaties and other sources of international law can
be maintained, and to promote social progress and better
standards of life in larger freedom." (Ibid) These goals, which
incorporated and emphasised the notion of equality and
freedom of all individuals and nations, were broad and
revolutionary for humankind as a whole.
The World Trade Organisation (WTO) deals with the rules
governing international trade. It was established on January 1,
1995, but the trading system that it represents dates to 1947,
when GATT established the system on which the principles of
the WTO are based. GATT was originally created as part of a
broader plan for economic recovery after World War II. It was
negotiated during the United Nations Conference on Trade and
Employment (UNCTE) in Havana, Cuba, in November 1947,
and was the outcome of the failure of negotiation to create the
4 The League of Nations (LN) was the first inter-governmental organisation that
existed between 1920 and 1946. It was founded as a result of the Paris Peace
Conference that ended World War I. Headquartered in Geneva, Switzerland, its
principal mission was to maintain international peace and security. Its primary
goals, as stated in its Covenant, were to prevent wars through collective security
measures and disarmament, by settling international disputes and conflicts through
arbitration and negotiation. The League of Nations achieved some success. Its
major failure, however, was that it was not able to prevent World War II; it was the
predecessor to the United Nations organisation.
.
14 International Trade Organisation (ITO) to complement the
International Monetary Fund and the World Bank. Its principal
purpose was to reduce barriers to international trade, through
the reduction of tariff barriers, subsidies on trade and
quantitative restrictions through a series of agreements. But
because it was not ratified, GATT remained a simple agreement,
and not originally an organisation in the normal sense.
According to Article III of the WTO Agreements, its objectives
are to:

...promote World Trade in a manner that benefits every
country;[...]ensure that developing countries secure a better
balance in the sharing of the advantages resulting from the
expansion of international trade corresponding to their
developmental needs; [...] demolish all hurdles to an open
world trading system and usher in international economic
renaissance because the world trade is an effective
instrument to foster economic growth; [...] enhance
competitiveness among all trading partners so as to benefit
consumers and help in global integration; [...] increase the
level of production and productivity with a view to ensuring
the level of employment in the world; [...] expand and utilise
world resources to the best; [...] improve the level of living
for the global population and speed up economic
development of the member nations.

This initiative geared towards regulating international trade
led to a first series of agreements through GATT. However the
pioneer States were unable to agree on its exact definition, and
thereafter created a series of cycles of negotiations. The end of
the Uruguay Round in January 1995 transformed GATT to the
WTO. Since it is not a United Nations specialised institution, it
has only maintained close ties with the UN and its agencies. The
relations of the two institutions are governed by the
"Arrangements for Effective Cooperations-Relations between
the WTO and the United Nations" signed on 15 November
1995. The Director General of the WTO participates on the
15