Privatization, Blended Finance and Canada’s Development Policies: A Pan-African Feminist Critique

On Tuesday, November 9, 2021, we spoke with Crystal Simeoni, the Director of the Nawi – Afrifem Macroeconomics Collective (Nawi Collective), a community of individuals and organizations working on influencing, analyzing, deconstructing, and reconstructing macroeconomic policies, narratives, and understanding of the same through an intersectional Pan-African feminist lens.

This interview is part of a series with the Blended Finance Project, a group of unions, non-governmental organizations, and academics who are concerned about the Canadian government’s embrace of what is called “blended finance.” We argue that blended finance is merely the latest iteration of the privatization and financialization of foreign aid, and we seek to promote more equitable public alternatives. This interview has been edited for length and clarity.

Adrian Murray (AM), Susan Spronk (SS): How would you characterize blended finance? Is it simply another form of privatization?

Crystal Simeoni (CS): A quick Google search will tell you that ‘blended finance is a strategic use of development finance for the mobilization of additional finance toward sustainable development.’ Blended finance is couched in the UN Sustainable Development Goals (SDGs) and in a ‘development’ narrative. But, as usual, the devil is in the details. Once you open up the concept, there are many reasons for concern, especially from a Pan-African feminist perspective.

AM, SS: Blended finance refers to many different kinds of partnerships, but the overwhelming narrative emphasizes partnering public finance with private forms of finance. What are some of the disadvantages of private forms of finance compared to public forms of finance?

CS: First, when we talk about private finance and public-private partnerships, that private partner will most likely be a multinational corporation from the global North. A hundred billion dollars leaves our continent of Africa every year through illicit financial flows, and 65 billion of that amount is through commercial activity. These are the multinationals that are supposedly delivering ‘development’ on this continent.

Second, to understand why private finance is being put forward as a “silver bullet” solution to remedy failing public services, it is necessary to go back to the historical context of colonialism but also the privatization agenda, which was pushed through the Structural Adjustment Programs of the 1980s. This history helps explain why our current services are so weak. PPPs feed into the narrative that assumes that the African state is incapable of providing for its citizens, and needs to ‘partner’ with multinational corporations from the global North. This narrative is a very damaging one, and one of the enduring legacies of the structural adjustment programs. During the structural adjustment period, a lot, if not most, of our services were privatized.

Today we’ve got a young population, many of whom (myself included) don’t remember a time where we could access universally accessible, quality, dignifying public services in the form of schools and hospitals. The only thing that we know are private solutions for public problems. So, the struggle becomes trying to get enough resources to be able to access services, such as private education, health care, health insurance, security, electricity backups for your home, boreholes for your water, and so on.

AM, SS: Could you tell us a more about the risks associated with blended finance and particularly its gendered impact? From a critical, Pan-African feminist perspective, could you please describe why you think the push for private finance is a problem for marginalized women who have few socio-economic resources?

CS: The end goal of private sector is profit. It’s not working to make sure citizens live in dignity or are joyful or have enough food on their tables.

The World Bank has put forward their ‘Cascade Approach’ to financing, which is being shoved down our throats. Here is how it works. First, the World Bank asks the government: Do you have a development issue? Great, so there’s a private solution for this problem. Then they ask: Are there any policies and legislation that are preventing private finance from entering? If so, you need to change that. Once you do, you need to guarantee and de-risk private investment since African countries are perceived as risky.

What this means is that what gets prioritized does not reflect what populations and citizens need but what is profitable. For example, if maternal healthcare is not profitable, it’s not on the table. Instead, there will be investment in mega infrastructure projects. We’re seeing this across the continent: expressways, railways, highways, all sorts of mega infrastructure that does not have a significant impact on improving the lives of everyday people, least of all a majority of women on the continent.

In Kenya, for example, where I live, we’ve built this standard-gauge rail which is accruing to about seven percent of debt in terms of our GDP. That’s a lot! This rail system doesn’t connect the many rural communities that are home to farmers who need to transport their goods. 60% of Africa’s food is grown by women – smallholder farmer women – and so if this rail system is not connecting these women who are growing the food that is feeding this population, I’m not sure who it’s made for, right? Yet all citizens are burdened with paying for this infrastructure even if they’re not using it. The payment of this debt is likely to come in the form of value-added tax. Women, in particular, bear the burden of paying value-added taxes on consumables.

The majority of women would benefit much more from, for example, a maternal hospital or child-care services that are close to their home so that they are able to spend time working or care for the elderly. Without an appreciation for what attracts investment and who decides what the priorities are, I’m afraid the women of this continent will carry the greatest burden and will continue to carry the greatest burden for generations to come.

AM, SS: One of the most powerful things about your work is the emphasis that you put on how privatization affects governance. In your piece in Open Democracy on public-private partnerships (PPPs), you argue that PPPs change the relationship between the state and citizen. Can you tell us more about the risks associated with these shifts?

CS: Privatization affects the social contract, or the agreement between citizens of a country (or a jurisdiction) and their government, that is, how they’re governed and what’s to be provided in terms of social services that are universally accessible. When the social contract morphs from one between state and citizen to one between state and private finance, the contracts that are entered into are no longer subject to parliamentary oversight. Citizens have no or little say over these contracts, and often have little to no access to information to help them understand what these contracts are about. Key questions include: Who the money is going to? Where this money is coming from? That is a right that all citizens should have, especially when it’s about the development of their country with their money.

In the global North, there are at least some frameworks to try to safeguard against these abuses. But, with respect to the global North’s agenda in the global South, it’s a little bit of ‘do what we say, but don’t do what we do.’ There is an extreme power imbalance. And this situation carries forward the same extractive power dynamic that has existed since the days of the slave trade. Calculated at today’s minimum wage – and this doesn’t include the care work that slave women contributed – about $97-trillion were injected into the economies of the global North. This extractivism continues through the colonial era, and what we’re seeing now is a neocolonialism with private finance at the center of it. It’s hidden behind technical language that makes it seem so complex, but really, at the heart of it is extraction. Jason Hickel describes this power dynamic as an apartheid of the global economic governance system. I think we need to call it out for what it is.

We also need to recognize that we need to be able to weave everything together in our response to developmental concerns. Addressing Illicit financial flows, paying reparations, forgiving debt, and finding a way out of the COVID-19 crisis all need to be a part of this conversation.

AM, SS: As you know, Canada is one of the countries that has announced a feminist international assistance policy. You just talked about how the conversation needs to be much more complex and these silver bullet solutions do not offer an alternative, so what would that feminist foreign aid policy look like?

CS: That’s a tough question but a simple one at the same time. We need to push for a questioning of power relations at the heart of everything. And that will tie to questions about tax, debt, vaccine equity, climate change, all of it. So, for a global North economy, there’s a call for degrowth. Trying to push for a degrowth agenda means slowly coming to a point where we’re finding a healthier balance between the planet and people. A lot has been written about degrowth: cutting back down to a four-day working week; looking at fast fashion; looking at this obsession with growth measured by GDP, which doesn’t really measure everything.

For regions like Africa, where I come from, we still need to grow but we also need to question what sort of growth we need. We’re calling for a post-growth agenda which places citizen well-being and the planet’s well-being at the centre of all decisions and all development.

Once we take that lens and look at development finance, most other things drastically change. The end point we are fighting for must be creating the conditions in which people will be able to live in dignity and have joyful and fulfilling lives. We need to decolonize spaces and processes by questioning the role of the IMF, the World Bank, and the role of the OECD (Organization for Economic Co-operation and Development). We’re pushing for a global tax body at the United Nations because we’re not represented at the OECD yet. The rules and frames that the OECD decides around tax – specifically the rules and frameworks that we have to abide by – are really unfair and, again, are extractive at their core. So, we need a global tax policy at the United Nations but with the caveat that we need to recognize that there are power dynamics even within the United Nations.

A feminist foreign policy also means moving away from this obsession with GDP growth, which is at the root of a lot of these problems. Decolonizing our narratives and making sure there’s space for multiple voices and our diversity of voices and pluralism of ideas, questioning that there are alternatives beyond neoliberal capitalism. There are so many alternatives out there. For example, I was reading a book a few months ago by Development Alternatives with Women for a New Era (DAWN) from 1985, and to be honest, it sounded like they were writing it in 2021! Everything that they were saying is exactly the same things that we’re saying. And so, recognizing that there are alternatives and begin to seriously look at these alternatives to help reframe the global economy.

AM, SS: The Canadian government has committed $300-million to this pooled blended finance initiative which aims to empower women, the Equality Fund. What would you say about that model of financing for development? What do you think they could do instead?

CS: I wish they would instead put their efforts into making sure that women’s movements and feminist movements across the world are properly financed and resourced and resourced as movements with core funding rather than project funding. I think financing movements and movement building is core and central to the change that we want to see. The change that we’re going to see cannot come from the private sector. The more time I spend in multilateral spaces and spaces of power, the more I see the presence of the private sector and the power and control that they have. And that’s extremely worrying for me.

So, I think it is important to facilitate movement building directly in the global South, rather than directed through bigger global North-based organizations. I think the time for that has come to change, and I really think what they need to be doing is recognizing their own power and pushing for equality in a global economic governance system that is so unequal and so extractive. So, pushing for a global tax body at the UN, for example, is something. It is very low hanging fruit. Pushing for a TRIPS waiver is another very low hanging fruit. I think a shift in narrative from focusing on individual livelihoods to systemic change is something that they need to take on board. Doing that requires a shift in strategy in terms of how they plan to spend this huge amount of money. •

Adrian Murray is a SSHRC post-doctoral fellow at the University of Johannesburg researching labour and social movement opposition to the neoliberal restructuring of public services.

Susan Spronk teaches international development and global studies at the University of Ottawa.