352 CHAPTER NiNE ■ InternatIonal Po lItI cal economy
railways that link East African states, tripling intraregional exports among these regional
economies. Kenya has emphasized education, building more schools and requiring
compulsory education. And, more than in other countries, indigenous technology
companies are bringing new communication devices to educational, agriculture, and
ser vice sectors. Kenya is penetrated by increasing numbers of cell phone users, who are
able not only to connect with each other but also to use the devices for key banking
ser vices. The technology has improved access to international markets and expedited
transfers between urban workers and rural families. The mobile com pany M- Pesa, for
example, allows users to transfer money easily through their mobile device. Fi nally,
civil society activists are playing an increasingly vital role, and demo cratic elections
occur in a peaceful manner.
While investments from the United States, Eu rope, and MNCs declined during
the global financial crisis, investments from China and other emerging economies like
India were growing at an unpre ce dented rate. China alone increased foreign invest-
ment from $9.5 billion in 2005 to $86.3 billion in 2013. In Ghana, Chinese loans and
investments have gone to roads, communications systems, rural electrification, and dam
building. In Kenya, about one- third of Chinese investments are in manufacturing. Chi-
nese companies are carry ing out construction of roads, bridges, and airports.
As the World Bank optimistically predicted in 2011, “Africa could be on the brink
of an economic take- off, much like China was 30 years ago and India 20 years ago.”
But much of this optimism assumes China as the driver of world economic growth, an
assumption that is increasingly being tested.
Critics suggest the need for some reforms of the global economic system. What is
needed: “a scalpel or a hatchet”?^25 Scalpel- like reforms are being implemented: giving
China and other BRICS a greater role in the IMF, hoping that China will channel its
foreign- currency savings through the IMF to stabilize markets and promote develop-
ment; improving the surveillance functions of the IMF to anticipate risks and threats;
reinvigorating the G7 with greater participation by China; rethinking the role of the
G20, including its finance ministers, central bank officials, and member state heads of
state, both in terms of membership and their shifting co ali tions; and reworking the
rules and regulations of the private financial institutions, although the latter has proven
more difficult than anticipated. Reforms in the Eurozone state have been granting more
authority to the Eu ro pean Central Bank to act as a regulator of banks in member coun-
tries and giving more authority to an IMF- like institution— namely, the Eu ro pean
Stability Mechanism—to handle bailouts and work with the Eu ro pean Central Bank.
Economic liberals believe that modest reforms can preserve the system, giving more
transparency to market transactions. They point to the promising economic recovery
after 2010 as evidence that an equilibrium can reemerge.
Those critics who argue that the crises demand the hatchet won der: Do these crises
portend the end of economic globalization as now practiced? Perhaps not the end, some