Iceland: Rags to Riches…to Rags?!

The most stunning news to me in the past 24 hours is the collapse of the financial system of Iceland and the likelihood for the country to declare bankruptcy. Not too long ago, the experts were marveling at how the past century chronicled a miraculous ascent to wealth and economic power for this tiny Scandinavian country and perhaps how African nations, like Ghana, could learn and prosper as well.

I am not an economist. I’m certainly not financially savvy though I try to maintain a budget, save a bit, and like many Americans now, I’m watching my already pitiful investments in a Roth IRA and other mutual funds dwindle by the minute. But I have a 30+ year investment horizon so I should hold steady, keep up with my contributions, dollar cost averaging, right? Right?! I took a microeconomics course in my first year in college along with other esoteric courses like philosophy and sociology in an attempt to steer away from my obvious love for biology, and was sorely disappointed that economic concepts (and philosophical debates for that matter) did not come easy to me.

Iceland. Bankrupt. The NYTimes article quotes a professor who thinks “the only sensible option is for the I.M.F to [rescue Iceland]. The Prime Minister declined to say whether the country was seeking help from the IMF, but that the option was being kept open. And, a team from the International Monetary Fund has been in the Icelandic capital all week.

What is the world coming to? No one is really talking about Africa – like we matter, right? But I can only imagine how the continent is being affected. It is a global world we live in, so you would expect this global financial crisis and slowing in economic growth (and rise of fuel and food prices) to affect us directly too. You would expect that those with an adventurous spirit would stop seeking our shores as their next economic venture and stop investing in our various young markets.

But, indirectly, one would expect remittances from Africans living abroad to their respective countries to slow down. I remember Western Union a few years back said Ghanaians living abroad sent about 100 million USD back to Ghana annually. That’s more than the country earned from top exports of gold or cocoa. Imagine what diasporan Nigerians (those enterprising Nigerians) do for their homeland? Now, imagine that drying up! I don’t even need to talk about aid drying up – it’s hard to be generous when you too are suffering and besides – America and the West have helped us Africans for way too long – we need to stop creating our own mess, so the critics say.

One thing I do know is that African leaders do need to be vigilant about this global economic crisis. Yeah, America and Britain are trying to bail out their economic sectors, and the I.M.F may bailout Iceland, but there’s no promise that they will bail our countries out too. I can just see it now … neo-neo-colonialism of the 21st century in the making …