The Economist reports:
. . . over the next few years, four Sub-Saharan countries—Ghana, Kenya, Nigeria and Zambia—are expected to issue sovereign bonds in international markets for the first time.
I’m tempted to ask which of these countries is not like the other. What struck me about this sign of economic development is that only one of these four, Nigeria, is an oil producing country.
For a bit more context, here is the expanded quote:
Africa’s financial markets are, at long last, becoming globalised. Low interest rates and saturated financial markets in OECD economies are pushing developed-world investors to look further afield, while the strengthening of African balance sheets (as a result of debt relief), underpinned by booming commodity export earnings and improved macroeconomic management, are making Sub-Saharan markets more enticing. The combination of “push” and “pull” factors is such that, over the next few years, four Sub-Saharan countries—Ghana, Kenya, Nigeria and Zambia—are expected to issue sovereign bonds in international markets for the first time.
Perceived risk in African markets has declined dramatically since 2000.
It does not look like oil is doing much financial good for the countries that do own it. Although some people and some parts of Nigeria are doing well, the part that produces the oil, the Niger Delta, is in appalling shape. And there is nothing about the US Africa Command, the US government’s principal approach to Africa, likely to address the heart of the problem, despite the honeyed words of diplomacy and aid.
As Paul Salopek said in the Chicago Tribune:
The planet’s last superpower is rattling its half-empty oilcan at the poorest continent in the world.
. . .
Americans already get more oil from Africa than from Saudi Arabia.
. . .
“I think the U.S. military would find our swamps worse than Iraq,” snorted Austin Onuoha, a Nigerian human-rights activist who specializes in oil issues. “But at least they might build some infrastructure after they invade. Americans always do this, right?”
Onuoha’s sarcasm was well-earned. He was talking in the dark, from his blacked-out house in the oil-rich Niger Delta. The electricity in Africa’s petro-giant had winked out again. And this fit sourly into his main thesis: Oil is rotting Africa’s frail democracies. (emphasis mine)
More and more voices are saying something I’ve been thinking about for some time. Africans need to solve African problems. This is the big drawback to the One Laptop Per Child program, selling cheap laptops for school children in developing countries, and to other technology development programs. No one in the target countries was involved in planning the development. It is a question raised about malaria research, and about a whole host of other issues.
In her film “Africa: Open for Business“ Carol Pineau asks:
Africa, Pineau tells us, has the best return on capital of any market in the world. Why isn’t there widespread investment on the continent. Risk? . . . The perception of risk far outpaces the real risk.
Pineau made her film about African entrepreneurship because she could not sell positive stories of African development to any news media. And it is certainly true that one sees almost nothing positive about Africa in the news media, although the Discovery travel channel has featured several different programs that were quite positive about Ghana. Still, that was travel entertainment, not news. I am constantly impressed by the entrepreneurship I see in Ghana. The usual coverage of Africa in the western news media: war and famine, is poisonous to those watching, as much as it is poisonous to the African people described.
Pineau is concerned about the long-term psychological damage of poor coverage of the continent. She reminds us that colonialism tried to ensure that colonies were never able to compete with their conquerors. She argues that the images of Africa are a form of this colonialism, and they perpetuate uncomfortable trends. “Aid has never, ever developed a nation,” she argues.
One of the problems is that we rarely take African voices seriously – she points to reports of snow on the peaks of Kilimanjaro. British geographic societies wouldn’t believe reports of snow on the mountain’s peak until a British explorer had been there. The same thing happens today, she tells us, in coverage of relief work. The people actually giving food and medical aid are Africans, but the people interviewed on camera are the “white saviors.”
The way development aid has worked so far has been a grave disadvantage to African countries. Kenyan economist James Shikwati says:
Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need. As absurd as it may sound: Development aid is one of the reasons for Africa’s problems. If the West were to cancel these payments, normal Africans wouldn’t even notice. Only the functionaries would be hard hit. Which is why they maintain that the world would stop turning without this development aid.
In the interview with Spiegel he speaks about corn sent to Kenya as aid:
A portion of the corn often goes directly into the hands of unsrupulous politicians who then pass it on to their own tribe to boost their next election campaign. Another portion of the shipment ends up on the black market where the corn is dumped at extremely low prices. Local farmers may as well put down their hoes right away; no one can compete with the UN’s World Food Program. And because the farmers go under in the face of this pressure, Kenya would have no reserves to draw on if there actually were a famine next year. It’s a simple but fatal cycle.
SPIEGEL: If the World Food Program didn’t do anything, the people would starve.
Shikwati: I don’t think so. In such a case, the Kenyans, for a change, would be forced to initiate trade relations with Uganda or Tanzania, and buy their food there. This type of trade is vital for Africa. It would force us to improve our own infrastructure, while making national borders — drawn by the Europeans by the way — more permeable. It would also force us to establish laws favoring market economy.
. . .
SPIEGEL: In the West, there are many compassionate citizens wanting to help Africa. Each year, they donate money and pack their old clothes into collection bags …
. . .
Shikwati: Why do we get these mountains of clothes? No one is freezing here. Instead, our tailors lose their livelihoods. They’re in the same position as our farmers. No one in the low-wage world of Africa can be cost-efficient enough to keep pace with donated products. In 1997, 137,000 workers were employed in Nigeria’s textile industry. By 2003, the figure had dropped to 57,000. The results are the same in all other areas where overwhelming helpfulness and fragile African markets collide.
I don’t know a great deal about Shikwati. From his words in the interview I have some reservations. He sounds a bit like the people in the US, mostly Republicans, who say you can’t solve a problem by throwing money at it. So they cut social programs which actually do some good, and run the government into debt throwing money at themselves and their cronies. Or perhaps he sounds a bit like a libertarian, which I think was fairly accurately characterized as anarchy for rich people. And I’m not exactly sure I understand or trust his ideas on AIDs. But his overall theme, that Africans need to handle our own affairs is right on target. No one in business, and no entrepreneur, can compete with free goods.
Pineau asks two critical questions:
* What would we do if we really cared about development in Africa?
* What can we learn from Africa if we decided to listen and stop always trying to teach?
Marina Beach shanty town, Ajegunle, AJ City, Lagos (Courtesy of Femi Jarrett)
for a brief history of Ajegunle see Ghetto Radio
Ian Welsh over at Firedoglake
wrote a recent column on a problem with western development “advice” and “assistance” that has been particularly damaging to African economies. The problem he points out is hardly the only problem, among others, corruption has had a devastating effect on the economies of many countries, and African countries have suffered more than their share of corruption. Those countries with oil have also suffered from the oil curse, with big incomes, but overall standards of living going down rather than up.
In order to generate cash needed or desired for a variety of reasons, developing countries were advised their greatest resource was land, on which they could grow cash crops. Unfortunately, the kind western high yield agricultural techniques necessary for most cash crops eliminate jobs and displace farmers, who then move to ever expanding slums in the cities. Meanwhile, during the last decades of the 20th century a number of developing countries were getting and following this same cash crop advice, glutting the commodities markets and driving down prices.
The ensuing lack of cash was treated as a failure on the part of the developing country, which was urged to work harder, borrow more, and spend less, in ways such as cutting food subsidies for the people whose livelihoods have been eliminated.
So you’ve gained hard currency, but you’ve lost jobs, most of which will never be recovered. The multiplier effect (the number of jobs created to serve primary jobs) is damn near zero, because the fancy new plantations and huge farms use machines built elsewhere, run on oil pumped elsewhere, need to be repaired by expats who were trained elsewhere, the fertilizer comes from oversees and even the seeds probably even come from overseas.
. . .
So, at the end of the day, by following the advice of western experts you’ve destroyed your rural economy, gone from a country which could feed itself to a net importer of food, created huge slums around your cities, increased the instability of your country – and haven’t modernized.
. . .
When citizens of third world countries talk about how the West in general, and America in specific, is keeping them down, this is much of what they’re talking about. It’s an economic system, which while sold as a benefit to the third world countries following the prescriptions, coincidentally worked out to provide very cheap commodities to the first world for decades, allowed quite a number of loans to be made and didn’t lift a single country I can think of out of poverty. (emphasis mine)
. . .
Those loans were made with the aid of experts who made pretty explicit claims about how things would work out for the better. The common excuse is that “corruption” is why they failed, but even in countries where there was little corruption, they failed. . . . Thirty years later the locals were worse off than they were before the loans were made and the advice was followed.
. . .
And meanwhile, in Asia, countries that didn’t follow this path – countries that built up industry behind trade barriers, didn’t try and convert their farmland into cash crops – countries that rejected the advice of the western experts, who didn’t accept the loans – they’re the ones who have lifted themselves out of poverty. The lesson, one might say, is clear. Beware Westerners giving advice. It’s not that the advice doesn’t work out to someone’s benefit, it’s just that that someone isn’t you.
And why did African countries accept this bad advice so trustingly. I suspect part of the reason is that they had little to no experience as countries. Most of the Asian countries had a country identity long before the late 20th
century, even those that may not have been independent or unified for a time. The borders in Africa were artificially drawn by Europeans, and African countries are still working out their identities and relationships within and between these borders. There has been a limited sense of a shared identity and history within many countries. Plus, there was very little local expertise of the sort needed to analyse Western advise, especially for the long term.
The dollar diplomacy, the low or no interest loans China is providing some countries, may offer a way to change course. Of course China is a huge marketer of cheap weapons as well, which are hugely destabilizing. And the US emphasis on military aid is also destabilizing. I’d like to be optimistic, but recent history does not offer much support.
I didn’t know Steve Gilliard personally, but his work was one of my inspirations for taking up blogging. Since he became sick I have already missed his grasp of history, and his fierce writing and analysis. My heart goes out to his friends and family. He is a great loss to American discourse.
The News Blog
The News Blog Archives
The Green Zone from BBC graphics and Google Maps courtesy of Booman Tribune.
How big is the Green Zone? It is 4.5 square miles. Look here to see a comparison to the Minnesota Twin Cities.
From Talking Points Memo:
By saying that Korea is the model for the US military presence in Iraq, the president is saying that he envisions the US military presence in Iraq continuing for many decades into the future.
Or let’s put that in more stark terms, for most of you reading this post, the president envisions US troops remaining in Iraq long after you’re dead. (emphasis mine)
Also reader DS at TPM points out:
I have believed, from the beginning – though I have always hoped to be proven wrong – that the Bush White House (i.e. Cheney) has had as its principal goal in Iraq the establishment of a permanent military presence in that country. . . . (for) energy security and therefore the control of energy supplies. This means control of the flow of oil from the Middle East.
. . .
Cheney, in particular, is vicious enough to contemplate a long-term presence at the cost of a daily toll in the dozens or hundreds as well as ongoing domestic opposition.
. . . there’s only one goal that makes sense of that strategy. And that is to permanently dominate the cluster of oil fields in southern Iraq, Saudi Arabia, Kuwait and Iran. Nothing to do with democracy, as though that needed saying. But also nothing to do with terrorism. We’re permanently occupying Iraq to lock down the world oil supply.
But all that is commentary. The headline is clear enough to get the message out: the president wants US troops in Iraq for decades to come.
We have had this information around for awhile. Two years ago, in June 2005, I read in Baghdad Burning about how the Green Zone was being built as permanent city:
What people find particularly frustrating is the fact that while Baghdad seems to be falling apart in so many ways with roads broken and pitted, buildings blasted and burnt out and residential areas often swimming in sewage, the Green Zone is flourishing.
. . .
The price of building materials has gone up unbelievably, in spite of the fact that major reconstruction has not yet begun. I assumed it was because so much of the concrete and other building materials was going to reinforce the restricted areas. A friend who recently got involved working with an Iraqi subcontractor who takes projects inside of the Green Zone explained that it was more than that. The Green Zone, he told us, is a city in itself. He came back awed, and more than a little bit upset. He talked of designs and plans being made for everything from the future US Embassy and the housing complex that will surround it, to restaurants, shops, fitness centers, gasoline stations, constant electricity and water- a virtual country inside of a country with its own rules, regulations and government. Ladies and gentlemen, welcome to the Republic of the Green Zone, also known as the Green Republic.
. . .
. . . if you could see the bases they are planning to build- if you could see what already has been built- you’d know that they are going to be here for quite a while.
The Green Zone is a source of consternation and aggravation for the typical Iraqi. It makes us anxious because it symbolises the heart of the occupation and if fortifications and barricades are any indicator- the occupation is going to be here for a long time. It is a provocation because no matter how anyone tries to explain or justify it, it is like a slap in the face. It tells us that while we are citizens in our own country, our comings and goings are restricted because portions of the country no longer belong to its people. They belong to the people living in the Green Republic.
Then recently I read in Firedoglake:
The $592 million embassy occupies a chunk of prime real estate two-thirds the size of Washington’s National Mall, with desk space for about 1,000 people behind high, blast-resistant walls.
. . . we are building a huge, permanent infrastructure in Iraq. We are putting in the latest equipment, and it is not there to support some temporary military presence. What’s going up is not something to be taken down and removed when our troops withdraw or respond to some uncertain Congressional appropriation. And the facilities that are being constructed, and the way they are being linked, indicate a more or less permanent military presence.
We’re spending billions upon billions on this, and it’s not slowing down. My friend has been there three times, and each time he goes back, he marvels at the tremendous change — in how much more there is now than there was last time. Much more sophisticated; more permanent.
This sure looks like the delusional bungling of Dick Cheney.
Dick Cheney and his ilk think we can wait them out (even though they live there!) as long as the American public can be numbed to the ongoing death toll.
He remains delusional as always, and has missed the point.
For example, you know that oil law the U.S. has been so hot and heavy to get the Iraqis to pass? It turns out that after months of massaging, the text of the law doesn’t guarantee Western oil companies anything; it just doesn’t exclude the possibility that they may get some lucrative deals. Oh, and during those months, billions of dollars’ worth of oil is unaccounted for, with one of the prime suspects being the Shiite militias/political parties that make up the government. I don’t think they’re about to pass a law that gives them a worse deal than what they’re getting off the books now.
The Americans aren’t the only ones who can play realpolitik, you know.
And as a friend of mine says, you have to be brave to be free in the US.
The Republicans want to keep US snivelling cowards. Before al-Qaeda, before Saddam Hussein, before Willie Horton, the message has always been Be Afraid! And the current Republican message, from the President and all the Republican presidential candidates, is still Be Afraid! Stay in a state of total unreasoning, unjustified terror! And vote Republican while you are there.
That is a long way from:
. . . the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.
I would dedicate this Nation to the policy of the good neighbor—the neighbor who resolutely respects himself and, because he does so, respects the rights of others—the neighbor who respects his obligations and respects the sanctity of his agreements in and with a world of neighbors.