Zimbabwe's $100 trillion note(s)

Zimbabwe's hyperinflation has become so extreme that the treasury is rolling out 10, 20, 50 and 100 trillion dollar notes. 100 Zimbabwean dollars are currently worth US$30. Now, quick! Go spend it before it's too late. That is, if there's anything to purchase with them...
However, the dollarisation of the economy means that few products are available in the local currency [...] Some shops are licensed to sells goods in foreign currency but everyone from vegetable sellers to mobile phone service providers peg their prices to the US dollar.

Most groceries are brought in by Zimbabweans from neighbouring South Africa, Botswana or Zambia, further driving up prices. There is more than 80% unemployment in the country and those with jobs find their salary is worthless unless they are paid in foreign currency

In case you had any doubts

China has overtaken Germany to become the world’s third largest economy in 2007 after the Chinese authorities on Wednesday revised upwards the figures for growth during that year.

China’s National Bureau of Statistics said that the economy expanded by 13 per cent in 2007, a sharp increase from the 11.9 per cent growth rate the authorities had previously stated.

With only the US and Japan now larger than China, the new figures highlight the rapid transformation the Chinese economy has undergone over the last 30 years since the Mao-era controls were first eased, although the economy is now suffering the toughest period in a decade as a result of the global financial crisis.

The news will also reinforce the case for giving China and other large emerging economies a bigger role in global financial decision-making, even if China has been hesitant about taking on new responsibilities.

Full story from the FT

If the world was a village of 100 people...

... how many of them would be African? European? American? Asian? What if you divided them into economy, life, food and danger zones? That's what Infographic tries to do:



















The map (I know, I know...) is interactive, so click around!

[NB. I just noticed the map doesn't properly account for the Middle Eastern population, and likely underestimates the spread of Chinese language speakers]

Exciting advances in African agriculture (and more maps!)

My fetish with maps continues. And this one is especially useful, too!

The project is called the African Soil Information Service (AfSIS), and is the first stage of a project to build a global digital map - called GlobalSoilMap.net - covering 80% of the world's soils. Bluntly stated, the project's objective is to increase the agricultural yields of Africa's farmers:

The aim is to build an interactive online tool, which will give extension workers and policymakers the information they need to determine how best to restore their "sleeping soils".

Meanwhile, an "aggressive" program of dissemination will ensure that AfSIS is readily available to African farmer associations and extension services, said a spokesman.

The plan is to continually monitor and update the map, with an ongoing soil surveillance service.

"If we are to reduce poverty, feed growing populations and cope with the impact of climate change on agriculture, we require accurate, up-to-date information on the state of Africa's soils," said Nteranya Sanginga, director of CIAT's Tropical Soil Biology and Fertility Institute.

"With accurate soil maps, we find farmers can increase their yields by around 60%, and sometimes double.

Given that agriculture remains the primary contributor to national GDP in the vast majority of African states, and is the sole provider of income for millions of the continent's citizens, (according to the World Bank it accounts for 30% of the continent's GDP and employs 75% of the population), AfSIS has the potential to contribute enormously to poverty reduction, and even the region's economic growth. Among my concerns, however, is that such advances in the agricultural sector will limit the continent's exports primarily to agricultural goods, in turn hindering export diversification and subsequently significant economic growth.

Regardless, the project is indeed a giant leap forward (and the maps quite wonderful and color-coded!) and boasts great potential. I would rest a bit easier, though, if someone devised a map of entrepreneurship opportunities, or hot spots for skills acquisition, for instance.... anyone?

A curious opportunity for U.S.-China relations

Vijaya Ramachandran writes:

Steven Chu, who faces confirmation hearings in the Senate today, is widely recognized as one of the world’s leading authorities on renewable energy. But less known is the fact that he presents the United States with a unique opportunity to make progress in its ongoing dialogue with China on climate change (see for example this commentary on UPI Asia).

Chu is the son of immigrants who came to the United States to attend the Massachusetts Institute of Technology. China takes enormous pride in his accomplishments, indeed his nomination was front page news in almost every major newspaper in China. His Nobel Prize received similar coverage in 1997, when it was noted that he is the fifth person of Chinese ethnicity to win this prestigious award. He is a foreign member of the Chinese Academy of Sciences, and has trained several prominent scientists in China. He was also instrumental in establishing the Bio-X Center at Jiaotong University in Shanghai, and serves as the center’s honorary director. As a result of all this, Chu enjoys direct access to China’s political leaders and has visited China several times over the past decade.

As with other nominations of individuals with recent immigrant backgrounds, Chu’s ties to China are a great asset. Thus far, we have not made much progress in our conversations with China on global warming and climate change. Of course our actions in terms of our own energy policy will be the most critical factor in changing course. With the selection of Steven Chu, we have a unique opportunity to make real progress with the Chinese government and the Chinese scientific community on this issue.

The lingering question, I would add, is one of China's genuine sincerity in pursuing such issues. 

New challenges in the world food crisis

Escalating hunger in African cities is forcing aid agencies accustomed to tackling food shortages in rural areas to scramble for strategies to address the more complex hunger problems in sprawling slums.

The United Nations World Food Program, the world's largest food-aid group, has plenty of experience trucking food into rural Africa, responding to shortages sparked by drought, famine and war. But in urban areas -- where, despite widespread poverty, hunger wasn't a significant issue until recently -- the hurdles are different.

In the vast and crowded slums, with many unnamed streets and dwellings without running water or electricity, it is difficult to identify who's most in need of help. Simply handing out food can disrupt cities' informal markets, cutting into the livelihoods of those who earn a few dollars each day selling peanuts or fresh fish, or of small farmers who haul their produce to the city.

The WFP, which usually takes the lead on aid in coordination with smaller organizations, began considering new tactics last year when it saw an urban hunger crisis developing in Africa.

For the full story, see the WSJ

Oil for Uganda

UK oil explorer Heritage Oil and its partner Tullow Oil have made a "world class" oil discovery in Uganda.

The finding by the Giraffe exploration well could be the largest discovery in the Lake Albert Rift Basin to date.

Reserves in the well and a linked discovery known as Buffalo, which was discovered in December, may come to more than 400 million barrels of oil.

From, the BBC

Why does Africa care (so much) about Gaza?

Since the recent outburst of violence in Gaza, thousands citizens across many African states have taken to the streets in protest. 63 individuals were injured in a protest in Algiers. Shops were robbed, cars damaged and windows broken. Hundreds of Shiite Muslims took to the streets in Kano, Nigeria, too, urging Nigerian President Umaru Yar'adua to sever diplomatic ties with Israel. The following video from Kenya's Citizen TV shows scenes from a protest in Nairobi: 


Why does Africa care so much about Gaza? Is it an expression of Muslim solidarity? Is it a kind of sympathy from one group of conflicted countries (very broadly speaking) to another? Is it economic? Readers voice their opinions with the BBC. 

Letter from Zimbabwe

An incredible communique posted by Shanta at the Africa Can ... End Poverty blog: 

I received this missive from a friend:
 
December 11, 2008
Harare, 1.00am
 
It is just after midnight in Harare. I have just returned from a midnight tour of the ATMs in Harare with a cousin. There are queues of people still waiting to get their weekly cash withdrawal limit of $100,000,000,000 (US$2.50). I saw the queues this morning when I went for my first meeting at 7.45am. I did not know then that I would be seeing them throughout the day. Most of the ATMs had run out of money. Rather than go home, people saved their precious place in the lines by lying down where they stood and taking a nap. Covering themselves with sacks, newspapers and whatever warming clothing they had. Those ATMs that were still paying out cash had queues of policemen and soldiers. I dared not pull out my camera then. When I did pull out my camera, it was of people too tired to care. Needless to say, picture quality from a moving car using a micro camera is not the best. This is not a normal interpretation of 24-hour banking; seven days a week.
 
Three hours earlier, I had gone to one of the cholera infected areas where my aunt lives. I had not intended to stay long. It is a way out of town and I did not want her worrying about my safety getting back into the city. There was a power outage from 6 p.m. and it had taken us two hours to find a house I last visited 20 years ago as a boy. But I did ask how she was coping in Harare; and to her nephew she poured her heart out. No clean water for weeks on end, no food in the shops and constant power cuts. She drives an hour and half across the township in search of clean drinking water, which she brings back in plastic containers. When the city council water does run through the taps in the house, the water is discolored with sewer water. The shops in the neighborhood are empty of basic necessities including mealie meal. Her husband now lives at their farm in another town so that he can plant, guard and harvest the maize that they will live on next year. There are groceries in some shops in the city, but they are sold in US$ and priced beyond her means. I am glad I brought her a suitcase of groceries. Groceries that, 20 years ago, my parents once drove from Lusaka to Harare to buy when Zambia was going through similar madness in the 1980s.
 
December 12, 2008
 
Today the Reserve Bank increased the cash withdrawal limit from $100,000,000 to $200,000,000 (US$4). It also introduced two higher-denomination notes, $200,000,000 and $500,000,000. As expected there was a mad rush to withdraw and spend the cash before it loses value. It is widely expected that retailers will increase their prices in line with the higher withdrawal limits. There were long (and I mean l…l…o…o…n…n…g…g) queues at every single working ATM. Offices were abandoned. I took pictures of the lines outside Barclays bank by walking to the first floor offices of government labor department. In a large pool office with at least 20 desks there was a lone clerk who looked up at me for all of two seconds. As I walked across the room to the window facing the bank, the files lay unattended on people’s desks…probably untouched for weeks. With civil service wages eroded by hyperinflation, people necessarily spend more time in the parallel economy trying to make ends meet. Interestingly, there are no runs on banks. The value of the withdrawals is so meaningless that the banks will be able to meet depositor demands with ease.

How much longer until the system bottoms under entirely, I wonder? 

Can't censor them? Then change the way they think.

(aka. China does Stepford).

The Chinese Communist Party has raised a "50 Cent Army" of internet commentators who are paid RMB0.50 for every pro-Chinese and CCP-endorsed comment they post on blog and media sites. Estimates suggest there are tens of thousands of such spin doctors, armed and ready to shape Chinese public opinion: 
Comments, rumours and opinions can be quickly spread between internet groups in a way that makes it hard for the government to censor.

So instead of just trying to prevent people from having their say, the government is also attempting to change they way they think.

To do this, they use specially trained - and ideologically sound - internet commentators.

They have been dubbed the "50-cent party" because of how much they are reputed to be paid for each positive posting (50 Chinese cents; $0.07; £0.05).

Full story from the BBC, [HT: Boing Boing]

Weren't we?... Wait a minute...

I think I missed something.

Wasn't it just not too long ago that divestment from Sudan was the issue? Celebrities from Spielberg to Clooney were making front-page news, urging U.S. firms to use their economic leverage to help halt the violence in Sudan. Berkshire Hathaway came under fire for rejecting the plan as did, naturally, the Chinese. Forty-two colleges and universities even restricted their holdings in companies somehow linked with the state. Divestment was a tour de force, at least for a time.

I recently did a news search for "divestment, Sudan." The most promising find was an article in today's Alaska Report noting the attempts of four Alaska legislators to stop the state from investing in foreign companies complicit in the Darfur genocide. So far so good. The second best find was a Washington Times feature piece, dated 1 January 2009, on the Genocide Intervention Network. Third best? An opinion piece in Payvand, an Iranian news network, on the rise of Hilary Clinton as U.S. Secretary of State. The piece has nothing to do with Sudan, but the word is mentioned. Twice.

And, that's it. 

Well, sort of. The FT reports that U.S. businessman Philippe Heilberg has secured a huge piece of fertile land in southern Sudan from the family of a notorious warlord. This is post-colonial Africa's biggest private land deal (the area is the size of Dubai!).

I tried looking at this deal objectively, really, I did. But really? Really!? On the one hand Mr. Heilberg is a private citizen and entitled to do as he damn well pleases. If he wants to buy land in a country where the government is responsible for the slaughter of thousands and thousands of individuals (and from a warlord, no less!), sure, go right ahead.  I don't question his right, only his judgement. Moreover, I do recognize that such purchases may assist in Sudan's renewed development (and there is little deying that it it needed - and quite badly), but really?

This purchase seemingly comes as a backhanded slap in the face to countless investors and activists who have been hard at work, attempting to aid victims of the genocide and terminate it altogether. If this was some small land deal, I would perhaps be inclined to let it slide. But this is the continent's biggest private land deal since the end of the colonial period. Think about that. What kind of a message does this send? And what a fantastic example of the classic free-rider problem: Well, um, you guys go on ahead and divest. Me? I'm just going to buy myself here this nice plot of land... 

Maybe he never got the memo.

What happened to the zeal that defined early divestment efforts? Where is the outrage? Since when did concern over humanitarian crises become a passing fad? What did I miss?! Maybe we all need to sit down and re-watch The Devil Came on Horseback (in my humble opinion among the best documentaries on the subject) to remind ourselves of the ongoing terror. Maybe this isn't as big of a deal as I'm making it out to be. Or, maybe, it is. 

An inauguration to celebrate


Before the trumpets sound at President-elect Obama's inauguration on 20 January, there is another presidential inauguration happening today that is worthy of equally great celebration: the inauguration of Ghana's new President, John Atta Mills.

As the Center for Global Development's Todd Moss observes:
This was Ghana's fifth consecutive democratic poll, and the country has now had two peaceful transitions from one party to another. Jerry Rawlings won the 1992 and 1996 polls and then retired on time (another reason to celebrate!). John Kufuor, at the time the leader of the opposition NPP, then beat Mills of the NDC in December 2000, and again in 2004. Now the presidency has swung back to Mills and his NDC. This is all pretty impressive and suggests that Ghana is once again the continent’s trailblazer.
Three cheers for democracy in Ghana!

What positive spillovers?

An article in today's Business Day drives home the point that China's recent adventures into Africa aren't about Africa -- they're about China, driven entirely by Beijing's opportunistic motives. Those who continue to optimistically muse over the ways in which China might bolster Africa's economic development may quickly find themselves out of arguments: not only has the commodity 'super-cycle' created by the Chinese imploded (or finds itself close to doing so), but with the recent economic downturn, Chinese investors who previously flocked to the continent are now exiting faster than they entered, seeking economic opportunities elsewhere: 
TWO pieces of conventional wisdom have been overturned in recent months. First, that the commodity “super-cycle” of the past five years would, if not last forever, plateau at a higher level than ever before, based on demand from India and China.

This has not happened, with potentially disastrous results for some African countries, which have enjoyed, on average, growth rates of 5% or more for the past few years. Such growth has been based on economic reforms, but fuelled by the large increases in commodity prices.

Second, that the Chinese were in Africa to stay, as part of a long-term strategy. In practice, Chinese entrepreneurs have been the first to leave when the market turned. More than 60 Chinese mining companies have left the mineral-rich Katanga province in the Democratic Republic of Congo in the past two months, as cobalt and copper prices have more than halved. More than 100 small Chinese operators are reported to have left Zambian mines for the same reason.

The implications for Africa are many. Economic growth will be slashed. Indeed, the price declines have been so sudden and so brutal many African leaders, who believed they were doing what the west recommended, suddenly find their economies again in tatters.

Wanted: an aircraft carrier. Signed, China

An friend of mine,  a Lieutenant in the U.S. Navy, drew my attention to this piece in yesterday's WSJ: 

Comments by China's national defense spokesman last month make it about as official as it's going to get: China's navy is in the market for an aircraft carrier. This is a sign that Beijing sees its ultimate prize within grasp: emergence as East Asia's preeminent great power. So should the region, and the protector of its stability for the last half century, the United States, be worried?

First things first: China is not about to knock America off its perch as the world's sole superpower. Developing the capacity to deploy aircraft carriers is a feat of incredible complexity. China's carrier project will take at least a decade to realize, and it will require billions of dollars and a great deal of the country's military design capacity.

[...] Yet there's every reason to believe China will achieve its goal eventually and deploy multiple carriers. It will likely start by using aircraft bought from Russia but go on to develop its own weapons systems. China will end up with a much smaller ship than the American super-carriers, with weapons about a generation behind. But this will still put it far ahead of its neighbors -- no East Asian country currently has carrier capacity.

NB: A decade is not as long as it seems. 

Censorship: in vogue for 2009

Government censorship seems to be the 'in' thing in China and Kenya this year. Governments in both states have rung in the New Year by cracking down on local media and internet sites (shock), much to the surprise and outrage of many (barring those in China, I suppose).

On January 2nd, President Kibaki signed the Kenya Communications (Amendment) Bill into law. The new legislation provides for heavy fines and prison sentences for press offenses, and also gives the government - above all information and interior ministries - the authority to issue broadcast licenses and monitor the production and content of news programs. The law has given rise to much protest across Kenya, as memories of a 2006 government raid on the offices of the Standard Newspapers, the country's second largest newspaper, and a 2007 media crackdown remain fresh.

To be perfectly honest, I remain somewhat puzzled by the passage of this law, especially given that the country is still trying to rebound after the 2007 presidential election and such media restrictions may well curtail much-needed foreign investments. Kenyan media has in past days carried several somewhat biting (biting if you're a member of Parliament, that is) stories about MPs refusal to pay taxes, disclosing the fiscal excesses of  Parliament, but I hesitate to accept the publication of such stories as the sole reason for the government clamping down so harshly. Then again, I could be wrong. Thoughts?

In China, too, 2009 has begun with, well, interesting developments: Chinese authorities have blocked a number of websites criticized for 'low and vulgar practices on the Internet,' among them Google's 'web page search' and 'image search' functions (kind of takes away from the point, doesn't it?). In addition, internet addicts are being sent to boot-camps (yes, seriously) where they undergo a three-month regimen of counseling, confidence building activities, sex ed (sex ed?!?) and in about 60% of cases, medication. Fabulous. Just imagine what they would do to us Western bloggers!

In all seriousness, though, it's often the case that when citizens are barred from accessing information, whatever that information may be, they more actively seek ways to evade censorship to access it. While government crackdowns a la Kenya and China may succeed (or give the impression of success) in the short-term, in the long term the result will be a populace exceptionally well-versed at evading filters and disseminating information. Media crackdowns aren't all they're cracked up to be.

Beyond Africa

China is looking to expand its mining and metal holdings in developed economies, moving beyond its focus on least-developed economies, like the Congo (though there rightly may be other reasons there). According to the FT, China is eyeing Australia, and especially Canada:
“The Chinese realise there are massive opportunities in the market,” said Keith Spence, president of Global Mining Corp, a China-focused resource investment company.

A year ago, they were going to Africa to acquire early-stage development assets. But now they are looking for larger tonnage, longer life, later-stage assets. There is less of an emphasis on emerging markets, because now there is choice.”
Moves to purchase more developed mining assets mirror trends in the agricultural sector. Moving beyond Africa, China has recently been buying up developed land assets in Latin America, most notably in Brazil and Argentina.  

Indeed, when China's so-called "African resource grab" came to the forefront of development debates, I remained of the opinion that this was going to be short-lived. I argued then, and hold now, that for major Chinese resource companies Africa is somewhat of a testing ground - if they can do it there, they can do it anywhere. With the (continued) acquisition of capital from their African investments, and the opportunity to improve upon strategies in perhaps the most difficult of waters, I suspect that we will begin to see more and more Chinese firms trying to expand into developed economies. China will still remain in Africa, but the continent will no longer be their primary focus.