Sachs and Easterly on African aid (what else?)
Africa's differences with other regions lie not in aid, but in circumstances and history. Unlike South Asia, for example, Africa has not yet had a Green Revolution of higher food yields, the formative event of India's economic takeoff from the late 1960s. India is a civilisation of great river systems and large-scale irrigation, thanks to the Himalayan snowmelt and glacier melt and the annual monsoon rains. Africa is a continent of rain-fed (non-irrigation) agriculture. The original Green Revolution, in which India's food output per land area rose markedly, came in the irrigated systems of Asia, not the rain-fed systems of Africa.
US aid heavily subsidised India's Green Revolution while World Bank opposition to aid for African agriculture from the 1980s until recently played an opposite and adverse role, holding back a similar breakthrough for Africa. It was the absence of aid for African agriculture rather than its presence that cost Africa mightily. And one can go on. Africa's tropical disease burden, heavy concentration of landlocked countries, decline of aid for infrastructure during the 1980s and 1990s, and misguided attempts by Africa's creditors to collect debt servicing under "structural adjustment programs" during the 1980s and 1990s all played their part.
To which Bill Easterly, in a column published the following day, responds:
Isn’t rapidly growing India also in the tropics? Yes, but they have snowmelt-fed irrigation instead of rain-fed agriculture. Isn’t rich Singapore also in the tropics? Yes, but they are coastal instead of landlocked. Don’t Latin America and Asia also have tropical diseases like malaria, just like Africa? Yes, but they have a better kind of mosquito. So a region will be poor if they are tropical, if rainfed, iflandlocked, and if they have the wrong mosquitoes – which, yes, fits many African countries. The reason for Occam’s Razor is that with enough Ifs, Buts, and Excepts you can fit any theory to any set of facts. [...]
The other problem with Sachs’ geography story is that it has already been refuted by other economists. The consensus among several prominent academic papers is that destructive governments rather than destructive geography explain the poverty of nations. Acemoglu, Johnson, and Robinson (2006), Easterly and Levine (2003), and Rodrik, Subramanian, and Trebbi (2004) all tested the geography story against the institutions story and came down on the side of institutions.
Geography may have had some influence on history, but through institutions – good government spread along lines of migration and communication through most temperate regions more easily than it did to tropical regions. The latter were also victims of colonialism (and in Africa’s case, the slave trade as well, which goes some way to explain bad government in Africa today).
So Robert Mugabe was a lot worse for Zimbabwe than the Anopheles mosquito. Corruption is more fatal for oil-rich Nigeria and Angola than latitude. Health is determined more by public actions against disease than by species of parasite. Other factors that Sachs mentions, such as illiteracy and poor infrastructure, are also symptoms of bad government services.
Further great insights into the ongoing Sachs-Easterly debate can be found here (PSD blog), here (HuffPo), and here (Texas in Africa). You can link to Easterly's blog here and follow Sachs here.
On the creative benefits of an expat existence
[...] William Maddux of INSEAD, a business school in Fontainebleau, France, and Adam Galinsky, of the Kellogg School of Management in Chicago, presented 155 American business students and 55 foreign ones studying in America with a test used by psychologists as a measure of creativity. Given a candle, some matches and a box of drawing pins, the students were asked to attach the candle to a cardboard wall so that no wax would drip on the floor when the candle was lit. (The solution is to use the box as a candleholder and fix it to the wall with the pins.) They found 60% of students who were either living abroad or had spent some time doing so, solved the problem, whereas only 42% of those who had not lived abroad did so.
The New York Times does Africa
Free trade as a tool for development
... the Doha Round, under the best of circumstances, will take some time to conclude, and the US and other rich countries should move as quickly as possible to further open their markets to the world’s poorest countries. The eighth of the Millennium Development Goals adopted at a UN summit in 2000 calls on the rich countries to provide duty-free-quota-free market access for the least-developed countries (LDCs). This goal was reiterated at the WTO’s 2005 Hong Kong ministerial meeting, but US negotiators would only commit to provide access for 97% of products and only in conjunction with the conclusion of the Doha Round.Importantly, the pledge to provide duty-free-quota-free access is not part of the round’s “single undertaking,” and the LDCs are not being asked to undertake liberalisation commitments. So President Obama would lose nothing and could gain a great deal of good will, as well as providing an economic boost to struggling developing countries, by asking Congress to act now and provide access on 100%of products, as the European Union already does, rather than just 97% as promised in Hong Kong. Three percent may not sound like much, but such liberalisation would unblock a number of items that that are of the most interest to poor countries.Providing full market access will not reverse the decline in trade flows, but it would open opportunities for some of the poorest countries in the world. It would also address a fundamental unfairness created by the fact that US trade policy, like that of other rich countries, discriminates against poor countries and poor people. The highest US tariffs fall on agricultural products and labour-intensive light manufactures, where many developing countries have a comparative advantage.
Chinese origins of the Napa wine industry
Old newspaper articles and other 19th-century accounts show hundreds of Chinese workers in both Napa and Sonoma counties.Many were farmers who brought their agricultural skills to the industry, helping establish vines and working in cellars. "There's more to this story. There's this whole human side of how the valley was developed," says Fong, who has researched the region's history.A 1967 paper by a Napa school official on file at the Napa County Historical Society records that when rains turned the 1887 grape harvest into a muddy mess, keeping wagons out, Chinese workers waded in barefoot and hauled out the grapes.But 19th-century Chinese in California faced fierce discrimination, including laws banning them from owning property and campaigns urging farmers not to hire them. In 1882, Congress passed an immigration ban on Chinese. Populations dwindled and rural Chinatowns disappeared as workers headed to cities.
A curious tidbit to showcase at your next tasting excursion, and an interesting history to ponder the next time you take a sip of a brilliant Napa Valley wine (may I suggest the Joseph Phelps Insignia Napa Valley 2002. Simply amazing).
[HT: Vinography]
More on contemporary land grabs: the case of the DRC
[South African farmers] are scrambling to get on board an ambitious venture to reclaim farmland in Congo's interior and help relieve that country of a reliance on food imports. Already some 70 farmers have booked a Congo tour and more than 3,000 have expressed interest, said Agri-SA, the South African farming group organizing the venture.... According to a draft memorandum of understanding, Congo is willing to sign long-term leases and provide tax breaks and waivers on duties of imported supplies for approved projects. The South Africans in turn would build infrastructure, employ locals and instruct them in modern farming techniques. People familiar with the matter say the initial focus will be on restarting state-owned farms abandoned in 1992.... South African commercial farmers, mostly the descendants of Dutch and French pioneers who began settling the continent's southern tip centuries ago, are renowned for their ability to coax food out of African soil. Eager for their expertise and capital, African countries from Ghana to Nigeria have offered them incentives to set up shop. South African farmers have turned Mozambique into a banana powerhouse. Zambia became self-sufficient in maize after welcoming farmers from Zimbabwe and from South Africa.
Land grabs in poor countries: blessing or curse?
The obvious motives for the deals are the spike in food prices and the subsequent decision of governments in several key producer countries to restrict their exports, threatening the food security of food importing countries such as the Gulf states, China and South Korea (the main participants in the deals). However, water shortages are another, hidden driver. Peter Brabeck-Letmathe, the chairman of Nestlé, claims: “The purchases weren’t about land, but water. For with the land comes the right to withdraw the water linked to it, in most countries essentially a freebie that increasingly could be the most valuable part of the deal.” He calls it “the great water grab”.
Host governments usually claim that the land they are offering for sale or lease is vacant or owned by the state. That is not always true. “Empty” land often supports herders who graze animals on it. Land may be formally owned by the state but contain people who have farmed it for generations. Their customary rights are recognised locally, but often not accepted in law, or in the terms of a foreign-investment deal.So the deals frequently set one group against another in host countries and the question is how those conflicts get resolved. “If you want people to invest in your country, you have to make concessions,” says the spokesman for Kenya’s president. (He was referring to a deal in which Qatar offered to build a new port in exchange for growing crops in the Tana river delta, something opposed by local farmers and conservationists.) The trouble is that the concessions are frequently one-sided. Customary owners are thrown off land they think of as theirs. Smallholders have their arms twisted to sign away their rights for a pittance.
Noteworthy….
Decreasing the number of currencies in Africa as a means of stimulating growth and trade
Does every country in Africa need a currency of its own? No. Because national currencies constitute an exchange and trade restriction, a further reduction of the number of currencies in Africa would likely encourage trade and growth in Africa. This is why the African Union aims at pooling all the continent’s currencies into a single currency by 2028. In the meantime, several regional monetary unions are on the drawing board, and two monetary unions already exist, one de jure and the other de facto. First, fourteen countries belonging to the Economic and Monetary Community of Central Africa and the West African Economic and Monetary Union use the CFA franc. Second, Lesotho, Namibia, Swaziland, and now Zimbabwe use the South African rand. Botswana used the South African rand for ten years following independence, 1966-76, before introducing the pula.... A strive for efficiency dictates the use of fewer and larger currencies and so do foreign investors who are understandably wary of weak and volatile currencies. This centripetal force is opposed by a centrifugal force rooted partly in national pride but also, more importantly, in the belief that sovereign national currencies make it possible to pursue independent and flexible monetary policies to foster economic and social development. This was the vision of Nigeria’s leaders in 1973, even if things turned out differently.
Dear Africa, We would like to invest. Sincerely, the U.S.A. (P.S. Just fix some things, first...)
The easiest, most obvious way to help poor people
Give them money.
No, seriously, give them money.
Aid Watch's Laura Freschi has a brilliant post on the innovative (though arguably really, truly obvious) aid approach taken by Oxfam GB and Concern WorldWide after the horrible flash floods that swept through the Western Province of Zambia in 2007. People lost their homes, livestock, and crops - in short, their livelihoods. Yet where USAID sent $280,000 worth of seeds and fertilizer, training for farmers, and emergency supplies, Oxfam and Concern Worldwide gave every affected family from $20 to $50 monthly, with absolutely no conditions:
An evaluation found that common fears about cash transfers—that the cash infusion will cause inflation in the market, that the money will be squandered, or that men will take control of the money—were unrealized.
What did people buy with the money? The list includes maize, beans, salt, cooking oil, meat, vegetables, clothes and blankets, paraffin, transport, soap and body lotion, and lots of other mundane household items. They also loaned it to friends, used it to pay back debts, purchased health care, education and transport, and rebuilt their homes. Only a very small fraction of the money (less than .5%) was spent on “unproductive” items, like liquor for the men.
Huh, go figure: poor people are capable of determining the depth and breadth of their particular needs! Shock horror! Who would have thought? And why didn't anyone discover this sooner?! *sigh*
Of course such cash transfers remain laden with concerns as those noted above and others, among them targeting the right people and equipping individuals with the knowledge to truly capitalize on the funds given to them. Regardless, such cash transfer programs appear to be the logical way to help people who have lost their livelihoods regain control once again. As Freschi writes:
With the cash transfers, the people can decide for themselves how to meet their most urgent needs. This gives people who have lost their livelihoods, belongings or loved ones a new feeling of control over their lives, builds money-management skills, and restores to them their power to make economic decisions. If you were in their shoes, which would you prefer?
Lula in Beijing to "defend a new economic order"
"I think the trip that I am about to embark on... is one of the most important I am going on to defend a new economic order and a new commercial policy in the world," Lula told reporters before leaving Brazil.Roberto Jaguaribe, a Brazilian foreign ministry official, said last week the trip represented a "reorganisation of the international scene" in which the top emerging economies were playing a bigger role in world affairs.
From bad to worse in Somalia
There is sufficient reason to believe that things in Somalia are going south. Wayyyy south. Mere months after the inauguration of the Transitional Federal Government, lead by moderate Islamist President Sheikh Sharif Ahmed, the opposition party (and by 'opposition party' I mean noted terrorist group) al-Shabab is doing everything in its power to bring the country to the ground. And is doing a pretty good job, at that:
After a week of heavy mortar and rocket attacks that have left at least 135 people dead and sent tens of thousands fleeing, the insurgents have moved to within a half-mile of the hilltop presidential palace in Mogadishu, the Somali capital, which is being guarded by African Union peacekeepers with tanks and armored vehicles.
The Islamists, reportedly joined by hundreds of foreign fighters, didn't move on the palace Friday and almost certainly would lose a ground confrontation with the better-armed, 4,300-man peacekeeping force. Still, Aweys, a veteran hard-liner who US officials charge is linked to Al Qaeda, vowed to topple the government and institute "the Islamic state of Somalia."
This is among the worst violence Mogadishu has seen this year, and what's more, it appears that there is little that outside forces can do about it save but sit and watch. Any peacekeeping mission will likely end in disaster, tantamount to or perhaps even surpassing that caused by the African Union's mission to the country. And, as Elizabeth Dickinson aptly notes, throwing money at the problem won't fix it either; in fact, it may well exacerbate it.
With little prospect for intervention or monetary aid, the international community is seemingly at a loss. This is horrible news for both Somalia and Western interests alike (obviously more so for the former than the latter). I'd venture to guess that life under a militant Islamist regime is not all that rosy, nor is its existence particularly promising for the ongoing war on terror. Hopefully the current state of affairs will not end in such an arrangement, though the present outlook is quite grim. Quite grim, indeed.
Update: Oh! I forgot to mention another somewhat disparaging factor implicated in all of this: the UNDP seems to think that Somalia's plight makes for a brilliant comic strip. A comic strip!! The alleged intent is "educational," but it all sounds a bit demeaning to me....
A sign of the times; dispatches from Ethiopia
Here in Ethiopia it is common for little children to shout ferenj when they see a white face. I am told that this comes from the Amharic word for a French person, ፈረንሳዊ (pronounced färänsawi), because French people were among the first white people Ethiopians had seen.
Today G and I were running down a dirt track through a small village and a small girl, about 4 years old, saw us running past. She shouted,
China! China!
I heard the other day that there were two old men sitting on a hillside in north Wello, watching the Chinese labourers building a new road. They were old-timers, who had fought against the Italians in 1935, and then watched the Italians build the first roads across the Blue Nile gorge and up to Eritrea. (”What have the Romans ever done for us?”) As these men watched the Chinese roll out the tarmac, one of them said to the other:
The Italians are back. Only now they have narrower eyes.
My humanitarian crisis is bigger than your humanitarian crisis
To put the death rate in perspective, at the peak of the Darfur crisis, the conflict-related death rate there was less than a third of the Congo’s, and by 2005 it had dropped to less than 4,000 per month. The United Nations has estimated some 300,000 may have died in total as a result of the years of conflict in Darfur; the same number die from the Congo conflict every six and a half months.
And yet, in the New York Times, which covers the Congo more than most U.S. outlets, Darfur has consistently received more coverage since it emerged as a media story in 2004. The Times gave Darfur nearly four times the coverage it gave the Congo in 2006, while Congolese were dying of war-related causes at nearly 10 times the rate of those in Darfur.
Rwanda: mHealth pioneer?
Supported by the Rwandan Ministry of Health, Voxiva, and the Treatment Research and AIDS Centre (TRAC), TRACnet is an electronic records system that can be uploaded to mobile phones. In Masaka it is being used to track and record the distribution of anti-retroviral medications, ensure drug adherence, electronically create and submit patient reports, and access the most up-to-date information about HIV/AIDS care and treatment.[...] In Masaka, I was guided through the health clinic by the local program manager, Hareuhana Diaedonne. During the tour, Hareuhana spoke at length about the simple but significant benefits that have been brought about by the introduction of mobile phones to the local healthcare system. Using TRACnet, he reported, data entry that used to take months to record and aggregate now can be collected in just 5 minutes.
African clichés, brought to you in taxonomic form
Africanus occidentalis: This cliche is at home in a broad variety of habitats, be it among development practitioners or wide-eyed teenagers visiting Africa for the first time. It can be distinguished by its prominent belief that concerted Western action can solve all of Africa’s problems. The Africanus occidentalis studentia lives a peaceful life in the dorm rooms of university students, who often react to its presence by talking at length about the spiritual connection and cultural vitality that they experienced while visiting one country in a very large continent for two weeks last summer. (The tragedy of receiving a university education whilst children in Africa are dying is an alternate topic, although this should not be confused with actual discussions of Rawlsian justice.)
Chinatown, Angola
Whither Chinese growth?
The total value of Chinese exports fell 22.6 per cent from a year earlier in April to $91.9bn, a faster rate of decline than the 17.1 per cent year-on-year drop in March, which many analysts and officials took as a sign that external demand for Chinese goods was starting to recover.
Retail sales have held up much better in China this year than in other big economies, growing at a real 15.9 per cent in Marchyear-on-year. But more important than the overall trend is the composition of the retail spending.The most robust consumer spending figures are coming from inland and lower-tier cities rather than from the traditional growth powerhouses clustered around the Yangtze and Pearl river deltas. A China Confidential survey assessing consumer spending intentions among an estimated 64m middle and upper income households in 189 cities in March showed a much higher propensity to spend in lower-tier cities.Overall, 51 per cent of respondents in 15 second-tier cities said they planned to increase spending this year from last – a full 9 percentage points more than the number from the first tier. In 170 third-tier cities, 49 per cent of respondents said they would boost their spending this year.