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ideas have consequences

You are here:Home>>Stevie C. Chiakwelu>>Displaying items by tag: aid or trade
Displaying items by tag: aid or trade

Africa needs to progress by any means necessary

Ideas have consequences and Ideas are precursors of actions. The idea-packed, sizzling debate on Africa between Bill Gates, co-chairman of the Bill & Melinda Gates Foundation and Matt Ridley the author of new book, "The Rational Optimist,"  should be review by any serious African politician, bureaucrat or  any person who has interest in Africa. On the pages of America’s Wall Street Journal both men duke it out on how to contribute and accelerate Africa’s progress in 21st century. It was interesting to see that there are individuals that really care about the welfare and wellbeing of Africa while few African leaders were busy abusing and looting the continent. Africa has made an enormous progress from being called the ‘Dark continent’ to an emerging democratic and enterprising landscape but her needs are numerous. A giant leap is what Africa needs to make a heightened quantifiable dent on poverty and to greatly ameliorate quality of life. The 21st century has been called the African century and she must take the bull by its horn to actualize it.

Africa has a bright economic outlook; free enterprise and democracy are taking hold in the continent. “Economic growth in Africa was expected to rise to 5% this year and could reach 7% in 2011, according to African Development Bank (AfDB) president Donald Kaberuka. Thus, as the global financial crisis abated and demand for commodities began to increase, Kaberuka said that Africa's economy was expected to grow between 4,5% and 5% this year, with the expansion likely to accelerate to 6,5% or 7% in 2011. South Africa, Nigeria and Kenya were highlighted as the three countries expected to help spur Africa's recovery on the back of improved global demand.” Nigeria, the second largest economy in Africa has the annual growth rate of 7.3% and expected to grow up to 10% in 2011.

On the pages of America's flagship newspaper on capitalism - The Wall Street Journal, Bill Gates and Matt Ridley showed genuine interest on how to improve Africa’s existential problems by either utilizing aid or unbridle capitalism. African problems at the   dawn of 21st century are littered across the continent. The myriads problems stems from economic inadequacy of the second largest continent; ranging from AIDS to perennial poverty. Africa has a great potential; Africa is natural resources-rich, the soil is fertile and the weather for the moment is terrific, the emergence of global warming notwithstanding.  But in spite of African natural and fledging human capital, together with the recent affirmative economic indices the continent has not realized her potential. In fact, Africa still has a long way before she will get to the promise land. Therefore this debate by these gentlemen is significant to Africa.

The essential thesis of Matt Ridley’s "The Rational Optimist,” on Africa is that "Aid doesn't work, hasn't worked and won't work,” and Africa needs trade and free enterprise.  While Bill Gates essentially maintains that for the moment Africa needs aid. Both men are essentially right – Africa needs both trade and aid.

Bill Gates commented in his piece that, “In discussing Africa, Mr. Ridley relies on critics who say, essentially, "Aid doesn't work, hasn't worked and won't work." He cites studies, for instance, that show a lack of short-term economic benefit from aid, but he ignores the fact that health improvements, driven by aid, have been a major factor in slowing population growth, which has proven, in turn, to be critical to long-term economic growth. I may be biased toward aid because I spend my money on it and meet with lots of people who are alive because of it, but even if that were not the case, I would not be persuaded by such incomplete analysis.”

Photo Courtesy: Bill & Melinda Gates Foundation Source:  “The 50 Most Generous American”  Business Week

The most important point  to be made crystal clear is that aid does work when it is judiciously administered and free of governmental red tape. But the way aid is administered is quite troubling, because so many strings are attached to the western aid given to African countries. By giving the aid directly from government to government opens door to corruption and manipulation of the African governments. Western governments can learn a lot from Bill and Melinda foundation that gives targeted aid to institution that really needs it, thereby curtailing corruption and bureaucratic red tape.

But at same time aid has its limitation on moving Africa forward. Africa needs aid, trade and debt remission to move forward and to savlage poor-development stricken continent. Of the $44 billion of official development aid given to Africa in 2008, majority of aid went to the donors through compulsory trade, servicing of foreign debt and bureaucratic shenanigans.

Bill Gates has been a great helping hand to the continent and his presence has been felt. With Bill and Melinda foundation, millions of dollars has been given to institutions in Africa to improve health mostly in AIDS and malaria patients. As for Mitt Ridley his contribution to the African debate cannot be easily write-off or devalued for with his pen he has summoned serious philanthropists including Bill Gates to weigh-in on the best ways to help the suffering masses of Africa.

But in reality both of these gentlemen have good ideas and Africa cannot take one direction and forgone another. The continent problem is circumventing therefore its solution should be comprehensive. Africa needs trade, aid and big ideas. All these are consistent and are not mutually exclusive; they can all co-exist for greater good of Africa.

Only one thing lacking in the debate is the absence of African participation. There are no African policy makers and bureaucrats participating on the pages of the Wall Street Journal. No matter how compassionate and passionate debates on Africa become, immediate stakeholders who are the inhabitants must be involved. In the problems of their continent, Africans must take the lead. No amount of help from outside will do the job Africans must do for themselves. That does not implies that Africa will be abandon to do the job alone and African friends including philanthropist Bill Gates should be acknowledged by Matt Ridley for his invaluable aid to Africa.

When Matt Ridley writes, “I am arguing that we should worry about real problems, including Africa's plight, but that we should do so in the knowledge that we have solved many such problems before and can do so again.”  Ridley is quite carried away by thinking “we” are the people to save Africa. Ridley must understand that every continent has its own problems and Africa has men and women who can solve her problems. Only thing Africa needs is a logical helping hand to correct present and past injustices. And Bill Gates is a true friend of Africa who understood that healthy Africa is precursor for a wealthy Africa.

The most important question must be asked, what does Africa really needs? To answer the question, we must move beyond the limited scope of the discussion and expand the dialogue into the future of Africa.  Africans have intelligent men and women of goodwill that can work with Bill gates and with Western governments to permanently improve African lots. Africa must take the lead by displaying intrinsic initiatives in order to move forward.

Beyond aid and debt remission, what does Africa really needs?

Empowerment to foster Freedom and Liberty:

Africans must live in the system of government that encourages freedom and justice. The respect for fundamental human rights must be instituted and adhered to; an environment that provides self-help, self-improvement and self-innovation must be encouraged. Only freedom can make these things possible and make free enterprise a reality, so that free people can create wealth and advance human dignity.

The West must encourage and support governance that accommodates checks and balances in Africa. This will in turn provide accountability and respect for the populace. What Africa needs mostly include, elimination of dictators and socialist regimes, establishment of virile/free political platform and economy, rule of law and respect for individual rights. All these things do border on fundamental issues which foreign aid alone cannot redress. Until these issues are properly put right, the story of the optimum utilization of these billions of dollars from foreign aid will always remain a mirage.

Anti-corruption legislation:

The responsibility of fighting corruption is too complex and gigantic to be left for one party. Both Africa and West must partake in the fight against corruption. The West must enact banking laws that will fish out bankers that accept laundered money and tainted wealth from corrupt African leaders and bureaucrats. Ill-gotten wealth must be returned to Africa without much ado, while the culprits must be exposed and prosecuted.

The West must work together with African governments on the war against corruption and bribery. Corporations and Transnational companies operating in Africa must not induce politicians and bureaucrats by bribes in their quest for contracts.

“African Union estimates that the continent loses as much as $148 billion a year to corruption. This money is rarely invested in Africa but finds its way into the international banking system and often into western banks. The proceeds of corrupt practices in Africa, (which the African experts group recommended in 2002 should be classified as a ‘crime against humanity’ because of its impact on ordinary people), are often laundered and made respectable by some of the most well known banks in the City of London or the discreet personal bankers of Geneva and Zurich."

Elimination of wars and Promotion of Peace and conflict resolutions:

The West can work with African union in finding solutions to the cessation of conflicts and wars. Wars (especially internal strife) are ubiquitous in the continent. Some African governments and warmongers commit their resources to executing endless wars. The West must frown upon the sell of arms to these parties by checkmating their native’s arms industries.

Fair and Balance Trade:

The West must encourage fair and equitable trade with Africa. The giving of aid must not be the only means to defeat poverty and alleviate quality of life in Africa. The promotion of trade can be possible when concessions are made to infant industries in Africa. The West can improve technological developments by investing in areas of science and technology that can sharpen the technical-know-how in the continent. The West must stand for fair trade at the World trade organization by conscientiously removing agricultural subsidies given to their own agricultural sectors that adversely affect the traffic of commodities from Africa. Only trade can be the panacea to poverty in Africa, this by and large booster a higher GDP and a decent standard of living.

Africa must embark on the area of trade specialization where she has the greatest comparative advantage. It seems that agriculture is the best possible for Africa. The Western World must take the initiative of reducing trade tariffs and removal of agricultural subsidies. By this, developing nations and poor countries especially in Africa can participate and compete favorably with the West. In practice, free trade must be made to work for every nation. World trade Organization must implement trade policies that are doable, workable and all-inclusive. Foreign aid is good and dandy, though on the contrary, history has always proven that aid has slightly or insignificantly improvement  on recipient nations nor ameliorate the well-beings of the fabric of the needy class at the long run. Foreign aid can be given via reduction in prices of medicine, pharmaceutical equipment and of essential commodities needed for survival in the less technological nations. We cannot downplay the role of foreign aid when fully utilized, when it goes to the required projects that ought to impact the needy positively. But Africa core need is beyond these immediate measures.

Africa needs and appreciates aid given to her but Africans most realize one thing, her destiny and future is in her hands.

Mr. Emeka Chiakwelu is the Principal Policy Strategist at Afripol. Africa Political & Economic Strategic Center (AFRIPOL) is foremost a public policy center whose fundamental objective is to broaden the parameters of public policy debates in Africa. To advocate, promote and encourage free enterprise, democracy, sustainable green environment, human rights, conflict resolutions, transparency and probity in Africa.

 

Published in Archive
Wednesday, 01 December 2010 15:33

Africa Needs Aid, Not Flawed Theories

Africa Needs Aid, Not Flawed Theories

The science writer Matt Ridley made his reputation with books like "The Red Queen: Sex and the Evolution of Human Nature" and "Genome: The Autobiography of a Species in 23 Chapters." His latest book, "The Rational Optimist: How Prosperity Evolves" is much broader, as its title suggests. Its subject is the history of humanity, focusing on why our species has succeeded and how we should think about the future.

Although I strongly disagree with what Mr. Ridley says in these pages about some of the critical issues facing the world today, his wider narrative is based on two ideas that are very important and powerful.

The first is that the key to rising prosperity over the course of human history has been the exchange of goods. This may not seem like a very original point, but Mr. Ridley takes the concept much further than previous writers. He argues that our success as a species, as opposed to earlier hominids, resulted from innate characteristics that allowed us to trade. Not long after Homo sapiens emerged, we were using rare objects, like obsidian blades, far away from the source materials needed to produce them. This suggests that large numbers of commercial links were established even at the hunter-gatherer stage of our development.

Mr. Ridley gives many examples of how exchange allowed groups to thrive, by enabling them, for example, to acquire fish hooks or sewing needles. He also points out that even the most primitive human groups today are open to exchange. I've always thought this openness was surprising, considering the risks involved, but Mr. Ridley convincingly describes its adaptive value.

Exchange has improved the human condition through the movement not only of goods but also of ideas. Unsurprisingly, given his background in genetics, Mr. Ridley compares this intermingling of ideas with the intermingling of genes in reproduction. In both cases, he sees the process as leading, ultimately, to the selection and development of the best offspring.

The second key idea in the book is, of course, "rational optimism." As Mr. Ridley shows, there have been constant predictions of a bleak future throughout human history, but they haven't come true. Our lives have improved dramatically—in terms of lifespan, nutrition, literacy, wealth and other measures—and he believes that the trend will continue. Too often this overwhelming success has been ignored in favor of dire predictions about threats like overpopulation or cancer, and Mr. Ridley deserves credit for confronting this pessimistic outlook.

Having shown that many past fears were ultimately unjustified, Mr. Ridley finally turns his "rational optimism" to two current problems whose seriousness, in his view, is greatly overblown: development in Africa and climate change. Here, in discussing complex matters where his expertise is not very deep, he gets into trouble.

Mr. Ridley spends 14 pages saying that everything will be just fine in Africa without our worrying about negative possibilities. This is unfortunate and misguided. Is his optimism justified because things always just happen to work out? Or do good results depend partly on our caring and taking action to prevent and solve problems? These are important questions, and he doesn't answer them.

In discussing Africa, Mr. Ridley relies on critics who say, essentially, "Aid doesn't work, hasn't worked and won't work." He cites studies, for instance, that show a lack of short-term economic benefit from aid, but he ignores the fact that health improvements, driven by aid, have been a major factor in slowing population growth, which has proven, in turn, to be critical to long-term economic growth. I may be biased toward aid because I spend my money on it and meet with lots of people who are alive because of it, but even if that were not the case, I would not be persuaded by such incomplete analysis.

Development in Africa is difficult to achieve, but I am optimistic that it will accelerate. Science will come up with vaccines for AIDS and malaria, and the "top-down" approach to aid criticized by Mr. Ridley (and by the economist William Easterly) will fund the delivery of these life-saving drugs. What Mr. Ridley fails to see is that worrying about the worst case—being pessimistic, to a degree—can actually help to drive a solution.

Mr. Ridley dismisses concern about climate change as another instance of unfounded pessimism. His discussion in this chapter is provocative, but he fails to prove that we shouldn't invest in reducing greenhouse gases. I asked Ken Caldeira, a scientist who studies global ecology at the Carnegie Institution for Science, to look over this part of the book. He pointed out that Mr. Ridley celebrates declining air-pollution emissions in the U.S. but does not acknowledge that this has come about because of government regulations based on publicly funded science, which Mr. Ridley opposes. As Mr. Caldeira rightly observes, "It is a wonder of development that our economy can grow as air pollution diminishes." What is true of the U.S. case, I'd suggest, can be true of the world as a whole as we deal with the challenges posed by climate change.

"The Rational Optimist" would be a great book if Mr. Ridley had wrapped things up before these hokey policy discussions and his venting against those he considers to be pessimists. I agree with him that some people are overly concerned with potential problems, and I hadn't realized that this pessimism was so common in rich countries over the last several centuries. As John Stuart Mill said in 1828, in a quote from the book that I especially enjoyed: "I have observed that not the man who hopes when others despair, but the man who despairs when others hope, is admired by a large class of persons as a sage."

The most obvious instance of excessive pessimism in Mill's era was the "Communist Manifesto." In one of history's great ironies, Karl Marx used the profits from the German textile mills of Friedrich Engels's father to support the writing and distribution of a political philosophy based on pessimism about capitalism.

Pessimism is often wrong because people assume a world where there is no change or innovation. They simply extrapolate from what is going on today, failing to recognize the new developments and insights that might alter current trends. For too long, for instance, population forecasts have ignored the possibility that population growth would ease as the world became better off, because people who are wealthier and healthier do not feel the need to have so many children. (For more on this issue, see the excellent presentations on the "Gapminder" website of the development expert Hans Rosling.)

A lot of the rhetoric about sustainability implicitly assumes that we will exhaust our natural resources, as though there will never be any substitution of one commodity for another in the future. But there has always been such substitution. The late economist Julian Simon made a famous wager with the biologist Paul Ehrlich, author of "The Population Bomb." In response to Mr. Ehrlich's prediction that population growth would lead to resource scarcity and mass starvation, Simon bet him that the cost of a basket of commodities, including copper, chromium and nickel, would actually decrease between 1980 and 1990. Mr. Simon won the bet because he believed that, despite increased demand, increased supply would win out. And in fact, to take one example, fiber optics soon took the place of copper wire in many communications technologies.

There are other potential problems in the future that Mr. Ridley could have addressed but did not. Some would put super-intelligent computers on that list. My own list would include large-scale bioterrorism or a pandemic. (Mr. Ridley briefly dismisses the pandemic threat, citing last year's false alarm over the H1N1 virus.) But bioterrorism and pandemics are the only threats I can foresee that could kill over a billion people. (Natural catastrophes might seem like good candidates for concern, but I've been persuaded by Vaclav Smil, in "Global Catastrophes and Trends," that the odds are very low of a large meteor strike or a massive volcanic eruption at Yellowstone.)

Even though we can't compute the odds for threats like bioterrorism or a pandemic, it's important to have the right people worrying about them and taking steps to minimize their likelihood and potential impact. On these issues, I am not impressed right now with the work being done by the U.S. and other governments.

The key question that Mr. Ridley fails to address is: What's wrong with worrying about and guarding against threats that might become real, large problems? Parents worry a great deal about their children's safety. Some of that worry leads to constructive steps to keep children safe, and some is just negative emotion that doesn't help anyone. If we all agree to join Mr. Ridley as rational optimists, does that mean that we should stop worrying about trends that might cause problems and not take action to anticipate them?

Mr. Ridley devotes his attention to just two present-day problems, development in Africa and climate change, and seems to conclude, "Don't worry, be happy." My prescription would be, "Worry about fewer things while understanding the lessons of the past, including lessons about the importance of innovation." This might qualify me as a rational optimist, depending on how stringent the criteria are. But there can be no doubt that excessive pessimism may cause problems with how society plans for the future. Mr. Ridley's book should trigger in-depth discussions on this important subject.

Like many other authors who write about innovation, Mr. Ridley suggests that all innovation comes from new companies, with no contribution from established companies. As you might expect, I disagree with this view. He also seems to think that innovation involves simply coming up with a new idea, when in fact the execution of the idea is critical. He quotes the early venture capitalist Georges Doriot as saying that as soon as a company succeeds, it stops innovating. A great counterexample is Intel, which developed over 99% of its breakthroughs after its first success.

Mr. Ridley describes the economy of the future as "post-corporatist and post-capitalist," a silly throwaway phrase. He never explains what will replace all the companies that figure out how to make microchips or fertilizer or engines or drugs. Of course, many companies will come and go—that is a key element of capitalism—but corporations will continue to drive most innovation. It is a dangerous and widespread problem to underestimate the ongoing innovation that takes place within mature corporations.

In his quest to highlight exchange as the key mechanism in the success of our species, Mr. Ridley underplays the role of other institutions, including education, government, patents and science, all of which, especially since the 19th century, have played a central role in the improvements that humanity has experienced. Too often, when Mr. Ridley finds an example that minimizes the contributions of these institutions, he seems to think that he has validated the idea that exchange deserves all of the credit.

I am always amazed by scientific possibilities. Electricity, steel, microprocessors, vaccines and other products are possible only because of our efforts to understand the world and how it works. The scientists and tinkerers who investigate these mechanisms are engaged in a profound process of discovery. Without their curiosity and creativity, no amount of exchange would have produced the world in which we now live.

—Bill Gates is co-chairman of the Bill & Melinda Gates Foundation and serves as chairman of Microsoft.

 

 

Published in Archive
Thursday, 24 June 2010 20:56

Trade or Aid for African development

From the fifteenth century to the present day, there have been ideological debates about Africa and her relationship with the rest of the world. Western pseudo- geneticist and evolutionist questioned the humanity of the African and suggested her existence on earth as just a mere savage. When that theory was disproved, the debate shifted to the inability of the African to govern herself and whether she possessed the skills and the intellect necessary to control her environment and society. All these challenges to the credibility of the African were made with disregard for history and Africa's contribution to mankind.

The debate for our age is aid or trade? 
Some argue that Africa must be paid reparation by the West, then the financial aid can be use to develop and sustain development in Africa. While others say we need both trade and aid. I say we only need trade. All the foreign aid and loans that have been given to Africa have produced no measurable result. No man will feed you and your family and then see you as an equal. This is about dignity.
On a civic level, Non Governmental Organizations (NGOs) from the continent can network with their counterparts in the Western world to support whatever cause they are fighting for. From a governmental perspective, the leadership cannot progress when they agree to neo-liberal economic policies (which have not be proven to be effective) that cripple the economy, and turn citizens inept by removing shields and stimulants that make the internal economy grow. 
If the African feels that he needs to be given reparations for colonization and unfair economic practices after independence, he must discuss those issues on a different platform. If he is to improve the current state of despair, poverty, and hopelessness, he must take ownership of himself and his country. Taking ownership means taking control of his environment and resources, demanding fair market prices for commodities, and setting standards based on the interest of Africans versus adopting foreign theories. 
Trade cannot be taught to the African because we are capitalists by nature. Even in antiquity, men farmed and women went to the market. You can still see the entrepreneurial spirit today in Africa since the people do not usually benefit from the wealth generated by the resources of their nations. The economy is sustained by local traders. For example, oil does not benefit the citizens of Nigeria although Nigeria is member of OPEC and makes billions from oil; the money goes to run government institutions. There is no reliable electricity for industrial or home use (manufacturers and society's elite use generators). Refined oil is expensive since it is largely imported, therefore making the cost of transporting goods high, again translating into costly goods. Very little money is invested in health care, education, and infrastructure.
The image of African leaders stretching their hands out to beg on the global stage is a reflection of their inferiority complex and incompetence as "leaders". African leaders have a "come help us mentality" and if you need help as a government then you are incapable of being seen as a mature, responsible body and will therefore be treated like a child. 
President Mobutu has more money in one bank account than the $5 billion loan the Democratic Republic of Congo just took from China to develop the country's infrastructure, and that does not include his wealth from other accounts, palaces and vehicles. 
What the average African want to communicate to the international community is that these leaders do not represent us. So when they are begging at the G8 or UN meetings, they are doing it for themselves and their cronies and not for the people. Western donors need to save their time and energy by depositing aid money into the Swiss bank accounts of African leaders, which is where the money is going to end up anyway. 
What the people need are fair trade policies. We need the West to open their markets to Africa, not only for raw materials, but processed and finished goods. Continental Unions (e.g. cotton, cocoa, and cassava farmers union) need to develop and share 'best practices', bargain for block prices, and more importantly control market prices. The price of cocoa needs to be set in West Africa and not in Chicago. The wheeling and dealing of world commodities through the Chicago Mercantile Exchange Group must be reexamined. Changing these policies will bolster the entrepreneurial spirit of the African, create a viable wealth distribution system, stimulate the local market, and augur a sense of self worth. Besides, it is always better for a man to fish and support his family than sit at home and be given fish everyday. 

Published in Gideon Nyan

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