December 30, 2004

Marshall Plan For Africa

The International Herald Tribune presents an article on the politics of aid, in which Todd Moss puts forward arguments as to why a Marshall plan is not what Africa needs. The success of American assistance to Europe after the second world war cannot be replicated in Africa, where unlike in pre-war Europe, there was already a high standard of living and experience with the markets, according to the article. Interesting to note was the fact that:

Africa is already relatively flooded with aid. The continent as a whole receives development assistance worth almost 8 percent of its gross domestic product. Exclude South Africa and Nigeria, and aid jumps to more than 13 percent of GDP - or more than four times the Marshall Plan at its height - for the other 46 African countries. (It's true that the United States now gives less as a share of its own economy, but that's a measure of donor generosity rather than help to a needy country.)

The author advocates a South Korea aid model style, and states that:

Africa's battle against poverty will ultimately depend on its own people and leaders. The international community can support them through more open trade, greater private investment and better development assistance. Evoking an idealized Marshall Plan may be good politics, but it exaggerates the value of aid - and suggests an approach that is inappropriate for Africa's development challenges.

Unfortunately, he fails to make a single comment on the effect of debts on economic growth in most African countries.

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Posted by Chippla Vandu, 5:40 PM | links to this post

10 Comments:

I'm curious, what viable options do you recognize as providing long-term stability and growth to sub-saharan africa?

Clearly democracy and autonomy alone has not worked. I point to your previous post as evidence that democracy in its present form in many african countries is truly no expression of the people at all.

It is in many ways the classic quandrum facing many formerly oppressed (and some currently) peoples throughout the world. Do they rely on the oppressor's new found generousity or do they take responsibility for their own future regardless of foreign benefactors?

Unfortunately the major problem in many countries is not the absolute quanity of resources but rather how those resources are distributed amoungst the citizens. As always, the rich have garnered a large percentage of their countries GDP which in turn puts them in an advantageous position to exploit the poor.

I am interested in your perspective, as I am only a "casual" observer from across the ocean.
Posted by Blogger JD at December 30, 2004 8:06 PM  
Sub-Saharan countries are diverse. While the likes of Botswana and South Africa are economically well off, most others are not. I can only speak with certainty about events in Nigeria, a country of which I am very well informed.

Nigeria is recovering from years of misrule, corruption and looting effected by successive military governments who were accountable to no one. While they embraced different types of economic policies, ranging from a mild form of free market capitalism to an outright state-controlled economy, they all had one thing in common – excessive corruption.

It is no longer news that the last but one Nigerian military dictator transferred at least $5 billion of state funds to his private bank accounts in Europe. Neither is it news that during the tenure of the last military ruler, $3 billion went missing just before the transition to civilian rule. But who cares? And we aren't even talking about the millions and billions of dollars siphoned by ministers and appointed officials all through the years. Rich Nigerians currently own some of the best pieces of real estate in European capitals, especially in London.

I happen to believe that though governments are meant to be the solution to the problems facing a large number of African countries, they are as a matter of fact the problem. Take Nigeria for instance, where there is such a strong central government and weak regional governments, as demanded by the constitution. This is a country that exports up to 2.5 million barrels of oil a day, yet its oil producing regions remain poor and undeveloped. The oil money is instead shared out evenly amongst the 36 states of the republic (based on population), even those that contribute practically nothing to the country's GDP. I find this absolutely illogical. The current government is trying to change this by allowing 13% of all oil revenues to be retained in the states where oil was obtained (this should have happened a long time ago).

It is necessary for African countries to realize that simply exporting raw materials cannot and will not help them achieve much desired economic growth. It's about time they started thinking about adding value to these materials before having them exported. And that's where the need for an educated workforce comes in.

Worthy of note also is the fact that the complex ethnic makeup of most African countries helps create and fuel conflicts. To the outside world, Nigeria is a country. To a large number of Nigerians, Nigeria is an agglomeration of different nations, each with its own unique cultural heritage. To buttress this point, inter-ethnic marriages are still very uncommon. But, I do believe that a generation or two down the line, prejudices over ethnic differences will begin to fade away.

There are quite a number of other issues I'd like to talk about. I'll discuss these over time in my blog. They cover a wide range of topics such as education, healthcare, private participation in the economy and citizenship rights.
Posted by Blogger Chippla Vandu at December 30, 2004 9:14 PM  
Please do! I look forward to it.

So if I understand you correctly many of the problems that face Nigeria in terms of economic development could be allieviated by a governmental structure that was indeed accountable to the population at large. If true than that is somewhat encouraging.

As for ethnic differences... Am I correct in assuming that many of these conflicts have arisen due to the arbitrary borders drawn by European colonizers? Sadly, many countries throughout the world share the same dilemna. However interstingly, the countries that have broad land masses that incorporate numerous ethnic groups, such as China, Russia, the US (though ethnic groups in the US are dispersed and none save the American Indians stake ancestrial claims to any one area) Saudi Arabia, and Brazil have done remarkably well. Though admittedly other factors are surely in play.
Posted by Blogger JD at December 31, 2004 5:15 PM  
In my opinion, a good government could make a world of difference in Nigeria within a decade. Unfortunately, I do not see such coming soon. Why? In 2007, Nigerians will be going to the polls to elect a new leader. Looking at the type of people who have so far shown interest in ascending to this most coveted of officies, I cannot be optimistic. Retired military generals, even an ex-military leader, who have looted and stolen from the national cofferes.

Indeed European colonizers drew the borders of present-day African countries with little regard to the ethnic or religious beliefs of different communities. Greed and economics dictated it all. However, amongst all the countries you mentioned, Nigeria is unique because it has got no dominant ethnic group or culture. There are three large groups – the Hausa-Fulanis in the north who are predominantly Muslims, the Yorubas in the west who follow Christianity, Islam or traditional beliefs, and the Igbos in the east who are predominantly Chrisitans.

Had a dominant ethnic group been present, it would simply have absorbed minor groups over time. That is why till date, the only unifying language in all of Nigeria remains English. Ancestral lands are also a hot topic in Nigeria. Unlike in the United States where your parents can come from one state and you from another, ancestral identity is so key to the Nigerian psyche. By law, you must come from the same province as your parents, grandparents, great-grandparents…the list goes on. I find this ludicrious and out of touch with modernity, in view of increasing migration from rural areas to cities.

But the ancestral system cannot simply be abolished. Before the advent of the entity called Nigeria, there were strong and well established monarchies within its present boundary. Thus, all across Nigeria today, one finds monarchs presiding over kingdoms that have since faded into oblivion. For the sake of peace, order and continuity the constitution recognizes these monarchs and they are paid by the government (yes, with money obtained from oil!). These monarchs are known as 'traditional rulers' in Nigeria.

I find the existence of monarchies within a republic absolutely out of place. But unlike the United States, there was no ideological basis for the creation of Nigeria. It was simply done to satisfy the greed of governemnts thousands of miles away. Nigeria only became a republic in 1963, three years after independence. And several institutions left untouched by the British such as monarchies, have remained in place till this day. Quite funny.
Posted by Blogger Chippla Vandu at December 31, 2004 6:47 PM  
Mr Shogren,

Other places u speak of as constituting diverse ethnic groups are not exactly so…Brazil for instance, the Japanese, Germans, etc went there on their own accord and in fairly recent times, same as the US ( as already stated). The current problem in Iraq, is a clear indication of what happens in Nigeria (not war, but in terms of lack of trust and co-existence) . Russia, is also a bad example as the USSR consisted of a people who’d been forced into unison. Chechnya and Afghanistan, are reminders of the situation at hand.

And Mr Chippla,

In which situation do u think foreign companies, (and by extension their governments) enjoy maximum profit in Africa...an Africa with corrupt leaders where accountability is not required or vice versa?
Posted by Anonymous Anonymous at January 2, 2005 10:34 AM  
I'm sorry to say but development aid should generally bypass governments or at least require government structures to work with local civil society organizations and take into account the governments' records on democracy, human rights and good governance. Though I'm in favor of blanket debt cancellation, future loans should be conditioned upon a demonstrable record of money being used for its intended purposes.

Money's being pouring into Africa. It just hasn't been used wisely by the mis-leaders. And donors haven't demanded accountablity.
Posted by Blogger Brian at January 3, 2005 5:02 PM  
Brian seems to have hit the nail on its head. Bypassing governments in the allocation of development aid is in my opinion a wonderful idea but unfortunately one that may never be. Foreign governments need some form of structure or authority in place that can act as a guarantor for aid given.

I wouldn't advise any foreign government to waste its aid money on a government such as that in Nigeria (granted, Nigeria receives much less aid than most African countries and could pretty much survive without it). Rather, such aid should be channeled directly to credible NGOs, except of course one expects to see a large chunk of aid money finding its way back to some bank account in Switzerland or London. There could hardly be a better 'adjective' to qualify the word corruption than the 'government of Nigeria'.
Posted by Blogger Chippla Vandu at January 3, 2005 7:40 PM  
Africa needs good governance and an end to agricultural subsidies in Europe and the US. A good dose of privatisation would help too.

It won't work over-night but it will work.
Posted by Blogger GGO Blog Editor at January 4, 2005 4:01 PM  
"Foreign governments need some form of structure or authority in place that can act as a guarantor for aid given."

Indeed. Yet, some African governments are guarantors only that aid will NOT reach its intended target.
Posted by Blogger Brian at January 4, 2005 11:53 PM  
I can't speak to Europe but my rejoinder is simply that the US will not drop agricultural subsidies anytime soon. These subsidies hark back nearly 80 years and have become ingrained in American domestic politics. For instance, I live in a state where the government actually pays people NOT to grow tobacco. Long ago farmers were given quotas to grow tobacco. They are paid for these quotas every year, regardless of whether or not they grow tobacco or not. These quotas have been handed down generation after generation so that now the grand-children of tobacco farmers are still getting paid by the government.

You understand the logic? Of course not, because there is none! But that's the way it is.

Also, the US foreign policy is so distrait now because of terrorism and war that Africa is not likely on the front burner at the White House these days.
Posted by Blogger JD at January 5, 2005 5:35 PM  

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