Tag Archives: africa

On Industrial Policy (In which I concur with Blattman 1001%)

7 May 2012

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I have made the case before here, here and here.

For more here’s Blattman, commenting on Industrial policy:

“You can’t pick winners” is the knee-jerk retort to the mention of anything that even rhymes with industrial policy. I would call it the triumph of ideology over evidence, except that even “ideology” feels like a generous term. Lazy thinking might be a more accurate description. Some have given the question a great deal of thought, but most have not.

I’m not suggesting that the paper above has the right answer (odds are, like most papers, it does not). I’m also not suggesting that governments can pick winners (probably they can’t). Nor am I forgetting that industrial policy is easily politicized and distorted (as surely it is). So what am I talking about?

More on this here.

Kenya’s Obscene Politician’s Salaries: Still a Problem

30 April 2012

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President Kibaki will probably not win the Mo Ibrahim Prize because of his questionable reelection but he sure will leave office a happy man.

According to the Star:

“When President Kibaki walks out of State House after the next elections, he will go home with a hefty gratuity—Sh50 million. The gratuity, the highest to be paid in the history of the country, has already been factored into the 2012/2013 budget by newly appointed Finance minister Njeru Githae.

Apart from the one-off payment of the gratuity, Githae also proposes to increase the annual allocation for retired presidents from the current Sh17.7 million to Sh30.2 million. The increase is meant to cater for the monthly pension which is due to Kibaki plus what taxpayers have been paying Moi since he left office in early 2003. The two will continue to draw the pension for the rest of their lives.”

“……Kibaki will also be entitled to get a monthly pension equal to eighty per cent of his current monthly salary. Kibaki is currently paid a basic monthly salary of Sh2 million (about $26,000) and earns an average of Sh24million ($200,000) a year under the current exchange rate.”

The figures are actually a bit off. Under current exchange ranges 2 million Shillings a month amounts to about US$300,000 annually. Not a bad deal at all.

These figures, however, raise questions about compensation packages for politicians in Kenya. Recently the treasury bribed MPs to pass the new budget and to be nice to the banks with a “gratuity” amounting to almost US$50,000. This on top of their already obscene annual salaries which stand at US$ 161,000, excluding other shady allowances that are never included under official pay. The last time I checked, all things considered, these MPigs (as they are derisively called locally) make upwards of US$174,000.

Per capita income in Kenya (in current dollars) stands at around US$800, with about 40% living below the poverty line.

I have argued before that paying MPs a decent salary may make them less amenable to executive manipulation (For supporting evidence see Barkan and Co. on legislative strength in Africa). But this just takes it too far.

A note from Mr. Development Man

9 February 2012

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Perhaps after experiencing a Bill Easterly moment, a friend of mine (grad student here at Stanford) had this on his facebook wall:

“Hello, my name is Mr. Development Man. I know Africa so much!! I went there one summer and stayed with an NGO. I talked to my servant cook who served me food, so I know African workers. I read a few books written by white Americans about Africa, and remembered their big words. So I know African ideology. African prostitutes talked to me at my hotel poolside, so I know about relationships in Africa. I took pictures of kids at the orphanage, so I know how Africans suffer.

My conclusions: Africans are corrupt. The place is poor because of poor policies. And my knowledge can help them. If they just listened to my smart American knowledge — obtained from the 2 months at the NGO, my white man books, my prostitutes, my few words with my servant cook — they would develop!! Why don’t they listen to me?? I can help them…Stubborn, corrupt African politicians…

Signed, Mr. Development Man. Remember, I am here to help you Africa!!”

I have a sense that Mr. Development Man’s note is directed at both development practitioners and academics alike. Let us all take heed.

Chad, who is into short stories and is also a late night radio DJ, wrote this Letter to Mr development man on the dynamics of the love-hate relationship between donors and aid recipients.

H/T Chad.

The missing big thinkers

4 December 2011

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In order to think big your country/region must have some geopolitical significance… or so it seems.

Here is a quote from the comment section on Dan Drezner’s post on the big thinkers that were overlooked in the FP 100 top thinkers list.

What’s the criteria for big thinkers? do they precede big issues or are they considered big thinkers bc their issues are perceived as important? or because they’re closer to those who get to decide what ‘big thinking’ is?

it’s nice to know that no one in Africa or Latin America is thinking – five or so out of the list of 100 is hardly inclusive.

The potato beats Maize, and most other Old World staples

15 July 2011

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The price of maize in Kenya and the rest of east Africa has hit the roof. The wider Horn of Africa region is currently experiencing its worst drought in 60 years, with thousands of refugees streaming into Kenya from Somalia every week.

10 million people in the wider Horn of Africa region are at risk. Kenya is already planning on opening a third refugee camp (besides Dadaab and Kakuma) to accommodate Somali refugees fleeing the famine.

Africa is the last major world region yet to experience a green revolution. Subsistence agriculture, in my view, is the culprit. Governments in the region must seriously come up with plans to consolidate and commercialize agriculture asap.

Having upwards of 70% of people dependent on subsistence agriculture is simply not sustainable. Period. To paraphrase Adam Smith, specialization determines the extent of the market AND the complexity and size of the economy. [italicized text mine]

As the region mulls over its agriculture and food policy it might help to consult Nunn and Qian’s new paper in the latest QJE. The paper makes the argument that the potato beats most of the Old World staples as far as a balanced supply of nutrients and calories is concerned (p. 604-5).

Maize is unable to rival potatoes in terms of nutrients or calories. It produces significantly fewer calories per acre of land. Moreover, humans are unable to subsist on a diet that is too con- centrated in maize. Significant consumption of maize is associated with pellagra, a disease caused by niacin deficiency. The effects of pellagra include skin, digestion, mental disorders, and, if un- treated, eventual death. The disease was first observed in the 1730s in Italy and even today continues to affect poor populations with diets that rely too heavily on maize. A second adverse effect of a corn-heavy diet is protein deficiency (Messer 2000a).

Sweet potatoes are also nutritious and produce similar amounts of calories per acre of land as potatoes, but they differ from potatoes in two important ways. First, the archaeological evidence suggests that sweet potatoes, transported by Polynes- ians, reached the Old World long before the European discovery of the New World. For many countries in our sample, their impact would have been felt as early as 1000 (Hather and Kirch 1991). Second, a close substitute to the sweet potato, the yam, already existed in the Old World (O’Brien 2000). Yams are broadly simi- lar to sweet potatoes in terms of both nutritional content and the requirements for cultivation. Many regions that were suitable for cultivating sweet potatoes had already cultivated yams when the former were introduced.

The New World staple, cassava, which is also called manioc or yuca, also provides abundant calories. But its deficiency in pro- tein and other important nutrients causes it to be a less “complete” food than potatoes (Cock 1982). In addition, because cassava con- tains toxic cyanogenic glycosides (e.g., cyanide), failure to properly prepare cassava causes konzo, a neurological disease that causes paralysis.

Graphical Illustration of China’s global reach

22 June 2011

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NPR has this cool graphic on China’s global investments [click on image to enlarge].

Notice that Nigeria is among the top destinations of Chinese investments.

In my alternate universe Abuja (the undisputed regional hegemon) is stable and uses this, and the fact that it is also among the most important sources of US-bound crude oil, as leverage to nudge the two biggest global powers in the direction of a more stable and coherent Africa policy.

More on this here.

Failed states index out, the usual suspects top the list

20 June 2011

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FP has the annual list of failed states. The Continent has a heavy presence on the list, with the usual suspects like Somalia, Sudan, Chad, Niger and Central African Republic, among the top failures. Also on the list are otherwise stable places like Uganda, Nigeria, Kenya, Ethiopia, among others.

The list is, in some sense, a reminder that several states out there are in dire straits. Insecurity and poverty continue to be a daily experience of far too many people. But it also raises methodological questions regarding the rankings. Some of the rankings certainly do not make any substantive sense and merely feed into alarmist stereotypes we already have of certain countries or regions of the world.

Methodological issues aside, the list is yet another reminder that despite the recent surge in Afro-optimism, a lot still needs to be done in order to improve the human condition in Africa, among other regions of the world.

africa’s Middle class

6 May 2011

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Elizabeth Dickinson at FP reports:

Given all this, perhaps the only thing about Africa that isn’t changing quickly is our perceptions of it. There’s an image impressed in all of our minds of a starving child, symobilizing an impoverished continent. If that was ever true, this is an excellent reminder that today, it’s at most a snapshot. Yes, there’s great human suffering and it’s not hard to find. But Africa as a whole is becoming a middle class continent.

It is hard to completely buy Dickinson’s optimism given the fact that Somalia, the DRC, Chad, Central Africa Republic, Sudan, among others are still far from being stable polities. The precarious nature of the stability in the more stable African states such as Uganda, Kenya, Ethiopia, Rwanda e.t.c. are also cause for concern.

That said, the reality is that there are many Africas. Those who fail to internalize that fact continue to do so at their own peril. Just ask the Indians and the Chinese.

the lion and the panda: still working on the relationship

20 April 2011

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The ambiguities in China’s relationship with Africa have created fertile ground for politicians. Opposition parties, especially in southern Africa, frequently campaign on anti-China platforms. Every country south of Rwanda has had acrimonious debates about Chinese “exploitation”. Even in normally calm places like Namibia, antipathy is stirring. Workers on Chinese building sites in Windhoek, the capital, are said to get a “raw deal”. In Zambia the opposition leader, Michael Sata, has made Sino-scepticism his trademark.

Much of this is wide of the mark. Critics claim that China has acquired ownership of natural resources, although service contracts and other concessions are the norm. China is also often accused of bringing prison labour to Africa—locals assume the highly disciplined Chinese workers in identical boiler suits they see toiling day and night must be doing so under duress.

Even so, the backlash is perhaps unsurprising. Africans say they feel under siege. Tens of thousands of entrepreneurs from one of the most successful modern economies have fanned out across the continent. Sanou Mbaye, a former senior official at the African Development Bank, says more Chinese have come to Africa in the past ten years than Europeans in the past 400. First came Chinese from state-owned companies, but more and more arrive solo or stay behind after finishing contract work.

Many dream of a new life. Miners and builders see business opportunities in Africa, and greater freedom (to be their own bosses and speak their minds, but also to pollute). A Chinese government survey of 1,600 companies shows the growing use of Africa as an industrial base. Manufacturing’s share of total Chinese investment (22%) is catching up fast with mining (29%).

That is the Economist reporting on the ever-growing Sino-African relationship. The main takeaway point is that Africa is increasingly becoming a manufacturing base for Chinese companies. With that comes transfer of technology, development of local expertise, increased competition and exposure to what’s happening outside the continent. In a few decades Chinese labor will get too expensive to support a robust export-oriented economy. That, coupled with increased domestic consumption in China will provide a good chance for African countries to finally begin their own move towards export-oriented industrialization and service provision.