How Russia Moved Into Central Africa

This is from Newsweek (highly recommended):

There are new guests at the ruined palace where Emperor Jean-Bédel Bokassa once held court. During his rule over the Central African Republic in the 1970s, Bokassa used a year’s worth of development aid to stage an extravagant coronation, and he personally oversaw the torture of prisoners. He fed some to his pet crocodiles and lions.

But the French government that helped install Bokassa in 1966 ousted him in 1979, deploying paratroopers to prevent any countercoup. Now, four decades later, it is Russian soldiers who mill around this crumbling estate in Berengo—and the shifting power dynamic is raising concerns in the West. President Vladimir Putin is pushing into Africa, forging new partnerships and rekindling Cold War–era alliances. “There will be a battle for Africa,” says Evgeny Korendyasov, head of Russian-African studies at the Russian Academy of Sciences, “and it will grow.”

How did Russia muscle its way into CAR? According to Reuters:

CAR has been under a U.N. arms embargo since 2013 so weapons shipments must be approved by the U.N. Security Council’s CAR sanctions committee, made up of the Council’s 15 members, including France and Russia. It operates by consensus.

France first offered to help CAR buy old weapons but the proposal was too expensive. France then offered 1,400 AK47 assault rifles it had seized off Somalia in 2016, according to a Security Council memo and four diplomats.

Russia objected on the grounds that weapons seized for breaching the U.N. arms embargo on Somalia could not be recycled for use in another country under embargo, two diplomats said. But mindful of the need for a quick solution, the sanctions committee approved Moscow’s donation of AK47s, sniper rifles, machine guns and grenade launchers in December, according to committee documents and diplomats.

Why Russia interested in the CAR now? Possible answers include (i) the potential for lucrative mining deals (Putin’s Chef, Evgeny Prigozhin, reportedly runs a diamond mine near Bangui and a gold mine in a rebel-held area); (ii) the CAR might be a great launching pad for Moscow’s ambitions in the Sahel and therefore a great addition to existing military deals on the Continent; and (iii) Russia’s defense firms might just be in it to run guns and make a quick buck in a country that remains overrun by all manner of rebel groups (some reports claim rebels control 80% of CAR’s territory).

And as for the CAR leadership, they just might be in the mood for a partner that delivers results without too much paperwork and rules:

President Touadéra has a number of incentives to work with Russia rather than France or the United States. Russia’s aid in arming the CAR’s military is a huge boon for the chronically underfunded state. The EU training mission in CAR has been agonizingly slow, leaving an underequipped and undertrained military to face a deteriorating security situation. Russian instructors, while certainly less concerned with the moral or ethical dilemmas of war, may give Touadéra the military he needs to combat the rebel groups across the country.

 

 

 

On Charles de Gaulle’s Legacy

This is from Ferdinand Mount’s review of A Certain Idea of France: The Life of Charles de Gaulle, by Julian Jackson:

De Gaulle’s coup of 13 May 1958 was equated by many, including de Gaulle himself, with Napoleon’s 18 Brumaire, and led to intensified misery for huge numbers of people. By encouraging the pieds noirs with his famous words ‘je vous ai compris,’ the war was prolonged for another four years and led to such horrific bloodshed that there could be no question of the settlers and the Muslims living side by side after independence. De Gaulle not only betrayed the whites who had brought him to power, he did nothing to help them when they decamped en masse to the mainland, bedraggled and destitute. Nor did he ‘raise a little finger’ to help the harkis – the Algerians who had fought loyally for France and who were murdered in their thousands after independence. These horrors are recounted more fully in Alistair Horne’s unforgettable A Savage War of Peace, but Jackson certainly does not underplay them. The creepy Foccart remained with de Gaulle to the end, as his adviser on Africa, wheeling in assorted francophone tyrants to be flattered by his master, who still had a cloudy vision of la gloire continuing to permeate sub-Saharan Africa. Some of the worst brutes – such as Bongo père et fils of Gabon and Bokassa of the Central African Republic – continued to enjoy French patronage. So much for de Gaulle the decoloniser.

Read the whole thing here.

 

Demography and the African future of the French language

This is from the Economist:

Today more people speak French in Kinshasa, capital of the Democratic Republic of Congo, than in Paris. By 2050, thanks to population growth in Africa, some 85% of the world’s French-speakers will live on the continent. Mr Macron has been promoting French on his recent travels to the Gulf, China and, pointedly, Ghana, an English-speaking west African country surrounded by French-speaking ones. Visiting Tunisia, he said he wanted to double the number learning French there by 2020.

I wonder what Ngugi wa Thiong’o makes of these developments.

Here is a possible answer:

La Francophonie “cannot just be an institution for saving the French language; that is not what Francophone countries are worried about,” explains Mr Mabanckou. “Africans don’t need the French language to exist.” He asks how many universities in France teach Francophone African literature, and complains that American students are more likely to study such writers than are French ones. The French literary world clings to a Paris-centric vision, Mr Mabanckou says, too often failing to consider writers from former colonies as part of mainstream literature, as British publishers and universities now do.

The Politics of the CFA Franc Zone

This is from the Economist:

Where some see an anchor, others see a millstone. To maintain the euro peg, notes Ndongo Samba Sylla, a Senegalese economist, these very poor countries must track the hawkish monetary policy of the European Central Bank. Since the introduction of the euro, income per person in the franc zone has grown at 1.4% a year, compared with 2.5% in all of sub-Saharan Africa.

More on this here.

People like Cameroonian president Paul Biya love the CFA. With good reason.

Yet elites do rather well out of the system, which makes it easier to send wealth abroad. And a weaker currency would increase the cost of imported goods. The only devaluation, in 1994, sparked riots.

Mozambique: Is there such a thing as predatory sovereign lending?

The Wall Street Journal has a great story on Mozambique’s hidden debt scandal:

Screen Shot 2016-06-30 at 8.03.37 PM.pngThe government picked Mr. Safa’s company, Privinvest, to supply ships, including patrol and surveillance vessels, and asked its help getting financing. The company disputes the characterization of the ships as military, saying they weren’t outfitted with weapons. Privinvest approached Credit Suisse about a loan for Mozambique, and a committee of senior executives, including then-CEO Gaël de Boissard, approved the deal.

Credit Suisse’s top brass signed off in part because the bank had pioneered a way to lend in developing countries without taking on much risk.

The bank found it could purchase sovereign-debt insurance through the Lloyd’s of London insurance market to hedge as much as 90% of the loans against default. Credit Suisse charged higher interest rates on the debt than its insurance premiums, pocketing the difference mostly risk free.

The insurance policies Credit Suisse used only covered governments. So when Mozambique wanted to borrow the money through state-owned companies instead, the bank came up with a twist: Mozambique would cosign.

FT notes that:

The debt was originally borrowed via a special purpose vehicle for Ematum [tuna fishing company], an arrangement that does not require the same level of disclosure as a sovereign bond issue.

Basically Credit Suisse, the Russian VTB Capital, and their Mozambican accomplices knew exactly what they were doing.

When the money got to Mozambique it mostly went into private pockets. The proposed tuna business the loans were intended to finance went bust (realizing a paltry 2.5% of projected sales). And the security purchases (ostensibly to secure Mozambique’s vast yet-to-be-developed gas fields) proved useless.

Meanwhile…

…….conditions in Mozambique are worsening. Its foreign-currency reserves fell to $1.8 billion in May from $2 billion in January, and it is seeking $180 million in food aid. Intensified fighting has sent more than 10,000 refugees to neighboring Malawi, according to the U.N. High Commission for Refugees.

Credit Suisse is a Swiss financial services company. According to the WSJ Privinvest’s struggling subsidiary Constructions Mécaniques de Normandie built the ships sold to Mozambique. The latter is, of course, based in France. Corruption knows no borders.

The Long Peace Since WWII, Visualized

Fewer people are dying in violent conflict (both in absolute figures and as a proportion of the total population of humans) than at any time since World War II. It is hard to believe this amid the flood of images and stories of violent death (state-sanctioned or otherwise) in countries like Mexico, the United States, Burundi, or Syria.

Elite Political Stability and Development: The Case of Europe

Alex Lee of Rochester and Avi Acharya of Stanford write:

During the Middle Ages, most European polities operated under a norm that gave only the close male relatives of a deceased monarch a clear place in the line of succession. When no such heirs were available, succession disputes were more likely, with more distant relatives and female(-line) heirs laying competing claims to the throne. These disputes often produced violent conflicts that destroyed existing state institutions and harmed subsequent economic development. Given these facts, we hypothesize that a shortage of male heirs to a European monarchy in the Middle Ages has a deleterious effect on levels of development across contemporary European regions ruled by that monarchy. We confirm this hypothesis by showing that regions that were more likely to have a shortage of such heirs are today poorer than other regions. This finding highlights the importance of the medieval period in European development, and shows how a sequence of small shocks can work in combination with both institutions and norms in shaping long-run development trajectories.

……. Our main empirical finding demonstrates the path dependent effects of the uneven nature of state development in medieval Europe arising due to the availability of male heirs. We show that regions of Europe that were ruled by medieval monarchs who had an abundance of male heirs are today richer than other regions. We are also able to trace our effects over time by showing that urban density in each century between 1300 and 1800 was higher in regions that had an abundance of male heirs. In addition, we show that an abundance of male heirs also decreased the frequency of internal wars and coups during the Late Middle Ages, and we find that contemporary economic development is negatively correlated with the frequency of these medieval wars and coups.

Forget the sweeping comparisons between England and the rest (esp France) that is common in works about economic development in Europe. This paper offers lots of great insights about the mechanics of statebuilding (and institution building) and the impact on economic development.

The linking of medieval European political realities to economics outcomes in 2007-2009 still requires a tighter justification. But the general insights in the paper about elite-level conflict and institution-building are spot on.

The paper is a reminder that our obsession with vertical accountability (mostly elections) as a means for institution-building is patently misguided. Much of the action takes place at the elite-level, hence the need to focus on horizontal accountability (as yours truly does….)

As they say, the paper is self-recommending.

H/T Andy Hall.

How is the world reacting to China’s rise?

China has experienced a spectacular economic growth in recent decades. Its economy grew more than 48 times from 1980 to 2013. How are the other countries reacting to China’s rise? Do they see it as an economic opportunity or a security threat? In this paper, we answer this question by analyzing online news reports about China published in Australia, France, Germany, Japan, Russia, South Korea, the UK and the US. More specifically, we first analyze the frequency with which China has appeared in news headlines, which is a measure of China’s influence in the world. Second, we build a Naive Bayes classifier to study the evolving nature of the news reports, i.e., whether they are economic or political. We then evaluate the friendliness of the news coverage based on sentiment analysis. Empirical results indicate that there has been increasing news coverage of China in all the countries under study. We also find that the emphasis of the reports is generally shifting towards China’s economy. Here Japan and South Korea are exceptions: they are reporting more on Chinese politics. In terms of global sentiment, the picture is quite gloomy. With the exception of Australia and, to some extent, France, all the other countries under examination are becoming less positive towards China.

That’s Yuan, Wang and Luo writing in a neat paper that analyzes news coverage of China in different countries.

More on this here (HT Jay Ulfelder).

On the Continent opinion survey data from a select set of countries show high favorability ratings for China — by about two thirds or more of survey respondents. The same countries have seen some decline in US favorability ratings over the last few years. As you’d expect, people’s reaction to China’s rise is based on perceptions of the potential material impact it will have on their lives. On average, the survey evidence suggests that most Africans view China’s rise as a good thing.

It is interesting that across the globe young people, on average, have a more positive view of China’s rise than older people. Younger people probably associate China more with glitzy gadgets in their pockets; and less with cultural revolutions and famine-inducing autocracy.

Africans Covered 98% of the Cost of Administering Colonial French West Africa (AOF)

Elise Huillery writes in the Journal of Economic History:

What share of French expenditure was allocated to West Africa? What share of West Africa’s revenue was provided by France? These two questions are crucial since scholars and politicians who claim colonization had a “positive role” make essentially the two arguments that the colonies benefited from imperial public investments and that mainland taxpayers sacrificed local investments for investments in the colonies.

I find that the costs of AOF’s colonization for the metropolis were low. From 1844 to 1957 France devoted on average 0.29 percent of its public expenditures to AOF’s colonization. Colonization of French West Africa was profitable for France to the extent that the impact on cumulative domestic production exceeded 3.2 billion 1914 francs. The military cost of conquest and pacification accounts for the vast majority (80 percent) of the average annual cost. The cost of central administration in Paris accounts for another 4 percent. So subsidies to AOF account for only 16 percent of the average annual cost, meaning that less than 0.05 percent of annual total metropolis public expenditures were devoted to AOF’s development.

For French West African taxpayers, French contribution was not as beneficial as has been argued. From 1907 to 19578 the metropolis provided about 2 percent of French West Africa’s public revenue. Local taxes thus accounted for nearly all of French West Africa’s revenue. These resources supported the cost of French civil servants whose salaries were disproportionally high compared to the limited financial capacity of the local population. Administrators, teachers, doctors, engineers, lawyers, and so on, were paid French salaries and got an additional allowance for being abroad. Thus, in the colonial public finance system, most revenues were collected on an African basis while being spent on a French basis. To illustrate this point, I show that colonial executives (eight governors and their cabinets) and district administrators (about 120 French civil servants) together accounted for more than 13 percent of local public expenditures.

The rest of this very fascinating paper is here.

Besides the headline finding, also interesting in the paper are: (i) the extent to which Paris subsidized private firms involved in the colonial enterprise; and (ii) the structure of the public finance system that allowed the AOF administration to borrow directly from French banks with the full backing of Paris (which allowed for lower rates). This might explain the persistence of the monetary relationship between former AOF territories and Paris in the form of the CFA and a common central bank (BCEAO).Screen Shot 2015-07-05 at 12.05.23 AM

As I keep saying, Economic History is hot again. And sooner rather than later it’s going to become more apparent to more people that African political and economic history did not begin in 1960, or for that matter in 1884-5. And neither was it just about the unimaginably catastrophic Atlantic experience.

Kenyan Intervention in (al-Shabab dominated) Southern Somalia

The ICG has an excellent new report on the state of the the Kenyan military intervention in Somalia.

The pressing issues raised in the report include economic, political and social concerns:

The slow pace of the military operation and the high cost of keeping troops in the field are the main reasons behind Nairobi’s desire to operate under AMISOM command. The treasury would then not have to pay the full cost of the campaign. It is estimated that Linda Nchi is costing the government at least KSh 210 million ($2.8 million) per month in personnel costs alone in a year of a record KSh 236 billion ($3.1 billion) budget deficit. If the interven- tion’s cost is not contained, already high inflation will spiral, and local discontent could become more serious…..

The intervention in Somalia is likely to have a complex impact on Kenyan Somalis’ political positions, because their attitude toward it is not straightforward. The government’s desire to establish a buffer zone between the border and the rest of Somalia privileges the Ogaden, the majority Kenyan-Somali clan. The possibility of a semi-autonomous state in the south of Somalia politically dominated by Ogaden may not be favoured by the minority, marginalised clans of north-eastern Kenya, such as the Ajuran and Degodia…..

Views within the ethnic Somali and wider Muslim community regarding the war are mixed but predominantly critical. Even those now mildly supportive could easily become hostile, especially if things go badly wrong, and civilian deaths mount. The notion that the war is popular within the Muslim community is wishful thinking, and the potential to exacerbate already worrying radicalisation in the country is very real. The police and other security services have shown some restraint in bigger cities, but there have been numerous reports of abuses in North Eastern Province.

Congrats to the All Blacks

New Zealand just won the rugby world cup after a 24-year wait. The other finalists, France, put up a most spirited fight. The final score was 8-7. I wish the Boks had gone all the way but for the next four years the All Blacks will be worthy world champions.

Here is presenting the NZ Herald:

The illusion of modern-day meritocracy

That is, most observers—novelists, economists, and laypersons alike—tend to assume that labor income now plays a much bigger role than inherited wealth in shaping people’s lives, and that human capital and hard work have become the key to personal material well-being. Although this is rarely formulated explicitly, the implicit assumption seems to be that the structure of modern economic growth has led to the rise of human capital, the decline of inheritance, and the triumph of meritocracy.

This article asks a simple question: is this optimistic view of economic development justified empirically and well grounded theoretically? The simple answer is “no.” Our empirical and the- oretical findings suggest that inherited wealth will most likely play as big a role in twenty-first-century capitalism as it did in nineteenth-century capitalism—at least from an aggregate view- point.

That is Piketty in an interesting paper on the long-run evolution of inheritance in France – in the current issue of the QJE (this is gated but ungated versions are available online ).

Emperor Bokassa’s madness immortalized at the UN Plaza in San Francisco

Emperor Bokassa (of the Central African Republic/”Empire”) ranks high among Africa’s worst dictators. For his coronation as emperor of the Central African Empire he spent half the national budget (with the assistance of the French, of course).

This afternoon I once more encountered his colossal error which remains immortalized at the UN Plaza in San Francisco.