Tag Archives: lusaka

Several African public figures (and associates) mentioned in the Panama Papers

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The Guardian has an excellent summary of what you need to know about the Panama Papers, the data leak of the century from the Panama-based law firm Mossack Fonseca.The firms specializes, among other things, in incorporating companies in offshore jurisdictions that guarantee secrecy of ownership.

Here is a map of the companies and clients mentioned in the leaked documents (source). Apparently, the entire haul (2.6 terabytes of data) has information on 214,000 shell companies spanning the period between 1970 to 2016.

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The leaked documents show links to 72 current or former heads of state and government. So far the highest-ranking public official most likely to resign as a result  of the leak is the Prime Minister of Iceland, Sigmundur Gunnlaugsson (see story here and here)

For a list of African public officials mentioned in the leaked documents see here. And I am sure we are going to hear a lot about all these rich people in developing countries.Screen Shot 2016-04-03 at 9.18.42 PM

Closer to home, the Daily Nation reports that Kenya’s Deputy Chief Justice, Kalpana Rawal, “has been linked to a string of shell companies registered in a notorious Caribbean tax haven popular with tax dodgers, dictators and drug dealers.” Justice Rawal has been dodging retirement for a while. May be after the latest revelations might find a reason to call it quits.

The ICIJ website has neat figures summarizing some of the findings from the massive data haul. Also, here is a Bloomberg story on the tax haven that is the United States. 

Africa’s looming debt crises

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The 1980s are calling. According to Bloomberg:

Zambia’s kwacha fell the most on record after Moody’s Investors Service cut the credit rating of Africa’s second-biggest copper producer, a move the government rejected and told investors to ignore…..

Zambia’s economy faces “a perfect storm” of plunging prices for the copper it relies on for 70 percent of export earnings at the same time as its worst power shortage, Ronak Gopaldas, a credit risk analyst at Rand Merchant Bank in Johannesburg, said by phone. Growth will slow to 3.4 percent in 2015, missing the government’s revised target of 5 percent, Barclays Plc said in a note last week. That would be the most sluggish pace since 2001.

The looming debt crisis will hit Zambia and other commodity exporters hard. As I noted two years ago, the vast majority of the African countries that have floated dollar-denominated bonds are heavily dependent on commodity exports. Many of them are already experiencing fiscal blues on account of the global commodity slump (see for example Angola, Zambia and Ghana). This will probably get worse. And the double whammy of plummeting currencies and reduced commodity exports will increase the real cost of external debt (on top of fueling domestic inflation). I do not envy African central bankers.

Making sure that the looming debt crises do not result in a disastrous retrenchment of the state in Africa, like happened in the 1980s and 1990s, is perhaps the biggest development challenge of our time. Too bad all the attention within the development community is focused elsewhere.

On the Zambian Presidential By-Election

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Zambians go to the polls today to elect a president to serve the remainder of the late Michael Sata’s term. President Sata died on the 28th of October, 2014. The winner of the by-election will be office until late 2016 when when elections are due for both the presidency and the National Assembly.

Today’s contest is between the two front-runners: Edgar Lungu, the candidate of the ruling Patriotic Front (PF); and Hakainde Hichilema (HH), the candidate of the United Party for National Development (UPND). Lungu has the advantage of incumbency, and a favorable electoral map (interim president Guy Scott is constitutionally barred from running). As the table below shows, support for Sata in the last election (2011) was concentrated in provinces that were both vote-rich (column 7) and recorded high turnout (column 5). HH’s support has historically been strongest in his native Southern Province and the vote-poor Western and Northwestern Provinces. He is also competitive in Central Province.

Presidential Election Results (2011)
Province Sata (PF) Banda (MMD) Hichilema (UPND) Turnout Turnout (2008) Vote Share (Ascending)
Northwestern 10.85 50.21 35.24 54.88 42.7 6.249513033
Western 23.12 33.2 28.21 47.77 38.4 6.800182089
Luapula 73.54 22.9 0.85 50.49 37.8 7.447270534
Central 28.28 48.21 20.82 46.87 40.6 8.149764957
Eastern 18.46 72.6 3.33 49.89 40.5 11.60268286
Southern 6.59 19.15 71.41 58.04 49.8 13.47451036
Northern 64.18 32.16 0.78 57.28 44.6 13.62680466
Lusaka 55.94 30.76 11.29 52.05 50.7 14.50255098
Copperbelt 67.88 26.22 3.57 59.5 52.8 18.14672051

HH’s chances will depend on whether the fallout within PF (Lungu’s nomination did not occur without incident) and the implosion of MMD produce a swing in his favor. Disaffected MMD supporters will therefore be a critical swing bloc. Furthermore, ahead of the elections Hichilema managed to get the endorsement of Geoffrey B. Mwamba (GBM), a former minister in the Sata government. But it is unclear whether GBM will be able to sway voters in his native north of the country, which voted solidly for Sata in 2011 (see map below). Sata, like GBM, was from Northern Province (since divided into Northern and Muchinga Provinces).

Sata constituency level vote share (% of votes cast)

Sata constituency level vote share (% of votes cast)

A low turnout today will favor PF. In the last presidential by-election (in 2008) turnout was 45.43%, 8 percentage points lower than the 53.65% recorded in the 2011 General Election. PF, with its wide support in the more urbanized Copperbelt and Lusaka (see map and table, column 6), therefore enters the race with a distinct advantage. If Hichilema is to have a chance he must not lose the turnout contest, and at the same time win by wide margins in the northwest, west and south of the country.

Of course the biggest unknown is whether Lungu can attract the same level of support as did Sata in 2011 (I lean towards him getting a sizable sympathy vote). Lungu is new to the presidential race, while HH has run multiple times. HH therefore has an assured strong base in the south (and possibly west) and better name recognition across the country. So despite PF’s incumbency status (which is no small matter), in many ways this is an open race.

From a research perspective, I’ll be keen to observe how the map above changes once all the votes are in. Which regions of the country will swing out of the PF column? Will the MMD survive this election? Can HH break out of his “Southern” tag?

Whatever the results, this by-election is a warm-up to what promises to be a very exciting General Election in 2016 (Also, I hope to have opinion poll data to play with ahead of the 2016 contest).

Nairobi to Lusaka, Part II

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Dar es Salaam is a pleasant town in late June. I had only been there once before, back in 2011 when I stayed for a day and a half to catch the Tazara. I didn’t like it then because of the heat and humidity (humidity is up there with cats – I am allergic – on the list of things I cannot stand). But this time round it was nice, I managed to walk around town marveling at the pillars of concrete and glass that are rising up in every corner of the city. The construction boom puts even Nairobi to shame, enough to make me think that the suggestions that Tanzania may soon eclipse Kenya as the place where all the action is in East Africa are not that far fetched after all (see image and this piece).  Image

My only complaint was that a prime section of the beach front still remains under-utilized, although this might be because of the presidential palace nearby. I hear you can’t drive there at certain times of the day (Stop channeling Mugabe, Bwana Kikwete. Also, let Chadema be). Oh, and I did manage to drive on the Kibaki road. I thought it was a new road, but it is not. Sections of it are actually pretty bad. Apparently, the Tanzanian government is planning an upgrade soon. I also drove past Mwalimu Nyerere’s home. It made me respect the man even more.

I arrived in Dar late on Tuesday night after many hours of travel by bus. On Thursday morning I was scheduled to continue with the second leg of the journey to Lusaka. I was at the bus stop by 5:45 AM, still sleepy. I had stayed up late the previous night, watching the Confederation Cup matches of the day, reading and writing my Saturday column. I fell asleep as soon as I got to my seat.

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Dar’s public housing units. For a moment I thought that the choice of color was meant to discourage applicants. Until I saw the pink public housing headquarters. Some of the units are in really nice parts of town.

The bus left the station promptly at 6:15 AM. Tanzania is huge. From Dar es Salaam to the Tunduma border is about 931 kilometres. The drive to the Zambian border took a total of 16 hours.

As I said in the previous post on this trip, I regretted taking the bus. If you want to travel overland between Dar and Lusaka, take the train. It is a million times more pleasant. There is a restaurant and a bar (that serves Tusker) on the train. There are bathrooms. And you have a bed. Plus the train is just slow enough that you can read and truly appreciate the empty Tanzanian countryside.

But the trip wasn’t all gloomy. The scenery was still enjoyable. Sections of Tanzania are quite hilly, with amazing views of cliffs and rivers and rock formations. At some point past Iringa I saw what seemed to be the biggest tree plantation in the world. For miles and miles all I could see were rows and rows of trees. And when there were no trees there were rows and rows of sisal. Someone is making bank off the land in that part of the country.

Also, western Tanzania is a lesson on how hard it is to achieve economic development in the context of a sparsely populated country. Such situations make it impossible to reach everyone with the grid and water pipes. Either the government has to wait for demographics to work its magic (again, see figure above – and be sure to check out this story on the Africa-driven demographic future of the world) or provide smart incentives to accelerate the process of urbanization.

For those who went to high school in Kenya, journeying by land through Tanzania reminded me of Ken Walibora’s Siku Njema. I felt like I was retracing the steps of Kongowea Mswahili. Some day I would like to go back and spend some time in Morogoro and Iringa. By the way, Siku Njema is by far the best Swahili novel I have ever read (which reminds me that it has been eight years since I read a Swahili novel. Suggestions are welcome, preferably by Tanzanian authors). It is about time someone translated it into English for a wider audience.

We reached Tunduma some minutes past 10 PM. The border crossing to Nakonde on the Zambian side was closed. Some passengers on the bus left to rent out rooms for the night. I decided to tough it out on the bus with the crew and a few other guys. Desperate for something warm to eat, I had chicken soup and plain rice for dinner. The “restaurant” reminded me of the place in Tamale, Ghana where Vanessa and I got food poisoning two months earlier. But I was desperate. I quickly ate my hot soup and rice and hoped for the best.

ImageI crossed the border early in the morning on foot. The bus had to wait in line for inspection and to pay duty for its cargo (It is at this point that I learned that the bus was actually going all the way to Harare in Zimbabwe). I am usually very careful with money changers, but perhaps because of my tiredness and lack of sleep the chaps in Nakonde got me.

If you ever cross to Nakonde on foot wait until you are on the Zambian side to exchange cash at the several legit forex stores that line the streets.

The bus finally got past customs at noon (on Friday). In Nakonde we waited for another two hours for more passengers and cargo.

I took the time to get some food supplies. Lusaka was another 1019 kilometres away. 

By this time I was dying to have a hot shower and be able to sleep in a warm bed. It was cold. Like serious cold. And Lusaka was still another 14 hours away.

I slept lightly through most of the 14 odd hours. In between I chatted with two Kenyan guys that were apparently immigrating to South Africa, with little more than their two bags. They said that this was their second attempt. The previous time they found work in Lusaka and decided to stay for a bit before going back to Nairobi. They were part of the bulk of passengers from Nakonde who were going all the way to Harare. Apparently, this is the route of choice for those who immigrate from eastern and central Africa into South Africa in search of greener pastures.

Before it got dark we saw several overturned trucks on the road. I slept very lightly, always waking up in a panic every time the driver braked or swerved while overtaking a truck just in time to avoid oncoming traffic. My only source of comfort was the fact that the driver was a middle aged man, most likely with a family to take care of and therefore with a modicum of risk aversion.

I arrived in Lusaka at around 4 AM, more than three days and 2871 kilometres since leaving Nairobi.

I said goodbye to my two Kenyan countrymen and rushed out of the bus as soon as I could. On the way to my hotel I couldn’t stop thinking how much I would like to read an ethnography of the crew of the bus companies (and their passengers and cargo) that do the Dar to Harare route.

At Lusaka Hotel that morning I had the best shower I had had in a very long time. And slept well past check out time. I had two months of fieldwork and travel in Zambia to look forward to.

Africa’s newfound love with creditors: Bond bubble in the making?

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I know it is increasingly becoming not kosher to put a damper on the Africa Rising narrative (these guys missed the memo, H/T Vanessa) but here is a much needed caution from Joe Stiglitz and Hamid Rashid, over at Project Syndicate, on SSA’s emerging appetite for private market debt (Africa needs US $90b for infrastructure; it can only raise $60 through taxes, FDI and concessional loans):

To the extent that this new lending is based on Africa’s strengthening economic fundamentals, the recent spate of sovereign-bond issues is a welcome sign. But here, as elsewhere, the record of private-sector credit assessments should leave one wary. So, are shortsighted financial markets, working with shortsighted governments, laying the groundwork for the world’s next debt crisis?

…….Evidence of either irrational exuberance or market expectations of a bailout is already mounting. How else can one explain Zambia’s ability to lock in a rate that was lower than the yield on a Spanish bond issue, even though Spain’s [which is not Uganda…] credit rating is four grades higher? Indeed, except for Namibia, all of these Sub-Saharan sovereign-bond issuers have “speculative” credit ratings, putting their issues in the “junk bond” category and signaling significant default risk.

The risks are real, especially when you consider the exposure to global commodity prices among the ten African countries that have floated bonds so far – Ghana, Gabon, the Democratic Republic of the Congo, Côte d’Ivoire, Senegal, Angola, Nigeria, Namibia, Zambia, and Tanzania.

In order to justify the exposure to the relatively higher risk and lending rates on the bond market (average debt period 11.2 years at 6.2% compared to 28.7 years at 1.6% for concessional loans) African governments must ensure prudent investment in sectors that will yield the biggest bang for the buck. And that also means having elaborate plans for specific projects with adequate consideration of the risks involved.

Here in Zambia (which is heavily dependent on Copper prices), the Finance Minister recently had to come out to defend how the country is using the $750 million it raised last year on the bond market (2013-14 budget here). Apparently there was no comprehensive plan for the cash so some of the money is still in the bank awaiting allocation to projects (It better be earning net positive real interest).

“They are fighting each other. By the time they have projects to finance, they will have earned quite a lot of interest from the Eurobond money they deposited. So, all the money is being used properly,” he [Finance Minister] said.

Following the initial success the country’s public sector plans to absorb another $4.5b in debt that will raise debt/GDP ratio from current ~25% to 30%. One hopes that there will be better (prior) planning this time round.

Indeed, last month FT had a story on growing fears over an Emerging (and Frontier) Markets bond bubble which had the following opening paragraph:

As far as financial follies go, tulip mania takes some beating. But future economic historians may look back at the time when investors financed a convention centre in Rwanda as the moment that the rush into emerging market bonds became frothy.

The piece also highlights the fact that the new rush to lend to African governments is not entirely driven by fundamentals – It is also a result of excess liquidity occasioned by ongoing quantitative easing in the wake of the Great Recession.

I remain optimistic about the incentive system that private borrowing will create for African governments (profit motive of creditors demands for sound macro management) and the potential for this to result in a nice virtuous cycle (if there is one thing I learned in Prof. Shiller’s class, it is the power of positive feedback in the markets).

But I also hope that when the big three “global” central banks start mopping up the cash they have been throwing around we won’t have a repeat of the 1980s, or worse, a cross between the 1980s (largely sovereign defaults) and the 1990s (largely private sector defaults) if the African private sector manages to get in on the action.

African governments, please proceed with caution.

Nairobi-Lusaka by road, Part I

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The towering Uhuru Heights under construction in Dar es Salaam combines office space with residential apartments

Lusaka must be the only African capital (or major city) that is not a frenzied construction site. No new major roads are being constructed downtown. My quick look only found two new constructions of tall-ish buildings downtown. Lusaka feels really sleepy compared to the three other African capitals/major cities that I have been to in the last three months  – Dar es Salaam, Nairobi, Accra. Dar es Salaam, in particular, is impressive. The city is constructing a rapid bus transportation system with a dedicated lane. Citywide construction of “office space cum residential apartments” mark the landscape promising a rich experience of downtown living for city residents in the near future (I wish Nairobi did more of this….)

The guy who runs the place I am staying at in Lusaka tells me that the only construction going on in town is of shopping malls and expensive residential houses that no one will afford. President Michael Sata, he argues, is bent on turning Zambia into Zimbabwe.

Michael Sata (a.k.a King Cobra) may not go the way of uncle Bob in Zim but he is definitely not the hope for change that Zambians voted for back in 2011. The growth in the economy (6% on average in the last decade, 7.3% last year) is barely trickling down and the ruling PF seems too preoccupied with killing the opposition to care. The old duo of  Scott and Sata seem out of ideas on how to translate the country’s economic growth into wider socio-economic transformation.

Indeed the African Development Bank in its latest report on the Zambian economy noted that “Zambia has yet to achieve significant gains in social and human development. The poverty headcount remains high, with about 60% of the population still living below the poverty line.” The economy is imbalanced, heavily dependent of capital-intensive copper mining that it barely taxes (80% of exports, but paltry a 6% of revenue).

I was first here two years ago for reconnaissance research and have come back for more work. The pace is a nice change from Nairobi. It is also warmer than Nairobi at this time of the year (well at least before nightfall) – just after three years in California and seven months in Nairobi and I have become a little soft on cold weather (Moving to Chicago this fall will be fun!!)

This time round instead of doing air (Nairobi-Dar), rail (Dar-Kapiri) and road (Kapiri-Lusaka), I decided to do it all by road. This turned out to be a terrible idea.

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Sign post on the Tanzanian side of Namanga

Leaving Nairobi was itself an adventure. Despite Vanessa’s well-intentioned “alarm clock” calls to make sure I was up and ready by 5 AM, I missed my bus (I also missed my bus the first time, which is why I flew to Dar es Salaam). However, this time round it was my dad who was dropping me off and because he is a lot more daring that me and my brother, he decided to chase the bus (we were barely five minutes late, thank you very much Nairobi traffic at 5:45 AM). We did not catch my bus (Dar Express), but caught up with its competitor (name withheld for legal reasons, see below) after it had been stopped by the traffic police on Mombasa road for lack of a passenger license (it had a cargo license). Let’s just say that I was mightily impressed by my dad’s driving skills. I wish I were as daring.

So after the police got their cut (which I later found out was Kshs 5000, about US $60) we set off on the journey to Dar. The conductor on the new bus was kind enough to give me a free ride to Namanga (only Tanzanians can do this!!!) with hopes of catching up with Dar Express – in the end we did not, and I had to pay Kshs 2000 for the rest of the journey. The last time I was on the Nairobi-Arusha road was in 2009 when it was all no more than a dirt track that left you caked in thick red-brown dust. Now it is all paved. Nairobi-Namanga took a dizzying three hours. Just over an hour and a half after that we were in Arusha. After Arusha we sped to Moshi where we were caught up in the Prime Minister’s motorcade as he went to the city referral hospital to visit victims of the recent bombing at an opposition rally in Arusha (Arusha is the Chadema (Tanzania’s main opposition party) stronghold; but even in Dar the few people I spoke to about politics did not have nice things to say about the CCM government, especially with regard to rising inequality and corruption – yeah, I just totally Tom-Friedmanned that one).

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The 922 kilometer (573 miles) Nairobi-Dar road

I must say that the Nairobi-Dar road is impressive. Save for about one hour total of patches that were still being done about two hours outside of Moshi, most of the road is paved. Sometimes I forget how massive (and hence empty) Tanzania is. Namanga-Arusha is marked by flat plains, rolling hills and mountains. In the plains cattle rearing appeared to be the economic mainstay (unfortunately, with school age kids herding tens of cattle and sheep – wake up, Tanzania ministry of education). The hilly and mountainous areas mostly have maize and coffee. After the hills there are vast sisal plantations that stretch from horizon to horizon. Arusha and Moshi are the only big towns on the Namanga-Dar route. I particularly like Moshi (or may be I just don’t like touristy, expensive Arusha). It is a town with character, combining a provincial feeling with urban comforts. It also has some nice public monuments.

I rarely see weigh bridges on Kenyan roads (besides the infamous two in Gilgil and on Mombasa road) but in Tanzania they are plenty. And they are not just for the trucks, but also cater for passenger buses. Most of the trucks on the route were connecting Uganda, Rwanda, Burundi and the eastern DRC to the port in Dar. The passengers on the bus consisted of businesspeople (mostly Kenyans and Congolese), random travelers like myself, and tourists (most of who alighted at Arusha). On the Kenyan side, between Nairobi and Namanga we had a total of 5 police stops. On the Tanzanian side between Namanga and Dar there were 6 police stops and about 4-5 weigh bridge stops – the Tanzanians definitely police their roads more keenly. The police on the Tanzanian side were on the lookout for khat/miraa (illegal in Tanzania, and a beloved commodity of truckers) from Kenya and other contraband. True to EAC hospitality, I did not have any problems with immigration at Namanga (unlike in Nakonde, Zambia) or at any of the police check points (officers came on board to check passports). Talking to Tanzanians reminded me of just how bad Kenyan Swahili is – we must sound to Tanzanians like the Congolese sound to us whenever they speak whatever it is they call Swahili (*ducks and runs*).

The bus arrived in Dar es Salaam about 20 hours after leaving Nairobi (Not bad for a US $42 ticket), despite having been made to believe that the trip would take 13 hours. It didn’t help that I ignored Vanessa’s advice to pack food, hoping to buy stuff on the road – the first food stop was six hours into the trip, I had not had breakfast. Exhausted, hungry and mad at myself for taking the hard way to Dar I decided to get a room at the Peacock Hotel. It is not fancy (probably a 4 star?) but it has hot water, the rooms are spacious, and there’s fast internet. They also have a nice restaurant downstairs (Tausi) and are within walking distance to the port and other sites of interest in Dar – a Subway, Indian restaurant, the national library, banks, etc.

I had a day to burn in Dar reading, writing and walking around in readiness for the second leg of my trip to Lusaka, again by road.

The 2013 Resource Governance Index

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The 2013 Resource Governance Index (published by the Revenue Watch Institute) is out. The top performing African countries include Ghana, Liberia?, Zambia and South Africa, with partial fulfillment. The bottom performing countries are Equatorial Guinea, Zimbabwe, South Sudan, the Democratic Republic of Congo and Mozambique.

The 58 nations included in the report “produce 85 percent of the world’s petroleum, 90 percent of diamonds and 80 percent of copper.” Ghana, where we are doing some evaluation  work on extractive sector transparency initiatives, is the best performing African country on the list. Image

More here. 

And in related news, The Africa Progress Report was released last week. The report details the massive loss of revenue by African governments through mismanagement – either by commission and/or omission – of extractive resources. For instance:

The report details five deals between 2010 and 2012, which cost the Democratic Republic of the Congo over US$1.3 billion in revenues through the undervaluation of assets and sale to foreign investors. This sum represents twice the annual health and education budgets of a country with one of the worst child mortality rates in the world and seven million pupils out of school.

The DRC alone is estimated to have 24 trillion dollars worth of untapped mineral resources.

The most bizarre case of resource management in Africa is Equatorial Guinea, a coutnry that is ranked 43rd on the global per capital GNI index but ranks 136th on the Human Development Index (2011).

Below is a map showing flows related to Africa’s vast resources:

RESOURCE-MAP

There is no way around the basics: Development will take time

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I just read Chris Blattman’s response to the UK Prime Minister’s op-ed in the Journal. It reminded me of a lot of the things that I have been reading lately in preparation for my fieldwork (My dissertation will tackle the subject of legislative (under)development in Africa, with a focus on the Kenyan and Zambian legislatures).

Cameron’s sentiments in the op-ed are emblematic of the problems of development assistance. Like in all kinds of foreign intervention, developed states often try to externalize their institutions (and more generally, ways of doing things). These attempts often ignore the lived realities of the countries being assisted.

Forgetting the history of his own country (think autocratic monarchs, monopolies, limited suffrage), Cameron thinks that democracy, human rights and free markets (all great things) will magically create jobs in the developing states of the world. They don’t. In fact, they often lag the job creation process. For development assistance to be effective it must eschew these feel-good approaches to the problem of underdevelopment.

Blattman is spot on on a number of points:

  1. Unchecked leaders are bad for economic development (this is why I am so much into PARLIAMENTS!!!): Also, democracy is NOT synonymous with limited government. Heads of state like Queen Victoria or Hu Jintao or Bismarck or even Seretse Khama were in no measure democrats. However, they ruled under systems with strong (sometimes extra-constitutional) checks to their power. That made a difference.
  2. Institutions rule, yes, but the right kinds of institutions: 1688 moments do not drop out of the sky. They are often preceded by decades if not centuries of civil strife, economic change and plain old learning. Institutional development takes time. Plus each society requires its own unique and appropriate mix of institutional arrangements to meet unique economic and social needs. A procrustean approach to institutional development (embodied in global capacity building) will inevitably fail. Institutional development must never be allowed to be captured by those who think that we can transform Chad simply by having them adopt Swedish institutions.
  3. Growth will require creation of jobs, i.e. industrial development: The poor countries of the world need real jobs for high school-leavers and other less educated people. The present focus on the “sexy” entrepreneurial sectors – whether they are small businesses for the poor or tech hubs for the very highly educated – as the engines for growth in the developing world is misguided. I reiterate, starting a business is a very risky venture that should be left to the wealthy and the occasional dare devil. The poor in the global south need stable 9-5 jobs. Lots of them.

And lastly, where do strong institutions come from? There is no easy answer to this question. What we know is:

  1. History matters: Present countries with a long history of stateness have a better track record of building strong institutions for development. Yes, they may not always be democratic, but countries with a long history of centralized rule have strong states (and institutions) that deliver for their people (for more on this see Englebert and Gennaioli and Rainer).
  2. Democracy does not always create strong institutions: Since 1945 many have chosen to forget the fact that universal suffrage is a pretty recent phenomenon in the political history of the world. For the longest time world polities were ruled by power barons who held de facto power (as opposed to the procedural de jure power in democracies). When democracy came along after the Enlightenment the resulting structures of rule often reflected these de facto configurations of power. Over time institutions in these countries were cemented enough to allow for complete outsiders like say the current president of the United States to be elected without upsetting the balance of power (in another era he would have had to have mounted a coup). This is the challenge of the democratization in the new post-WWII states. How do you make democracy serve the interests of the people, rather that purely that of the elite? How do you use democracy to create strong institutions? Is this even possible? And if not, what other options do we have?

Happy Independence Day to all the Zambians out there!

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Image source: Wikipedia

Why explore space while millions starve on earth?

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As we await more tantalizing images and results from NASA’s Curiosity Mars Rover it is important to ponder the real aim of research, even research that at times seems pointless and wasteful in light of other pressing concerns. Here’s a recap of an exchange from an earlier time regarding a possible exploration mission to the red planet.

In 1970, a Zambia-based nun named Sister Mary Jucunda wrote to Dr. Ernst Stuhlinger, then-associate director of science at NASA’s Marshall Space Flight Center, in response to his ongoing research into a piloted mission to Mars. Specifically, she asked how he could suggest spending billions of dollars on such a project at a time when so many children were starving on Earth. 

Dr. Stuhlinger wrote back, in part saying:

…… I know that you do not expect an answer such as “Oh, I did not know that there are children dying from hunger, but from now on I will desist from any kind of space research until mankind has solved that problem!” In fact, I have known of famined children long before I knew that a voyage to the planet Mars is technically feasible. However, I believe, like many of my friends, that travelling to the Moon and eventually to Mars and to other planets is a venture which we should undertake now, and I even believe that this project, in the long run, will contribute more to the solution of these grave problems we are facing here on Earth than many other potential projects of help which are debated and discussed year after year, and which are so extremely slow in yielding tangible results.

More on this (highly recommended) here.

H/T @vkwhatt

Quick hits

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HIV self-testing showing promising results in Malawi.

Kenyan legislators, who make upwards of $175,000 a year, now have $3000 chairs to snooze on.

Jina Moore on the white correspondent’s burden in “Africa.”

This sad event in Zambia adds significance to my planned fieldwork there in the coming year on Chinese-African relations.

And lastly, celebrating the informal economy on the Continent:

[youtube.com/watch?v=Yi0fNa1G4-4&sns=fb]

TAZARA Pictures (Preview, see link to original post and more pictures below)

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Richard White’s Railroaded proved to be an appropriate reading for the trip

Leaving Dar es Salaam

Most of the two-day ride was across the empty countryside

Mbeya is the biggest station before Kapiri. We broke down here for almost 5 hours

Of course the picture collection wouldn’t be complete without the African sunset

Just a reminder of who built the railway line

Kapiri Mposhi, final stop on the TAZARA line

The original post is here.

What does a Sata Presidency Mean for Zambia?

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UPDATE:

For a closer take on the Sino-Zambian connection check out Louise Redvers’ piece for the BBC.

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So the Economist beat me to writing about what a Sata presidency means for the Zambian economy, especially with regard to foreign investment.

For the two of you out there who are not conversant with the campaign details in the Zambian election, Mr. Sata’s main campaign strategy involved characterizing incumbent President Banda as someone who was out to mortgage Zambia’s future to foreign investors, and especially China.

Here is what the Economist had to say:

“He is too savvy a politician not to realise how much this impoverished country of 13m people needs China’s cash. Over the past decade, the Chinese have invested over $2 billion in Zambia, the GDP of which is only $16 billion. More than half of that came in last year. And China is committed to pouring in billions more. There are now about 300 Chinese companies in Zambia, most of them privately owned, employing around 25,000 locals. Standards differ: some companies treat their workers badly, but most of the big state-owned companies genuinely seek to respect local labour laws.”

The long and short of it is that Sata will definitely kick out a few shady companies that were operating outside the law – and these are not just Chinese firms; the South Africans and Australians also have some shady businesses in Zambia. The former, especially, have a lot of money-laundering operations.

More on this here and here.

On the democracy and governance front, things won’t change much. President Sata’s camp is full of recycled UNIP veterans. UNIP was the independence party that ruled Zambia between 1964 and 1991. Mr. Sata, however, could surprise us by finally passing through a new constitution for Zambia. The last parliament killed the proposed constitution.

when dictators’ oracles fail them

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One of the biggest problems in dictatorships is the dearth of dependable information. This problem affects both dictators and their oppressed subjects alike. The same applies to presidents in electoral regimes who surround themselves with “yes men,” the latter who are oftentimes more concerned about pleasing their patron than giving him the right information.

This cartoon from the Daily Nation exemplifies the surprise from some quarters that greeted Rupiah Banda’s defeat in the just concluded tripartite elections in Zambia.

Former president Banda might have been a victim of misinformation, above and beyond the fact that the opposition Patriotic Front run a skillfully crafted campaign complete with this mega hit (in Zambia at least).

[youtube.com/watch?v=G16vj5hJKfw]

HT African Arguments

Sata is Zambia’s president-elect

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NB: Still hoping from airport to airport and will give my reaction to the Sata victory when I finally get back to Palo Alto on Friday evening Pacific Time.

Michael Sata of the Patriotic Front is the new president of Zambia. Mr. Sata beat incumbent president Banda after getting 43% of the declared results in the just concluded general elections in Zambia.

As was expected, the high turnout (from the numbers I have, low 60s), favored Mr. Sata. In the last election turnout was a dismal 45%.

For more of this read the Post.