Sean Jacobs's Blog, page 310

This week we shine some light on the World Bank

World Bank President Jim Yong Kim (right) embraces African Bank President Donald Kaberuka (Photo Credit: World Bank)

(1) The World Bank effectively has a monopoly in the market for measuring poverty. Almost everyone has heard of the Bank’s “a dollar a day” measure. It’s famous. It’s thrown around at poverty conferences, poverty strategy sessions, in the business class section of flights to Davos, coffee shops, academic seminars at hip universities, et cetera. It seems that everybody (but the poor) knows about it. And the idea seems simple enough: Figure out the absolute minimum amount of money one needs to live meaningfully. Anyone with a daily expenditure below this minimum is then considered poor.

The World Bank first estimated poverty using this approach in 1990. And back then, this minimum was thought to be $1 per day. Since then, it has been adjusted upwards to reflect changes in the cost of living in countries across the globe. It’s currently at $1.90 per day.

(2) Behind this simple number is a battalion of assumptions. There’s nothing intrinsically wrong with making assumptions because social reality is complex. But it turns out that the assumptions the World Bank makes in arriving at its poverty measure are quite “strong.” In other words, using a different set of assumptions result in different poverty estimates to the extent that the Bank’s approach is “incoherent and meaningless.” That’s the charge levelled by Professor Sanjay Reddy, one of our favorite economists based at the New School for Social Research in New York City. Reddy makes this argument in a paper published last week with Rahul Lahoti (the version that’s not behind a paywall is here. We didn’t tell you). The paper’s main conclusions are discussed in this blog post and was also covered by The Economist.  

(3) While the World Bank’s measure implies that the number of poor people has declined across the globe between 1990 and today, Sanjay Reddy’s work suggests otherwise. And this matters a great deal because many policies are considered “pro-poor” precisely because they reduce poverty as per the World Bank’s measure.

(4) Still on this topic, a new World Bank report titled Poverty In A Rising Africa finds that

poverty in Africa may be lower than current estimates suggest and [there hasn’t been a] systematic increase in inequality.

Hmmm, we wonder what Professor Reddy has to say about this.    

(5) Still some more on the World Bank: The human rights advocacy group, the Oakland Institute, has released a report alleging the Bank has resumed lending money to Ethiopia towards a controversial project linked to land evictions. The report is summarized and discussed here.     

(6) Some more on poverty: March 21 marked the first anniversary of Namibia’s third president since independence, Hage Geingob. Upon assuming office,Geingob launched a “War on Poverty” which came complete with a Poverty Eradication Ministry. The stocktaking looks disappointing, one year hence.     

(7) Things are looking up for Zimbabwe (or are they?). The country might later this year access IMF funding for the first time since 1999. True to form, the IMF has asked (or is it ordered?) the country to implement a series of “policy reforms” including a cut to public sector wages.

We wonder how wise this move is considering that Zimbabwe is still recovering, and perhaps hasn’t fully recovered, from a skills exodus of epic proportions. You probably want to attract and maintain skills as you rebuild the state’s capacity not scare them away. But who are we to say anything about this? The IMF are the experts here. They know best. Right?

(8) Although not explicitly mentioned in the IMF’s press statement, there’s been news (here, here and here) suggesting that part of the conditions led down by the IMF was for Zimbabwe to begin compensating farmers who lost land during the controversial land redistribution program.

Is this a policy reform? And is it borrowing from Bridget to pay Mary? We are curious to hear the opinions of Zimbabweans on this matter.

(9) The economist William Easterly this past week shared the image below and tweeted: “Let’s be clear that U.S. Foreign Aid is not about development, it’s about U.S. national security”.   

(10) Finally, in Russia, a homegrown credit ratings agency has been launched to rate Russian debt. This follows the exit of Moody’s, the impending exit of Fitch as well as Standard and Poors’ uncertain future in that country.

Ain’t nothing wrong with this, right? After all, some other big power in the world already has its own rating agencies rating its debt. Heck, we all should have our own rating agencies. We at Africa Is A Country have thus decided to rate our bonds Super-duper Grade. The best. Guaranteed to get your money back.  

It’s the economy, No. 6

World Bank President Jim Yong Kim (right) embraces African Bank President Donald Kaberuka (Photo Credit: World Bank)

This week we start off by shining some light on the World Bank.

(1) The World Bank effectively has a monopoly in the market for measuring poverty. Almost everyone has heard of the Bank’s “a dollar a day” measure. It’s famous. It’s thrown around at poverty conferences, poverty strategy sessions, in the business class section of flights to Davos, coffee shops, academic seminars at hip universities, et cetera. It seems that everybody (but the poor) knows about it. And the idea seems simple enough: Figure out the absolute minimum amount of money one needs to live meaningfully. Anyone with a daily expenditure below this minimum is then considered poor.

The World Bank first estimated poverty using this approach in 1990. And back then, this minimum was thought to be $1 per day. Since then, it has been adjusted upwards to reflect changes in the cost of living in countries across the globe. It’s currently at $1.90 per day.

(2) Behind this simple number is a battalion of assumptions. There’s nothing intrinsically wrong with making assumptions because social reality is complex. But it turns out that the assumptions the World Bank makes in arriving at its poverty measure are quite “strong.” In other words, using a different set of assumptions result in different poverty estimates to the extent that the Bank’s approach is “incoherent and meaningless.” That’s the charge levelled by Professor Sanjay Reddy, one of our favorite economists based at the New School for Social Research in New York City. Reddy makes this argument in a paper published last week with Rahul Lahoti (the version that’s not behind a paywall is here. We didn’t tell you). The paper’s main conclusions are discussed in this blog post and was also covered by The Economist.  

(3) While the World Bank’s measure implies that the number of poor people has declined across the globe between 1990 and today, Sanjay Reddy’s work suggests otherwise. And this matters a great deal because many policies are considered “pro-poor” precisely because they reduce poverty as per the World Bank’s measure.

(4) Still on this topic, a new World Bank report titled Poverty In A Rising Africa finds that

poverty in Africa may be lower than current estimates suggest and [there hasn’t been a] systematic increase in inequality.

Hmmm, we wonder what Professor Reddy has to say about this.    

(5) Still some more on the World Bank: The human rights advocacy group, the Oakland Institute, has released a report alleging the Bank has resumed lending money to Ethiopia towards a controversial project linked to land evictions. The report is summarized and discussed here.     

(6) Some more on poverty: March 21 marked the first anniversary of Namibia’s third president since independence, Hage Geingob. Upon assuming office,Geingob launched a “War on Poverty” which came complete with a Poverty Eradication Ministry. The stocktaking looks disappointing, one year hence.     

(7) Things are looking up for Zimbabwe (or are they?). The country might later this year access IMF funding for the first time since 1999. True to form, the IMF has asked (or is it ordered?) the country to implement a series of “policy reforms” including a cut to public sector wages.

We wonder how wise this move is considering that Zimbabwe is still recovering, and perhaps hasn’t fully recovered, from a skills exodus of epic proportions. You probably want to attract and maintain skills as you rebuild the state’s capacity not scare them away. But who are we to say anything about this? The IMF are the experts here. They know best. Right?

(8) Although not explicitly mentioned in the IMF’s press statement, there’s been news (here, here and here) suggesting that part of the conditions led down by the IMF was for Zimbabwe to begin compensating farmers who lost land during the controversial land redistribution program.

Is this a policy reform? And is it borrowing from Bridget to pay Mary? We are curious to hear the opinions of Zimbabweans on this matter.

(9) The economist William Easterly this past week shared the image below and tweeted: “Let’s be clear that U.S. Foreign Aid is not about development, it’s about U.S. national security”.   

(10) Finally, in Russia, a homegrown credit ratings agency has been launched to rate Russian debt. This follows the exit of Moody’s, the impending exit of Fitch as well as Standard and Poors’ uncertain future in that country.

Ain’t nothing wrong with this, right? After all, some other big power in the world already has its own rating agencies rating its debt. Heck, we all should have our own rating agencies. We at Africa Is A Country have thus decided to rate our bonds Super-duper Grade. The best. Guaranteed to get your money back.  

“I go chop money nah”: the perversion of class consciousness in Nigeria.

In a country where the police and justice system are largely perceived as corrupt and ineffective, many Nigerians have resorted to vigilantism and jungle justice to balance the scales. But as expected, in the court of public opinion where sentimentality and frustration run high, the quest for justice can become perverted, if not overtly partial.

Take road accidents for instance. Motorists have been eternally typecast as villains. It doesn’t matter whether the pedestrian was jay-walking or the bicyclist was riding blindfolded, the fault will be laid at the feet of the car owner – the oppressor of the lowly and the enemy of progress.

I remember a story narrated by Peter, a taxi driver whose brother was involved in a road accident in their village that claimed the life of a motorcyclist and his passenger. According to Peter, the motorcycle failed to stop at an intersection linking the minor road to the expressway, and rode smack into his brother’s car. Such accidents are rife in cities across Nigeria, contributing to the banishment of okadas (commercial motorcycles) to city margins and their subsequent replacement with slower motorised rickshaws.

A fatal road accident is every Nigerian motorists’ nightmare as mobs have been known to brutalise and immolate drivers (and sometimes passengers) in their vehicle before questions are asked. It’s for this reason that some motorists hit and run. Others like Peter’s brother, quickly seek sanctuary in a nearby a police station, where they will inevitably have to bail themselves and the car out after settling burial expenses with the victim’s community. No easy feat for most in a country were funerals are unnecessarily expensive, and as such an avenue for surviving family members to demand excessive sums in compensation. Never mind that their dead would most likely never have earned that figure over their entire lifespan.

Now when accidents involve two automobiles, the driver of the sleeker car gets less sympathy, notwithstanding who was at fault, a scene I witnessed at a junction. Neither the screaming red brake lights nor the traffic warden’s white-gloved palm up could stop the rickety truck from ramming into the bumper of the SUV. As expected, an argument ensued, the usual crowd of nothing-doers flocked around the vehicles to proffer unsolicited opinions, and then the police arrived.

In the final analysis, three options emerged. The crowd reasoned the SUV driver should pay for damages on both cars on the account that he could afford to. The police suggested the drivers park their vehicles in the police station until the matter was resolved. Parking was a means of extorting money from both parties, since, as an unwritten rule, cars were charged each day they remained at the station. The third was for the SUV driver to swallow the bitter fact he’d have to cough up the money to fix his car, since car insurance policies are a rarity in Nigeria and a court case could languish in the legal system for years.

Selective justice, where the poor are painted as innocent victims or saints by the largely impoverished population, is nothing more than a case of good old classism. Granted, the poor are immensely impacted by corruption and whatever ills the Nigerian society can dish out, but lest we forget they’re also active participants in perpetuating their circumstances. Corrupt politicians, who win elections by handing out bags of rice and phone recharge cards in exchange for votes, would be a thing of the past if the poor eschewed instant gratification for competent candidates.

The lower class, which makes up more than half the population, isn’t helpless. They can, as posited in George Orwell’s 1984, upend the entire socio-political and economic structure to birth a more equal and humane society if they’re inclined. Still, I’m afraid that this theory may not apply to Nigeria. Ask a random person from the lower class what they would do if given the reins of the country, and their answer – accompanied by a sly smirk – will most likely be: “Ah, I go chop money nah.” An answer no different than one coming from a middle or upper class person.

A convenient example of a person from the lower class who made it to the top is Nigeria’s former president Goodluck Jonathan, who claims to have walked to school without shoes as a child. Yet despite his humble beginnings, his presidency was characterized by poor governance and gross mismanagement of Nigeria’s treasury.

In the same vein, Niger-Delta militants, who took up arms to protest pervasive poverty and the continuous degradation of their land and water by oil spills, quickly forgot their struggle after they were awarded lucrative contracts to guard oil pipelines they once targeted. With their newfound wealth, they built mansions and bought SUVs while their brethren continue to inhale noxious fumes from incessant gas-flaring.

The tendency of the lower class to view car-owning Nigerians as an extension of the ruling class – and, as such, Voodoo dolls on which to vent their frustrations – is neither here nor there. Not if during elections they hire themselves out as goons to politicians and sell their votes to the highest bidder. If they channelled their resentment appropriately and positively, rather than begrudged ordinary Nigerians struggling to make a living, chances are their lot would improve tremendously.

Na Moita–Photographing the Settlements of Rio de Janeiro

“Na Moita” is slang in Rio de Janeiro, Brazil, for an action that cannot be carried out in the open. It literally translates to “in the bush,” and it is normally associated with delinquent activity, but also with anything unusual.

In the Baixada Fluminense – that is, the northern, most populous area of the Greater Metropolitan Area of Rio de Janeiro – life is often times at odds with city planning and other abstract notions, such as laws.

“Morar” is a Portuguese verb rich in connotations–it can mean “to reside,” “to abide,” “to live,” “to settle,” and “to occupy,” depending on the context–and it captures essentially the status of the inhabitants, or “moradores,” of these communities: some occupy, some others reside, few abide by the rules, and all live together thanks to interim agreements amongst themselves. For example, such is the case with the drug-dealing gangs that fuel the relentless confrontations with police, which have ended in blockades made of unused furniture.     

Along with some students and staff from The New School in New York, I visited the Parque das Missões and Vila Beira Mar, two of the most prominent examples of slum habitation in Rio, according to local NGO Teto (which is known throughout Spanish-speaking Latin America as “Un Techo para mi País,” a Chilean transnational organization that mobilizes young volunteers to fight poverty).

Teto was there to accompany us throughout all the process. By association, people in the communities did not question much the fact that we were taking pictures, since the organization would always send media teams to document their housing intervention projects.

The living conditions were dire, electricity would disappear every time it rained, and the clogged drainage would cause major floods, not to mention serious sanitation issues. However forsaken the community seemed to our group, each individual that we spoke to was perfectly content with their community and the strong ties that bind it together: It was a settlement (or “assentamento,” which, in its etymology, signals to an agreement) that they all had created in the face of pressing difficulties. Needless to say, most assentamentos do not have a housing permit from the local prefecture.

Perhaps more importantly, community members also spoke of how dependent they were of “Bolsa Família.” This social welfare program was perhaps the centerpiece of the Lula administration, also part of the larger Fome Zero federal assistance program. It reduced poverty by 27.7% from 2006 to 2011, and is often described as the most impactful program of its kind in the world. It is now under threat by the large scale protests and court challenges against the Worker’s Party (Partido dos Trabalhadores) government.

Without Bolsa Família, the lives of the people of these neighborhoods would dire, and they would maybe be confronted with other decisions to be taken “na moita.”

These photographs, below, taken with a manual focus analog compact camera in black and white celluloid (a lot of focus hunting went on), are themselves as makeshift as the structures and situations that they intend to document; they portray the precarious material conditions and the way inhabitants bypass implicit or explicit norms to adjust to the ever shifting social dynamics, urban environments.

The hunt for (the trial of) Dedan Kimathi

Dedan Kimathi’s face is inescapable in modern Kenya. Framed by bundles of dreadlocks pulled into two long horns, it appears on t-shirts, in larger-than-life murals aside Nairobi buildings, and in graffiti art on the sides of matatu buses. His image has long stood in, symbolically, for all the heroic ideals and lost hopes of an era of revolutionary decolonization.

The full photograph presents a much different picture: Kimathi, handcuffed, loosely covered in blankets, sitting in the defendant’s chair on trial for his life in November 1956. The “hunt” for Dedan Kimathi, an enigmatic leader of the so-called Mau Mau rebellion that engulfed Kenya in the 1950s – a movement that had many names, many faces, and even more interpretations – captivated global attention in the years leading up to his capture. In 1956, Kimathi pled not guilty to charges of weapons and ammunition possession, which carried the death penalty under the Emergency Regulations instituted in 1952. Hundreds of people gathered outside the courthouse, hoping to catch a glimpse of the legendary leader. The trial ended in conviction, with Kimathi sentenced to be “hanged by the neck until he is dead.” After the failure of multiple appeals, Kimathi was hanged on 18 February 1957.

It has long been assumed that the record of Kimathi’s trial had been lost, destroyed, or purposefully kept hidden. Many have gone in search of it in archives across multiple continents, with little success. I recently came across a letter from no less than the late J.M. Kariuki, a former Mau Mau detainee and outspoken populist Kenyan politician assassinated in 1975, requesting the file from the High Court in 1971. The request was denied.

Why? The life of any “archive” can be strange and convoluted. The British destroyed and hid records, particularly in relation to their colonial past, as revealed by the recent activism of Mau Mau veterans seeking reparations from the British government. Various governments of postcolonial Kenya have also destroyed or denied access to archives based on their potential impact on contemporary conflicts over land, politics, violence and memory. But colonial trial records have, in general, been available in England and Kenya. The void left where Kimathi’s trial file should be, increased exponentially the popular myths and conspiracy theories that have long surrounded him.

The absence of this file is especially ironic, given Kimathi’s deep belief in the power of words and his dedication to the bureaucratic work of historical documentation. Kimathi excelled in school debating clubs and was known for his oratory flair. In the forests of Central Kenya, he lectured the Mau Mau itungati (troops of young warriors) on the necessity of historical records: each camp kept an accounts log, wrote histories, issued new identity cards, and carefully recorded lists of loyal fighters and traitorous others.

He established the Kenya Parliament in the forest and marked his official decrees with a stamp: “Marshal D. Kimathi.” He was also a prolific letter writer, producing eloquent tracts that compared the struggle in Kenya to those in Indochina and Rhodesia, quoted biblical scripture alongside Kikuyu proverbs, and called on the British to live up to their own moral claims: “Mtoto umleavyo ndivyo akuavyo” (roughly, “As you bring up a child, so will he grow”).  Although the British painted the Mau Mau as atavistic, anti-modern savages who spurned civilization, the state Kimathi built in the forest demonstrates that his Mau Mau was not the rejection of modern governance, but the building of an alternative to the colonial version of it.

Kimathi Mural at PAWA254

My search for Kimathi’s trial emerged circuitously, inspired by an earlier discovery of the revealing, but mislabelled, trial file of Elijah Masinde, another anti-colonial, rebel prophet. Tales of ephemeral encounters and partial glimpses of the Kimathi trial led me to a multi-year, multi-continental, and multi-archival search, filled with false starts, fraudulent (or at least poorly transcribed) copies and growing suspicions.

Last year, there was a breakthrough. I followed leads to the British lawyers, Sir Dingle Foot and Ralph Millner, who had taken up Kimathi’s appeal to the Privy Council in London. Millner, often described as a “socialist” or “communist” lawyer, had defended several African trade unionists and liberation leaders against colonial prosecutions. Ralph Millner’s papers, held in the Royal Senate House Library in London, had only recently been catalogued and opened to the public.

And there it was: a complete, certified, original transcript of the trial of Dedan Kimathi, under embossed seal of Her Majesty’s Supreme Court of Kenya. Working with Kenya’s Chief Justice Willy Mutunga and the dedicated staff at the Supreme Court, the file has now made a long anticipated return to Kenya.

The revelations from the trial are too numerous to list here: from the controversial retelling of the capture and shooting of Kimathi by Homeguard Ndirangu s/o Mau to Kimathi’s own testimony, which tells of his painful personal history with epilepsy, internal struggles within the Mau Mau movement and his desire for peace in Kenya. The return of this critical piece of lost history will no doubt shock many, its content unsettling many popular and historical assumptions, and spark much-needed debates on a far broader range of issues than those raised purely from the pages of the trial.

Will Kimathi’s trial papers raise the dead? Probably not. But they do provoke unsettled issues. Like those of land and freedom (or self-mastery) for which the Mau Mau fought and on which many feel independent Kenya has not delivered. Kenyans may ask: land and freedom for whom?

What happened to ‘Africa Rising’?

First up: (1) Things are not looking up for the “Africa Rising” story and we are only half-way through what was meant to be Africa’s decade. Ghana, just last year, was bailed out by the IMF. Kenya, this past week, announced that the IMF had offered the country a $1.5bn stand-by facility. In Zambia, the IMF concluded a two-week visit painting a very dismal outlook for the country. Zambia will soon need a bailout. In Mozambique, the authorities have had to renegotiate repayment terms on outstanding debts given the country’s lackluster economic performance. It’s also becoming increasingly likely that Nigeria, the continent’s biggest economy, might have to approach the “Fund” for help in plugging its budget shortfall.

(2) Ironically, the Economist, using data from the IMF, declared in 2011 that Ghana, Mozambique, Nigeria and Zambia would be among this decade’s star performers.

We don’t know whether to laugh or cry.

(3) As we said last year, Africa needs to industrialize if it’s going to meaningfully rise. That’s the lesson from history. Countries on the continent need to move away from the colonial legacy of depending on primary commodities (cocoa, copper, oil, et cetera).

(4) For a longtime, economists in the South talked at length about how the benefits of trade liberalization were exaggerated. After all, they had seen first-hand the devastation that the lowering of tariffs had wrought on labour markets in their countries. But these were dismissed as nothing other than the protestations of heretics by the powers that be. The case for ever “freer trade” was ironclad. Trade raised all the boats in the sea!

The free trade religion is now looking shaky even in the West. Recent statistical work by the MIT economist David Autor and his colleagues finds that increased trade between the U.S. and China has been utterly devastating for manufacturing jobs in the U.S. And this partly explains the rise of Trumpism.

American economists rule the world. Perhaps the obsession with free trade will now die.

(5) By the way, if you have an hour to spare you can listen to David Autor talk, in a very accessible way, about his work on trade and the disappearance of U.S. manufacturing jobs here. And one of our favourite economists Dani Rodrik had a set of interesting tweets on this very topic last week.

(6) At the blog Stumbling and Mumbling, which we secretly think is an apt description of the econ profession (shhh, don’t tell anyone), was this interesting post about how U.K politics and policymaking is dominated by private school types. Here’s an excerpt:

The problem is that the dominance of the privately-educated leads to one prism dominating political discourse, leading to a damaging lack of cognitive diversity.

We could rewrite this sentence as:

The problem is that the dominance of Western development economists leads to one prism dominating the development discourse on Africa, leading to a damaging lack of cognitive diversity.

(7) Relatedly, David Pilling of the Financial Times recently declared that “the only thing we know about African economies is that we do not know much at all”.

We wonder who the “WE” is in Mr. Pilling’s statement. Perhaps “WE” stands for Western Economists?

(8) Okay, for some good news. According to the Economist, agriculture production across much of Africa (Ethiopia, Mali, Rwanda, Zambia et cetera) is improving quickly. Which is a good thing.

(9) Curiously though, the Economist seems to think this is a result of market reforms started in the early 80s and 90s. Our reading of the evidence, at least for Zambia and Malawi (countries that we are familiar with), actually suggests the reverse. Agriculture production in the two countries was revived as soon as the state reintroduced subsidies (see the scholarly evidence for Malawi and a chart we put together for Zambia).

(10) In Nigeria, the soon-to-be disbanded Nigeria National Petroleum Corporation (NNPC) is looking for its $16bn. Does anyone know where it is?

(11) “It’s easier for North Americans to travel within Africa than Africans themselves”. This is shameful and Africa needs to fix this. The economic benefits of increasing intra-African mobility are potentially large. Ghana’s recent announcement that it would grant visas on arrival to citizens of the African Union is a giant step in the right direction. Other countries need to emulate this; and

(12) Finally, we came across the following sentence while reading Charles Chukwuma Soludo and Thandika Mkandawire’s edited volume African Perspectives on Structural Adjustment:

It is estimated that about 100,000 expatriate technical-assistance staff work in Africa, meddling in every aspect of policy analysis, advise, policy-making, and implementation and gulping up $4billion per year.

Too many cooks spoil the Egusi Soup.

It’s the economy, N°5

First up: (1) Things are not looking up for the “Africa Rising” story and we are only half-way through what was meant to be Africa’s decade. Ghana, just last year, was bailed out by the IMF. Kenya, this past week, announced that the IMF had offered the country a $1.5bn stand-by facility. In Zambia, the IMF concluded a two-week visit painting a very dismal outlook for the country. Zambia will soon need a bailout. In Mozambique, the authorities have had to renegotiate repayment terms on outstanding debts given the country’s lackluster economic performance. It’s also becoming increasingly likely that Nigeria, the continent’s biggest economy, might have to approach the “Fund” for help in plugging its budget shortfall.

(2) Ironically, the Economist, using data from the IMF, declared in 2011 that Ghana, Mozambique, Nigeria and Zambia would be among this decade’s star performers.

We don’t know whether to laugh or cry.

(3) As we said last year, Africa needs to industrialize if it’s going to meaningfully rise. That’s the lesson from history. Countries on the continent need to move away from the colonial legacy of depending on primary commodities (cocoa, copper, oil, et cetera).

(4) For a longtime, economists in the South talked at length about how the benefits of trade liberalization were exaggerated. After all, they had seen first-hand the devastation that the lowering of tariffs had wrought on labour markets in their countries. But these were dismissed as nothing other than the protestations of heretics by the powers that be. The case for ever “freer trade” was ironclad. Trade raised all the boats in the sea!

The free trade religion is now looking shaky even in the West. Recent statistical work by the MIT economist David Autor and his colleagues finds that increased trade between the U.S. and China has been utterly devastating for manufacturing jobs in the U.S. And this partly explains the rise of Trumpism.

American economists rule the world. Perhaps the obsession with free trade will now die.

(5) By the way, if you have an hour to spare you can listen to David Autor talk, in a very accessible way, about his work on trade and the disappearance of U.S. manufacturing jobs here. And one of our favourite economists Dani Rodrik had a set of interesting tweets on this very topic last week.

(6) At the blog Stumbling and Mumbling, which we secretly think is an apt description of the econ profession (shhh, don’t tell anyone), was this interesting post about how U.K politics and policymaking is dominated by private school types. Here’s an excerpt:

The problem is that the dominance of the privately-educated leads to one prism dominating political discourse, leading to a damaging lack of cognitive diversity.

We could rewrite this sentence as:

The problem is that the dominance of Western development economists leads to one prism dominating the development discourse on Africa, leading to a damaging lack of cognitive diversity.

(7) Relatedly, David Pilling of the Financial Times recently declared that “the only thing we know about African economies is that we do not know much at all”.

We wonder who the “WE” is in Mr. Pilling’s statement. Perhaps “WE” stands for Western Economists?

(8) Okay, for some good news. According to the Economist, agriculture production across much of Africa (Ethiopia, Mali, Rwanda, Zambia et cetera) is improving quickly. Which is a good thing.

(9) Curiously though, the Economist seems to think this is a result of market reforms started in the early 80s and 90s. Our reading of the evidence, at least for Zambia and Malawi (countries that we are familiar with), actually suggests the reverse. Agriculture production in the two countries was revived as soon as the state reintroduced subsidies (see the scholarly evidence for Malawi and a chart we put together for Zambia).

(10) In Nigeria, the soon-to-be disbanded Nigeria National Petroleum Corporation (NNPC) is looking for its $16bn. Does anyone know where it is?

(11) “It’s easier for North Americans to travel within Africa than Africans themselves”. This is shameful and Africa needs to fix this. The economic benefits of increasing intra-African mobility are potentially large. Ghana’s recent announcement that it would grant visas on arrival to citizens of the African Union is a giant step in the right direction. Other countries need to emulate this; and

(12) Finally, we came across the following sentence while reading Charles Chukwuma Soludo and Thandika Mkandawire’s edited volume African Perspectives on Structural Adjustment:

It is estimated that about 100,000 expatriate technical-assistance staff work in Africa, meddling in every aspect of policy analysis, advise, policy-making, and implementation and gulping up $4billion per year.

Too many cooks spoil the Egusi Soup.

Hillary Clinton, Goldman Sachs and ‘African Development’

Hillary Clinton is still refusing to release the transcripts of three paid speeches she gave in 2013 at Goldman Sachs, “an investment bank notorious for using its ties to public officials to influence policy.” The speeches collectively netted her $675,000.

We came across a video of a speech she gave to Goldman Sachs at the headquarters of the Clinton Global Initiative in September 2014. On this occasion, the investment firm was celebrating its 10,000 Women initiative, an anti-poverty campaign that invests in entrepreneurial women (and entrepreneurial women only) in low-income countries. In the speech, Clinton has some fun at Africa’s expense.

First, some background: The 10,000 Women program argues that women in poor countries are best positioned to fix the global economy, because of their inherently female tendency to reinvest most of their earnings in their families and communities. As poor women are liberated from the yoke of tradition, culture and other patriarchal norms that might stifle their private sector potential, they are free to access credit, grow businesses and solve poverty once and for all. Indeed, Goldman Sachs’ chiefs and allies assure you that overcoming the credit gap will empower women to take up their “rightful role in helping to change the face of the global economy.”

The Clintons have long been entangled with this corporate development agenda, so it wasn’t surprising that Hillary took to the stage at the 2014 event and hailed Goldman Sachs’ work with a boilerplate about “extraordinary commitment.” She declared “the credit gap [one] of the biggest problems we face in the global economy,” but neglected to mention that, on the whole, micro-lending programs have had disappointing results. At times, the results have been tragic. Instead Hillary offered an anecdote about a trip to Africa she made some 20 years ago.

About 6:35 into the video, Clinton begins talking about unnamed African economists she met somewhere (undisclosed) in Africa. To her horror and amusement, the economists were utterly oblivious to the contributions women were making to their communities. Clinton asked them how they calculated women’s work and they told her, “we don’t.” She then lectured them on their apparent sexism.

Yet, as resident AIAC economist, Grieve Chelwa, recently reminded us on this site, “women’s contribution to, for instance, agriculture in most African countries are [actually] relatively well captured in agricultural surveys. And agriculture is not an insignificant part of total output on the continent.” Furthermore, “women’s domestic work is hardly reflected in GDP statistics even in the U.S.”

One of the obvious problems with Clinton’s admiration and approval of Goldman Sachs’ approach, is that it paints, at best, an incomplete picture of how free-market capitalism actually works, and that it promotes the idea that poor women and rich banks, rather than states, are responsible for fixing economic problems.

In reality, as long as US and other multinationals keep sucking billions of dollars out of the continent every year – through tax evasion and trade mispricing practices – the potential for African women entrepreneurs and their respective countries to prosper is limited.

Clinton knows this all too well and so the video exposes not only her cozy connections with Wall Street oligarchs, but also her avowed establishment perspective on global development.

*For more on Hillary’s Africa agenda, see previously on AIAC, and in-depth coverage in other media here, here, here, here and here.

Hillary Clinton, Goldman Sachs and ‘African Development’

Hillary Clinton is still refusing to release the transcripts of three paid speeches she gave in 2013 at Goldman Sachs, “an investment bank notorious for using its ties to public officials to influence policy.” The speeches collectively netted her $675,000.

We came across a video of a speech she gave to Goldman Sachs at the headquarters of the Clinton Global Initiative in September 2014. On this occasion, the investment firm was celebrating its 10,000 Women initiative, an anti-poverty campaign that invests in entrepreneurial women (and entrepreneurial women only) in low-income countries. In the speech, Clinton has some fun at Africa’s expense.

First, some background: The 10,000 Women program argues that women in poor countries are best positioned to fix the global economy, because of their inherently female tendency to reinvest most of their earnings in their families and communities. As poor women are liberated from the yoke of tradition, culture and other patriarchal norms that might stifle their private sector potential, they are free to access credit, grow businesses and solve poverty once and for all. Indeed, Goldman Sachs’ chiefs and allies assure you that overcoming the credit gap will empower women to take up their “rightful role in helping to change the face of the global economy.”

The Clintons have long been entangled with this corporate development agenda, so it wasn’t surprising that Hillary took to the stage at the 2014 event and hailed Goldman Sachs’ work with a boilerplate about “extraordinary commitment.” She declared “the credit gap [one] of the biggest problems we face in the global economy,” but neglected to mention that, on the whole, micro-lending programs have had disappointing results. At times, the results have been tragic. Instead Hillary offered an anecdote about a trip to Africa she made some 20 years ago.

About 6:35 into the video, Clinton begins talking about unnamed African economists she met somewhere (undisclosed) in Africa. To her horror and amusement, the economists were utterly oblivious to the contributions women were making to their communities. Clinton asked them how they calculated women’s work and they told her, “we don’t.” She then lectured them on their apparent sexism.

Yet, as resident AIAC economist, Grieve Chelwa, recently reminded us on this site, “women’s contribution to, for instance, agriculture in most African countries are [actually] relatively well captured in agricultural surveys. And agriculture is not an insignificant part of total output on the continent.” Furthermore, “women’s domestic work is hardly reflected in GDP statistics even in the U.S.”

One of the obvious problems with Clinton’s admiration and approval of Goldman Sachs’ approach, is that it paints, at best, an incomplete picture of how free-market capitalism actually works, and that it promotes the idea that poor women and rich banks, rather than states, are responsible for fixing economic problems.

In reality, as long as US and other multinationals keep sucking billions of dollars out of the continent every year – through tax evasion and trade mispricing practices – the potential for African women entrepreneurs and their respective countries to prosper is limited.

Clinton knows this all too well and so the video exposes not only her cozy connections with Wall Street oligarchs, but also her avowed establishment perspective on global development.

*For more on Hillary’s Africa agenda, see previously on AIAC, and in-depth coverage in other media here, here, here, here and here.

Uganda’s chemical elections

Tear gas – the English term – is frequently overheard in everyday conversation in Kampala. Its chemical formula is a semi-permanent climatic feature in the capital. Residents exchange advice on prevailing winds at taxi stages prior to planning their journeys through town. Customers leave online reviews of local businesses that read: “safe place, [no] tear gas or rioting.” Levels of familiarity are such that a local police womens’ rugby team in the nearby town of Jinja is named “Jinja Police Teargas Rangers,” while the Finance Minister, Matia Kasaija, recently cited the government’s decision to import rather than manufacture tear gas as a reason for the poor performance of the Ugandan shilling.

Kizza Besigye, Uganda’s opposition leader, is widely thought to be the most tear-gassed man in Kampala. His multiple arrests and detentions have become quotidian event that inspires rolling of the eyes en masse in the capital (he has been under house arrest since last months elections). In 2011, police officers fired a tear gas canister directly into his car during a protest against the rising cost of food and fuel. Apparently disappointed by its effect, they then expended a can of pepper spray in his face, leaving him temporarily blinded.

Tear gas comes in a variety of chemical formulas designed to irritate the mucous membranes, causing coughing, crying, sneezing, breathing difficulties and severe pain in the eyes. Its deployment dates back to the First World War, when xylyl bromide was used to force disoriented soldiers out of their trenches, exposing them to artillery fire.

The proliferation of tear gas around the world owes much to the work of the US General Amos Fries, who spearheaded the creation of an international gas market after the war. Writing in the Atlantic Monthly, Anna Feigenbaum refers to a 1921 article in the trade publication, Gas Age Record, that explains how gas is “admirably suited to the purpose of isolating the individual from the mob spirit,” and is equally effective at dealing with “savages” – a versatility that enamored it to both colonial administrations and law enforcement agencies.

The US remains the largest exporter of tear gas today, due to a sustained alliance between the defense industry, government and the military. Feigenbaum recorded 314 cases of its use around the world in 2013 (not including unreported incidents) – the vast majority of cases being against nonviolent protesters. Uganda came sixth in this global league table and was the most frequent offender in Sub-Saharan Africa.

The Ugandan government began to import tear gas from China in 2011, in line with its shifting economic alliances. A large shipment containing “more than a dozen new tear-gas vehicles” arrived last month, one of which fired at market traders present at a pre-election rally.

Edward (33), who works as a produce vendor in Nakasero market, says he has been exposed to tear gas on five occasions, while David (36), a boda-boda (motorcycle taxi) driver, reports having witnessed 30 separate incidents while driving around the city.

Kampala’s markets have responded to the repeated gassing of the city centre by electing their own defense committees, responsible for keeping lookout, transporting afflicted persons to safe areas and administering towels soaked in water and lemon juice.

Asked about the origins of tear gas in Kampala, Edward doesn’t hesitate: “Museveni is the big man – he is the one that orders it.”

Agnes Nakasujja (49), a spice vendor, interjects: “We feel bad, because we know what is next; we don’t want to have war.” Unlike Edward and David, she remembers the conflicts that afflicted Kampala in the early 1980s, and is unwilling to risk stability by voting for the opposition.

Perhaps the most pernicious effect of the increased deployment of tear gas and military equipment on the streets in Kampala is in the fear that it invokes in the electorate, providing a reminder of the close relationship between the president, the police and the military. As Museveni begins his fifth term as President of Uganda, the growing “mobs” of politically disaffected people in Kampala are likely to be left rubbing their eyes.