Press reports indicate that French President Nicholas Sarkozy has publicly expressed his displeasure at his British and American counterparts for stalling on a G20 joint accord to respond to the global recession. Sarkozy and Germany's Angela Merkel are pressing for more stringent measures to clean up the financial and banking worlds in advanced economies particularly the push for regulation of the industry and a rethink to the financial stimulus measures that have gained currency especially under the Obama administration.
In one sense the rift is ideological. The US and Britain want to bail out the financial and Banking worlds without requiring a radical surgery or a more stringent approach such as statutory regulation and other checks and balances in the industry, what in the US would be the republican standpoint.
France and Germany prefer a more regulated industry, that is cautious and see the US and UK as preserving a system that smacks of reckless capitalism that has brought the world to the brink of financial catastrophe. Clearly the execesses in the US and British markets impact the rest of the world which is why Europe see these reforms in the financial and banking industry as critical to the health of the rest of the world economy. Thomas Friedman was more right that he imagined. The world truly is flat.
The US and British governments need to step up to the plate and make bold decisions( inspite of the political costs that come with it) if another financial down turn is to be avoided and industry regulation is clearly at the heart of any such measures.
The era of banking and financial industry execesses such as off- shore banking,tax havens, cooking books of account, lending carte-blanches is over.
The evidence suggests that more prudent banking and regulation of the financial services industry is the way foward and indeed the Franco-German approach saved the duo from more severe effects of thedownturn as compared to the US and the UK.
The UK and US owe to the rest of the world to 'get it right' this time and save the world from another recession years from now.
Thursday, April 2, 2009
Sunday, March 8, 2009
The Global Financial Crisis: Is this the end of the Asian Tigers’ Model?
It was supposed to be a straight forward model. To get out of the poverty trap all countries needed to do was to set up industries and factories for producing cheaply priced goods for the American and European markets. That setting up industries would create jobs and jobs would come with high incomes and millions would be lifted out of poverty and deprivation.
On the basis of this export-led growth model, Japan’s Toyota and Nissan produced reliable but competitively priced vehicles, South Korea’s Hyundai and LG produced electronics and China ,’ the factory to the world’ produced all these goods and almost everything else . Malaysia, Taiwan, Singapore and others soon joined to complete the ‘Asian Tigers’ club.
For decades the Asian Tigers recorded unprecedented economic growth rates and established themselves as world- class industrial production power houses and not even the 1997 Asian financial crisis could stop them. Many western companies couldn’t compete with Asia’s low production costs, especially low-wage labour and soon moved many of their production houses to Asia. Have you noticed that it seems all computers are now manufactured in China?
Then came the global financial crisis or the credit crunch which unraveled in 2008.Suddenly
consumer spending in America and Europe drastically reduced, heralding the ’ end of free-wheeling consumption fueled by easy credit and the wealth effect of ever rising asset values’. As the economic slump deepens, export demand from the west can no longer sustain Asian industry. Tens of thousands of thousands of factories are closing down and millions have become newly unemployed.
According to a recent issue of TIME magazine, it is estimated that last year, 60,000 enterprises were shut down in China’s Guandong province alone, as export orders and credit dried up. In India, the organization for Indian Exporters warned that 10 million Indian workers were set to lose their jobs as a result of the slump in export demand.
Ajay Chhibber, the director of the Asia bureau at the United Nations Development programme says’ in a medium and long term sense the export-led growth model is coming under stress’.
The export-led growth model adopted by Asian leaders, including China ‘s Deng Xiaoping in 1978 and India’s Manmohan Singh in 1991 was responsible for lifting millions in Asia out of poverty as farmer workers become factory workers and their incomes skyrocketed overnight.
According to the World Bank, In 1981, nearly 80% of East Asians lived on less than$1.25 a day and by 2005 only 18% did In a comparable period, Sub Saharan Africa’s poverty levels have remained at 50% between 1981 and 2005 owing to our inability to hop on the globalization train by producing cheap toys, textiles, TVs that the west demands.
Critics of the export-led growth model point out the exclusion of the rural population who are left out in the mainly urban-based industrial jobs. For example despite India being touted as an emerging economy still has 70% of its population as being regarded as rural and poor. The number of poor Indians increased from 436 million in 1990 to 456 million in 2005. The majority have been largely left behind by the production-for-export sector that is majorly based in urban centres such as Mumbai. It is therefore clear that the export-led growth model on its own is not sufficient to lift entire populations out of poverty if it’s not accompanied by other initiatives such as land reform and investments education, roads and other infrastructure.
Dependence on western export markets and the global financial crisis has brought into focus the need to nurture domestic markets. The Chinese premier speaking at the World Economic Forum earlier this year has conceded this much and clearly China’s huge domestic market should be tapped as an alternative market.
In the words of Charles Dickens, these are ’ hard times’ for the export-led growth model but clearly there don’t seem to be many tested models for lifting millions out of poverty.
On the basis of this export-led growth model, Japan’s Toyota and Nissan produced reliable but competitively priced vehicles, South Korea’s Hyundai and LG produced electronics and China ,’ the factory to the world’ produced all these goods and almost everything else . Malaysia, Taiwan, Singapore and others soon joined to complete the ‘Asian Tigers’ club.
For decades the Asian Tigers recorded unprecedented economic growth rates and established themselves as world- class industrial production power houses and not even the 1997 Asian financial crisis could stop them. Many western companies couldn’t compete with Asia’s low production costs, especially low-wage labour and soon moved many of their production houses to Asia. Have you noticed that it seems all computers are now manufactured in China?
Then came the global financial crisis or the credit crunch which unraveled in 2008.Suddenly
consumer spending in America and Europe drastically reduced, heralding the ’ end of free-wheeling consumption fueled by easy credit and the wealth effect of ever rising asset values’. As the economic slump deepens, export demand from the west can no longer sustain Asian industry. Tens of thousands of thousands of factories are closing down and millions have become newly unemployed.
According to a recent issue of TIME magazine, it is estimated that last year, 60,000 enterprises were shut down in China’s Guandong province alone, as export orders and credit dried up. In India, the organization for Indian Exporters warned that 10 million Indian workers were set to lose their jobs as a result of the slump in export demand.
Ajay Chhibber, the director of the Asia bureau at the United Nations Development programme says’ in a medium and long term sense the export-led growth model is coming under stress’.
The export-led growth model adopted by Asian leaders, including China ‘s Deng Xiaoping in 1978 and India’s Manmohan Singh in 1991 was responsible for lifting millions in Asia out of poverty as farmer workers become factory workers and their incomes skyrocketed overnight.
According to the World Bank, In 1981, nearly 80% of East Asians lived on less than$1.25 a day and by 2005 only 18% did In a comparable period, Sub Saharan Africa’s poverty levels have remained at 50% between 1981 and 2005 owing to our inability to hop on the globalization train by producing cheap toys, textiles, TVs that the west demands.
Critics of the export-led growth model point out the exclusion of the rural population who are left out in the mainly urban-based industrial jobs. For example despite India being touted as an emerging economy still has 70% of its population as being regarded as rural and poor. The number of poor Indians increased from 436 million in 1990 to 456 million in 2005. The majority have been largely left behind by the production-for-export sector that is majorly based in urban centres such as Mumbai. It is therefore clear that the export-led growth model on its own is not sufficient to lift entire populations out of poverty if it’s not accompanied by other initiatives such as land reform and investments education, roads and other infrastructure.
Dependence on western export markets and the global financial crisis has brought into focus the need to nurture domestic markets. The Chinese premier speaking at the World Economic Forum earlier this year has conceded this much and clearly China’s huge domestic market should be tapped as an alternative market.
In the words of Charles Dickens, these are ’ hard times’ for the export-led growth model but clearly there don’t seem to be many tested models for lifting millions out of poverty.
Monday, February 9, 2009
CAN UGANDA ESCAPE THE 'CURSE OF OIL'?
‘A growing body of evidence suggests that oil, far from being a blessing to African countries is a curse. Without exception, every developing country where oil has been discovered has seen its standard of living decline and its people suffer, while its less endowed neighbors have gone on to relative prosperity’ writes John Ghazvinian author of Untapped: The Scramble for Africa’s Oil. The example of Nigeria is instructive on its own here. Nigeria, the world’s seventh largest oil producer is ranked among the twenty poorest countries of the world, with 57 percent of the population living on less than a dollar a day according to the World Bank .
Many African countries have recently discovered oil among them, Equatorial Guinea, Angola, Sudan and until recently, Ghana and our very own Uganda.
The American charity, Catholic Relief Services projects that$ 200 billion in oil revenue will flow into the coffers of African governments over the next decade. This can only be good news, right?
Paul Collier in the 2007 bestseller, The Bottom Billion: Why the World’s Poorest Countries are Failing and What Can Be Done About it goes one better and provides economic evidence that shows that oil or broadly natural resources discoveries in poor countries actually retard economic growth or create distortions in fragile economies. And this is no arm-chair treatise. He illustrates with hard-nosed evidence how natural resources are a ‘trap’ for developing countries citing examples such as Nigeria, Gabon and Angola. Economists refer to this sudden inflow of petroleum dollars in economies as the ‘Dutch disease’ or ‘ the paradox of plenty’.
According to John Ghazvinian , only about 5 percent of the billions of dollars invested in African petroleum projects every year are actually spent in Africa.
Because most oil production is capital intensive and relies heavily on ultra modern extraction technology, only limited highly skilled openings are available and these often go to foreign nationals The paradox is that oil exploration in Africa creates far more jobs for western nationals who have the requisite skills than it does for locals.
In Untapped: The Scramble for Africa’s Oil it is shown that the oil boom in Nigeria had a negative effect on agricultural production.’ From 1970 to 1982, production of cocoa fell 43 percent, that of rubber 29 percent and ground nuts 64 percent. The percentage of Nigerians living in poverty went from 28 percent in 1980 to 66 percent in 1996.Average annual income, which in 1980 was$ 800 per person, today stands at a mere $300’.
Several studies suggest that oil booms in developing economies result in a decline in national tax revenues. That because of the sudden inflow of foreign exchange accruing from oil revenues, the incentive to generate national tax revenue diminishes. ’Between 1970 and 1993, countries without oil saw their economies grow four times faster than those of countries with oil’.
Let us lose the economic theory and bring this a little closer to home. Picture this. Uganda has started exporting oil to the international market. The proceeds from the oil will not come in Ugandan shillings but in US dollars or euros. Suddenly, the country is awash with foreign exchange. The result is that the value of the Uganda shilling artificially inflates. The effect is that imported products become cheaper and consequently, a huge national appetite for imported goods like Hummers and Plasma screens grows. Meanwhile Ugandan coffee or iron sheets from Roofings become expensive for Rwanda and Congo because of the appreciating Ugandan shilling. The local agricultural and manufacturing sectors take a hit. But the government is not too bothered about the decline in tax revenue after all there are petrodollars It doesn’t stop there. Local food production is no longer commercially viable due to reduced export demand. Agricultural farm lands are abandoned as everyone rushes to the cities to get a piece of the oil boom. As a result there is less domestic food production and urban dwellers such as those in Kampala take to imported food stuffs. This is not an imaginary story. This is the story of Gabon, a veteran oil exporter in Africa which now imports 80 percent of its food from Cameroon.
Celebrated economist Jeffrey Sachs’ Oil Revenue Management Plan’ for the management of Sao Tome’s future oil wealth that includes the establishment of a permanent fund dedicated to development projects and poverty reduction and a Norwegian-style fund for future generations should be endearing.
So, next time you hear that Uganda’s discovery of oil in Hoima and Amuru districts can only be a good thing. Think again.
Many African countries have recently discovered oil among them, Equatorial Guinea, Angola, Sudan and until recently, Ghana and our very own Uganda.
The American charity, Catholic Relief Services projects that$ 200 billion in oil revenue will flow into the coffers of African governments over the next decade. This can only be good news, right?
Paul Collier in the 2007 bestseller, The Bottom Billion: Why the World’s Poorest Countries are Failing and What Can Be Done About it goes one better and provides economic evidence that shows that oil or broadly natural resources discoveries in poor countries actually retard economic growth or create distortions in fragile economies. And this is no arm-chair treatise. He illustrates with hard-nosed evidence how natural resources are a ‘trap’ for developing countries citing examples such as Nigeria, Gabon and Angola. Economists refer to this sudden inflow of petroleum dollars in economies as the ‘Dutch disease’ or ‘ the paradox of plenty’.
According to John Ghazvinian , only about 5 percent of the billions of dollars invested in African petroleum projects every year are actually spent in Africa.
Because most oil production is capital intensive and relies heavily on ultra modern extraction technology, only limited highly skilled openings are available and these often go to foreign nationals The paradox is that oil exploration in Africa creates far more jobs for western nationals who have the requisite skills than it does for locals.
In Untapped: The Scramble for Africa’s Oil it is shown that the oil boom in Nigeria had a negative effect on agricultural production.’ From 1970 to 1982, production of cocoa fell 43 percent, that of rubber 29 percent and ground nuts 64 percent. The percentage of Nigerians living in poverty went from 28 percent in 1980 to 66 percent in 1996.Average annual income, which in 1980 was$ 800 per person, today stands at a mere $300’.
Several studies suggest that oil booms in developing economies result in a decline in national tax revenues. That because of the sudden inflow of foreign exchange accruing from oil revenues, the incentive to generate national tax revenue diminishes. ’Between 1970 and 1993, countries without oil saw their economies grow four times faster than those of countries with oil’.
Let us lose the economic theory and bring this a little closer to home. Picture this. Uganda has started exporting oil to the international market. The proceeds from the oil will not come in Ugandan shillings but in US dollars or euros. Suddenly, the country is awash with foreign exchange. The result is that the value of the Uganda shilling artificially inflates. The effect is that imported products become cheaper and consequently, a huge national appetite for imported goods like Hummers and Plasma screens grows. Meanwhile Ugandan coffee or iron sheets from Roofings become expensive for Rwanda and Congo because of the appreciating Ugandan shilling. The local agricultural and manufacturing sectors take a hit. But the government is not too bothered about the decline in tax revenue after all there are petrodollars It doesn’t stop there. Local food production is no longer commercially viable due to reduced export demand. Agricultural farm lands are abandoned as everyone rushes to the cities to get a piece of the oil boom. As a result there is less domestic food production and urban dwellers such as those in Kampala take to imported food stuffs. This is not an imaginary story. This is the story of Gabon, a veteran oil exporter in Africa which now imports 80 percent of its food from Cameroon.
Celebrated economist Jeffrey Sachs’ Oil Revenue Management Plan’ for the management of Sao Tome’s future oil wealth that includes the establishment of a permanent fund dedicated to development projects and poverty reduction and a Norwegian-style fund for future generations should be endearing.
So, next time you hear that Uganda’s discovery of oil in Hoima and Amuru districts can only be a good thing. Think again.
Friday, January 9, 2009
THE BOTTOM BILLION: A Pedestrian Book Review
A few days before christmas a friend from Boston,MA brought a book along which he thought I would like.And Like it I did. In fact very much. Paul Collier's 'The Bottom Billion: Why the Poorest Countries Are Falling and What Can be Done About it' turned out to be an immensly cheerful and worthy companion during the holidays and it was for good reason.
Collier's 'Bottom Billion' has been described by 'The Economist' as 'set to become a classic' and its no idle praise. It's praise that is well earned. Reading Collier's book reminded me of Jeff Sachs''The End of Poverty' and William Easterly's 'The Elusive Quest for Growth' and'The White Man's Burden' it fits in well with them-dutiful efforts by eminent economists to diagonise the causes of African's economic malaise and the road map out of it.
Paul Collier should know. He was head of development research at the World Bank.He has worked ex-chief economist at the World Bank,Joseph Stiglizt-a Nobel Prize economist.
Collier is economics professor at Oxford university and head of their centre of the study on African economies.
'Bottom-Billion' breaks new ground in understanding African economies by introducing a new paradigm with in which to understand the roots of Africa's worsening poverty. Collier talks about 'traps' which bind Africa to the ground. The traps include the usual suspects, conflict,natural rseources(especially oil), being land locked and 'bad' governance. The 'traps' are not especially new in development economics but Collier has moved scholarship further by adducing enormous quantitative evidence to show their influence on African economies.
Collier's book is backed up by years of development research in Africa which he has done with coloborations with several other researchers and clearly his book is no arm-chair treatise but a work generated out of over twenty years of economic research on African economies. Some of the work is plain fresh, never having been presented before in the way he does in the book.His work on the economic significance of coups,military and civil conflicts is especially endearing coming as it is from an economist. He also lends to his work some political science methods and research in a way that is unprecedented marrying ecomomics and political science in the quest
for answers to African economic dysfunction.
The book is full of invaluable findings that are instructive. For example his research shows that countries that have been in the pits(economically speaking) take 59 years to turn the corner!
Collier brings to the fore, the dimension of international trade and its relation to African poverty suggesting that opening western markets to African goods and services can be a life line for the 'bottom billion'.
'Bottom Billion' pushes the frontiers of mainstream development economics and goes beyond the body of knowledge we have become accustomed to explain what afflicts Africa beyond the tools of traditional economics.
His book is really one on Africa and it is clear he has been to many African capitals and is aware of the inner workings in contemporary African state craft as well as having a slew of contacts from Nairobi to Abuja.
The title is a little misleading because his attention is especially focussed on Africa and not the wider developing world as the title may suggest. His last chapter' The struggle for the bottom billion' which is a call to arms to rescue African economies doesnt keep up with the high tempo that starts of with the earlier chapter and seems some what of an anti climax.
The prose has a poppy feel.Its very accessible to the lay reader and it is easy to follow without the arrogant diction of scholarship or the' linguistic sophistication' you will find in many other works of development economics. The book doesnt take itself too seriously and there are many light hearted moments and occassionally his diction induces hearty laughter(uncommon for an economists) although in this he reminds me of Robert Guest's'The Shackled Continent' or even William Easterly's 'The Elusive Quest for Growth'. Yes, even with all the tragic and desparate poverty in Africa it is possible to squeeze out a laugh.And they come plenty in 'Bottom Billion'.
Collier's 'Bottom Billion' has been described by 'The Economist' as 'set to become a classic' and its no idle praise. It's praise that is well earned. Reading Collier's book reminded me of Jeff Sachs''The End of Poverty' and William Easterly's 'The Elusive Quest for Growth' and'The White Man's Burden' it fits in well with them-dutiful efforts by eminent economists to diagonise the causes of African's economic malaise and the road map out of it.
Paul Collier should know. He was head of development research at the World Bank.He has worked ex-chief economist at the World Bank,Joseph Stiglizt-a Nobel Prize economist.
Collier is economics professor at Oxford university and head of their centre of the study on African economies.
'Bottom-Billion' breaks new ground in understanding African economies by introducing a new paradigm with in which to understand the roots of Africa's worsening poverty. Collier talks about 'traps' which bind Africa to the ground. The traps include the usual suspects, conflict,natural rseources(especially oil), being land locked and 'bad' governance. The 'traps' are not especially new in development economics but Collier has moved scholarship further by adducing enormous quantitative evidence to show their influence on African economies.
Collier's book is backed up by years of development research in Africa which he has done with coloborations with several other researchers and clearly his book is no arm-chair treatise but a work generated out of over twenty years of economic research on African economies. Some of the work is plain fresh, never having been presented before in the way he does in the book.His work on the economic significance of coups,military and civil conflicts is especially endearing coming as it is from an economist. He also lends to his work some political science methods and research in a way that is unprecedented marrying ecomomics and political science in the quest
for answers to African economic dysfunction.
The book is full of invaluable findings that are instructive. For example his research shows that countries that have been in the pits(economically speaking) take 59 years to turn the corner!
Collier brings to the fore, the dimension of international trade and its relation to African poverty suggesting that opening western markets to African goods and services can be a life line for the 'bottom billion'.
'Bottom Billion' pushes the frontiers of mainstream development economics and goes beyond the body of knowledge we have become accustomed to explain what afflicts Africa beyond the tools of traditional economics.
His book is really one on Africa and it is clear he has been to many African capitals and is aware of the inner workings in contemporary African state craft as well as having a slew of contacts from Nairobi to Abuja.
The title is a little misleading because his attention is especially focussed on Africa and not the wider developing world as the title may suggest. His last chapter' The struggle for the bottom billion' which is a call to arms to rescue African economies doesnt keep up with the high tempo that starts of with the earlier chapter and seems some what of an anti climax.
The prose has a poppy feel.Its very accessible to the lay reader and it is easy to follow without the arrogant diction of scholarship or the' linguistic sophistication' you will find in many other works of development economics. The book doesnt take itself too seriously and there are many light hearted moments and occassionally his diction induces hearty laughter(uncommon for an economists) although in this he reminds me of Robert Guest's'The Shackled Continent' or even William Easterly's 'The Elusive Quest for Growth'. Yes, even with all the tragic and desparate poverty in Africa it is possible to squeeze out a laugh.And they come plenty in 'Bottom Billion'.
Tuesday, December 23, 2008
ARE NGOs THE NEW COLONIAL POWERS IN AFRICA?
An article in a recent issue of Foreign Policy doesn’t mince words and calls international NGOs in Africa ‘the new colonialists ‘. In many countries, international NGOs have replaced traditional western donors and absentee states’ influence by providing services that are traditionally the responsibility of the home governments Hamid Karzai, the Afghan president prefers to call it ‘NGOism’-the growing trend where international NGOs wield increasing power and resources in fragile states or failed states as some would have us call them.
Hamid Karzai has reason to worry. In Afghanistan, 80% of services such as health care and education are provided by international and local NGOs.
International NGOs are gaining new importance in the developing world owing to the increasing preference by western countries to route donor funds through international NGOs rather than national governments which are perceived as corrupt, bureaucratic or incompetent.
According to Foreign Policy, an influential American magazine, the amount of aid flowing through NGOs in Africa rather than governments has more than tripled.
Recently the French embassy in Kampala signed an agreement with an international NGO to distribute relief supplies in Karamoja. In a bygone era this aid would be routed through the disaster ministry or the Prime Minister’s office. USAID has been channeling millions of dollars of AIDS money through intermediary International NGOs such as CARE. Considerable British relief aid in Uganda is sometimes routed through Oxfam or Save the Children.
Foreign Policy shows that spending by CARE, the international NGO, has increased by 65% since 1999 to $ 607 million in 2007. Save the Children’s budget has tripled since 1998 while Doctors without Borders (Medicine san Frontiers)’s budget has doubled since 2001 signaling increasing command of financial resources by international NGOs.
In 2006, total aid to the developing world from countries of the Organization for Economic Cooperation and Development (OECD) amounted to $325 billion. Just a third of that sum came from governments. The rest came from non-state actors principally, international NGOs.
A 2005 Newsweek report estimates that if the world’s NGOs were grouped together as a country they would rank fifth in the world in terms of the value of funds controlled.
If truth be told, NGOs have been a godsend for the millions in our countries who can’t cope unaided From safe water provision, to life -saving health care, to relief supplies, NGOs have reached our needy people faster and more efficiently than our governments. Most of what they do is ordinarily the preserve of the state but in banana republics, the state is often dysfunctional or simply cash strapped. “Like failed cousins, they are increasingly unable to and perhaps unwilling to fulfill the functions that have long defined what it means to be a state.”
An analyst has observed that we live in a period when the nation state is distrusted, or more precisely, its institutions are considered ineffective and unreliable’.
International NGOs operating in Uganda like Plan International or World Vision will tell you that they are always under constant pressure from local politicians to locate their operations in more politically expedient areas, which speaks volumes about the increasing power of NGOs in relation to that of the state in Africa.
International NGO support perpetuates a dependence syndrome by the state on NGOs and doesn’t help states develop capacity in sectors such as relief or disaster response where NGOs dominate.
It has also been observed that international NGOs suck all the best local talent on the market because of attractive salaries that the public or even private sector can’t match. A good example in Uganda is HIV/AIDS treatment health care. Some of the best medical workers have left the public health sector and are on the payroll of international AIDS research agencies.
There have also been concerns that NGOs don’t have many checks and balances or are not as accountable as say governments to the electorate or private companies to shareholders and that more regulation is needed, a kind of requiring the ‘do-gooders to prove they do good’.
‘No matter how well-intentioned, these new colonialists need weak states as much as weak states need them’ couldn’t have put it better.
Hamid Karzai has reason to worry. In Afghanistan, 80% of services such as health care and education are provided by international and local NGOs.
International NGOs are gaining new importance in the developing world owing to the increasing preference by western countries to route donor funds through international NGOs rather than national governments which are perceived as corrupt, bureaucratic or incompetent.
According to Foreign Policy, an influential American magazine, the amount of aid flowing through NGOs in Africa rather than governments has more than tripled.
Recently the French embassy in Kampala signed an agreement with an international NGO to distribute relief supplies in Karamoja. In a bygone era this aid would be routed through the disaster ministry or the Prime Minister’s office. USAID has been channeling millions of dollars of AIDS money through intermediary International NGOs such as CARE. Considerable British relief aid in Uganda is sometimes routed through Oxfam or Save the Children.
Foreign Policy shows that spending by CARE, the international NGO, has increased by 65% since 1999 to $ 607 million in 2007. Save the Children’s budget has tripled since 1998 while Doctors without Borders (Medicine san Frontiers)’s budget has doubled since 2001 signaling increasing command of financial resources by international NGOs.
In 2006, total aid to the developing world from countries of the Organization for Economic Cooperation and Development (OECD) amounted to $325 billion. Just a third of that sum came from governments. The rest came from non-state actors principally, international NGOs.
A 2005 Newsweek report estimates that if the world’s NGOs were grouped together as a country they would rank fifth in the world in terms of the value of funds controlled.
If truth be told, NGOs have been a godsend for the millions in our countries who can’t cope unaided From safe water provision, to life -saving health care, to relief supplies, NGOs have reached our needy people faster and more efficiently than our governments. Most of what they do is ordinarily the preserve of the state but in banana republics, the state is often dysfunctional or simply cash strapped. “Like failed cousins, they are increasingly unable to and perhaps unwilling to fulfill the functions that have long defined what it means to be a state.”
An analyst has observed that we live in a period when the nation state is distrusted, or more precisely, its institutions are considered ineffective and unreliable’.
International NGOs operating in Uganda like Plan International or World Vision will tell you that they are always under constant pressure from local politicians to locate their operations in more politically expedient areas, which speaks volumes about the increasing power of NGOs in relation to that of the state in Africa.
International NGO support perpetuates a dependence syndrome by the state on NGOs and doesn’t help states develop capacity in sectors such as relief or disaster response where NGOs dominate.
It has also been observed that international NGOs suck all the best local talent on the market because of attractive salaries that the public or even private sector can’t match. A good example in Uganda is HIV/AIDS treatment health care. Some of the best medical workers have left the public health sector and are on the payroll of international AIDS research agencies.
There have also been concerns that NGOs don’t have many checks and balances or are not as accountable as say governments to the electorate or private companies to shareholders and that more regulation is needed, a kind of requiring the ‘do-gooders to prove they do good’.
‘No matter how well-intentioned, these new colonialists need weak states as much as weak states need them’ couldn’t have put it better.
Wednesday, December 3, 2008
OBAMA WILL WIN A SECOND TERM.
Four years from now dont tell me I didnt tell you what I am telling you now. Obama will win a second term as President of the United States. His political genuis has already shown even before he swears in. His cabinet picks and economic stimulus plans give a glimpse of what a tactician he is.
Some have called it the 'cabinet of rivals' and yes, only a deft politician would have gambled to have on the team as a bitter a rival as Hilary Clinton . Obama has said he was inspired to include his rivals after inspiration from Abraham Lincoln who claims copyright to the idea of a 'cabinet of rivals. His inclusion of Robert Gates,a republican defense secretary hold-over from Bush says good things about him. Gates is credited with turning around the pentagon after the divisive reign of Don Rumsefeld and helping turn the tide in Iraq. What one would read from this is that he is willing to make compromises and of course to address the commonly held notion that republicans are prefered when it comes to the security and defence docket. At least dubya didnt get it all wrong. Most of the rest of the team are experienced clinton-era hands such as attorney general appointee Holder and Susan Rice,ambassdor to the United Nations.
You get the sense that he will govern from the middle and if he continues on that path a second term will be within grasp.
Obama enters office with enormous public will and immense political capital. He needs to make good of his election promises. He has already indicated he will close the infamous Guantanamo bay prison. He has reitariated his plan to withdraw US troops from Iraq with a new escape clause' in consultation with the commanders'. Many will see this as backtracking and Obama will need to go through with plans to withdraw troops before the end of his first term.
It already feels like he is president even when W. still reigns at 1600. One president at a time he counsels but americans cant wait.
I am telling you, that skinny kid with a funny name will get a second term.
Some have called it the 'cabinet of rivals' and yes, only a deft politician would have gambled to have on the team as a bitter a rival as Hilary Clinton . Obama has said he was inspired to include his rivals after inspiration from Abraham Lincoln who claims copyright to the idea of a 'cabinet of rivals. His inclusion of Robert Gates,a republican defense secretary hold-over from Bush says good things about him. Gates is credited with turning around the pentagon after the divisive reign of Don Rumsefeld and helping turn the tide in Iraq. What one would read from this is that he is willing to make compromises and of course to address the commonly held notion that republicans are prefered when it comes to the security and defence docket. At least dubya didnt get it all wrong. Most of the rest of the team are experienced clinton-era hands such as attorney general appointee Holder and Susan Rice,ambassdor to the United Nations.
You get the sense that he will govern from the middle and if he continues on that path a second term will be within grasp.
Obama enters office with enormous public will and immense political capital. He needs to make good of his election promises. He has already indicated he will close the infamous Guantanamo bay prison. He has reitariated his plan to withdraw US troops from Iraq with a new escape clause' in consultation with the commanders'. Many will see this as backtracking and Obama will need to go through with plans to withdraw troops before the end of his first term.
It already feels like he is president even when W. still reigns at 1600. One president at a time he counsels but americans cant wait.
I am telling you, that skinny kid with a funny name will get a second term.
Tuesday, November 11, 2008
IS BARACK OBAMA THE SAVIOUR OF THE WORLD
Obama on the telly,Obama in the papers, Obama on bumper stickers. Why, you wonder, has the world taken on to Obama to almost mystical, spiritual proportions? And its not in Africa alone. Although the Africans have clearly outdone themselves on this one. Sometimes you wonder, who is happier about Obama's poll victory- the Americans or the Kenyans for instance? Obamamania has been witnessed in Japan, europe and the middle east. A friend of mine thinks this cant-get-enough- of Obama thing is a commentry on our own state of affairs. That because we are so repulsed by our own politics especialy down here in Africa, we look to Obama as alternative political redemption. That if we loved our politics enough we wouldnt be too distracted by Barack Obama. That its the same reason the english premiership has a cult following in Africa. That we cant stand our own soccer clubs, match fixing and mal foot ball administration. The truth of course is that Obama is a very inspirational human interest story in its own right but does our craze for him say something about how we feel about things in our own countries? Is the world looking for a saviour out of all the hopelessness, the despair, the financial quagmire in which we are mirred?. Its food for thought.
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