See Paul Collier of the Centre for the Study of African Economies at Oxford at TED on providing Credible Hope to the bottom billion people in Earth's poorest countries. Collier draws from the historical precedence of the US investing in post-WWII Europe. As I've written about before in Paul Collier on How to Tackle Africa's Challenges, he spotlights four pillars of Aid, Trade, Security, and Governance and especially focuses on strengthening governance, mutual systems of support. He's optimistic because of the commodity boom which -- even with global economic downturn -- still flows an enormous amount of money into developing countries. But how can this money be maximally effective? He wants international standards to stick with in order to harness resource boom in a way that's transparent, verified, and beneficial to the people. Persuasive stuff. As one wag put it...
"Collier is not charismatic, but his arguments are compelling."
Thanks to my MIT colleague Ethan Zuckerman for spotting this fascinating piece by Oxford's Paul Collier in IMF Finance & Development on Building an African Infrastructure about orchestrated co-development of railways cutting across industries and polities...
"Key political decisions are needed to build critical rail networks for a continent well suited to them. [Alas] during the past half-century Africa’s rail network, never very extensive, has shrunk. [But] by radically reducing transportation costs, railways could open up vast tracts of Africa to economic opportunities, especially in agriculture and mining, which many countries are relying on for future growth. The continent needs a decade of massive investment in rail networks.
What might accelerate such investment?
The core economic challenge is to organize the rail network in a way that meets the needs both of the extraction industries and of agriculture. Mining operations require railways and ports. Were there no agricultural users, the mining companies themselves could finance the rail network from some of the high profits generated by extraction. As long as these rail links serve agriculture and resource-extraction users, agriculture need pay only the marginal cost of operation. In effect, the differential profitability of mines and agriculture creates the potential for price discrimination between them. Mining companies, eager to open up resource-laden lands, have offered to set up such railways, even though these companies are not likely to welcome or desire multifunctional use of the rail network. [...] It would be beyond the core competence and natural interest of a mining company to run a railway that prices its service for farms at their marginal cost. As a result, even if a mining company were to provide such rail service, farms would likely mistrust it because of its peripheral nature for the mining company. [...] A third-party commercial operator with core competence in infrastructure but without mining interests appears to be the most credible option."
Collier goes on to point out things are equally complicated when crossing political borders. But that ultimately...
"African governments risk missing a historic opportunity to transform the transportation arteries of the continent. [...] risks can be addressed by subregional rail authorities with decision-making power. Africa’s current generation of political leaders has the opportunity to open the physical geography of the region. The decisions they must make are complicated, and much is at stake for the economic well-being of the continent."
Oxford economist Paul Collier, author of The Bottom Billion -- (reviewed in the NYTimes column The Least Among Us by Harvard historian Niall Ferguson) -- has an insightful OpEd piece in the NYTimes today titled A Measure of Hope about the need for sustained and rapid action to tackle global poverty. Collier notes...
Our top priority should be to provide credible hope where it has been lacking. The African countries in the bottom billion have missed out on the prolonged period of global growth that the rest of the world has experienced. The United Nations’ goal should not be to help the poor in fast-growing and middle-income countries; it should do its utmost to help the bottom billion to catch up.
[But the] Millennium Development Goals [...] are devoid of strategy; their only remedy is more aid. I am not hostile to aid. I think we should increase it, though given the looming recession in Europe and North America, I doubt we will. But other policies on governance, agriculture, security and trade could be used to potent effect. International coordination is needed more than ever. For all its manifest limitations, the United Nations must work. International coordination has been, indeed, the great achievement of the Millennium Development Goals; all the major donor countries have bought into them.
But they should now be revised so as to focus on the challenge of helping the bottom billion to converge with the rest of mankind -- and on a more realistic timescale. We need not just [the current UN Secretary General-sponsored] “Year of the Bottom Billion,” but several decades.
And I think we can do it: We can -- and, indeed, we must -- truly eliminate the scourge of poverty from our planet by 2050 and to replace it with increasing prosperity and growing hope.
"Proper stewardship of natural assets and liabilities is a matter of planetary urgency: natural resources have the potential either to transform the poorest countries or to tear them apart, while the carbon emissions and agricultural follies of the rich world could further impoverish them. The Plundered Planet charts a course between unchecked profiteering on the one hand and environmental romanticism on the other to offer realistic and sustainable solutions to dauntingly complex issues. Grounded in a belief in the power of informed citizens, Collier proposes a series of international standards that would help poor countries rich in natural assets better manage those resources, policy changes that would raise world food supply, and a clear-headed approach to climate change that acknowledges the benefits of industrialization while addressing the need for alternatives to carbon trading."
Collier has spoken recently about his approach and aspirations...
Along these same lines, yesterday in the FT was Part 2 of a series by Alan Beattie entitled Seeds of Change: Africa seeks to engineer an agricultural revolution giving hard data about the state of African agriculture and covering several interesting elements, including the need for innovations in crop seed, irrigation, transportation, and market-mechanisms. Plus Beattie gives a taste of the debate between those who prioritize helping the small farmholder first versus those who seek to support medium to larger farm enterprises.
And then today, in an FT article entitled Abu Dhabi looks to Sudan for food supply, we see the very exciting investment news that Abu Dhabi's development fund is pouring money into a large-scale 70,000 acre agri-project north of Khartoum in the Sudan, a key state in the MENACA region. The Sudan has an estimated 100 Million acres of agricultural land, of which only 20 Million is being used today, and only 2 Million acres being farmed intensively with irrigation and modern methods. This enormous, supposedly pariah country -- Sudan is as big as Western Europe, but with long-time internal conflicts -- is one of the potential bread-basket countries of Africa. And this will happen when they get their political house in order, welcome in Peacemakers and Peacekeepers for stability and security, attract US$ Billions of investment in infrastructure, irrigation, and more, and generally focus on improving the lives of everyday Sudanese of all backgrounds.
Having just read again Paul Collier's The Bottom Billion, and coming to appreciate the poverty trap of being landlocked with bad neighbors, it's heartening to read in the BBC that Mozambique to build coal railway...
"...link the coal-rich northern Moatize mines to Nacala port by 2015. [...] the railway is part of Mozambique's plan to become a regional trans-shipment route. Its three key ports -- Maputo, Beira and Nacala -- are strategically important to Mozambique's neighbours, especially landlocked Malawi, Zambia and Zimbabwe, as well as parts of South Africa."
Given Collier, this is an enlightened move and puts this interesting country in the spotlight again. Mozambique is an ex-Portuguese colony but, unusually and intriguingly, is a member of The Commonwealth. This aspiration for greater integration is excellent and one I hope The Commonwealth will embrace further as it enters its next 60 years and beyond. Finally, the role of Brazilian giant Vale in developing the Moatize mines is an emergent element of post-colonial engagement among the Lusophone countries.
The BBC writes Africa urged to manage resources noting that commodity-fueled cash inflows could and should be used in a way which really benefits their citizens. The core of the article cites Oxford development economist Paul Collier who argues...
"...that an open and transparent system for the auctioning of commodities is a simple way of ensuring citizens get value for money. "All too often it has been good deals for the companies and quite often good deals for the minister who negotiated it but not good deals for ordinary citizens," he says. A part of the charter related to how better to manage the sale of rights for mineral extraction. The historical method of allocating mining rights has not benefitted the general populace. "It has ruined African governance because it has encouraged corruption, so we want to alter that pattern of behaviour," explains Dr Collier."
"...a set of principles for governments and societies on how to use the opportunities created by natural resources effectively. Some of the poorest countries in the world have large amounts of natural resources and these can provide a pathway out of poverty. Yet in the past, these opportunities have often been missed, and resource abundant countries have consequently remained poor."
I'm fascinated by the long-term future prospects for Sierra Leone, an impoverished but beautiful and resource-rich West African country on the mend after a destructive civil war. Opportunities come from developing the mineral resources in such a way that the people participate in the upside, perhaps via some percapitization method, and certainly drawing on the lessons-learned by Paul Collier and colleagues, as well as Paul Romer and his Charter Cities movement. This means seeking better pathways for sustainably developing Freetown, the capital city, an intriguing emerging entrepot, and potentially the Hong Kong of West Africa. This certainly includes seeking slum solutions and transforming the lives of people in locales such as Kroo Bay for the better... Further bridge-building with neighbors, both Liberia and the historically Francophonic, are important, including, for instance, accelerating connective infrastructure, especiallyrailways and upgrading the roadways, and turning Gola Forest into a transfrontier peace park. And certainly boosting openness, supporting the UN's deep engagement, resolving land disputes, minimizing corruption, and seeking a measure of justice for the injured and aggrieved. As TIME just noted in a tragic photoessay, maternal and other healthcare services need investment and support. While there's tremendous challenges and room for progress, Sierra Leone has many positives... As a final note, here in a very cool move, UNICEF goodwill ambassador and ultra-famous football star, David Beckham, stops at a roadside pitch in Sierra Leone and totally surprises the local players!-)
"South African commercial farmers, mostly the descendants of Dutch and French pioneers who began settling the continent's southern tip centuries ago, are renowned for their ability to coax food out of African soil. Eager for their expertise and capital, African countries from Ghana to Nigeria have offered them incentives to set up shop. South African farmers have turned Mozambique into a banana powerhouse. Zambia became self-sufficient in maize after welcoming farmers from Zimbabwe and from South Africa. Such programs can be controversial, touching on sensitive issues of race, colonialism and land tenure. Agri-SA is addressing the concerns with a multiethnic expedition. "The farmers going to the Congo aren't just white farmers," said Andre Botha, who leads the initiative. "There's black farmers going with us...white commercial farmers...colored commercial farmers...Indian commercial farmers -- going to the Congo as South African farmers."
Recent discussions about Bjorn Lomborg on Global Priorities and Paul Collier on Africa's Challenges have inspired my interest in Peacekeeping and the more general suite of diplomatic engagements and military interventions. It's remarkable just how many historical and currently on-going initiatives there are just run by the UN (versus EU, Nato, African Union, or individual countries) as you can gauge from this map...
If we use Gapminder (and other means of Visualizing Economics) to look at a couple centuries of Income per Capita vs Time this allows us to see the remarkable phenomenon of economic convergence or catch-up waves as one economy after the other -- for example, first Japan, then South Korea, and now China -- takeoff and begin to grow disproportionately faster and converge, in per capita economic terms, with the wealthier countries (which are growing more slowly and steadily) represented by the United States... We need to understand these growth-takeoff success-stories well enough to spread prosperity policies everywhere in order to accelerate convergence world-wide, especially among the bottom 50-60 economies, Paul Collier's Bottom Billion.
Quick thought experiment: If all developing countries, starting today (or soon), began growing at the average "takeoff rate" of Japan/Korea/China, roughly when would be the timeframe of economic convergence with US and the rest of today's rich?
Thanks to Sasha Lezhnev, co-founder of the Grassroots Reconciliation Group, for these poignant images of the Congo conflict mineral zone... I really first properly learned of the larger situation tonight because of Scott Pelley's 60 Minutes report on Congo Gold, the mineral fuel for an ongoing cycle of violence among competing rebel militias which has literally killed millions of civilians. There are many vicious dynamics involved...
"John Prendergast, who worked in the Clinton administration on Africa policy, co-founded "The Enough Project," which works to expose war crimes. He says Congo is stuck in a vicious cycle of war -- in which rape and other atrocities are common -- due to the outside world's demand for the precious minerals it holds. "If you do a conflict analysis, you will find that when there are spikes in violence, it has something to do with contestation over the mineral resources, gold and the rest of them," he tells Pelley. Congo also holds vast quantities of copper, tin and coltan -- an essential ingredient of electronics. Militias will attack civilian populations near the mineral supply to take control over a source of income. "It's chaos organized in order to exploit the gold and other minerals for the enrichment of these armed groups and it just keeps the cycle going and going," says Prendergast."
Pelley goes on to interview the jewelry industry and draw parallels with "conflict diamonds" which are banned. Seems to me that commercial pressures are only one vector of influence. Surely this is a clear-cut case for armed humanitarian intervention -- Peacemaking -- as Paul Collier argues for -- "Security Assistance through Military Intervention" -- which is something rather beyond the Peacekeeping currently being tried. See here the 60 Minutes piece...
I just stumbled upon this pretty brutal map showcasing best and worst places worldwide. Well, if you, like me, are interested in advancing our Millennium Development Goals, I respectfully suggest that the "bottom" list is a good place to start. Meaning: If we can figure out what works there, the rest is relatively easy... If you want a larger list, check out Paul Collier's Bottom Billion book.
"...the downside of modern industry is that the typical task is most efficiently undertaken by clustering many firms together in the same place. This creates a chicken-and-egg problem in that no firm wants to be the first to produce in a new location. African governments can help to counter this coordination problem by promoting export zones at ports, ensuring that infrastructure and the regulatory environment is supportive."
And by Richard Liang of the CDC...
"...members of the African diaspora are returning home because they see prospects that they cannot find in the us and europe. This "reverse" brain-drain can have a positive impact, particularly in countries like Ghana where recent oil and gas finds are big news and offer good prospects. They have seen the huge potential of their homeland and are doing something about it."
And by Cartridge & De Cleene from Yara...
"...the work we are doing to create an agriculture growth corridor along the existing Beira infrastructure and trading corridor in Mozambique illustrates a new way forward. Initiated in partnership with the government of Mozambique, and organisations including the Norwegian Government, AGRA, World Bank, African Development Bank and InfraCo, the concept provides an example of how to tackle constraints, such as low yields, limited access to finance and poor quality infrastructure, through a holistic and co-ordinated approach. Crucially, the initiative is underpinned by an innovative financing structure, which combines commercial and concessional sources of finance. [...] Although the Beira Agricultural Growth Corridor offers a replicable model, we need a step change in the way stakeholders collaborate to achieve real and transformative scale, and the appropriate mechanisms and frameworks to deliver this, particularly as it relates to small holder farmers. This includes, for example, a greater willingness to share the risks associated with early stage investment in agricultural innovation, especially as it takes time and patience for new approaches to bear fruit. We also require more creative and flexible ways to leverage sources of finance to support and fast track promising new business models. The Africa Enterprise Challenge fund is a good example of what can be achieved."
MIT $100K Entrepreneurship Competition, Enterprise Forum Global, Enterprise Forum of Cambridge, Muddy Charles Pub, African Business Club, Sloan Entrepreneurs for International Development, Global Startup Workshop, Sustainability@MIT, TechLink, Making Progress, HighTechFever.tv, MIT Innovation Tours
Collier, who is the director of the Centre for the Study of African Economies at Oxford, subsequently published his book, The Bottom Billion, which he discusses in further lectures, for instance... The Bottom Billion has won several awards and was especially spotlighted by the FT's Economist Martin Wolf in a review entitled How the bottom billion are trapped. Collier covers four less well-appreciated traps:
