The continent is doing a booming business selling diamonds, oil and coffee to China, but is it benefiting Africans? Economist Glenn Hubbard weighs in.
NEW YORK (Fortune) -- There's an irony afoot on the African continent. After years of state control of their economies, African governments are opening up to foreign business as never before.
Foreign companies are lining up to pump African oil, dig African minerals, build and run African ports, export African coffee and cocoa. But what about local companies? The World Bank's latest "Doing Business" report tells a very sad tale.
Let's take Angola. It has diamonds, oil and coffee. These commodities boomed over the past decade, and the government gave licenses to foreign companies to produce and export them.
These days, that includes the Chinese: Angola is now China's biggest African trading partner. China is also building infrastructure for the Angolan government using everything Chinese, including labor and cement. There are far more foreigners in Angola now -- European and Asian -- than there ever were in colonial times.
But what about local Angolan business? According to "Doing Business", Angola ranks now 169 out of 183 countries around the world. That means that the Angolan government essentially does not allow its own people to start and run their own businesses.
This restriction makes for a new kind of apartheid: the business community of Angola is European and Asian, not African. That might not be the intent, but it certainly is the result.
The same is true in country after country of sub-Saharan Africa. But not everywhere. Rwanda stands out as a positive model: it went from 143 on the list in 2009 to 67 in 2010. After years climbing the list, Mauritius now ranks 17.
These two countries show that it is possible for African governments to free their people to start and run their own businesses, and overcome the de facto apartheid that has spread through the African business sector.
China's role in this new apartheid is especially ironic. Twenty years ago Deng Xiao Ping freed the Chinese people to start and run their own businesses, for a very simple reason. He and his fellow leaders had become Communists fifty years before because they genuinely believed it would bring greater prosperity to their people, but over the decades it became obvious that wasn't true.
Just across the border, Korea was a clear example: the Communist North remained poor, and the pro-business South prospered. So Deng Xiao Ping switched. Today, 80% of China's employment and 60% of its GDP comes from local small and medium businesses, which barely existed twenty years ago.
In the old days, Communist China claimed solidarity with Third World peoples -- but what about today? As most countries of the Third World suppress their local business sectors, especially in Africa, China just goes right along.
Chinese leaders will argue that they do so to respect the sovereignty of national governments: if Angola wants to suppress the local Angolan business sector, China has no right to make them change.
But how is that different from South Africa under apartheid? In those days, the South African government put up enormous obstacles to prevent black Africans from starting and owning their own businesses. China joined the rest of the world in condemning South African apartheid, and rightly so. But today, China joins the rest of the world in turning a blind eye to the ongoing apartheid of the local business sector throughout most of Sub-Saharan Africa.
But of course, the western powers are no better than China. They continue to lavish foreign aid on countries that suppress their local business sectors.
There is a collective amnesia among prosperous countries about how they themselves rose from poverty: their local business sectors. They have forgotten their liberal roots -- the term "liberal" first referred to pro-business Europeans struggling against feudal "conservatives."
China and the western powers today are only half-liberal: they foster their own domestic business sectors but tolerate the suppression of the domestic business sectors in the poor countries of the world.
There is an alternative, but it requires political will and leadership among China and other prosperous countries. They can redirect their foreign aid to help foster the local business sector in poor countries.
And there's a powerful precedent: the Marshall Plan of post-war Europe. It made loans to local European businesses, which repaid them to their governments, which used the money for commercial infrastructure like ports and railways. That same model can work today.
Two decades ago, outside pressure helped overturn apartheid in South Africa. Tomorrow, outside pressure can help overturn business apartheid in most of Sub-Saharan Africa. It's time for worldwide solidarity with the struggling local businesses in poor countries around the world. The new apartheid calls for a new movement against it. Who will lead the way?
--Glenn Hubbard, a former chairman of the U.S. Council of Economic Advisers, is co-author, along with Bill Duggan, of a new book, Aid Trap -- Hard Truths About Ending Poverty. He is also dean of Columbia Business School.
Tuesday, October 13, 2009
Friday, August 7, 2009
The Politics of Insults
I've stopped reading news from Zambia of late because it does nothing but frustrate me. Our people deserve better. We do not need more visionless political parties or power hungry leaders; what we need is radical change.
Our current leadership has not been leading but rather maintaing the status quo. They have not been representing our interests but rather engaging in the politics of insults and character assassinations. This kind of political theatre does not help the ordinary Zambian. If our political leaders have no vision and plan, they should simply step aside and let others lead.
While I applaud the formation of new parties, they look like more of the same and while I applaud the efforts of other citizens forming semi political NGOSs, I am skeptical about their motives. If there is one thing we Zambians know to do is talk and a lot of talking is happening right now but I do not see any visionary leadership emerging. I am still waiting for the real leaders to stand up; Zambia's Obama if you will and we will know him/her when we see his/her vision for Zambia.
While we wait for the real leader to emerge, we the people need to remind ourselves that no one will bring the change we seek unless we demand it through our actions and words. Here are a few worthy things to fight for and pressure our government to deliver:
1. Quality education:
2. Quality Health care
3. JOBS
These are a few of my thoughts. What do you think?
Our current leadership has not been leading but rather maintaing the status quo. They have not been representing our interests but rather engaging in the politics of insults and character assassinations. This kind of political theatre does not help the ordinary Zambian. If our political leaders have no vision and plan, they should simply step aside and let others lead.
While I applaud the formation of new parties, they look like more of the same and while I applaud the efforts of other citizens forming semi political NGOSs, I am skeptical about their motives. If there is one thing we Zambians know to do is talk and a lot of talking is happening right now but I do not see any visionary leadership emerging. I am still waiting for the real leaders to stand up; Zambia's Obama if you will and we will know him/her when we see his/her vision for Zambia.
While we wait for the real leader to emerge, we the people need to remind ourselves that no one will bring the change we seek unless we demand it through our actions and words. Here are a few worthy things to fight for and pressure our government to deliver:
1. Quality education:
2. Quality Health care
3. JOBS
These are a few of my thoughts. What do you think?
Saturday, June 13, 2009
NEW ORGANIZATION PUSHING FOR TANGIBLE CHANGE
There is a new pressure group advocating for real leadership and vision for Zambia. Visit their website at www.zambiaunite4change.org
Thursday, June 4, 2009
ERADICATING CORRUPTION IN ZAMBIA
In recent weeks we have heard of how ministry of health workers and officials diverted funds in the ministry boost their own personal coffers. While the saying, “crime does not pay”, may be applicable in this case, we have to pose and think about the things that feeds this corrupt culture and indeed they are many. However, I would like to draw your attention to a few.
Firstly, the culture of corruption has been fueled by our country’s lack of sophisticated management systems that hold leaders and everyone accountable. For example, in the USA the president’s tax records are public knowledge because they are deliberately published. These records tell the public how much the president made that tax year and where his extra income came from if any. This is not the case in Zambia. The only time we hear of our leader’s net worth is when they are running for political office. Why don’t we institute a system by which we know how much our leaders make every year and how they have acquired that wealth. This will surely keep people accountable.
However, one can make the argument that people will simply hide their ill gotten wealth through corrupt avenues and that is a legitimate argument. However, if we ask for the cooperation of financial institutions and empower the Zambia Revenue Authority to enforce tax codes and an effective tax return reporting system, we will make tremendous headway. But the biggest problem in my view is leadership.
Our current political leaders MUST retire. They have run their course and should accept the fact that they cannot lead Zambia to a better future because they do not know how to lead in this new political and global economic climate. They continue to seek political office because of the benefits they reap through corrupt practices. Corrupt leaders should be pursued and prosecuted and pay a steep price for their corruption. Long prison sentences would help to this end because if someone faced the possibility of a 2o year prison sentence they would think twice about stealing from the Zambian people.
Secondly, poverty is another contributing factor to fueling a culture of corruption. While am reluctant to heap a huge amount of blame on this factor because of the entitlement overtones that legitimize people’s lack of ingenuity in seeking solutions to their poverty, I must admit that it plays a role in creating a culture of corruption.
If government does not make better conditions of service for civil servants a priority, people will be forced to find the much needed extra income elsewhere and corruption is the easiest way. However, this issue also has to be seen from the view of the “corrupter” because it takes 2 or more parties to make corruption work. Why do people pay other people to have certain services provided when such services should be offered upon request without further prodding? Therein lays the dilemma of civil service corruption. I think that if great customer service became a priority and the mantra of our government agencies and that this was acted upon, people would become less inclined to corrupt someone in order to have better service.
In his book “Leading at a higher Level,” Ken Blanchard says that organizations should focus on the triple bottom line: Becoming the provider of choice, the employer of choice and the investment of choice. In a nut shell, government agencies should offer such an excellent service to the public that they become the provider of choice. These agencies should also provide excellent conditions of service that people are waiting in line to work for them and thirdly, if these agencies do the first two things right, then they will attract investment from both the general public and the donor community.
Failure to do these 3 things, in my opinion, will not help the fight against corruption and if anything, this scourge will become an irreversible pandemic affecting generations to come.
Firstly, the culture of corruption has been fueled by our country’s lack of sophisticated management systems that hold leaders and everyone accountable. For example, in the USA the president’s tax records are public knowledge because they are deliberately published. These records tell the public how much the president made that tax year and where his extra income came from if any. This is not the case in Zambia. The only time we hear of our leader’s net worth is when they are running for political office. Why don’t we institute a system by which we know how much our leaders make every year and how they have acquired that wealth. This will surely keep people accountable.
However, one can make the argument that people will simply hide their ill gotten wealth through corrupt avenues and that is a legitimate argument. However, if we ask for the cooperation of financial institutions and empower the Zambia Revenue Authority to enforce tax codes and an effective tax return reporting system, we will make tremendous headway. But the biggest problem in my view is leadership.
Our current political leaders MUST retire. They have run their course and should accept the fact that they cannot lead Zambia to a better future because they do not know how to lead in this new political and global economic climate. They continue to seek political office because of the benefits they reap through corrupt practices. Corrupt leaders should be pursued and prosecuted and pay a steep price for their corruption. Long prison sentences would help to this end because if someone faced the possibility of a 2o year prison sentence they would think twice about stealing from the Zambian people.
Secondly, poverty is another contributing factor to fueling a culture of corruption. While am reluctant to heap a huge amount of blame on this factor because of the entitlement overtones that legitimize people’s lack of ingenuity in seeking solutions to their poverty, I must admit that it plays a role in creating a culture of corruption.
If government does not make better conditions of service for civil servants a priority, people will be forced to find the much needed extra income elsewhere and corruption is the easiest way. However, this issue also has to be seen from the view of the “corrupter” because it takes 2 or more parties to make corruption work. Why do people pay other people to have certain services provided when such services should be offered upon request without further prodding? Therein lays the dilemma of civil service corruption. I think that if great customer service became a priority and the mantra of our government agencies and that this was acted upon, people would become less inclined to corrupt someone in order to have better service.
In his book “Leading at a higher Level,” Ken Blanchard says that organizations should focus on the triple bottom line: Becoming the provider of choice, the employer of choice and the investment of choice. In a nut shell, government agencies should offer such an excellent service to the public that they become the provider of choice. These agencies should also provide excellent conditions of service that people are waiting in line to work for them and thirdly, if these agencies do the first two things right, then they will attract investment from both the general public and the donor community.
Failure to do these 3 things, in my opinion, will not help the fight against corruption and if anything, this scourge will become an irreversible pandemic affecting generations to come.
Tuesday, May 12, 2009
ZAMBIA'S LEADERSHIP CRISIS
"PATRIOTIC Front (PF) leader Michael Sata has said he will contest the 2011 presidential elections despite some people suggesting that he is too old and needs to groom a younger person (TIMES OF ZAMBIA)."
The insistence of Mr. Sata to contest the 2011 elections speaks to the leadership crisis that our nation faces. For the last 18 years, no viable young politician has come to the Zambian political scene and offered a sensible alternative to the old guard. Our leadership crisis has hampered development as we've had a shortage of radical ideas that would revolutionize the way development is perceived and pursued.
It is very easy for the old guard to say young people should be involved in national leadership but their words do not line up with their actions. How can young politicians rise to leadership positions if the right environment is not created for them? There must be systems within our political parties that allows young leadership to be groomed and allowed to test their leadership skills. This only happens if the old guard creates an atmosphere in which genuine sharing of ideas can happen coupled with a firm commitment to change. If these things do not happen, then young people will continue to be absent from the political leadership landscape.
On the flip side of things, young politicians can decide to form their own political parties and formulate their own agenda for development. They, however, have to overcome a great challenge; the people of Zambia. As Zambians, we are too patient almost to a fault. We will hang on to political promises for a very long time. It takes us a while to change and see the promises for what they really are; empty political gimmicks.
Therefore, if young people are to take charge and lead, they need to be in it for the long haul. They need to devise ways to communicate their agenda to the Zambian people and do so in a convincing way. There is no doubt in my mind that this can and must happen for our country to gain economic independence.
Our philosophy of political leadership must also change. Those of us outside the established political system must begin finding creative ways of implementing change in our communities through partnerships and the harnessing of the people's hunger for change and turning it into productive energy. As Zambians, we waste a lot of time talking instead of acting. We focus so much on government's ability to change our lives instead of focusing on our own ability to change dire situations in our communities. For example, when rainy season comes, drainage becomes a problem in many communities. Why not get together as a community to clean our surroundings and implement a food for work program. We will be helping to solve 2 problems; the drainage problem and the hunger problem.
Please do not get me wrong; I am a big proponent of government's involvement in changing the course of a nation by providing the framework and infrastructure for the people to maximize their potential and create economic freedom. However, WE THE PEOPLE, also have a solemn obligation to MOVE our government when it becomes idle through our ACTIONS and words. The person who gives the people a cause and shows them a better way of life will eventually become the leader. My challenge to Zambians is to start thinking of creative ways you can change your own community.
The insistence of Mr. Sata to contest the 2011 elections speaks to the leadership crisis that our nation faces. For the last 18 years, no viable young politician has come to the Zambian political scene and offered a sensible alternative to the old guard. Our leadership crisis has hampered development as we've had a shortage of radical ideas that would revolutionize the way development is perceived and pursued.
It is very easy for the old guard to say young people should be involved in national leadership but their words do not line up with their actions. How can young politicians rise to leadership positions if the right environment is not created for them? There must be systems within our political parties that allows young leadership to be groomed and allowed to test their leadership skills. This only happens if the old guard creates an atmosphere in which genuine sharing of ideas can happen coupled with a firm commitment to change. If these things do not happen, then young people will continue to be absent from the political leadership landscape.
On the flip side of things, young politicians can decide to form their own political parties and formulate their own agenda for development. They, however, have to overcome a great challenge; the people of Zambia. As Zambians, we are too patient almost to a fault. We will hang on to political promises for a very long time. It takes us a while to change and see the promises for what they really are; empty political gimmicks.
Therefore, if young people are to take charge and lead, they need to be in it for the long haul. They need to devise ways to communicate their agenda to the Zambian people and do so in a convincing way. There is no doubt in my mind that this can and must happen for our country to gain economic independence.
Our philosophy of political leadership must also change. Those of us outside the established political system must begin finding creative ways of implementing change in our communities through partnerships and the harnessing of the people's hunger for change and turning it into productive energy. As Zambians, we waste a lot of time talking instead of acting. We focus so much on government's ability to change our lives instead of focusing on our own ability to change dire situations in our communities. For example, when rainy season comes, drainage becomes a problem in many communities. Why not get together as a community to clean our surroundings and implement a food for work program. We will be helping to solve 2 problems; the drainage problem and the hunger problem.
Please do not get me wrong; I am a big proponent of government's involvement in changing the course of a nation by providing the framework and infrastructure for the people to maximize their potential and create economic freedom. However, WE THE PEOPLE, also have a solemn obligation to MOVE our government when it becomes idle through our ACTIONS and words. The person who gives the people a cause and shows them a better way of life will eventually become the leader. My challenge to Zambians is to start thinking of creative ways you can change your own community.
Tuesday, April 7, 2009
RURAL DEVELOPMENT
I am usually skeptical about posting specific political party information on my blogs but since we are talking about Zambian politics I might as well.
I have been following The Citizens’s democratic party and they have just posted a new page on Rural Development . www.cdpzambia.wordpress.com
There are some interesting things in there and I have some execepts below.
The CDP approach is informed by several factors:
1. Much of Zambia’s arable and fertile land and other natural resources are in good rural areas.
2. Poverty, disease and hunger levels are higher in rural areas than they are in urban areas.
3. Traditional leaders and NGOs directly work with the people most affected and would be a great partner in bringing direct aid and development to these areas.
4. The nation cannot have food security if it does not invest in these areas. Their success is Zambia’s success.
CDP will gauge the success of its approach if the following benchmarks are met:
1. Is rural Zambia producing enough food for itself and the nation? Is rural Zambia winning in the fight to provide good nutrition to its people?
2. Does rural Zambia have access to quality healthcare by way of good, well staffed clinics and medications?
3. Is rural Zambia winning the fight against malaria and other infectious diseases?
4. Does rural Zambia have access to quality primary, secondary and higher education? Does it have enough schools, teachers, and educational materials to accommodate the population?
5. Is rural Zambia well connected by way of good and well maintained roads, land, air, and water transportation, communication and electricity infrastructure? Do the people have access to mobile and computer technology?
6. Is rural Zambia benefiting from its natural resources by way of taxes, royalties and other commercial activity in the area? Are these resources being used to better the lives of the people?
These are the questions that our approach will answer and ensure that Zambia emerges an economic titan in Africa.
THE VILLAGE DEVELOPMENT TRUST
CDP will form what we are calling Village Development Trusts (V.D.T.). Each village will form one and its role will be to facilitate and manage local development with a focus on defeating poverty, disease and hunger. CDP realizes that for this approach to work, all stake holders must be part of the formulation of the plan. Though in here we outline the basics, our desire is that stakeholders will feel free to change the plan to suit their particular rural situation.
At the center of our approach are the traditional leader and his team who are the custodians of the people’s resources and culture. Other stakeholders such as NGOs working in the area as well as other donor partners will also have representation and a voice on the V.D.T.
Central government, in conjunction with donor partners will provide funding, infrastructure such as roads, schools, clinics, medicines, trucks, tractors, computers, stand-alone electric generators and communication equipment; technical support such as teachers, doctors, health workers, agriculture extension officers and agri-industry consultants will also be provided by government.
The V.D.T. will focus on Agriculture, Health, Education and infrastructure.
Read the rest of their document at www.cdpzambia.wordpress.com
I have been following The Citizens’s democratic party and they have just posted a new page on Rural Development . www.cdpzambia.wordpress.com
There are some interesting things in there and I have some execepts below.
The CDP approach is informed by several factors:
1. Much of Zambia’s arable and fertile land and other natural resources are in good rural areas.
2. Poverty, disease and hunger levels are higher in rural areas than they are in urban areas.
3. Traditional leaders and NGOs directly work with the people most affected and would be a great partner in bringing direct aid and development to these areas.
4. The nation cannot have food security if it does not invest in these areas. Their success is Zambia’s success.
CDP will gauge the success of its approach if the following benchmarks are met:
1. Is rural Zambia producing enough food for itself and the nation? Is rural Zambia winning in the fight to provide good nutrition to its people?
2. Does rural Zambia have access to quality healthcare by way of good, well staffed clinics and medications?
3. Is rural Zambia winning the fight against malaria and other infectious diseases?
4. Does rural Zambia have access to quality primary, secondary and higher education? Does it have enough schools, teachers, and educational materials to accommodate the population?
5. Is rural Zambia well connected by way of good and well maintained roads, land, air, and water transportation, communication and electricity infrastructure? Do the people have access to mobile and computer technology?
6. Is rural Zambia benefiting from its natural resources by way of taxes, royalties and other commercial activity in the area? Are these resources being used to better the lives of the people?
These are the questions that our approach will answer and ensure that Zambia emerges an economic titan in Africa.
THE VILLAGE DEVELOPMENT TRUST
CDP will form what we are calling Village Development Trusts (V.D.T.). Each village will form one and its role will be to facilitate and manage local development with a focus on defeating poverty, disease and hunger. CDP realizes that for this approach to work, all stake holders must be part of the formulation of the plan. Though in here we outline the basics, our desire is that stakeholders will feel free to change the plan to suit their particular rural situation.
At the center of our approach are the traditional leader and his team who are the custodians of the people’s resources and culture. Other stakeholders such as NGOs working in the area as well as other donor partners will also have representation and a voice on the V.D.T.
Central government, in conjunction with donor partners will provide funding, infrastructure such as roads, schools, clinics, medicines, trucks, tractors, computers, stand-alone electric generators and communication equipment; technical support such as teachers, doctors, health workers, agriculture extension officers and agri-industry consultants will also be provided by government.
The V.D.T. will focus on Agriculture, Health, Education and infrastructure.
Read the rest of their document at www.cdpzambia.wordpress.com
Thursday, April 2, 2009
JOB CREATION NOT IMPOSSIBLE
A story that recently appeared in The Zambia Daily mail quoted the Minster of works and supply Mr. Mike Mungoloti saying that “GOVERNMENT is in the process of establishing an internal monitoring and audit unit under the Roads Development Agency (RDA), which will pursue contractors that fail to rehabilitate roads effectively……..has directed the RDA to terminate contracts for local and foreign contractors that fail to fulfill their obligations.”
The only question I have is “why is the government using foreign and local private contractors to construct roads instead of equipping our local councils to do this?
Furthermore, “RDA executive director, Erasmus Chilundika said reintroduction of advance payments to contractors was being addressed. Mr. Chilundika said once the practice was reintroduced, the agency would be strict in issuing advance payments to ensure that funds were utilized prudently by contractors.”
In other words, money is available to do the job but government stills opts to give such jobs to the private sector even when they have shown that they do not have sufficient operating capital. I believe in supporting local businesses but not at the expense of meaningful development.
For the past 15 years or so, the MMD government has failed to create jobs and they have said that free market policies and private sector investments will accomplish this. In my view they are doing this the wrong way. I believe that government should use its existing structures, with some much needed improvements, to drive development and create jobs. I am not advocating for a return to UNIP policies but there are ways to profitably put people back to work while at the same time upholding free market principles. Government cannot completely relieve its self from the role of creating jobs because it’s the only structure in our nation that is big enough to accomplish some big things.
For example Mr. Erasmus Chilundika also said “When you apply for advance payment, we will require you to specify what you want to acquire and we will make sure we follow you to verify if the equipment is bough.”
Wait a minute. Since when does government advance payments to private entities to buy equipment to do a job that they are being paid to do? I guess I shouldn’t be that surprised but if all the money given to contractors was used to equip local councils to construct roads and bridges, Zambia would have been investing in its short and long term development. Employment would increase, along with it a demand for goods and services which in turn will advance local economic development. However, this whole process would have been the result of a forward thinking leadership which Zambia lacks right now.
The only question I have is “why is the government using foreign and local private contractors to construct roads instead of equipping our local councils to do this?
Furthermore, “RDA executive director, Erasmus Chilundika said reintroduction of advance payments to contractors was being addressed. Mr. Chilundika said once the practice was reintroduced, the agency would be strict in issuing advance payments to ensure that funds were utilized prudently by contractors.”
In other words, money is available to do the job but government stills opts to give such jobs to the private sector even when they have shown that they do not have sufficient operating capital. I believe in supporting local businesses but not at the expense of meaningful development.
For the past 15 years or so, the MMD government has failed to create jobs and they have said that free market policies and private sector investments will accomplish this. In my view they are doing this the wrong way. I believe that government should use its existing structures, with some much needed improvements, to drive development and create jobs. I am not advocating for a return to UNIP policies but there are ways to profitably put people back to work while at the same time upholding free market principles. Government cannot completely relieve its self from the role of creating jobs because it’s the only structure in our nation that is big enough to accomplish some big things.
For example Mr. Erasmus Chilundika also said “When you apply for advance payment, we will require you to specify what you want to acquire and we will make sure we follow you to verify if the equipment is bough.”
Wait a minute. Since when does government advance payments to private entities to buy equipment to do a job that they are being paid to do? I guess I shouldn’t be that surprised but if all the money given to contractors was used to equip local councils to construct roads and bridges, Zambia would have been investing in its short and long term development. Employment would increase, along with it a demand for goods and services which in turn will advance local economic development. However, this whole process would have been the result of a forward thinking leadership which Zambia lacks right now.
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