My Beauty Best Teacher

Joshua Hammer of Newsweek writes about the increasing profile of Africa's Women in areas of leadership.
"...Africa's transformation also reflects a growing recognition that the corruption, civil war and decay that have plagued the continent for generations have been largely the work of men. In the past few years, grass-roots women's groups have been sounding a distinctly feminist message, arguing that the qualities displayed by women at the family level—fiscal integrity, maternal nurturing—may be what Africa needs to lift itself off its knees. Give an African woman a loan, they argue, and she'll spend it on her children's school fees and food for the family. Give it to a man, and he'll just as likely fritter it away.
Women certainly have different problems and priorities than men. Across Africa, they're often deprived of education, job opportunities, even the choice of marital partners. Rape is seldom punished. Polygamy is widespread, which has led to spiraling HIV-infection rates. Most African women have no right to own property. Yet the new female politicians are confronting these and other issues that their male counterparts haven't been willing to touch..."

Where does Microfinance go from here Raghuram Rajah asks "...How can microfinance be made more viable? Asking this question relegates financial services for the poor to a separate and unequal existence. Instead, we should ask how we can make financial services available to all. If we focus just on finance for the very poor, the thinking immediately shifts to subsidies and charity, which hurts the quality of service. Not only do the poor lack the collective voice to demand better services, but government money can spoil the credit culture. As one participant in a women's credit cooperative said, 'We don't default now because we would be defaulting on our sisters' money. If we took money from the government, default rates would go up because we would all feel we were defaulting only on the government...What needs to be done? For one, the government should encourage the creation of infrastructure that can allow technology to bring down transaction costs...Perhaps most important, the government should encourage competition in the financial sector. As private sector banks find their traditional businesses coming under fierce competition, they will seek out nontraditional businesses, including providing services to the very poor..."
via PSD Blog

An IDRC Study examined the success of indigenous pre-commercial inventions in Nigeria and posits solutions to improve the structural inefficiencies within this important plank of industrial realization. They include that
"...The government should not fund R&D activities until it identifies specific social, economic, technical, and other kinds of problems that need R&D solutions. The next step should be to develop research programs with specific objectives and, after dialogue with R&D institutes, to evolve means for achieving the desired results. Funds should then be tied to specific research programs. R&D institutes should be made to sink or swim on the basis of the number of feasible need-oriented research programs they can attract and what they can do with the programs. This means putting an end to blanket funding for institutes..."also"...The R&D institutes should be allowed to sell their services to the private sector and thus become more relevant to the needs of the country. The institutes should be allowed to compete for research projects initiated in the private sector. For this to be effective, the government needs to provide the private sector with an incentive to use R&D services. A climate of liberal imports does not provide this incentive. The incentive should take the form of special tax rebates or outright matching of funds for private-sector users of indigenous R&D institutes..."

Chamberlain Peterside recommends a number measures to stimulate the fundamental base of Nigeria's economy.
"...It is quite realistic to recommend that Nigeria earmarks $5,0 billion of its foreign reserve for this purpose. Even after paying-off the foreign debt, Nigeria will still be left with substantial amount of money to sustain its current account status, support the currency market and tuck away some nest-egg for future generation. That is if subsequent governments don't steal it. Hypothetically, the $5,0 billion development fund could be deployed as follows:

1. Utilize $2,0 billion for infrastructure and power generation, to boost capacity to 10,000 – 20,000 megawatts over the next 5 years, electrify the rural areas and rehabilitate decaying road network and bridges nationwide.

2. Utilize $1,8 billion to create a Fannie Mae (US Federal National Mortgage Association) type housing fund to stimulate secondary mortgage market in Nigeria, guarantee home loans for low to middle income families and buy such mortgage notes from primary mortgage institutions (PMI).

3. Utilize $1,2 billion to fund agro and micro lending schemes, underwrite and guarantee loans to genuine micro businesses and mechanized farming organizations.

4. Utilize the $1,0 - $1,5 billion savings in debt service payment to target the lowest population segment and offer them social benefits that could translate into improved life-quality – basic education, primary health care, low cost housing subsidy, rural infrastructure etc..."

Dibussi Tande reviews The Undercover Economist by Tim Harford he
"...has successfully described in the simplest (and most entertaining) terms, the nature of the Cameroonian political system. Political scientists such as Jean Francois Bayart and Michael Bratton have described it as a neopatrimonial and prebendal system, i.e., one that is controlled by a rapacious and unaccountable ruling class that under-develops the country by continuously “eating the state”, and promoting widespread corruption in order to survive..."

Debbie Ariyo highlights the importance of small and medium enterprises (SME's) and makes suggestions on how to bolster them.
"...if Nigeria is to reach its full potential in terms of economic and social development, it cannot afford to ignore the importance of its indigenous small and medium enterprises (SMEs), and the contributions that they make to the country’s economy. In this wise, trade liberalisation and the encouragement of foreign direct investment has to go hand in hand with a thorough and concentrated effort to help the growth and development of SMEs..."

The bette noir of manufacturers worldwide - Chinese Industry is experiencing the inevitable result of breakneck economic growth-rising labour costs. What took much smaller industrialisers longer to achieve is finally lapping at the shores of the latest economic miracle. Businessweek writes:
"...Doesn't China have an inexhaustible supply of cheap labor? Not any longer. From the textile and toy factories of the south to the corporate headquarters and research labs in Beijing and Shanghai, the No. 1 challenge today is finding and keeping good workers. Turnover in some low-tech industries approaches 50%, according to the Institute of Contemporary Observation, a Shenzhen labor research group. Guangdong Province says it has 2.5 million jobs that remain unfilled, while Jiangsu, Zhejiang, and Shandong provinces say they, too, face shortages of qualified workers. "Before, people talked about China's unlimited labor supply," says Zhang Juwei, deputy director of the Institute of Population & Labor Economics at the Chinese Academy of Social Sciences in Beijing. "We should revise that: China is facing a limited supply of labor..."
The next league of industrializers like Vietnam have already risen to the challenge, the question that needs to be asked is Whither Africa?

John Nellis argues for renewed vigor in the privatization of state owned enterprises."...the need to repair, modernize and expand African infrastructure networks remains very great. The financial resources required for this task must come from governments, official sources, and, increasingly, from private capital markets. The two approaches on which reform hopes have been based have both proven deficient, though in different ways. The revised tactics require further revision. The search for mechanisms that combine private capital and expertise with socially acceptable management and delivery must be renewed...Settling for the more cautious, politically palatable and socially acceptable PPI forms—for example, management contracts as opposed to concessions or divestitures—will not solve the capital shortage problem. Moreover, and somewhat paradoxically, the more acceptable management and lease contracts place heavy demands on governments, in terms of designing, negotiating, evaluating and enforcing them...The bottom line is that Africa has huge infrastructure needs that, for various reasons, are not being addressed the only way that is financially possible: with private money..."

Reuben Abraham follows up on the absorptive capacity debate "...since the Marshall Plan worked, surely a similar initiative will work in Africa too. Well, let's look at the numbers first. If this idea were in fact true, Africa would have been well developed by now, given the trillion dollars that have been poured into the continent in the last 50 years (by way of comparison, the Marshall Plan consisted of $13 billion worth of assistance, or $130 billion, once you adjust for inflation). In fact, most of Africa is substantially worse off today than when aid first started to flow in. Instead, the money has been frittered away on such development projects as clearing the jungle in the middle of the Congo to build a new runway on which the Concorde could land to ferry Mobutu and his family to Disneyland and France. No prizes for guessing where the money to clear the forest, lease the Concorde etc came from.
So, what is the difference between post-war Europe and Africa which explains this discrepancy? Well, it links directly to the absorptive capacity issue. Japan, Germany etc were well functioning countries with solid institutions (legal system, education system, banking system etc) before they were visited by the horrors of the war. So, an infusion of capital could be put to use easily and efficiently to rebuild the institutions destroyed by war. It was simply a matter of getting trained teachers or bankers back to work, rather than training an entire cadre from scratch. By contrast, when the Belgians left the Congo, there were exactly 17 college graduates in a country the size of western Europe. To imagine that a country with 17 college graduates could absorb large infusions of aid (without any institutions in place) just because Germany and Japan (which were superpowers before the war) did so is bordering on the insane..."
via Zoo Station

James Eedes of the The Banker writes "...does Africa have any chance of escaping its predicament?..If international investors are seeing the potential, there is reason for guarded optimism. It is also the best retort to the very reasonable question: why should anyone outside Africa care about the continent’s future? The answer to that is not morality, which is seldom an enduring motivation. We should care because to ignore Africa is to miss the opportunity that exists in many of the continent’s mostly-virgin markets..."

Kate Meagher writes on the need to incorporate and formalise informal networks "...Although West African cross-border networks have facilitated global trade and private wealth accumulation, they have tended to undermine regional manufacturing, financial stability, and infrastructural investment. Thus instead of integrating West Africa into the global economy, in many respects cross-border trade has reinforced West Africa’s global economic marginalisaton. Policy-makers are left with two choices: cross-border trade can be suppressed and criminalised, or it can be brought into the formal economy.
For West African development, criminalisation is not the best option. For all it faults, cross-border trade remains the most efficient, organised and deep-rooted system of trade in the sub-region. The commercial skills, experience and organisational infrastructure of cross-border networks represent invaluable resources for the development of effective West African trade. What is needed is the incorporation of cross-border trade into the formal economy through more appropriate policy incentives to guide and redirect its activities..."

"...Over the past 30 years, over $300 billion has been spent on Aid to Africa. At their 2005 summit, the Group of Eight nations pledged an annual increase of $50 billion in aid to African nations. The vast majority of this historical and most recent aid funding has been allocated towards addressing many of the problems above. But this aid has not been allocated towards addressing one of the root causes of the problems – the continent’s undersupply of leaders. To enable rapid development, we must train and empower a new generation of ethical and dedicated leaders to drive positive political, economic, and social change across the continent...The African Leadership Academy aims to develop these leaders..."

Nicholas Newman writes "...All debt forgiveness or rescheduling does is to delay the day when such countries will need to make the painful process to reform their economic, governmental and political systems. The 1996 World Bank Report argues “Aid may have unintentionally encouraged misrule that led to collapse and civil conflict”. Almost all civil governance and public development in Africa is paid for by foreign aid, enabling African despots to wage wars on their neighbours...Did you know debt forgiveness or rescheduling increases the cost of future borrowing - as such a process worsens the credit rating of such a state. Indonesia has rescheduled three times and the cost of borrowing has gone up each time. That explains why many third world states including Laos and Vietnam are against such proposals reports the World Bank..."
via OxfordBlog