My Beauty Best Teacher

A summary of the OECD publication "The Rise of China and India - What's in it for Africa" makes a number of points:

In order to avoid being trapped into the unpromising corner of vulnerable, capital-intensive and high-risk raw material dependence, resource-rich Africa will have to balance the need to match the promotion of job-rich sectors with the desire to capitalise on a windfall gain generated by higher commodity prices. Monetary authorities will have to lean against the real currency appreciation in order to avoid burdening industries competing with imports, and exporters outside the resource sector. Central banks need to be supported by fiscal authorities, which are required to limit public spending on services and construction to keep non-tradables prices in check.Investment abroad of export proceeds will further insulate the local economies from ‘DutchDisease’ effects.
Furthermore, in low-tech activities like clothing or footwear, growing FDI into China and India is likely to crowd out investment in Africa, although geography and preferential tariff treatment may still provide some African countries with a competitive edge. Head-on competition, however, is unlikely to be the main channel through which the Asian drivers impact on FDI flows into (and out of) Africa.

FMR Review writes

Post-conflict countries such as Liberia offer the opportunity to meet the immediate needs of conflict-affected populations while building the foundation for a vibrant entrepreneurial sector that will help fuel long-term growth and stability. However, the
threat also exists that a large influx of relief money, improperly directed into grant or loan programmes, will not be absorbed properly and will create dependency or a poor credit culture.

Larry Elliott writes about the continents economic challenges:

"...At the level of the firm, productivity tends to be weak because of a lack of investment in both physical and human capital. In countries such as Ghana, there is evidence of micro-financing initiatives to provide seed-corn capital for individual traders, but it is still early days. At the second level, governments need to think strategically about what their priorities are. The drive for universal primary education is welcome but there has been no similar expansion of secondary, let alone tertiary, education. The regional challenge is pretty straightforward. Africa needs three or four powerhouses - one in each part of the continent - to drag the rest along. South Africa, Nigeria and Kenya are the potential hubs for regional markets in which countries can exploit economies of scale and the potential to trade. Trade barriers within Africa are as serious an impediment to development as are unfair global trade rules..."

Abdul Karim Bangura reviews 'African Fractals: Modern Computing and Indigenous Design' by Ron Eglash:

Eglash's research began in the 1980s while investigating settlement architecture in Central and West Africa. Aerial photographs of various settlement compounds revealed that many were composed of circular structures enclosed in other circles, or rectangles within rectangles, and that the compounds were likely to have street patterns in which broad avenues branched into very small footpaths. As Eglash notes, at first he thought it was just from unconscious social dynamics. But during his fieldwork, he found that fractal designs also appear in a wide variety of intentional designs--carving, hairstyling, metalwork, painting, textiles--and the recursive process of fractal algorithms are even employed in African quantitative systems. Eglash adds that in the design rationales and cultural semantics of many African geometric figures, as well as in indigenous quantitative systems (additive progression, doubling sequences, binary recursion) and symbolic systems (iconic symbols for feedback loops, equiangular spirals, infinity), there are abstract ideas and formal structures that closely parallel some of the fundamental aspects of fractal geometry. These results, Eglash concludes, are congruent with recent developments in complex systems theory, which suggest that pre-modern, non-state societies were neither utterly anarchic, nor frozen in static order, but rather utilized an adaptive flexibility that capitalized on the nonlinear aspects of ecological dynamics.

Also mentioned at BazungaBucks

Abdul Jabbar writes

"...Remittances from the recent migrants are emerging as an important source of external development finance. These inward flows of money have been growing in both absolute volumes, as well as relative to other sources of external finance. Perhaps even more important, remittances are the most stable source of external finance and are providing crucial social insurance in many countries afflicted by economic and political crises..."

Val Mcqueen writes about the phenomenal success of ethnic South Asians expelled by Uganda in the 1970's:

"...How does one account for a group of people who came from the Third World to the First World (the UK) with nothing but a suitcase, within three generations, overtook around 99.5 percent of the natives in terms of wealth?
Like the Chinese, ethnic south Asians have a reputation for possessing shrewd commercial instincts and a willingness to sacrifice short term advantage (i.e. going to work for someone else in return for a regular salary) in the service of a long-term goal. The entire family stays focused....They didn't waste time on regrets. They hunkered down and got to work...They were thrifty. They worked long hours. They saved their money..."

A report on methods to increase private capital flows to SSA stated:

The supply of assets is still very limited, and, in addition to the public companies already listed on stock exchanges, the number of private firms listed needs to be increased. In some cases, privatization of public assets offers the best avenue for increasing the supply of assets in the economy and attracting foreign investors. While foreign investment can play a valuable role in stimulating capital markets in Africa, the growth and stability of these markets will require the development of a healthy base of domestic investors. Pension reform and the promotion of mutual funds could encourage domestic investment in fledgling stock markets.

John R. Minnis asserts that;

Education policy in sub-Saharan Africa is predicated on human capital assumptions and therefore promotes the expansion of formal education as a way to promote economic growth. As a result, formal education is valued primarily as a private consumer good, a form of cultural capital that allows some to get ahead and stay ahead, rather than as a public good that also benefits the overall society. In the absence of vibrant industrial labor markets, job prospects for school leavers are poor, which places an inflated premium on educational credentials. The collapse of formal economies combined with high population growth rates suggests that higher social rates of return might accrue from more investments in nonformal adult education aimed at improving the skills and labor productivity of rural populations
,SAGEPub.In other words "Many governments in Sub-Saharan Africa continue to expand formal education in times of economic decline, in the hope that more investment in it will stimulate growth. Unfortunately the skills acquired by graduates cannot be used in the absence of vibrant labour markets. Instead, they compete for scarce white collar jobs in already bloated state bureaucracies...money would be better spent on nonformal education that does not lead to credentials but to useful skills and knowledge that could be used to improve agricultural production.",BritishLib.

Agwu Amogu writes

"...When men are free to develop their self-interest, when they are free to use their minds in pursuit of what will make them happy, better their lives the wonderful creativity of the mind glows...the mind is the incubator of prosperity it is a costly ignorance to subject it to any form of coercion, as such coercion will paralyse productivity. The system of free minds, freemen and free market is a system of prosperity, growth and wealth creation...Wealth is actually created when enterprising individuals discover new ways to use existing resources. Since the possibilities of human creativity is infinite, then wealth too must be limitless. One idea leads to the next so one invention leads to the other.
The amount of wealth a nation has or produces does not depend mainly on the availability of natural resources, instead it is dependent upon human resources, the self-determined thoughts and creativity of its populace. The realization that natural resources does not limit creation of wealth is a very liberating one. For instance Switzerland and Japan have little or no mineral resources, while Nigeria and Mexico are greatly endowed with mineral resources, yet people in Switzerland and Japan are more comfortable that those in Nigeria and Mexico..."

via IPPA
photo courtesy freemarket.net

"...Afrobarometer is an independent,nonpartisan research project that measures the social and political and economic atmosphere in Africa.Afrobarometer surveys are conducted in more than a dozen African countries and are reeated on a regular cycle..." Their goals are:

• To produce scientifically reliable data on public opinion in Sub-saharan Africa.

• To strengthen institutional capacity for survey research in Africa

• To broadly disseminate and apply survey results

via PSD Blog

Continuing our coverage of alternative financing methods for education, we take a look at Ellen Mashiko's report on existing university endowments within the continent, she states that:

Endowing African universities is not an audacious initiative but a sound investment in the future by the recipient and the donor. The recipient commits to fulfilling the conditions put forward by the donor, which in the best cases are jointly developed, and to ensuring that the endowment is integrated into an institutional strategy and action plan for sustained growth. The donor supports the university by providing the funds and offering follow-up programs and activities that not only help ensure sustained growth but also expand the opportunities for the university beyond the parameters of the endowment.

Let us not pretend to be suprised by this, a number of assessments have warned about the futility of debt relief policies.

The report by the Washington-based Independent Evaluation Group (IEG) says that in half the countries that received debt relief under the programme known as the Highly Indebted Poor Countries (HIPC) initiative, debt has in fact climbed back up to where it was before the debt relief plan.So far, the HIPC initiative has eased 19 billion dollars of debt in 18 countries, halving their debt ratios. However, the IEG found that in 11 of the 13 countries the report studies, and which graduated from the programme that qualifies them to start receiving debt forgiveness, called the completion-point, external debt has actually risen.

Wealth creation,industrialization and broad culture of ownership are the keys to climbing out of poverty.The sooner Sub-Saharan Africa accepts that this inescapable fact relates entirely to self-reliance the better.

via DENIAfrica

In an address (see video) to The House Committee on International Relations George Ayittey stated that:

Africa's experience shows that a corrupt government is incapable of efficient economic management and eliciting the sacrifices necessary for the development effort. A corrupt African government cannot attract foreign investment or spur domestic investment. Like the colonial state, the predatory African state is also
extractive. Under colonialism, Africa's resources and wealth were plundered for the development of metropolitan European countries. Today the tiny, parasitic ruling elites use their governing authority to exploit and extract resources from the productive members of the society. These resources are then spent lavishly by the elites on themselves or siphoned out of Africa.

Fekru Debebe asserts(PDF) that :

Privatization essentially increases the role of the private sector in the national economy and induces changes in basic values and attitudes in a society. The common characteristic features of countries which rely primarily on the private sector and free markets are freedom, basic human rights and democracy. These values are important to the development of the private sector and the acceptance of privatization would initiate a fundamental shift toward democratic values...The privatization process can also be a significant positive influence in the development of African entrepreneurial talent. In the statist development strategy of the past, indigenous entrepreneurial talent had neither been solicited nor its role recognized and encouraged. As the result, local entrepreneurs moved to where domestic opportunities were open to them, the informal sector...The new spirit toward privatization and market oriented policies is likely to bring entrepreneurs into the formal sector where they can learn and be trained in the tools of modern finance, commerce, and management. As they become more skilled and educated in an environment of freedom and private enterprise they are bound to make significant contribution to economic progress of their nations.

Charles C. Soludo wrote;

It is evident that the development challenge facing Africa requires major strategic, creative thinking. The SSA needs to do certain things very differently, but the question is how? A dominant view is that the best chance of sustained development in Africa should be pursued within the framework of a growth-promoting and market-accelerating model, but which is human-centred to address the pervasive poverty of the region...
With regard to specific area of strategies for rapid industrialization, several questions emerge. For example, where would Africa’s comparative advantage lie in the future, and how can such comparative advantage be “created” — a la the Asian way — without being constrained by the GATTified world? Should Africa start small (with little things that have lost competitiveness, and as Ojimi(Yoshishisa Ojimi a former vice-minister of MITI) argued in the case of Japan — areas that have lowest productivity and lowest returns), or, should it go high-tech. and seek to compete all the way? In the latter case, how would SSA do it, and with what technology and market penetration strategies?
It has become fashionable to suggest diversification of the export base into manufactures, but the challenge is to demonstrate how such an option is viable and that chosen sectors/products are potentially competitive. In essence, while it is important to learn how the Asians dealt with the past, it is even more important to understand how some of the countries (especially those in “transition”) are coping with current constraints and opportunities. For example, a lot of lessons could be learnt from other emerging industrializers (e.g., China, Vietnam, etc.) in terms of their innovations in interpreting and exploiting the provisions of the GATT/WTO and their strategies for “economic diplomacy.”

via IDRC

Co-founded by Ory Okolloh of Kenyan Pundit Mzalendo's mission is to "keep an eye on the Kenyan Parliament."It was established for the following reasons:

1. It is very difficult to get information about what Kenyan Members of Parliament are doing when in Parliament. Though the Hansard offers a verbatim transcript of Parliamentary proceedings it is not widely circulated or accessible. In addition, even if one could get access to the Hansard, extracting relevant information can be time consuming. Furthermore, there is virtually no way of knowing what government business is being conducted in Parliament; for instance, the contents of draft bills are rarely publicized.
2. The Kenyan government is still very much a “closed society” — the default de facto presumption is that the public does not have a right know unless they have special permission. The fact that the official Parliament website is still shut down after an uproar from some MPs who were upset that their resumes were available online is a testament to this. By focusing on one of the major government institutions that should be the most accessible, Mzalendo aims to both “open” up Parliament and demonstrate that it is both possible and necessary for Kenyans to demand and expect more accountability from public institutions.
3. By relying on technology and the Internet, Mzalendo hopes to be especially accessible to young Kenyans. Young people will soon represent the largest voting bloc in Kenya and we believe that it is important to both get them engaged in public participation in ways that are appealing to them and give them the tools that will facilitate this engagement. In the near future, the site will offer interactive features including a discussion board, individual constituency blogs, and an opportunity to ask your MP questions and get a response online.
4. Although Mzalendo is a long-term project, we are cognizant of the fact that the 2007 elections are around the corner and we feel it is important for Kenyan voters to have a record of what their individual MPs have been doing since their election into Parliament. Our goal is to have a complete compilation of all the Parliamentary records from 2003 we are able to access available online.

Ampofo Ofori comments on the lack of self-reliance amongst Ghanaians (read Sub-Saharan African's here) he asks the question "...What are we doing on our own to improve the conditions in our country and eradicate poverty, disease, hunger and hopelessness from this great country?..."Questioning the leadership he states "...The question is, do our leaders have to sit down doing no brain search to find ways to get us out of spoon feeding by others, and feed ourselves? Can’t our leaders sit down and plan the success of our future from our own back yard?..."

Africa Focus analyses the continents commodity trap:

"...most African countries have been losing market shares in commodity exports to other developing countries, while at the same time most have been unable to diversify into manufactured exports. Africa's difficulties in maintaining market shares for its traditional commodities derive from its inability to overcome structural constraints and modernize its agricultural sector, combined with the high cost of trading. Africa has not been able to increase the productivity of its agriculture because of a combination of factors, including land tenure and small-scale farming, rudimentary technology and policies that reduced the role of state institutions in innovation and investment in the sector. As a result, it has lost its competitive advantage in producing cocoa, tea and coffee vis-a-vis the new and more competitive producers in Asia and Latin America..."

The New York Times reports on the rising profile and importance of India's manufacturing industry:

"...India has cultivated an image as a center for outsourcing, creating a new economy of call centers and software campuses that has lifted the relatively privileged. And even though workers here have for years stitched clothing and apparel, a widespread manufacturing base has been elusive, and factories have long been conspicuous for their relative absence here.
So the new murmurings of manufacturing could have a profound effect for a vast number of India's poor people, as well as for the international sourcing of goods from cars to bras.
For decades, manufacturing in India has been hobbled by antiquated labor laws, creaking infrastructure and paperwork. But for many of the three-quarters of Indians with less than a middle-school education, few factories has meant few jobs..."

The significance of these developments for Sub-Saharan Africa should not be ignored, manufacturing by and large remains the pre-eminent driver for alleviating poverty and raising per capita income.

Elisabeth Moyer asks "...Where are Africa's engineers going to come from? Where are the research scientists going to come from? Where are the ministers of the environment going to come from?... "The AIMS program is crucial for the development of Africa in that it strengthens the science base and it builds capacity at African universities," Hahne(AIMS Director Fritz Hahne) said. "It also teaches students to tackle real problems that need to be solved for African development. It is hoped that after leaving AIMS, these persons will also take up positions in industry and in public administration in their native countries..."

photo courtesy Harvard University Gazette

PSD Blog reports on a debate regarding Latin America's problem with the free market or moreso crony capitalism:

One legitimate reason for the opposition to capitalism in Latin America is that it frequently has been "crony capitalism" as opposed to the competitive capitalism that produces desirable social outcomes. Crony capitalism is a system where companies with close connections to the government gain economic power not by competing better, but by using the government to get favored and protected positions. These favors include monopolies over telecommunications, exclusive licenses to import different goods, and other sizeable economic advantages. Some cronyism is found in all countries, but Mexico and other Latin countries have often taken the influence of political connections to extremes.

What lessons can Sub-Saharan Africa learn from this? They include:

• The need to foster domestic competition across all industries.
• The incorporation of the massive informal economy into the formal economy.
• Fostering a climate for a culture of ownership.
• The dismantling of private monopolies.