Tag Archives: Foreign

Louise Fresco on feeding the whole world

Dr. Fresco’s TED Talk is one of the most important we’ve seen in the past year. Important, because she explains, in very engaging way, the principles of a sound agriculture policy for Africa. She has resigned her FAO post, and is now on the faculty of the University of Amsterdam.

Her credibility is enhanced by her years of hands-dirty experience in Africa. The experience and science combine to make it very clear how misguided is the “romantic greens” policy of encouraging small subsistence farming. She sees modern technology and mechanization as central to feeding the developing world. I’ll speculate that she also understands that urbanization is also key.

I recommend her Univ. of Amsterdam paper “Biomass, food & sustainability: Is there a dilemma?.

Why International Assistance Does Not Alleviate Poverty

From the Charter Cities blog:

In reviewing Dambisa Moyo’s Dead Aid in Foreign Affairs, Jagdish Bhagwati takes an interesting look at the history of development aid. He traces the changes in the way economists viewed aid as well as changes in the tactics used by aid advocates. He goes on to note that while many development debates are still aid-related, the most recent development success stories, such as those in India and China, have a very different relation to aid—almost none at all.

[From Jagdish Bhagwati on Development Aid]

Here’s a representative excerpt from Bhagwati:

(…) Moyo’s sense of outrage derives partly from her distress over how rock stars, such as Bono, have dominated the public discussion of aid and development in recent years, to the exclusion of Africans with experience and expertise. “Scarcely does one see Africa’s (elected) officials or those African policymakers charged with a country’s development portfolio offer an opinion on what should be done,” she writes, “or what might actually work to save the continent from its regression. . . . One disastrous consequence of this has been that honest, critical and serious dialogue and debate on the merits and demerits of aid have atrophied.” She also distances herself from academic proponents of aid, virtually disowning her former Harvard professor Jeffrey Sachs, whose technocratic advocacy of aid and moralistic denunciations of aid skeptics cut no ice with her. Instead, she dedicates her book to a prominent and prescient early critic of aid, the development economist Peter Bauer.

Moyo’s analysis begins with the frustrating fact that in economic terms, Africa has actually regressed, rather than progressed, since shedding colonial rule several decades ago. She notes that the special factors customarily cited to account for this tragic situation — geography, history, social cleavages, and civil wars — are not as compelling as they appear. Indeed, there are many places where these constraints have been overcome. Moyo is less convincing, however, when she tries to argue that aid itself has been the crucial factor holding Africa back, and she verges on deliberate provocation when she proposes terminating all aid within five years — a proposal that is both impractical (given existing long-term commitments) and unhelpful (since an abrupt withdrawal of aid would leave chaos in its wake).

Moyo’s indictment of aid, however, is serious business, going beyond Africa to draw on cross-sectional studies and anecdotes from across the globe. Before buying her indictment, however, it is necessary to explore why the hopes of donors have so often been dashed.

(…) although aid was predicated on increased domestic savings, in practice it led to reduced domestic savings. Many aid recipients were smart enough to realize that once wealthy nations had made a commitment to support them, shortfalls in their domestic efforts would be compensated by increased, not diminished, aid flows. Besides, as Moyo notes, the World Bank — which provided much of the multilateral aid flows — faced a moral hazard: unlike the International Monetary Fund, which lends on a temporary basis and has a “good year” when it lends nothing, the World Bank was then judged by how much money it disbursed, not by how well that money was spent — and the recipients knew this.

After countries such as China and India changed course and adopted liberal (or, if you prefer, “neoliberal”) reforms in the last decades of the century, their growth rates soared and half a billion people managed to move above the poverty line — without question, the greatest and quickest progress in fighting poverty in history.

Neither China nor India, Moyo points out, owed their progress to aid inflows at all. True, India had used aid well, but for decades its growth was inhibited by bad policies, and it was only when aid had become negligible and its economic policies improved in the early 1990s that its economy boomed. The same goes for China.

What Makes a Nation Rich?

Say you’re a world leader and you want your country’s economy to prosper. According to this Clark Medal winner from MIT, there’s a simple solution: start with free elections.

CLICK HERE FOR A MAP OF HOW GOVERNMENTS AFFECT THE WEALTH OF NATIONS >>

That is a bad headline I think – free elections may not work unless the institutions are right — especially the rule of law and private property rights. Here’s MIT economist Daron Acemoglu:

(…) The question social scientists have unsuccessfully wrestled with for centuries is, Why? But the question they should have been asking is, How? Because inequality is not predetermined. Nations are not like children — they are not born rich or poor. Their governments make them that way.

(…) yet while Sachs and Diamond offer good insight into certain aspects of poverty, they share something in common with Montesquieu and others who followed: They ignore incentives. People need incentives to invest and prosper; they need to know that if they work hard, they can make money and actually keep that money. And the key to ensuring those incentives is sound institutions — the rule of law and security and a governing system that offers opportunities to achieve and innovate. That’s what determines the haves from the have-nots — not geography or weather or technology or disease or ethnicity.

Put simply: Fix incentives and you will fix poverty. And if you wish to fix institutions, you have to fix governments.

How do we know that institutions are so central to the wealth and poverty of nations? Start in Nogales, a city cut in half by the Mexican-American border fence. There is no difference in geography between the two halves of Nogales. The weather is the same. The winds are the same, as are the soils. The types of diseases prevalent in the area given its geography and climate are the same, as is the ethnic, cultural, and linguistic background of the residents. By logic, both sides of the city should be identical economically.

And yet they are far from the same.

On one side of the border fence, in Santa Cruz County, Arizona, the median household income is $30,000. A few feet away, it’s $10,000. On one side, most of the teenagers are in public high school, and the majority of the adults are high school graduates. On the other side, few of the residents have gone to high school, let alone college. Those in Arizona enjoy relatively good health and Medicare for those over sixty-five, not to mention an efficient road network, electricity, telephone service, and a dependable sewage and public-health system. None of those things are a given across the border. There, the roads are bad, the infant-mortality rate high, electricity and phone service expensive and spotty.

The key difference is that those on the north side of the border enjoy law and order and dependable government services — they can go about their daily activities and jobs without fear for their life or safety or property rights. On the other side, the inhabitants have institutions that perpetuate crime, graft, and insecurity.

Nogales may be the most obvious example, but it’s far from the only one. Take Singapore, a once-impoverished tropical island that became the richest nation in Asia after British colonialists enshrined property rights and encouraged trade. Or China, where decades of stagnation and famine were reversed only after Deng Xiaoping began introducing private-property rights in agriculture, and later in industry. Or Botswana, whose economy has flourished over the past forty years while the rest of Africa has withered, thanks to strong tribal institutions and farsighted nation building by its early elected leaders.

Now look at the economic and political failures. You can begin in Sierra Leone, where a lack of functioning institutions and an overabundance of diamonds have fueled decades of civil war and strife and corruption that continue unchecked today. Or take communist North Korea, a geographical, ethnic, and cultural mirror of its capitalist neighbor to the south, yet ten times poorer. Or Egypt, cradle of one of the world’s great civilizations yet stagnant economically ever since its colonization by the Ottomans and then the Europeans, only made worse by its post-independence governments, which have restricted all economic activities and markets. In fact, the theory can be used to shed light on the patterns of inequality for much of the world.

If we know why nations are poor, the resulting question is what can we do to help them. Our ability to impose institutions from the outside is limited, as the recent U. S. experiences in Afghanistan and Iraq demonstrate. But we are not helpless, and in many instances, there is a lot to be done. Even the most repressed citizens of the world will stand up to tyrants when given the opportunity. We saw this recently in Iran and a few years ago in Ukraine during the Orange Revolution.

Please continue reading…

When Sarkozy Spoke Truth to Obama

Claudia Rosett, as usual, did a great job contrasting Obama’s rhetoric with Sarkozy’s call for action:

The setting was the special, summit-level Security Council meeting Thursday morning, chaired by Obama, in which the official topics were nuclear nonproliferation and disarmament for the entire world — but with no focus on any specific country. The meeting was advertised by the White House as “historic,” if for no other reason than that no U.S. President has ever before stooped to chair the often feckless and at times just plain sleazy UN Security Council — where the 15 members currently include Vietnam and Libya. For this particular occasion, Libya’s foreign minister attended (thus sparing the Council the risk of a replay of Qaddadi’s 96 minute performance the previous day on the General Assembly stage). The rest of the table was filled with presidents and prime ministers.

They began with Obama’s pre-packaged deal of unanimously adopting a “historic” resolution, which Obama said “enshrines our shared commitment to the goal of a world without nuclear weapons,” etc, etc. etc (All very nice, but what does this have to do with the real world?). Secretary-General Ban Ki-Moon kicked off the ensuing round of official self-congratulatory huffing and puffing (”…a historic moment…a fresh start towards a new future”). The canned diplo-speak continued, as each member spoke in turn – Costa Rica, Croatia, Russia, Spain, Austria, Vietnam, Uganda, China … and then it was the turn of the French president, Nicolas Sarkozy. Here’s his wakeup call, in the UN’s translation from the French (boldface mine):

“We are here to guarantee peace. We are right to talk about the future. But the present comes before the future, and the present includes two major nuclear crises. The peoples of the entire world are listening to what we are saying, including our promises, commitments and speeches. But we live in the real world, not in a virtual one.

We say that we must reduce. President Obama himself has said that he dreams of a world without nuclear weapons. Before our very eyes, two countries are doing exactly the opposite at this very moment. Since 2005, Iran has violated five Security Council Resolutions. [Ed note: Sarkozy then listed international proposals for dialogue with Iran attempted in 2005, 2006, 2007, 2008, 2009.] I support America’s extended hand. But what have these proposals for dialogue produced for the international community? Nothing but more enriched uranium and more centrifuges. And last but not least, it has resulted in a statement by Iranian leaders calling for wiping off the map a Member of the United Nations. What are we to do? What conclusion are we to draw? At a certain moment hard facts will force us to take decisions.

… Secondly, there is North Korea — and there it is even more striking. It has violated every Security Council decision since 1993. It pays absolutely no attention to what the international community says. Even more, it continues ballistic missile testing. How can we accept that? What conclusions should we draw? …”

You can read President Sarkozy’s entire statement here (in all its Defcon 1 relevance to the disclosures Friday of another Iranian uranium enrichment plant hidden on a military base near Qom) – click on this link to Security Council meetings for 2009, then click on the link for “Meeting Record” of Sept 24th and scroll to page 12.

UPDATE: the full text English translation is here. The closing paragraph:

….So, ladies and gentlemen, my dear colleagues, this is what I believe, in full support of what was decided in the resolution and in full support of President Obama’s initiative. What I believe is that by having the courage to strengthen sanctions, together, against countries that violate Security Council resolutions, we will give credibility to our commitment to a world whose future holds fewer nuclear weapons and perhaps, one day, no nuclear weapons./.