Datum: 20.01.11 10:59
Kategorie: Kolumnen, Diaspora-Afrika

Von: Templeton.org

Will Money Solve Africa's Development problems?

NO WAY. The problem in Africa has never been lack of money, but rather the inability to exploit the African mind. Picture a banana farmer in a rural African village with a leaking roof that would cost $100 to fix. If one purchased $100 worth of his bananas, the farmer would have the power and choice to determine whether the leaking roof is his top spending priority. On the other hand, if he is given $100 as a grant or loan to fix the roof, his choice would be limited to what the owner of the big money views as a priority. Out of 960 million Africans in 53 states, there are innovators and entrepreneurs who, if rewarded by the market, will address the challenges facing the continent.

If money was the key to solving problems, banks would send agents on the streets to supply money to afflicted individuals. But banks only offer money to individuals who successfully translate their problems into opportunities. A $7 million British compensation to 228 Samburu herders in Kenya in 2002 did not stop them from turning into paupers by 2007. Money in itself is neutral. Big money viewed as capital has led strategists (who depict Africa as trapped in a cycle of poverty) to argue for massive inflows of money as the only means of escape from poverty. Viewing money as a receipt for value, a creation, and a resultant effect of exchange between different parties offers a chance to translate African problems into opportunities.

As Lord Peter Bauer aptly pointed out, "Money is the result of economic achievement and not a precondition." How can Africans engage in activities that will lead to economic achievement? The key is to transform the mindset of the 50% of the African population below age 20 to focus on turning African problems into opportunities. In Africa today, there are entrepreneurial opportunities to feed an estimated 200 million hungry people, kill billions of malaria causing mosquitoes that threaten the lives of an estimated 500 million, and develop infrastructure.

Africa has enormous capital in the form of natural resources that include oil, hydroelectric power, diamonds, uranium, gold, cobalt, 70% of the world’s Coltan and 34% of its cassiterite. Coltan and cassiterite are strategic in the production of cell phones, laptops, and other portable electronic products. If Africans employed the power of reason, the global cell phone industry that churns out 25 cell phones per second would provide a huge source of revenue for respective countries; thereby widening their menu of choices.

Focusing on the African human mind as capital will help translate resources into wealth, thereby helping to solve Africa’s problems. Money’s usefulness and value will only spring from rational responses to the challenges that face the continent through exchange of products and services at the village, national, continental, and international levels.
 

James Shikwati is the founder and director of the Inter Region Economic Network and CEO of The African Executive business magazine.

 

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I THOUGHT SO… But now I don’t.

There is that threadbare maxim: If you hold a hammer in your hand, every problem looks like a nail. What happens, then, when all we hold in our hand is a checkbook?

Checkbook Development suggests that poor nations cannot build the skills necessary to solve their own problems. There is, however, a notable exception.

The President of Rwanda, Paul Kagame, called me to his office to assist him to build private sector capacity and improve export competitiveness. I informed him that it would not be possible for the amount of money and time he budgeted to do my job and train Rwandans at the same time. He told me the story of when he had finally accumulated enough money to provide back pay for his troops who were fighting to end the genocide. He asked them if he could use the money, instead, to purchase helicopters to help end the war sooner. Not a single soldier objected.

President Kagame purchased the aircraft from countries on the condition that they also provide pilots. He then persuaded those pilots to fly missions into enemy territory, and, at the same time, train Rwandans to fly. His tactics, in a land of no roads and a thousand mountains, shortened the war, and saved lives.

Every nation needs money to upgrade and improve the lives of their citizens; and it is good when a rich nation helps a poor one after a devastating act of God, or to meet a basic human need. But, too often, when one nation aids another it is based on a massive infusion of financial capital in return for changing monetary, trade, investment, fiscal, sectoral, and wage policies. This is often the right advice, but there is a trade-off, too. The nation with all the money often assumes the decision rights; and the responsibility for a nation’s future must always reside with the citizens of that nation, not with foreign advisors, and certainly not with its creditors and donors.

This sort of checkbook development confuses compassion and generosity with over-responsibility for fellow human beings. Explicitly or implicitly, the donor is telling them how to run their country, and in the process, without meaning to, can rob citizens of emerging nations of their most precious assets – dignity and self-reliance.

Rwanda receives little foreign aid. The leaders of the World Bank had introduced me and several other experts to President Kagame and promised to pay the cost of our work; but they needed two years to program it, and Rwanda did not have two years. President Kagame understood that poverty was destroying the cornerstones of his country’s society: –tolerance, trust, aspirations, and hope. He decided to pay our salaries from the proceeds of his privatization program, but he stipulated that we begin immediately, and that we pay him back if we did not do what we said we could do. He further demanded, "I want you to be like those pilots who flew the aircraft and trained Rwandans." I asked, "Do you want me to help you kill the enemy, too?" He said, "I want you to help me kill poverty."

Rwanda doesn’t have money, but it is a nation without the rampant fatalism often fostered (however unintentionally) by benevolent people. Its leadership has had the courage to challenge the underlying assumptions of international aid, and that has led to growth of almost 20% per year in subsistence wages in its key export sectors.

The responsibility for its own future lies squarely on the shoulders of its men and women.

Not a single Rwandan objects.

Michael Fairbanks is the co-founder of OTF Group, and the SEVEN FUND, which provides grants for enterprise solutions to poverty.

 

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NO. In fact, after fifty years of trying and $600 billion worth of aid-giving, with close to zero rise in living standards in Africa, I can make the case for “No” pretty decisively. Aid advocates talk about cheap solutions like the 10-cent oral rehydration salts that would save a baby dying from diarrheal diseases, the 12-cent malaria medicine that saves someone dying from malaria, or the $5 bed nets that keep them from getting malaria in the first place. Yet despite the aid money flowing, two million babies still died from diarrheal diseases last year, more than a million still died from malaria, and most potential malaria victims are still not sleeping under bed nets.

Clearly, money alone does not solve problems. What is needed instead are business, social, and political entrepreneurs who take responsibility for, say, making sure medicines reach victims, rather than more grandiose slogans about comprehensive administrative solutions that only serve as publicity vehicles for raising yet more money for ineffectual aid bureaucracies. Entrepreneurs would be accountable for results, in contrast to the aid bureaucrats and rich country politicians who make promises that nobody holds them accountable for keeping.

As for facilitating African development, free enterprise has been the tried and true vehicle for escaping poverty everywhere else (see China and India most recently) and it is patronizing to suggest that it won’t work in Africa. The hope of Africa comes much more from someone like businessman Alieu Conteh, who started a hugely successful cell phone company in the Democratic Republic of the Congo amid the chaos of civil war, than it does from celebrity aid advocates like Bono. Africans are far from being condemned to be helpless wards of rich donors: homegrown economic and political freedoms will allow Africans themselves to solve their own problems.

William Easterly is professor of economics at New York University, joint with Africa House, and co-director of NYU's Development Research Institute. He is also a non-resident fellow of the Center for Global Development in Washington, DC.

A Templeton conversation, in templeton.org / French translation from unmondelibre.org







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