Tuesday, May 23, 2006

 

Reform in Africa

In today's Los Angeles Times Michael Holman writes about how corruption in Africa has stymied the efforts of the wealthy nations to help the people of Africa. He starts his article with a short summary of attempts to help Africa. He cites arguments by one expert who advises building model "development villages." Another expert advises: "We've tried that and failed. Instead, aid agencies should focus on specific tasks - such as getting malaria medicine to the sick, clean water to the poor, textbooks to schoolchildren - coupled with home-grown political and economic reforms."

No matter which path we follow, endemic corruption foils any plan. The money goes into the pockets and foreign bank accounts of corrupt officials instead of into useful projects. Mr. Holman notes approvingly that "World Bank President Paul Wolfowitz [has] put a crackdown on graft at the top of his development agenda..." Effects are being felt in Asia and South America. Countries in these regions are working to eliminate graft so that they can qualify for World Bank loans. In Africa there has been no effect so far.

Mr. Holman makes another important suggestion: “[Africa] also needs radical reform of the largely communal land-ownership system. It must introduce a competitive business environment, one that does not, for example, require six weeks to register a new company in Kenya, compared to six days in Hong Kong. It needs a bill of business rights, with provisions to allow arbitration of disputes in a neutral venue abroad, circumventing the corrupt legal systems that have scared off investors. In short, Africa must create the business conditions in which African capital will return.”

Contrast this suggestion with dismissive comments on other approaches to helping the Africans: Model development villages and specific tasks. Contrast it also with his comments about Paul Wolfowitz: “.....he has learned that what works elsewhere in the world does not necessarily work in Africa. That lesson is a prerequisite to change in Africa, which is undergoing a continental crisis distinct from the rest of the developing world.”

If Mr. Holman is correct, African society is similar to the society of Native Americans before the arrival of European settlers. The history of the Americas suggests that the change of the social order from one of communal use of resources, particularly land, to one of private ownership and competition did not confer any benefits on the natives. Rather, the new settlers replaced the natives. I wonder whether Mr. Holman’s prescription for Africa has a similar outcome for native Africans.
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