Blog of Q's

“The Kenyan economics expert James Shikwati, 35, says that aid to Africa
does more harm than good. The avid proponent of globalization spoke
with SPIEGEL about the disastrous effects of Western development policy
in Africa, corrupt rulers, and the tendency to overstate the AIDS
problem.”
We
have seen aid for some relatively small, hard-working, civil society
organizations–especially in education and health–do a lot of good
because the recipients were committed to growing organically, not
relying on foreign aid. Shikwati does point out some unsettling facts.

See this new editorial by clicking on the title or on “Editorials”, to the right.

PRI Weekly Briefing, 11 March 2005
By Joseph A. D’Agostino
 
The month after he urged Hong Kong couples to have more children, Sir
Donald Tsang became acting chief executive of Hong Kong following the
retirement of Tung Chee-hwa.  …
Tsang, a Catholic with two sons, could easily be its choice.
 
In a major departure from the Communist Chinese government line, which
enforces a one-child policy on mainland Chinese, Tsang urged Hong Kong
couples to have three children apiece in order to counteract falling
birthrates and an aging population.  He said on a Radio Television
Hong Kong program last month, “Hong Kong has one of the lowest total
fertility rates in the world and we need to think about how to resolve
the problems discouraging people from having children. . . . I think
each couple needs to give birth to at least two children to reach the
population replacement level.  Three will be the best.”
 
… Perhaps even China’s anti-family Communist leadership recognizes
that Hong Kong is in dire straits.  In the meantime, the nearby
sovereign city-state of Singapore has implemented a host of financial
incentives to persuade its low-fertility population to have more
children.
 
Hong Kong, with a population of 7 million, has a fertility rate of .94
children per woman, far below the 2.1 children per woman required to
maintain an even population level.  Hong Kong’s rate is even below
those of Italy and Spain, whose people are fast committing national
suicide with fertility rates slightly above 1.
…

 Click on “Editorials”, to the right, for excerpts from this interesting article–which is brief in itself.

The following are excerpts from an interesting article.

Opini�n Sur
By Ram�n Daubon, Vice President for Programs at the Inter American Foundation

… we shouldn’t expect those who’ve devoted their lives to the wrong way of doing foreign aid to come out and admit they’ve been wrong all along. … Hence I propose a primer for new practitioners, based on fourteen basic thoughts and a checklist.

1. Traditional “development assistance” has not worked
…
2. Institutions matter
…
3. But institutions need to be legitimized
… This self-reinforcing cycle—performance depending on trust depending on performance─happens with institutions at all levels of public life, from the national to the neighborhood. The challenge for development assistance is to find the right level at which to jump-start that virtuous circle.
…
4. Community-driven development is where the rubber hits the road
… People live at the local level; their most pressing issues are typically local. Principal donors are thus beginning to focus their efforts on creating spaces at the local level in which such acting can take place, places for people in local public life.
…
5. Whether to be top-down or bottom-up: that is the question
…
6. The issue of scaling up and scaling out
… It is on the power of coordinated self-help practices, the “art of associating” that impressed Tocqueville in the 1830s, on which countries like America were built. … In effect, the process of development becomes one of re-defining relationships within and between such groups. Those reformed relationships call for and support reformed public institutions to mediate them. …
7. We need a different way to think about power

Ultimately, the core problem of underdevelopment is the unequal distribution of power. When power is evenly distributed politics and markets work more fairly and income and wealth assume fairer distributions. Yet, inversely, redistributing income will not by itself re-distribute power. North Korea probably has a flatter distribution of income than most developing nations. And we define power not only as the capacity to coerce or force, but as the capacity to make things happen. The crowds in the streets of Kiev in December 2004 showed power, yet they had no guns or tanks. Power is also the capacity to affect one’s own life.

8. Such empowerment requires owning the context, the whole set of circumstances
…
9. A “community” is not a place; it is the relationships that define it
… A community is an aggregate of relationships, surrounded by constantly changing circumstances. … Traditional development assistance is destined to fail first of all because it is designed to serve a reality which will have changed by the time the assistance reaches its destination. But more significantly, it fails because it is directed at the circumstances and not at the relationships that generate the circumstances. …

10. A democratic community can adapt to circumstances
…
11. A democratic community is a deliberative community
…
12. The greatest generator of information is openness.
…
13. But this is just a theory…

There is always a theory. What we call development “practice” is based on the theory of six decades ago. … Sixty years of practice under that theory has little to show for its effort. … Because poverty is not the lack of things; it is the lack of power to change the circumstances that generate the lack of things. And those circumstances remain─in essence─unchanged. But the required power cannot be simply given to the poor; it has to be encouraged and resourced.
…
14. So, here’s a checklist for donors and activists for a citizens’ political process

a. Who IS and who is NOT in the conversation? The more diverse the conversation, the more complicated it will be. The more complicated, the richer the options. The richer the options, the more the choices. The more the choices, the better the decision. A diverse, complicated conversation will therefore be much harder and conflictual, but it will generate more knowledge and will produce a more solid commitment to the agreements that are made, no matter how unimportant they may initially appear. Those small, committed agreements, few at first and later by the thousands and millions, will form the bedrock of sustainable governance.

b. Look for themes and patterns rather than causes and problems. Look for the simple underlying pattern and the clear organizing principle beneath the surface complexity. Focus on relationships─economic, social and political─and their components: identities, expressions of authority and power, interests, perceptions and stereotypes, and patterns of interaction of the groups involved.

c. Trust the power of the organizing principle and let it loose: combine some expectation of acceptable behavior with the freedom available to individuals to assert themselves in unplanned ways.

d. Give it time. Simple-minded ideas are designed quickly, even when they are complicated. Lasting ones, even if simple, must emerge at their own pace.

Plan the global, but let the local free. Everywhere in nature, order is maintained in the midst of change because autonomy exists at local levels. A system can manage the global demands for change when it has built into it internal freedom of motion at the local level. The local level shouldn’t be waiting for instructions, but rather constantly innovating, guided by a shared organizing principle of self-reference—not knowing where its next step is.

“Caminante no hay camino—se hace camino al andar” (“Traveler, there is no path; the path is made by walking” –Antonio Machado)

By George Melloan, Wall Street Journal, March 22, 2005; Page A15

… [T]he amount of private lending flowing into the developing world
practically exploded in the 1980s when governments began to welcome
private investment. John Taylor, U.S. undersecretary of the Treasury
for International Affairs, told Journal editors last week that too many
countries that are rich enough to be graduated from World Bank lending
are still getting support.

Governmental institutions have a different incentive structure from
private firms. Private-sector workers are rewarded for problem solving.
The public sector has no such incentive because the continued existence
of the problem keeps them budgeted and in business. That’s why aid
efforts by nongovernmental organizations like Doctors Without Borders
are often more effective than those of governmental bodies.

The desire to maintain funding is why the World Bank and other aid
agencies are disinclined to graduate borrowers. It also accounts for
the fear that a bright new president might start peeking under the
rocks. Mr. Bush clearly isn’t putting one of his most talented
officials out to pasture.

The president is embarked on a crusade to spread political freedom
throughout the world. Economic freedom is the handmaiden of that
attempt because it empowers individuals, through the economic security
they achieve, to demand their political rights. If socialism is
crumbling throughout the world, as it appears to be, the multilateral
agencies that have given it so much support in so many places will have
to be reconsidered.

That is not to say there will be no place in the future for government
directed foreign aid. The Meltzer Commission recommended that lending
be replaced by direct grants to the poorest nations contingent on the
achievement of measurable results. That seems like a good idea. Paul
Wolfowitz will probably come up with some others.

By Sebastian Mallaby, Washington Post, Monday, March 7, 2005; Page A19

“… But the Fiorina rumor raises other questions. Does the Bush team
understand that private-sector experience is only dimly relevant to the
World Bank challenge? Corporate bosses are used to firing people,
measuring performance by profits and dominating their boards of
directors. But the World Bank, like most public institutions, is an
entirely different beast. It’s hard to fire people. Performance is
measured not by the clear metric of profits but by poverty reduction,
which takes years to occur and is hard to track precisely. And the
board is composed of interfering governments that are forever
rearranging the bank’s development priorities. So it’s not just that as
a private-sector manager, Fiorina did so badly she was fired. It’s that
her experience doesn’t fit what’s needed in a World Bank president.

Equally, the Fiorina rumor forces the question: Does the Bush team mean
to choose someone who knows nothing about development? Of course, this
wouldn’t be a first; witness the Barber Conable appointment. But
newcomers to development are easily muddled by the magic-bullet claims
that stalk this field — claims that the key to development lies in
micro-credit or female education or property rights, to cite three
common examples. If you don’t understand how to sort the snake-oil
salesmen from the truth tellers, you can’t set a sane course for the
World Bank and stick to it….”

By BOB DAVIS, WALL STREET JOURNAL, February 23, 2005; Page A15

… the “Washington Consensus” … identified government as a roadblock
to prosperity, and called for dismantling trade barriers, eliminating
budget deficits, selling off state-owned industries and opening Latin
nations to foreign investment. Latin America took that advice and
during the following decade shucked many of its protectionist ways.
Nevertheless, the region slipped further behind Asia and the
industrialized world, while poverty remained high. “Deep reforms; lousy
growth,” says Mr. Hausmann, who is now at Harvard University. “There
must be something wrong with the theories of growth.”

Mr. Hausmann and a handful of development economists are rethinking the
free-market orthodoxy for Latin America. They argue that government
isn’t any longer the main drag on growth; indeed, it may often be the
solution. They advise governments to subsidize entrepreneurial projects
throughout Latin America, in the hopes of developing new businesses and
igniting growth. Given Latin America’s history of subsidies lining the
pockets of the rich, they also are devising policies to help
governments limit political influence. Even restricting free trade is
an option. “Industrial development for 200 years has involved the
selective use of trade protection, and it wasn’t captured by special
interests,” says Columbia University economist Joseph Stiglitz, a Nobel
laureate.

… Mr. Hausmann defends his policy flip-flop. “The role of the
scientist isn’t to commit to consistency but to the perception of
truth,” he says.

… [A] country economist for Bangladesh blanched at industrial policy.
“I’d be very scared of putting it in place” in a country with high
levels of corruption, he said. … [A]n economic adviser at the
[World]bank … says … development ideas have been stuck in a rut.
“This forces us to think of different hypotheses,” he says.

By MARY ANASTASIA O’GRADY , Wall St. Journal, March 4, 2005; Page A15
“When Stanley Fischer stepped down as deputy managing director of the
fund in 2001, he gave an interview in which he defended his liberal
bailout strategies during his tenure at the fund. ‘Those who emphasize
that IMF lending should be smaller and less frequent are implicitly
saying there should be much less international lending and reliance on
international capital markets,’ Mr. Fischer said.

Well, not exactly. What we are saying is that capital flows should be
proportional to the credibility earned by adhering to liberal
economics, limited government and respect for institutions. But that
makes demands. Why go there when IMF largess will paper over policy
mismanagement?

Closing down the IMF may be too much to hope for. But it is at least
important to note that Argentina provides two priceless lessons. The
first is that IMF largess not only damages reform momentum but also
exacerbates risk. The second is that borrowers and lenders can work out
bond defaults on their own, and when they do, incentives are likely to
return to the emerging markets, raising accountability in governance.”

by Douglas Sylva

… One can quickly discern the contempt
the UN feels towards the Philippines by reading the only two articles
on the Philippines that UNFPA has posted on its website. One article
describes the Philippines as a “demographic nightmare . . . where even
the Muslim clergy are more liberal on family planning than the
Catholics, led by the aptly named Cardinal Sin, Archbishop of Manila.”

“What went wrong? The Catholic Church
for one thing. From the pulpits and the nation’s tabloid press, church
leaders inveigh against contraceptives.”

Of course, nothing went wrong. The
Philippines’ success against AIDS should be a model for the rest of the
world. But the UN experts, blinded as they are by ideology, simply
cannot fathom how this could be…