Obama and Africa

Following a G8 meeting where leaders announced a $20 billion commitment to help alleviate hunger and improve food security in the developing world, and a short stop-over in the Vatican to exchange pleasantries with the Pope, Barack Obama traveled to Ghana for his first presidential trip to the African continent.

Obama’s visit generated a wave of enthusiasm across the region, and he was welcomed in Ghana by a huge government delegation, as well as throngs of electrified Ghanaians. Needless to say, the president’s choice of Ghana elicited feelings of national pride for its people and its government – as noted by Cadman Atta Mills, the Ghanaian president’s brother and chairman of the National Economic Advisory board, “Ghanaians have extremely high expectations for this visit. A lot of it is sentimental and personal.” Knowing Accra, I’m sure the vibe there must have been incredible.

In spite of the historical nature of the visit, the speech delivered by Obama didn’t represent any dramatic shifts in the American position toward Africa. Some critics were disappointed that it didn’t represent more of a “shakeup of U.S.-Africa policy”; others lamented that it did not address the tougher issues such as the protection of human rights or how to deal with the continuing tragedies in Sudan and the Democratic Republic of Congo.

Still, l believe that Obama’s speech sent the crucial message-in no uncertain terms-that good governance is key to solving the continent’s chronic underdevelopment issues.

While this position does not represent a departure from previous administrations, who also touted democracy and good governance as fundamental elements of peace and prosperity, I think it’s important to take note of the concrete implications of Obama’s speech and visit.

Obama sends a powerful message by choosing Ghana over Kenya (his father’s homeland), Namibia, Botswana (both stable, democratic countries), South Africa (arguably the continent’s most successful nation), or, most significantly, Nigeria, Ghana’s resource-rich neighbor and the world’s fourth largest nation (and, by the way, also America’s biggest trading partner in sub-Saharan Africa; the U.S. imports about 20 percent of its oil from Nigeria…)

Obama explained that he chose Ghana, a nation of 23 million that has had two peaceful democratic transitions, to “highlight” its adherence to democratic principles and institutions, ensuring the kind of stability that brings prosperity. Nigeria, in contrast, is notorious for its entrenched corruption and chronic lack of effective governance – indeed, in spite of tremendous oil wealth, poverty rates are still alarmingly high (70% of the population fell under the poverty line in 2007.)

His words were quite stern:

“This isn’t just some abstract notion that we’re trying to impose on Africa […] The African continent is a place of extraordinary promise as well as challenges. We’re not going to be able to fulfill those promises unless we see better governance”

“No country is going to create wealth if its leaders exploit the economy to enrich themselves, or police can be bought off by drug traffickers […] No business wants to invest in a place where the government skims 20 percent off the top, or the head of the port authority is corrupt. No person wants to live in a society where the rule of law gives way to the rule of brutality and bribery. That is not democracy, that is tyranny, and now is the time for it to end.”

By “snubbing” Nigeria and pointing to Ghana as an example of good governance in the region, Obama is probably also hoping to signal to the Ghanaian government that he is expecting them not to mismanage the profits from the country’s new-found offshore oil. A well-timed message, as large oil deposits were recently discovered off the coast of Ghana, with production slated to come online in the next couple of years – and along with it, a steep increase in government revenues. There is reason to hope that the country will be stepping up to its responsibilities. Ghana’s energy minister,Joe Oteng-Adjei, recently declared: “We are committed to doing the right thing for investors and for the country … our concern is that we bring in a third party to deliver the synergies that we expect.”

Human Rights Watch recently released a grim report on Equatorial Guinea, reminding us that the “resource curse” is still very much a reality to contend with in Africa:

“Since oil was discovered there in the early 1990s, Equatorial Guinea’s GDP has increased more than 5,000 percent, and the country has become the fourth-largest oil producer in sub-Saharan Africa. At the same time, living standards for the country’s 500,000 people have not substantially improved. Here is a country where people should have the per capita wealth of Spain or Italy, but instead they live in poverty worse than in Afghanistan or Chad.”

Additionally, many countries in Africa face a common challenge of having to address the creation or strengthening of institutions that guarantee the rule of law and enforce respect for the constitutional rights of citizens. Ghana has done well on that front, especially relative to most other countries in the region, and it’s clear to all of Ghana’s neighbors (particularly Nigeria) that to win the favor of the U.S. and its charismatic president, a proactive stance on good governance is necessary.

In spite of Obama’s strong and meaningful message, I don’t think this is a watershed moment in the U.S.-Africa relationship. First off, for all the verbal commitments to being “a friend and a partner every step of the way,” let’s get real about what the current recession implies: a bit of turning inwards for rich countries who will again not deliver the necessary policy changes to really make a difference; the lowering of tariffs for African products; a complete overhaul of agricultural subsidies – these are among some of the critical areas for policy intervention. In this climate of fiscal constraint and tightening credit across the globe, access to finance is also a key issue for African development. Despite their significance for the continent, Obama failed to speak about the aforementioned issues.

Probably because he knows that in one brief (albeit historical) visit, and one speech, one can only deliver so much.

Bono’s assessment is that “presidential attention would be a shot in the arm for these [anti-corruption, rule of law improvement] efforts — an infusion of moral and political amino acids that, by the way, will make aid dollars go further.”

I’d like to believe that a one-day visit to West Africa and a speech before the Ghanaian parliament could truly galvanize country-level efforts in promoting effective democracy. But, at the risk of stretching Bill Easterly’s Man in Charge argument, I think we need to have a humbler understanding of what this speech means for America’s relationship with Africa. Efficiently dealing with issues as varied as corruption, nonexistent infrastructure, protracted conflicts or subpar education, will require significant – if not dramatic – shifts in policy and attitudes. While Bono seems to believe that Obama’s words inevitably produce change, African commentators are (surprisingly?) far more sober in their assessments. An editorial in the South African Daily News notes that “even the most devoted Obama fans are aware of the fact that the first black American president – whom they love to call a ‘son of Africa’ – cannot solve the continent’s many problems.”

I agree with David Rothkopf, who discusses the natural limitations of presidential influence and power: “It’s time recognize that it really does take a big team of empowered leaders to make the complex foreign policy of the U.S. work and evolve in the right directions. It’s time to recognize that it does not reflect badly on the president if we all agree he cannot transform the world single handedly, that however different he may be from his predecessors, that alone is not enough.”

Getting it wrong

A recurrent theme in international development is the issue of measuring and reporting aid effectiveness – this topic gets a lot of buzz, and rightly so. Especially in an age of fiscal constraints, it is ever more important to deploy funding to projects that work. There’s a lot of debate about whether official development aid is more effective than chanelling funding through small local NGOs, big international ones, or something in between. What I find baffling is that a lot of people are willing to say that one is the better alternative – personally, I think that there are some government agencies, some NGOs (large/small) that are good at handling aid money, and others that aren’t. Dismissing one model for the other doesn’t make any sense, given how heterogenous the group is. 

As the excellent blog Good Intentions are Not Enough points out, one of the main problems with aid agency/NGO reporting is the fact that negative findings are often swept under the rug, or spun into a positive narrative because these agencies are afraid of jeopardizing their sources of fuding. The problem is that funders often don’t have the capacity to closely monitor/evaluate the impact of their donation, and rely on reporting from their grantee… Which is obviously problematic, for a number of reasons. Even if the grantee outsources evaluation to a third party, the results that filter back to the donor aren’t always guaranteed to accurately reflect reality. There’s also the issue of overstating a crisis or situation to attract funding, another dangerous and unsustainable practice. Organizations and agencies that receive aid are all actually competing for resources – they are, after all, entities that employ staff etc. and whose own existence depends on the existence of a need, a crisis, a situation that has to be addressed. It’s no wonder that they tend to overstate, spin, or misreport the facts to their donors – for some, it is a matter of organizational survival. 

It makes it complicated to evaluate the effectiveness of aid in this context: not only do you generally have to contend with insufficient monitoring mechanisms at the project level, which make it difficult to know whether any quantifiable objectives are met, but there are also all these qualitative dimensions that come into play. The straightforward elements of evaluating aid effectiveness can sometimes be overshadowed by subjectivity – the reputation of an organization, who’s on the board,  its ability to serve beneficiaries at scale…etc. And let’s not forget the highly political nature of official development aid – the fact that Israel, Egypt, Colombia and Pakistan are the countries which receive the most American official development aid (ODA) is a telling fact (not counting Iraq and Afghanistan.) To genuinely evaluate the effectiveness of aid, we shouldn’t just be looking at the glossy quarterly and year end reports. For some well-entrenched organizations and agencies, the validity of their model, of their projects is barely questioned.

Interestingly, when it comes to ODA, there seems to be a correlation between the degree of aid dependency and lack of transparency and accountability on the part of the recipient government. (“The Open Budget Survey reveals that those countries performing least well in terms of budget transparency practices share certain characteristics, including lower income levels, dependence on foreign aid, reliance on revenues from hydrocarbon extraction, and weak democratic institutions.”) For a lot of these countries, ODA is their principal lifeline, and to stop the flow of funds would probably have catastrophic consequences for the population (actually, that is an assumption – would be interesting to find out what impact lower levels of ODA would have on a country like Liberia)

The whole “aid effectiveness” debate is rather obscured, in my opinion, by political and subjective factors – how can we effectively evaluate the impact of aid when aid disbursements themselves aren’t based on genuine levels of need, but rather on how well the agency, organization or government is able to convince donors of that need. Whether one looks at ODA, or funding for agencies/NGOs carrying out development activities in low income countries, we’re never going to be serious about “aid effectiveness” until we look at the full process, from needs assessment to expost evaluation.

Until we are able (willing?) to do so, we’ll have to accept a certain degree of inefficiency when it comes to aid. It’s not a perfect system, far from it, but the fact that such vigorous debate exists around development aid – in all of its forms – is a hopefully a sign that, as time goes by, we’ll be much more sophisticated when it comes to efficient aid allocation, monitoring and evaluation.

Apparently, World Vision in Liberia didn’t get that memo.

A disturbing example of large scale corruption within NGOs just emerged in Liberia. Astonishingly, 90% of World Vision’s aid to Liberia went missing – they lost $1mm as their project managers were selling food and using construction materials that were supposed to benefit Liberians (World Vision was a sub-grantee for food distribution and food-for-work projects.)

World Vision calculated that $884,681 worth of food was missing, with a total loss, including ocean freight expenses to ship the food to Liberia, of $1.45 million. 

The United States spent an additional $300,000 for construction materials, most of which were never used on the intended projects.

Unfortunately for World Vision, it means that their fundraising will suffer as a result – while this is obviously too bad for them and the beneficiaries of their other, functional projects, there is no reason why donors should not sanction World Vision for its lack of oversight. World Vision apparently employs 250 people in Liberia, which is quite significant – besides other international organizations or the government, there are few employers of this size in Liberia (hence the 85% unemployment rate…) and they’ve been operating there since the early 80s – it’s quite unbelievable and unacceptable that it took them 2 years  to uncover this massive fraud. 

I honestly have no idea how something of this scale could have occured – how is it possible that no one realized that 34 of the towns intended to benefit from this project didn’t exist? It really says a lot about WV’s management capacity and how (un)rigorous their internal monitoring mechanisms are. In addition, in a context of poverty, how could over a million dollars disappear discreetly? 

Quite apart from the fact that their Community Resettlement and Rehabilitation Project ended up being a massive failure because of this fraud, it’s also worth noting that their model of importing food from the United States for aid is a flawed approach – why not purchase locally and support the Liberian agricultural sector and its small-holder farmers? Owen Barder recently wrote  that instead of importing food aid to Ethiopia, cash transfers would be more effective in combating hunger (which makes a lot of sense, by the way: in doing so, you would reduce the cost of providing food aid). I suppose the risk here is that people may not use the cash for its intended purpose – but the counter-argument is that if the person would naturally use the cash for whatever is their greatest need, which hopefully doesn’t involve getting drunk at the local bar…(more about purchasing food aid locally here, and more about untying food aid here)

I have serious beef with this World Vision drama: not only did they fail the people of Liberia by botching the design and execution of its CRRP, but this is also going to contribute to increasing the distrust for organizations doing similar work. The “public relations disaster” mentioned by Kleinman is not limited to WV, but will have repercussions for other NGOs. Shame. 

Warning: shameless plug

As for The Niapele Project’s School Nutrition Initiative in Liberia, we just received a small grant from the GO Campaign to cover the start-up costs of the project. While we certainly don’t have the ability to operate at a scale quite like a large INGO, we’re still planning on feeding 600 kids/day during the upcoming school year. And we take monitoring seriously – in addition to having trustworthy program coordinators, we track the impact of the program through regular medical assessments. We’ll also be sourcing food items for the project from an agricultural co-op in Central Liberia which is run by a local grassroots organization, Malaya. While we don’t have the enormous budget, staff and long standing experience of World Vision in Liberia, Niapele’s work in Liberia is guided by an honest assessment of needs at the community level, and we believe that our small-scale impact will be long lasting. 

Dead Aid Bandwagon

If you are a development nerd, you have probably read ad nauseam about Dambisa Moyo’s new book, Dead Aid. In the last few months, there has been an interesting debate happening between different schools of thought. Essentially, Moyo argues that foreign aid to African countries is one of the preeminent root causes of Africa’s underdevelopment (for lack of a better word), and that instead of throwing billions of (wasted) dollars into the hands of dicators, African governments should instead be given access to more private finance. 


Having worked at the World Bank and Goldman Sachs, Moyo – who hails from Zambia – offers a refreshing perspective on the aid debate (which is typically dominated by white males… no surprises there, right?)


Her book unleashed an outpouring of commentary – some condemning her views, others wholeheartedly agreeing, and everything in between. I have been tempted to throw in my two cents, but the more I read about it, the more convinced I am that a) everything that could be said, has been said and, b) the debate over whether aid should be stopped or not is such a macro discussion that, ultimately, we’re getting stuck at the “50,000 foot” view – and that doesn’t really help move the debate forward constructively. Because, as we all know, foreign aid will NOT end – even if you were able to show by a+b=c that aid caused most of Africa’s problems, Official Development Aid (ODA) is still a critical foreign policy tool, and to call for its halt is unrealistic.

Anyway.  

Most recently, Francis Fukuyama voiced his opinion on the matter in Slate. He compares Moyo’s argument with another prominent African scholar’s views, Wangari Maatai. His piece, I thought, actually touches on a couple of really key issues, which most commentary on “Dead Aid” have failed to focus on. Excerpt:

Both women see sub-Saharan Africa’s fundamental problem not as one of resources, human or natural, or as a matter of geography, but, rather, as one of bad government. Far too many regimes in Africa have become patronage machines in which political power is sought by “big men” for the sole purpose of acquiring resources—resources that are funneled either back to the networks of supporters who helped a particular leader come to power or else into the proverbial Swiss bank account. There is no concept of public good; politics has devolved instead into a zero-sum struggle to appropriate the state and whatever assets it can control.

This view actually echoes what one of the most prominent French African scholars, Jean Francois Bayart, writes in his book “L’Etat en Afrique: La politique du ventre“. In this book, he writes that the “politics of the belly” – which is to say the political culture that is prevalent in Africa whereby rulers seek to accumulate power and possessions –  is not only the fundamental issue that has been plaguing the continent, but also a product of its very particular social, political and economic history. In his book (which I unfortunately don’t think has been translated into English), he describes how complex social and political networks arose in the context of colonial and post colonial sub-Saharan Africa, and how the polity that emerged is defined by an intricate interplay between foreign dependency, reliance on local (and often socially constructed) tribal or ethnic identities and leaders’ destructive desire to selfishly accumulate resources. 

Of course, given that we’re talking about a whole continent, generalizations are very hard to make – so while one can certainly find counter points to Bayart and Fukuyama’s argument, there is an element of truth to it, which to me captures the most powerful criticism of Moyo’s book: it’s not aid per se that’s the problem – it’s what’s being done with it, and how it’s being managed. And of course, Moyo knows this. But, as Owen Barder notes:

It seems to me that Dambisa Moyo has set up a false dichotomy between aid and entrepreneurship. Many of the things Moyo would like to see – better access to financial services, a better business environment, lower tariffs – can be (and are) supported by aid. 

It’s been frustrating to read Bono’s response to Moyo, as well as the reactions from a lot of people “shocked” that Moyo would call for an end to foreign aid. But, if (like me…) you subscribe to the Easterly school of thought that holds that most ODA ends up being horribly wasted and that an entirely new ODA regime needs to come about, then her argument, while virulent and, frankly, aggressive, makes sense. 

Just recently, from (of all places) USA Today:

Two United Nations agencies spent millions in U.S. money on substandard Afghanistan construction projects, including a central bank without electricity and a bridge at risk of “life threatening” collapse. 

In the current context, I think it’s great to debate the virtues (or lack thereof) of ODA – however, focusing on that macro question shouldn’t be a reason to turn our focus away from the real issue: today, there are millions of aid dollars at work – how do we actually make them work, with a view to incrementally decrease countries’ dependence on foreign assistance? 

Oh, aid effectiveness… You are hella elusive. 

Understanding the poor?

I’ve been neglecting my little corner of the internet these past couple of weeks… Blogging can be a serious “monkey on your back” situation, and the more I put it off, the less motivated I become to write. Also, the fact that I’ve been doing a lot of writing and editing at work every day probably compounds this… Anyway, poor excuses. There is a lot I want to share, like for example (and in no particular order), my impressions of Peru, the value of a trillion dollars, Obama’s greying hair and the ICC indictment of President Bashir (great article by Alex de Waal, who is The Authority on Darfur).


But I won’t… Not today, at least (although chances are I will never write about Obama’s hair). One of my colleagues forwarded an article from the Stanford Social Innovation Review a few weeks back, noting that the last couple paragraphs completely jive with our organization’s mission (hurray! I agree with the conclusions of the article, and it gave me a warm fuzzy feeling that I spend my days working for an organization that embraces those principles) 

The author, Aneel Karnani, makes a lot of good points in this article called “Romanticizing the Poor”. He lays to rest a lot of misconceptions about the business opportunities that exist at the bottom of the pyramid – his main thesis is that poor people are not necessarily aspiring entrepreneurs (as many advocates of microfinance see it), nor are they particularly discerning consumers (as corporations like to portray). Excerpt:

Beneath these beliefs in the market readiness of poor people lies a more basic assumption: people in dire straits are well-informed and rational economic actors. Yet this view denies the fact that poor people often act against their own self-interest. Of course, wealthier people sometimes do so, too. But poor people face far worse consequences for their bad choices than do more affluent people. And so romanticized views of BOP people as value-conscious consumers and resilient entrepreneurs are not only false, but also harmful. These views lead states to build too few legal, regulatory, and social mechanisms to protect the poor, as well as to rely too heavily on market solutions to poverty.

To support his views, he makes a number of compelling (and honest) arguments that deconstruct a “romanticized” vision of the poor, which rests on the assumption that they are rational economic actors. Of course, because he’s talking about billions of people in a general way, these are clearly sweeping generalizations – but like all generalizations, there is a lot of truth to what he’s saying. 

He notes, for example, that people who live in poverty tend to spend inordinate amounts of money on celebrations, festivals and what I will call, broadly speaking, escapism (he cites a recent field study in Sri Lanka which reveals that more than 10% of poor male respondents regularly spend their entire incomes on alcohol). This really resonates with me – I am still unable to understand why Liberian refugees in Ghana needed to have a costly “Miss Liberia” pageant, or make t-shirts for every last occasion of the year (you essentially cannot be a “real” organization or club until you have a t-shirt with your motto and logo on it). That always struck me as an immense waste of resources, particularly in a context of complete and utter need – you wouldn’t be pressed to find someone telling you about their t-shirt order and in the same breath asking you for money to buy food/water/go to the clinic.

I remember trying to organize a half day workshop on nutrition for the staff of the school I was volunteering at – I drew up a budget, and discussed it with my local colleague. He pointed out that my food/refreshment line item was quite small – indeed, I had only accounted for the purchase of water and some basic snacks. He explained that “no one would show up” unless I had the event catered and everyone got a “soft drink”. Yes – catered. In the end, most of the costs of the workshop were food related. I thought this was because I was white and therefore incredibly rich, of course, that people expected this. But time after time, I heard about these “catered workshops” during my time in the refugee camp.

Another trend which Karnani points to is how corporations take advantage of the lack of regulations in order to market products that are detrimental to a person’s health – such as liquor in very small (and therefore very affordable) packages. This brings up another memory: small sachets of rum that would litter the ground of the refugee camp. Except they weren’t being made by large foreign corporations but by smart local entrepreneurs – these are the guys who are really taking advantage of business opportunities at the bottom of the pyramid. This is a point I disagree on slightly – Karnani says: “It is not only tobacco and alcohol companies that exploit the weaknesses of the poor: Even Unilever, a consumer products company, preys on the anxieties of disadvantaged people” Umm… wait: it’s not only tobacco and alcohol companies marketing to the poor that exploit weaknesses – that’s what every single company that markets a non-essential product does!! Everyone on the planet is subject to shameless marketing, not just the poor. The difference is, though, is that I know I don’t “need” a blanket with arm holes (even though I know a lot of people who would fight me on this, but bear with me). At the bottom of the pyramid, as Karnani writes,

” …yet these advocates do not acknowledge that the poor lack the education, information, and other economic, cultural, and social capital that would allow them to take advantage of—and shield themselves against—the vagaries of the free market.”

I think he nails it with that sentence.

I really think that it ultimately boils down to education – what I’m talking about though, goes much beyond the Millenium Development Goal of providing primary education to all the world’s children by 2015 (that ain’t happening, by the way). In my mind, “education” comprises formal education at all levels, including the promotion of university or technical degrees, as well as skills and knowledge transfer. For micro, small and medium size enterprises, good leadership and sound management are essential for success – neither of these skills is born out of thin air, and individuals need to somehow acquire them. A direct result of this is the increased premium places on capacity building and technical assistance as crucial complements of financing for any informal organization or business in the developing world.

As Karnani accurately notes, for individuals to “take advantage of and shield themselves from the vagaries of the free market”, a strong regulatory framework is imperative. Consumers need to be protected and industries promoted, controlled and appropriately incentivized – isn’t that what we ask from our own governments? (well, perhaps Rush Limbaugh disagrees…) 

An interesting and rather intense debate took place over at Nextbillion.net regarding this piece – one of the scholars that Karnani criticizes in his piece, Al Hammond, responds to Karnani in no uncertain terms. I highly recommend checking out the vitriolic back and forth. Here‘s a softer response to Karnani’s article.

Karnani’s article is a must-read – as my good friend CPL said, “that’s one of the best most honest pieces I have read in a long time.”

Oh, and here are a couple of photos from my trip to Peru


From 2009 pics

This man owns and runs a cheese factory/shop in the mountain town of Cajamarca, Peru. He started his business about 10 years ago, and now sells cheese in different regions of the country – his marketing strategy was developed with the help of a local economic development organization. He told us his story and showed us around his facilities, describing which challenges he faced as a small business owner – very enlightening. I’ll admit the cheese wasn’t really all that great (I’m from France… I have discerning taste in cheese), but on the other hand the dulce de leche (displayed in the center of the photo), was amazingly good. 



From 2009 pics

And this is “Lima-by-Night”, viewed from the neighborhood of Barranco (I want to live there). Yes, it’s a ginormous illuminated crucifix. 


Not buyin’ it

From the Freakonomics blog:

According to this Reuters article, charitable contributions are down in the U.S. only “modestly” so far this year. But charitable giving, unlike the stock market, is a lagging indicator.

“That’s funny”, I thought. Because, from my perspective, charitable contributions have seriously decreased since September. If you actually read the Reuters article mentioned above, it becomes clear that the bulk of charitable funds available for non-profits is for programs in the US only. Which is fine, and it makes sense: hard times call for more solidarity with your compadres.

Not surprisingly, though, organizations doing work in the developing world are taking a hit – funds pledged are drawn out over longer periods of time, or have been retracted. In other cases, donors simply choose to divert their support towards domestic causes, or give a smaller proportion of their charitable contributions for foreign based programs. And, since I work for organizations doing work outside the US, I’m witnessing first hand the effects of this drop in funding: programs being cut, postponed, canceled.

It’s too bad, as a lot of work being done in poverty alleviation outside the US was reaping results – and, as these tough economic times are also affecting developing countries, support for vulnerable people and poverty reduction initiatives (broadly speaking) are ever more necessary.

(I’m curious to see statistics about charitable giving a year from now – the real plunge in funding began around September, and, as the article notes, there is a lag.)

On an unrelated note, this really struck a chord with me: we have a “macromyopia” problem.