Africa’s Jobless Growth: Economic success just for a few cannot be a replacement for human rights or participation, or democracy August

Africa is Rising! At Least Its 1% Is

 Zainab Usman*

Africa’s economy may be booming, but this will do little to help unemployment and poverty if growth is jobless and its spoils are limited to the few.

“What we need in Africa is balanced development. Economic success cannot be a replacement for human rights or participation, or democracy … it doesn’t work…it worries us a lot when we don’t see the trickle-through factor, when gain goes to the top 1% or 2%, leaving the rest behind.” – Mo Ibrahim October 15, 2012

It did not come as a surprise to many when, on October 15, the Mo Ibrahim Foundation announced that there was no winner for its annual $5 million African leadership award – for the third time since its inception in 2006. What was surprising, however, was that the foundation’s chair, British-Sudanese billionaire Mo Ibrahim, alsoadmonished the much-celebrated recent economic ‘success’ of the African continent for largely failing to translate into better human rights and social development, and for essentially creating a few elitist winners at the top whilst the rest were left struggling at the very bottom.

Recent reports, forecasts and editorials of influential financial magazines are incredibly optimisticabout Africa – its booming economic growth, its investment opportunities and its growing middle-class. Sub-Saharan African countries are reportedly among the fastest growing in the world with six out of ten world’s fastest growing economies, and recording growth rates averaging 4.9%, higher than the developing country average and much higher than the developed country average.

The Economist’s December 2011 print issue was boldly titled ‘Africa Rises’ and in August 2012, it again boldly proclaimed that ‘A Continent Goes Shopping’, underscoring the voracious purchasing power of the African middle-class to buy consumer and even luxury goods. The current received wisdom in these sleek reports, glossy magazine pages and glass-panelled conference rooms is that sub-Saharan Africa really is the place to be and to invest in, with all its abundant opportunities.

Jobless growth

This much-trumpeted economic success is mostly true, until one looks at the other side. Then questions arise over to what extent growth is spread across sectors of the economy, and whether such economic growth is translating into corresponding improvements in human and social development.

It is common knowledge that this new dawn of booming economic growth is largely the consequence of the recent rise in the global commodity prices of natural resources, chiefly oil, while the vibrancy of other sectors of the economy such as banking, telecommunications and construction trail behind in terms of growth. Many African countries primarily depend on the exportation of natural resources – and industry which is highly capital- (and technology-) intensive, providing few jobs. Only five of Africa’s fifty-four countries are currently not “either producing or looking for oil”.

It is therefore no surprise that many African countries, especially the economic powerhouses of the continent, are bedevilled by high unemployment, particularly amongst young people – hovering at25% in Egypt, 48% in South Africa and 42% in Nigeria. Thus, growth in capital-intensive sectors – such as resource exports, banking, and telecommunications – is barely trickling down to create jobs and economic opportunities for the vast majority of the people – a phenomenon commonly known as ‘jobless growth’.

Many sub-Saharan African countries experiencing record-level economic growth still have low rankings in human development indices, despite marginalimprovements in education enrolment and, with countrywide variations, maternal health. This contradiction is further reinforced by the growing inequality that characterises many of such African ‘powerhouses’. Luanda in Angola (thanks to flowing petro-dollars) and N’Djamena in Chad were, respectively, the second and eighth most expensive cities to live as an expatriate in 2012 – ahead of Sydney, London and New York according to Mercer’s Cost of Living Survey. Juba in the newly independent South Sudan is also gaining notoriety for its high cost of living, while the price of select real estate in Abuja and Lagos in Nigeria reportedly rivals that of some Western cities. These expensive cities are in countries grouped within the ‘Low Human Development’ category of the United Nation’s Human Development Indexbased on indicators such as health, income and education.

A tale of two cities

There has certainly been some improvement – for one, there is now an identifiable middle-class in Africa with money to splash around in the cinemas of Abuja and pricey hotels of Accra, the malls and retail outlets of Johannesburg and the exclusive residential estates of Lagos and Nairobi. However, once you step out of these glitzy inner cities and look to the outskirts, the glaring contrast between the shiny modernity and the urban deprivation in the slums hits you like the searing tropical sun.

 

The task thus remains for governments to devise sustainable development strategies that are tailored specifically to suit the African context. Such strategies must sustain the momentum of economic growth while ensuring that growth spreads to and strengthens sectors such as mechanised agriculture, light manufacturing and small-scale enterprises, which have a direct impact on the lives and incomes of citizens.

Such transformational policies should ensure that revenue windfalls are utilised wisely towards social and welfare policies, which will empower millions of Africans out of poverty, thereby creating a robust middle-class rather than just enriching an already existing sliver. It also means that such funds can be saved to help with later needs, as with the Sovereign Wealth Fund embarked on by countries such as Angola and the new oil-producer Ghana.

Importantly, the African youth bulge needs to be transformed into a demographic dividend by providing employment and economic opportunities to an increasingly educated African youth and by providing critically needed infrastructure so that abundant innovative ideas, which are capable of transforming lives and societies, can materialise into reality.

Ultimately, these are still governance challenges that Africa has a long way go to overcome, but the marginal improvements in some aspects of governance, especially women’s rights, as the Mo Ibrahim Foundation’s Index has shown, gives room for some cautious optimism. Mo Ibrahim’s admonishment could not have come at a better time.

Read @ it original source:http://thinkafricapress.com/development/mo-ibrahim-issues-timely-caution-afro-optimists?utm_content=buffer46624&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

 

*Zainab Usman is a Nigerian freelance writer. She is currently a DPhil candidate at the University of Oxford in Governance and Political Economy of Economic Diversification in Sub-Saharan Africa. She has a BSc in International Studies from Ahmadu Bello University Zaria and a Masters in International Political Economy and Development from the University of Birmingham. Zainab is an advocate of good governance, poverty reduction and women and youth empowerment. She regularly blogs atzainabusman.wordpress.com.

Is Poverty the fault, crime, of the poor?

 

 

 

 

 

The truth is that humanity must now confront, not just poverty, but a convergence of mega crises, all of which are deeply interconnected: Government corruption; ecological destabilization; structural debt; and hyper-consumerism established in the west and rapidly expanding worldwide.

 

 

 

 

 

Right now, a long and complicated process is underway to replace the UN Millennium Development Goals (MDGs), which expire in 2015, with new Sustainable Development Goals (SDGs). These will set the parameters for international development for the next 15 years and every government, UN agency, large corporation and NGO, not to mention billions of citizens on the planet have a stake.

Judging by what’s being produced, though, we have a serious problem. The best way to describe it is with an old joke: There’s a man driving through the countryside, trying to find a nearby town. He’s desperately lost and so when he sees a woman by the side of the road he pulls over and asks for directions. The woman scratches her head and says, “Well, I wouldn’t start from here.”

The best evidence of where the SDGs are starting from is the so-called “Zero Draft” document, first released on 3 June and currently undergoing exhaustive consultation.

First things to note are the big differences with the MDGs. Most strikingly, the SDGs suggest an end to poverty is possible in the next 15 years, whereas the MDGs aimed at halving it. The implication is that we’ve made amazing progress and are now on the home stretch. Secondly, the SDGs get serious about climate change. This is a major paradigm shift and, what’s more, they aim squarely at the heart of the problem: patterns of production and consumption. Impressive. Thirdly, reducing inequality “within and between” countries is included, with a goal of its own. This suggests another paradigm shift, and a controversial one because it opens the door, just a crack, to the idea that the extremely rich might be making an undue amount of their money off the backs of the extremely poor.

Of these three goals, it is fairly certain that two will disappear before the process concludes. There is no way the world’s rich governments and corporations will allow a meaningful challenge to production and consumption patterns, or a focus on reducing inequality. This is a given.

However, there is an even more important problem in the Zero Draft document which is that the very starting point of the issue is profoundly misconceived. How do we know? Because of the language. Language is a code that contains a lot more than its literal meaning, and an analysis of semantic frames in the Zero Draft exposes the logic upon which it is built.

Let’s take the opening paragraph:

“Poverty eradication is the greatest global challenge facing the world today and an indispensable requirement for sustainable development. We are therefore committed to freeing humanity from poverty and hunger as a matter of urgency.”

Poverty can be conceptualised in many ways and in this passage it is presented as both a preventable disease (“to be eradicated”) and as a prison (“to free humanity from”). In both, the framing reveals the framers’ view, conscious or otherwise, on causation. Diseases are just part of the natural world, so if poverty is a disease, it suggest that it is something for which no-one is to blame. The logic of a prison meanwhile is that people are in it for committing a crime. The former denies the idea that human actions may be a cause of inequality and poverty; the latter invokes the idea that poverty is the fault – the crime – of the poor.

Also note the phrase: “the greatest global challenge.” This asserts a logic in which there is a hierarchy of individual issues based on relative importance, with poverty at the top. The truth, however, is that humanity must confront a convergence of mega-crises all of which are deeply interconnected. Government corruption, ecological destabilisation, structural debt, hyper-consumerism established in the West and rapidly expanding in the east and south, for example, are all closely linked. But framing poverty as “the greatest global challenge” conceals the web of interconnected systems and removes them from consideration. The result: No systemic solutions can arise from a logic that denies systemic problems.

There is a good reason for this: it protects the status quo. This logic validates the current system and ordering of power by excusing it of blame and says it can, indeed must, continue business as usual. This is the logic of the corporate capitalist system.

There’s no denying that some excellent progress has been made since 1990 – the year the MDGs measure from – but you don’t need to deny that to know there is something fundamentally wrong with a global economy in which, at a time when wealth grew by 66%, the ratio of average incomes of the richest 5% and the poorest 20% rose from 202:1 to 275:1. Or that the reality masked by the ratios is that one third of all deaths since 1990 (432 million) have been poverty-related. Using UN figures, that’s more than double the combined deaths from the Two World Wars, Mao’s Great Leap Forward, Stalin’s purges, and all military and civilian deaths from the wars in Korea, Vietnam, Afghanistan and Iraq. What’s more, even though we are now seeing around 400,000 deaths every year from climate change, we are pumping 61% more greenhouse gasses into the atmosphere annually than we were in 1990.

The point is that, in light of the logic the language exposes – and we have mentioned just two of many possible examples telling the same story – any glorification of the SDGs we hear over the next year must be seen as reinforcing the logic their language contains.

To really tackle poverty, inequality and climate change, we would need to change that logic to one that is built on an acceptance of how much these problems are the result of human actions. And that the fact of living in poverty makes no inherent comment whatsoever on the person or people concerned, other than that they live in poverty. This in turn would make a wholly different type and scale of change feel like common sense. For example, it would feel obvious to work towards taxing carbon emissions at source and putting in place sanctions against those responsible for hoardingat least $26 trillion in tax havens. We would instinctively reach to introduce laws that give local authorities everywhere the right to revoke corporate charters for serious social or environmental misdeeds anywhere. And the big one: money. Ridiculous though it may sound, right now we allow private banks to control the supply of US dollars, euros and other major currencies that surge through the global economy. These banks charge everyone, including governments, interest on every note, thereby guaranteeing that a constant river of money flows into their coffers, along with immense power. But unfortunately, none of these issues will make it into the SDGs because they contradict the current, dominant logic, and what’s more, because they might actually work and redistribute power and wealth more equitably.

We compound our problems when we allow ourselves to be drawn into processes like the SDG-design are turning out to be. Every ounce of credence given to their frames helps weigh down the center of debate far from where it needs to be. Until the UN can use its powers, resources and privileges to promote policies that grow from the logic of its highest ideals, we may help it, the planet and each other best by divesting our attention from it and finding avenues for change that can.

This article was originally published by Common Dreams.

Read more @ http://commondreams.org/views/2014/08/06/hidden-shallows-global-poverty-eradication-efforts

How the Economic Machine Works

 

 

 

 

How the economic Machine works

Watch and read more @

http://www.economicprinciples.org/

http://bwater.com/Uploads/FileManager/research/how-the-economic-machine-works/ray_dalio__how_the_economic_machine_works__leveragings_and_deleveragings.pdf#page=2

 

 

The Human Factor in Innovation:Ethiopia Ranks Very Low in 2014 Global Innovation Index July 20, 2014

 

 

Global Innovation Index (GII) 2014:  This year, the theme of the report is the ‘Human Factor in Innovation’

The fundamental driver behind any innovation process is the human factor associated with it. We observe that some nations take the lead in innovation capability over others. A major factor for this disparity of innovation prowess is the quality of human capital linked to the innovation activities carried out in these nations. Otherfactors, such as technology and capital, also influence the innovation process; these directly correlate with the human factor. Hence nurturing human capital at all levels and in all sections of society can be crucial for developing the foundation for innovation.

Human-Centric Innovation: Inspired Talent Is the Engine of Innovation.

http://www.globalinnovationindex.org/content.aspx?page=gii-full-report-2014

 

Out of 143 countries listed in the Global Innovation Index report released in Sydney, Australia,  18th July 2014, Ethiopia  is in the 126th position. The score is 25.4.

Among Ethiopia’s poorest performances are:

Innovation input sub-index (128)

Ecological sustainability (136)

Political stability (136)

Regulatory quality (134)

Ease of starting business (130)

Human Capital & research (137)

Education   (136)

ICT access (133)

Logistics performance (133)

Online creativity (141)

http://www.globalinnovationindex.org/content.aspx?page=gii-full-report-2014#pdfopener

 

Switzerland, the United Kingdom and Sweden are the most innovative countries in the world – and Singapore is Asia’s most innovative economy. No African country made the first 39 spot in the ranking but Mauritius tops the list for African countries coming in at 40. Mauritius (40) and Seychelles  (51) beat South Africa (53rd) to the chase in the African continent. The regional winner, Mauritius,  has shown an impressive improvement of 13 places from 53rd in 2013. The  following Africa countries are in the first 100 rankings: Tunisia (78), Morocco (84), Kenya (85), Uganda (91), Botswana (92), Ghana (96), Cabo Verde (97), Senegal (98) and Egypt (99).

Top 10 in the  2014 rankings:

1. Switzerland

2. United Kingdom

3. Sweden

4. Finland

5. Netherlands

6. USA

7. Singapore

8. Denmark

9. Luxembourg

10. Hong Kong (China)

According to  the authors of the report: “These GII leaders have created well-linked innovation ecosystems, where investments in human capital combined with strong innovation infrastructures contribute to high levels of creativity.”

“In particular, the top 25 countries in the GII consistently score high in most indicators and have strengths in areas such as innovation infrastructure, including information and communication technologies; business sophistication such as knowledge workers, innovation linkages, and knowledge absorption; and innovation outputs such as creative goods and services and online creativity.”

11 of the bottom 20 countries are from Africa ( Ethiopia, Sudan, Burundi, Angola, Niger, Algeria, Zimbabwe, Swaziland, Benin, Guinea and Togo). These countries are making the 11 worst African countries.

The Global Innovation Index surveys 143 economies around the world, using 81 indicators – to gauge both their innovation capabilities and measurable results.

The annual rankings is published by Cornell University, INSEAD and the World Intellectual Property Organization.
To view the full list, click here

Theorizing Development

Theorizing Development

From historical perspectives, the urgency underlying the contemporary development quest of developing economies has been recognised for the last seven decades. Of course, this should not be considered as that there were no problems of development prior to 1940’s.  However, paralleling the increasing for economic self-determination and development of developing economies, there has been a tremendous growth in intellectual activity concerning the development problems.

The past 70 years have also witnessed a gluttony  of models, theories, and empirical investigations of the development problem and the possibilities offered for transforming Asia, African, Latin American, and Caribbean nations. This body of knowledge as come to be known in academics and policy circles as development economics.

In these perspectives development is discerned in the context of   sustained rise of an entire society and social system towards a better and ‘humane life’. What constitutes a better and humane life is an inquiry as old as humankind. Nevertheless, it must be regularly and systematically revised and answered over again in the unsteady milieu of the human society. Economists have agreed on at least on three universal or core values as a discernible and practical guidelines for understanding the gist of development (see Todaro,1994; Goulet, 1971; Soedjatmoko, 1985; Owens, 1987).  These core- values include:

Sustenance:

 the ability to meet basic needs: food, shelter, health and protection. A basic function of all economic activity, thus, is to provide a means of overcoming the helplessness and misery emerging from a lack of food, shelter, health and protection. The necessary conditions are improving the quality of life, rising per head income, the elimination of absolute poverty, greater employment opportunity and lessening income inequalities;

self-esteem:

which includes possessing education, technology, authenticity, identity, dignity, recognition, honour, a sense of worth and self respect, of not being used as a tool by others for their own exigency;

Freedom from servitude:

 to be able to choose. Human freedom includes emancipation from alienating material conditions of life and from social servitude to other people, nature, ignorance, misery, institutions, and dogmatic beliefs. Freedom includes an extended range of choices for societies and their members and together with a minimization of external restraints in the satiation of some social goals. Human freedom embraces personal security, the rule of law, and freedom of leisure, expression, political participation and equality of opportunity.

Sustained and accelerated increase and change in quantity and quantity of material goods and services (both in absolute and per capita), increase in productive capacity and structural transformation of production system (e.g. from agriculture to industry then to services and presently to knowledge based (new) economy), etc. hereinafter economic growth is a necessary if not a sufficient condition for development.

As elaborated in Hirischman (1981) and Lal (1983), this corpus of thought and knowledge denotes economics with a particular perspective of developing nations and the development process. It has come to shape the beliefs about the economic development of developing countries and policies and strategies that should be followed in this process. While development economics goes beyond the mere application of traditional economic principles to the study of developing economies, it remains an intellectual offspring and sub discipline of the mainstream economics discipline. The growth in economic knowledge and the corresponding intellectual maturation of development thought and policy debate has led to the appearance of various perspectives of thought on the theory and reality of development and underdevelopment within the same discipline of development economics. The two  main paradigms are neo-classicals (orthodox), and Political economy (neo-Marxists). There are also eclectics.

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