Friday, January 29, 2010

The African Union Coup D’état

There are some diplomatic backdoor dealings to usurp the position of the Chairmanship of the African Union at its annual meeting in Ethiopia this week. As already agreed by African leaders, the position of chairman of the African Union rotates every year on a regional basis. Libyan leader Muammar Gaddafi who has been Chairman of the African Union for the past year is expected to hand over to a new Chairman representing Southern Africa. However, Tunisia is seriously backing a proposal to extend the chairmanship of Gaddafi for one more year. This smells like a coup d’état in the continental body. Oh ho Africa! Everybody knows about Africa’s penchant for coup d’états and instituting one party states. And in recent times, changing constitutional two term limits to allow for third terms. But at least their undemocratic practices have been limited to their individual countries. How will anybody take them serious when they cannot even adhere to simple rules they have agreed on for their continental body.
Gaddafi’s controversiality aside, there is absolutely no justification for extending the chairman ship of Libya especially when the Southern Africans have already agreed among themselves to elect the Malawian president as their representative to chair the African Union. According to Libya’s foreign minister in Addis Ababa, Libya's vision for a "United States of Africa" (USA) needs more time and energy to be completed. Other analysts are saying Libya is one of the continent's heavyweights and is one of member countries that bear the financial burden of contributions to the AU. How nice! We have heard all these before. These reasons are very familiar refrain African leaders use to justify their undemocratic practices – ‘we need more time to implement our good policies’, ‘the country has prospered under my leadership so I need a third term to make things even better’. As if they cannot contribute to the development of their countries if they are not presidents. After over 50 years of justifications for their undemocratic practices, the economy of Africa is nothing to write home about. It is good that Mozambique and Malawi have registered their protests to this coup d’état at the African Union. Libya can still implement it vision of a ‘A United States of Africa’ as well as continue it financial support of the African Union without still being president. In any case it is inconceivable that Libya will be able to make any meaningful headway in it USA plan even if they are given the chairmanship for 5 years. After all the USA idea was conceived in the 1960s and yet there has not been any signs pointing to any kind of USA in the near future in Africa.

Thursday, January 28, 2010

Private Enterprise in Ghana

This week i read about a politician in Ghana telling the youth as well as new graduates to establish their own businesses instead of looking at the government sector for jobs. In fact this is an issue that both the ruling government and the opposition parties have raise several times and frankly I think they should be lauded for encouraging free enterprise. After all, it is a widely accepted principle throughout the world that the private sector is the engine of growth and that is where most of the opportunities in new innovation and speedy salary increases lie. However, I don’t think these politicians should stop at just telling the youth to turn to the private sector for job opportunities. These public officials will have to back their rhetoric with the right incentives to refocus the attention of the youth on the tremendous opportunities that exist in the private sector. In any case, innovation in private enterprise is their most potential part to economic development.
In fact it is not that the youth do know about the opportunities in the private sector (you don’t need to have a PhD to know about the flexibility of work and the unlimited salary opportunities in the private sector), but currently there is more incentives to work in politics than the private sector. The private sector rewards hard work and often times you need to work long hours, weekends and sometimes deal with a great deal of uncertainty during the initial stages of a business endeavor. However, once you hit it in business, you hit really big. One of my very successful entrepreneur friends told me that an average entrepreneur will need about 5 years of incubation period to establish a successful business. However, all too often in Ghana, when you are a politician, you don’t have to deal with this incubation period of starting a business. People become rich overnight as soon as they enter into politics. And the juicy part is that on top of the comfortable living, you also become untouchable by the law. Politicians who prior to entering the government had no cars or at best some rickety car that can easily give you tetanus are all of a sudden ridding brand new $40,000 cars, living in the plushest parts of town and travelling abroad like nobody’s business. They are waited on like monarchs with personal security, a chain of office assistants (messengers) and domestic servants. These politicians enjoy facilities that people who have been in business for 20 years cannot even afford to provide for themselves. And talk about power, they have more than they even need. Politicians are hardly stopped or harassed by the police, they do no wrong and favors are lined up for them wherever they go. By the time they are out of politics, they have two or three houses and a fleet of cars to their name. So the average youth is not stupid – it is all about the discount rate. There can be potential reward in starting your own business. Once you have crossed the incubation period of business, there are potential goldmines (that is assuming the state is not going to come after you). But at the end of the day why would anybody want to go through the difficulty and hardship of the incubation process when you can easily hit it big in politics.
If they want us to start our own business then they should work to dispel the idea that politics is where the easy money is. First instead of all those expensive cars they buy for politicians with our tax money, they can do with some modest cars to reflect the economic realities in the country. Second, the lip service of zero tolerance for corruption should end. There should be proper system of accountability for public officials and people found in contravention of the law should be dealt with severely. The people’s money should never be easy for the picking of politicians. Also, everybody should be treated equally before the law irrespective of your income or place in life. The security forces should stop hiding under the cloak of ‘we are performing our duties’ and stop the mishandling of citizens even before they are brought before a court of law. In addition, government agencies must have a standard operating procedure (SOP) to which all bureaucrats must strictly follow. With a strictly enforced SOP the issue of favoring politicians over others will cease. Further, each program of study at the secondary schools and tertiary institutions must have a course on entrepreneurship on their curriculum to teach people how they can easily translate their skills into successful private ventures. And most importantly, credit should be easily available for people to start their own business.

Monday, January 25, 2010

The Value of Environmental Protection

At the last climate conference in Copenhagen, the developed countries once again re-echoed the need for developing countries to be more environmentally responsible. There seem to be a convergence in the literature that global warming is real and it is being accelerated by human activities. It is therefore seems sensible that we make the right decisions to decrease our foot print on the environment. In any case, the environment supports our life systems on earth. However, one thing that most people, especially those in the developed world have failed to realize is that any sense of environmental quality is a luxury for many people in the developing world. I always tell my students and my colleagues that environmental quality should be seen as a higher need above the basic needs category in Maslow’s Hierarchy of Needs. It is only when you have been able to satisfy your basic needs (food, shelter, clothing) that environmental quality really becomes a need. For many in the developing world, the last thing they want to hear is any system that increases the cost of production now for the reason that we are safeguarding the environment for tomorrow. The experts will tell you that being poor is still no reason to be environmentally careless because environmental degradation will in the long run lead to more poverty. There is no dispute that environmental quality, in the long run is inextricably linked to economic development and poverty alleviation. But the issue is that in the long run those who do not have the ability to satisfy their basic needs will be dead. So what is the incentive now to protect the environment – NONE. It is therefore not surprising that in the developing world it is uncommon to see proper smoke belching factories. Western companies facing straighter environmental standards home quickly relocate to developing countries where they can pollute like they own the atmosphere. It is not that the developing country authorities do not care about the future cost (and sometimes immediate cost) of environmental pollution, but to them the most important bottom line is the reducing the double digit unemployment rate, raising more revenue to improve health care, water supply, increase agricultural yields etc. In any case, if one developing country were to put in place a straighter environmental regime, the companies will quickly relocate to where it is the cheapest to produce (often with less stringent environmental rules). Can you imagine telling your constituents that “eh eh the reason why the local company employing 20% of the labor force has relocated or closed is because they have a high carbon emission”. You will be gone in no time.

According to Gallup Poll Americans have always rated the environmental protection higher than the economic growth. However, for the first time in over 25 years, Americans in 2009 rated the economic growth higher than the environmental protection. The reason? - In 2008/9, Americans were told they were facing the worst depression since the 1930s. With the record bank failures, mortgage foreclosures and high unemployment rate, American saw their very basic needs being threatened. So, just like the people in the developing world, without the comfort of satisfying your basic needs, there is no real need to care for the environment.

Prior to the economy getting to the brink of collapse, it made sense for Americans to put environmental quality over economic growth. With an already strong economy, most people were able to satisfy their basic needs. Lower environmental standards threaten their existing lifestyles (which included the basic needs). Environmental protection therefore serves to preserve the ecosystem and hence their existing lifestyles. However, many in the developing world are now struggling to have a lifestyle and therefore places very little premium on the environment. Developing countries will only put a lot more emphasis on environmental quality if majority of the people are able to reach middle income level so that they will also feel a threat to their lifestyles by a degrading environment. The developed countries can sit down and wait for a middle class to emerge in the developing world or they can accelerate the process by offering more assistance to the developing countries to accelerate development and the emergence of a middle class in the developed world.

Sunday, January 24, 2010

The Crotch Bomber

Umar Farouk Abdulmutallab has changed any delusional thinking that Black Africans can never be suicide bombers. But most shocking was the fact that the Christmas Day Bomber (my favorite – crotch Bomber) was a Nigerian. Nigerians are generally known for one thing – those guys like money and they will do whatever it takes to get rich. Although there are pockets of ‘Radicals’, Nigerians are hardly known for sacrificing themselves for a cause. No matter how you look at what Farouk did, he has succeeded in labeling all black Africans potential suicide bombers and has added one more ‘accolade’ to the already soiled Nigerian image. One issue that has seen very little discussion, especially in African circles, is how young Farouk was when his parents sent him abroad for studies. We in Africa are often striving – almost to an obsession- to send our kids abroad for studies. In any case, why blame the African parent. Truth be told, our educational system is too often riddled with industrial strikes, embroiled in petty party politics and suffers from systemic neglect. Besides, a university degree from abroad can easily be a job certificate in Africa. Even people who participate in short term (I mean days) training programs abroad go round touting that they are better than the average citizen because they are American Trained, British Educated etc – so why blame the African parent who wants the best for his or her child. But the critical question is how young should these kids be sent abroad and how prepared are these young Africans to handle the pressures of living abroad. In the case of Farouk, he was sent abroad as a teenager, when he was the most vulnerable. The average African kid from a middle income or rich family is just not equipped to survive unsupervised abroad. A combination of culture and riches socializes these kids to almost complete dependence on their parents. They usually thrive on an elaborate support system made up of extended family members and hired servants. Many of these kids taste real independence for the first time when they leave home for college. They often find themselves isolated from their family and the support system that they have been used to all their lives. Imagine being isolated and also in the middle of an unfamiliar culture which can be very brutal to the weak minded. It is under these conditions that these kids are their most vulnerable. We can deduce from Umar’s web postings that he was just not prepared to handle all the challenges of independent living abroad. In the case of Farouk, it was the combination of his Moslem piety and isolation that set the stage for his eventual crotch bombing attempt. But before his infamous Christmas day attempt, many of these isolated kids abroad like him have been caught in thievery, experimented with drugs, cigarettes, prostitution and all kinds of vices that will make their parents back in Africa cringe if they found out. So my piece to the parents is, Africa may not have the best schools but you have to be careful when and where you send your young child. He may not end up like Farouk – a crotch bomber – but he may turn to something completely different than you ever envisaged. Sometimes it is better to keep your child right under your nose where you can straighten him with the ‘proper African discipline’ if he were to start bending. And if you decide to send them abroad, make sure you prepare them well for the challenges ahead.