Monday, April 18, 2005

Rock stars and logic do not mix

We are heading into the dreaded G-7 summit in Edinburgh in July, when new ways of pouring money into the bottomless pit of corrupt Third World dictatorial treasure troves and NGOs will be thrashed out.

Apparently an agreement between Britain and the United States on debt relief that would put already poor nations even lower down in the scale of credit-worthiness is on the cards, though there are still differences about raising the amount of aid.

Well, long may those differences remains. We are not talking about action that is neutral in its effect. Handing over more money to the existing systems will actually make matters worse. By our breast-beating and bleeding-hearts interference we are actively condemning large numbers of people to continuing poverty and oppression.

Ah but we are going to ask for good governance. Oh we are, are we? And from whom are we going to ask it? Come to think of it, how is good governance to be defined or monitored?

Let us recall that various NGOs, many of whom have registered as sponsors for the ineffably silly Make Poverty History website, have already been squeaking about not imposing western values and making sure that reforms are introduced by the developing countries’ own governments.

As they have not introduced a single reform so far and unlikely to do so while they can simply hold out a hand or two for more dosh, this seems an unlikely proposition. Perhaps, we should wait till they do so and then give them help in carrying out those reforms. No, no, no, say the same NGOs, money must be given now. There is poverty there. (And what have all these NGOs been doing all this time to alleviate said poverty? Apart from making their own lives better, that is?)

No, the answer is to target aid better. How is that to be achieved? Well, through the NGOs, of course, who will then do various deals and impose various collectivist socialist solutions.

Let us recall also the squeal that went up when Paul Wolfowitz was proposed for the World Bank. He was accused – oh horror! – of wanting to promote the American agenda of spreading democracy in the world. It is, of course, the same NGOs who were telling us that aid should be better targeted who were hollering about Wolfowitz.

Let us hope all these people will take a little time out of their partying during the forthcoming Global Development Summit in London at the end of June. Yes, I know, the money spent on a summit of that kind is probably equal of several developing countries’ budgets. But this one will have at least one interesting speaker.

Franklin Cudjoe, Director of Imani, a Ghanaian think-tank, who has an article in today’s Daily Telegraph will address the summit on June 28. What he will say will not be comfortable hearing, if his article is anything to go by.

First of all, he has very little time for “rock-star economics”.

“Rock stars and charities can be powerful advocates for good causes, and they generally have good intentions - but in many cases their lyrics do not genuinely rhyme with the silent hum of the very poor they seek to protect. Their economics are just plain wrong. They ignore history, peddling the misguided belief that poverty, famine and corruption can be solved with foreign aid, debt relief and other policies that have already failed Africa.”

Mr Cudjoe talks of matters that are well known to many but are rarely discussed in polite circles (i. e. the media and the great and the good). For instance, while he is in favour of developed countries lifting trade barriers that they have put up against the developing ones (well, who wouldn’t be?) he points out that it is the poor countries that are the most protectionist and that policy is preventing their economic development.

He attacks so-called fair trade, which shelters growers from competition, prevents consumers from having a choice and encourages poverty as well as ingenious ways of by-passing the rules.

And, as he does not say, the western Fair Trade brigade ties farmers and producers into a single crop economy as well as artificially designated prices and a monopolistic distribution sector.
The truth is that because of their own protectionist policies African countries trade with each other considerably less than they do with the western world.

The answer is, according to Mr Cudjoe, far-reaching reforms in the developing countries:

“Establishing property rights would be an important first step; an effective, transparent and accountable legal system is another. Combined with respect for private property and the rule of law, these broad reforms would encourage entrepreneurship, trade, innovation and even environmental protection because they empower people - rather than the politicians.

As our economies grow and develop, people will be able to afford better technologies, clean water, superior energy sources, better healthcare, and insurance. But one is unlikely to hear such ideas from rock stars and development charities.

While these high-profile campaigns continue to blame western countries for our poverty, they simply give our own politicians more excuses to delay badly needed institutional reforms. Poor Africans would be far better off without rock-star economics.”

One is tempted to say that we would all be far better off without rock-star economics but, at least, these people do not condemn us all to poverty.

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