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May 2009

Pourquoi il faut augmenter l'aide en faveur de l'Afrique

Submitted by Shanta on Mon, 2009-05-25 15:15

Dans les pays riches, lorsque le taux de croissance économique diminue de 3 ou 4 points, les individus perdent leur emploi et, probablement, leur maison, mais ils les retrouvent lorsque la reprise économique intervient. Dans les pays pauvres d’Afrique, les enfants sont retirés de l’école — et sont privés de la possibilité de devenir plus tard des adultes productifs. Dans certains cas, les enfants meurent avant d’avoir eu la chance d’aller à l’école. Si l’effondrement actuel de la croissance s’apparente à ceux qu’a connus l’Afrique par le passé,

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Why aid to Africa must increase

Submitted by Shanta on Mon, 2009-05-25 15:14

In rich countries, when economic growth declines by three or four percentage points, people lose their jobs and possibly their houses, but they regain them when the economy rebounds. In poor African countries, children get pulled out of school—and miss out on becoming productive adults. In some cases, children die before they have a chance to go to school. If the current growth collapse is typical of the ones Africa has experienced in the past, an additional 700,000 African children may die before their first birthday.

In short, the effects of the global recession on Africa will be permanent. So the idea that aid may be threatened because of the recession in rich countries seems to have the logic backwards. Precisely because the effects in rich countries are temporary, resources should go to places where they may be permanent. Of course, there are political pressures to spend domestically. But do politicians in rich countries really think that a few more votes are worth more than the lives of the infants who will die as a result of the recession? 

The problem with economists

Submitted by Shanta on Thu, 2009-05-14 11:43

I flinched when, at a recent BBC World Debate Zeinab Badawi asked Bob Zoellick why, when there are so many economists at the World Bank, they couldn’t do anything about protecting developing countries from the impact of the global crisis. Were we asleep at the wheel? Montek Ahluwalia gave us temporary respite by pointing out that the economists in the industrialized countries didn’t see the global recession coming even in their own countries, much less that it would spread to poorer countries. 

But this begs the question of why economists didn’t forecast the global financial and economic crisis. Recently there have been two thoughtful pieces addressing this question. 

John Kay (hat tip to my colleague Apurva Sanghi) faults economists’ desire to develop a general theory of everything. Meanwhile, Barry Eichengreen (hat tip to Dani Rodrik) says that there is no problem with economic theory, but a problem with its application:

In fact, large swaths of modern economic theory focus squarely on the kind of generic problems that created our current mess. The problem was not an inability to imagine that conflicts of interest, self-dealing and herd behavior could arise, but a peculiar failure to apply those insights to the real world.

On Aid to Africa

Submitted by Tijan Sallah on Tue, 2009-05-12 10:38

Dambisa Moyo' book "Dead Aid" is gaining influence among African leaders (I wanted to point to President Kagame's thoughtful commentary in the FT). I would like to add the following comments. Volumes of aid to Africa per se are not the issue; instead the issue is the quality of political leadership and the effectiveness with which aid is put to in Africa to support the continent's development.    Aid, by itself, is not a bad thing and, if utilized properly, can help resource constrained economies make wise investments to move from a low to a higher base of performance. Post-war Western Europe and Japan reconstructed into a modern economy through massive aid provided through the Marshall Plan, and many developing economies in East Asia (China, Korea, etc) and South Asia (e.g., India) have taken off because of large injections of external aid and, of course, the determined will and good policies of those nations. I find the debate championing the ending of aid to Africa as a dangerous one for it misses one key economic argument: resource fungibility.

La crise économique mondiale quels impacts sur l'Afrique subsaharienne ?

Submitted by Shanta on Tue, 2009-05-05 09:04

Lors d’une mission en Europe, j’ai assisté à un séminaire à l’Institut Français des Relations Internationales IFRI. J’ai parlé des quatre canaux de transmission de la crise en Afrique, et la réponse de la Banque Mondiale. Le débat qui a suivi mon discours était très riche et intéressant. Les questions étaient diverses—sur la relation entre la croissance et la pauvreté, les solutions régionales et les états fragiles. Vous pouvez lire le compte rendu de la conférence ici.