China is poised to overtake Japan in 2010 as the world's second largest economy, weighing in at about 40% of US GDP.
According to leading economists, the dominant underlying force propelling China's growth is the continued migration of people from the agricultural sector to the more modern economy - industry and services.
A transition of surplus labour from agriculture to industry and services would increase efficiency and align the Chinese economy with OECD. Thanks to the economic downturn, China’s stimulus package has produced much needed infrastructure that will buttress future growth.
But in the long run, China must carefully steer its economy away from reliance on cheap exports towards domestic consumption to make its roaring surge more sustainable, and forestall a Japan like bubble.
How China will spend this new capital remains an open question. China’s record as an ethical and responsible actor on the world stage is not inspiring. For instance, China maintains that “Western Style” democracy does not suit Africa. China supports despotic regimes in place like Zimbabwe; it has no qualms about doing business with murderous leaders such as Sudan’s Bashir. In October 2009, China struck a $7 billion deal on minerals and infrastructure with Guinea's military junta.
My sense is that as China waxes and the West wanes, the modest democratic and human rights gains in most of Africa could founder. Buoyed by “no strings attached” cash from China, a new wave of African dictatorships could emerge.
Creative Commons
Thursday, December 31, 2009
Friday, December 25, 2009
Aid for Business
There is a brand new addition into the overflowing field of literature on the merit and de-merits of aid to the developing world. The Aid Trap, by Glenn Hubbard and William Duggan. Columbia University Press, September 2009.
Glenn Hubbard and William Duggan both of Columbia Business School are the authors of this new addition. Their central thesis is aid for business development through the private rather than the public sector, welfare programmes. Aid for business they argue, has been the key to economic development in countries that have grown fast, but it is only rarely the principal focus of development aid.
Microfinance is increasingly the best anti-poverty programme in the developing world. However it has not received the support in deserves from aid agencies or governments in developing countries.
Hubbard and Duggan point out the Marshall Plan was used to provide resources for local businesses in post-war Europe. They advocate for a new Marshall Plan for poor countries, with aid (capital) flowing directly to private local businesses who in turn build companies and create wealth. C. K Prahalad and William Easterly have made similar arguments.
But is the well heeled aid industry ready for reform? Does Africa have the requisite entrepreneurial and skilled labour to harness massive capital flows to business?
Glenn Hubbard and William Duggan both of Columbia Business School are the authors of this new addition. Their central thesis is aid for business development through the private rather than the public sector, welfare programmes. Aid for business they argue, has been the key to economic development in countries that have grown fast, but it is only rarely the principal focus of development aid.
Microfinance is increasingly the best anti-poverty programme in the developing world. However it has not received the support in deserves from aid agencies or governments in developing countries.
Hubbard and Duggan point out the Marshall Plan was used to provide resources for local businesses in post-war Europe. They advocate for a new Marshall Plan for poor countries, with aid (capital) flowing directly to private local businesses who in turn build companies and create wealth. C. K Prahalad and William Easterly have made similar arguments.
But is the well heeled aid industry ready for reform? Does Africa have the requisite entrepreneurial and skilled labour to harness massive capital flows to business?
The Magic of Christmas
Over 2000 years ago in Bethlehem a son was born to a Jewish woman and a carpenter, the Virgin Mary and Joseph. The revelation of this holy birth was made to the humble and the wise and a King.
I was born and grew up in a little village in Nyakach, 60 km south west of Kisumu. The delight was the new clothes and shoes. Christmas was always new, colourful and joyful. The Christmas service was always long. The nativity sermon delivered in the sweltering mid-day of hot December in a jam parked little church.
I have changed. Today the delight of new clothes and the excitement of the large and sumptuous Christmas meal is no more. But I see tons of happy kids in colourful splendour. And my kids ask to go out. I see adults too, consumed by the fire of indulgent consumption.
The magic of Christmas is enduring, unchanging.
In palaces or the Vatican or in the dark huts in the neglected corners of the world, it is Christmas. Some things are truly shared. Rich or poor. Shepherd or wise men.
The juxtaposition and coexistence of humility and majesty in the nativity of Jesus is awesome. This must teach us something about ourselves.
I was born and grew up in a little village in Nyakach, 60 km south west of Kisumu. The delight was the new clothes and shoes. Christmas was always new, colourful and joyful. The Christmas service was always long. The nativity sermon delivered in the sweltering mid-day of hot December in a jam parked little church.
I have changed. Today the delight of new clothes and the excitement of the large and sumptuous Christmas meal is no more. But I see tons of happy kids in colourful splendour. And my kids ask to go out. I see adults too, consumed by the fire of indulgent consumption.
The magic of Christmas is enduring, unchanging.
In palaces or the Vatican or in the dark huts in the neglected corners of the world, it is Christmas. Some things are truly shared. Rich or poor. Shepherd or wise men.
The juxtaposition and coexistence of humility and majesty in the nativity of Jesus is awesome. This must teach us something about ourselves.
Thursday, December 24, 2009
Poverty, Nutrion and Human Development
The first Millennium Development Goal seeks to halve the proportion of people who suffer from hunger by 2015. This goal establishes as an indicator to monitor progress, the proportion of children under five years of age who are underweight.
Low height-for-age or stunting is a strong indicator of hunger and its key determinant, poverty. Stunting indicates the cumulative effects of inadequate nutrition and poor health conditions that result from endemic poverty.
A recent UNICEF report Tracking Progress on Child and Maternal Nutrition, reveals that a staggering 195 million children under five years old, 90 % of whom are in Africa and Asia, suffer from the debilitating impact of stunting attributable to hunger and malnutrition. Hungry and malnourished children struggle to withstand illnesses such as pneumonia and diarrhea. And often, the illness prevails. Hence undernourishment is an important underlying cause of child mortality.
The children who survive may become trapped in a vicious cycle of incessant illness and faltering growth-usurping their physical health, irretrievably damaging their development and their cognitive capacities, as well as impairing their productivity as adults.
The UNICEF report shows that the health of a child is inextricably linked to the health of the mother. Women whose nutritional status was poor when they conceived or who didn’t gain enough weight during pregnancy may deliver babies with low birth weight. These infants may be susceptible to infectious diseases and as adults may face a higher risk of chronic illness such as heart disease and diabetes. The report underscores the critical importance of the first 1,000 days from conception for a child’s development. Within this window, nutritional deficiencies can reduce the ability to fight and survive disease, and damage social and mental aptitude.
The report notes that there is a much better understanding of the programme strategies and approaches to improve nutrition, based on sound evidence and improved health and nutrition data. However, progress is slow, especially in Africa where stunting dropped from around 38% to 34% between 1990 and 2008. In Asia the prevalence of stunting dropped from about 44 per cent in 1990 to an estimated 30 per cent in the same period. Asia’s relatively rapid progress is strongly associated with rapid economic growth in countries like China, Republic of Korea, Sri Lanka, Thailand and Indonesia.
In Africa, more children may become undernourished due to persistent poverty, adverse weather, rapid increase in food prices an increasing land degradation and decline in agricultural productivity.
Renewed commitments on food security, nutrition and sustainable agriculture must therefore be a critical part of a wider global and national agenda to address the coupled problems of poverty, under nutrition and human development.
Low height-for-age or stunting is a strong indicator of hunger and its key determinant, poverty. Stunting indicates the cumulative effects of inadequate nutrition and poor health conditions that result from endemic poverty.
A recent UNICEF report Tracking Progress on Child and Maternal Nutrition, reveals that a staggering 195 million children under five years old, 90 % of whom are in Africa and Asia, suffer from the debilitating impact of stunting attributable to hunger and malnutrition. Hungry and malnourished children struggle to withstand illnesses such as pneumonia and diarrhea. And often, the illness prevails. Hence undernourishment is an important underlying cause of child mortality.
The children who survive may become trapped in a vicious cycle of incessant illness and faltering growth-usurping their physical health, irretrievably damaging their development and their cognitive capacities, as well as impairing their productivity as adults.
The UNICEF report shows that the health of a child is inextricably linked to the health of the mother. Women whose nutritional status was poor when they conceived or who didn’t gain enough weight during pregnancy may deliver babies with low birth weight. These infants may be susceptible to infectious diseases and as adults may face a higher risk of chronic illness such as heart disease and diabetes. The report underscores the critical importance of the first 1,000 days from conception for a child’s development. Within this window, nutritional deficiencies can reduce the ability to fight and survive disease, and damage social and mental aptitude.
The report notes that there is a much better understanding of the programme strategies and approaches to improve nutrition, based on sound evidence and improved health and nutrition data. However, progress is slow, especially in Africa where stunting dropped from around 38% to 34% between 1990 and 2008. In Asia the prevalence of stunting dropped from about 44 per cent in 1990 to an estimated 30 per cent in the same period. Asia’s relatively rapid progress is strongly associated with rapid economic growth in countries like China, Republic of Korea, Sri Lanka, Thailand and Indonesia.
In Africa, more children may become undernourished due to persistent poverty, adverse weather, rapid increase in food prices an increasing land degradation and decline in agricultural productivity.
Renewed commitments on food security, nutrition and sustainable agriculture must therefore be a critical part of a wider global and national agenda to address the coupled problems of poverty, under nutrition and human development.
Monday, December 21, 2009
The Road from Copenhagen
The Copenhagen Summit was chaotic, at times absurd. The final accord fell far too short of global expectations. However, Copenhagen marks an essential new beginning upon which planetary stewardship can be built.
The big emitters, China and the United States of America, know what they must do to forestall further anthropogenic interference with the planet’s climate system. But they will not act because they are constrained by economic and political risks.
Was Copenhagen a total disaster? Trying to answer this question will undoubtedly generate more heat that light. But we certainly can embark on sense-making through examining what went wrong while also recognizing the achievements of Copenhagen.
Convening the heads of state meeting on climate in parallel with the United Nations negotiating process was at the heart of the chaos and confusion that marked the final days of the Copenhagen Summit. It was absolutely difficult to harmonize the formal United Nations negotiating process with the informal gathering involving more than 100 presidents and prime ministers.
The two-track nature of the Copenhagen Summit was problematic, contributing to a ludicrous denouement driven by political brinkmanship and economic interests. In the end Copenhagen was held to ransom by a powerful coalition. For instance, despite the support of a critical coalition of developed and developing countries, China vetoed an agreement on 50% reductions in global emissions by 2050 or on 80% reductions by developed countries.
Essentially, the United States, China, India, Brazil and South Africa struck a deal and presented the rest of the world with a fait accompli. The EU could have prevented this from becoming adopted as a global climate deal by refusing to endorse it. They did not. Ethiopia's Prime Minister Meles Zenawi was enlisted as the champion of France and the United Kingdom as they sought African support for their finance proposal. Zenawi delivered the African Union. The deal was then presented to the greater body of countries on a take-it-or-leave-it basis by small the United States and China.
Questions must be asked about the structure and process of future climate negotiations. The principle that global environmental issues can and should be tackled on a co-operative international basis has taken a crippling blow. It is now debatable whether the UN framework convention on climate change is relevant, or whether powerful countries will unilaterally, or in a small group, decide by how much they are prepared to cut carbon emissions.
But Copenhagen did produce a new beginning with significant and positive outcomes. For instance, the Copenhagen Accord “recognizes” the scientific case for keeping temperature rises to no more than 2 degrees Celsius and that deep cuts in global emissions will be required. The accord recognizes that although socio-economic advancement is the overriding priority of developing countries, sustainable development and a low-emission development strategy are inextricably bound together.
The Copenhagen Accord also agrees that “developed countries shall provide adequate, predictable and sustainable financial resources, technology and capacity-building to support the implementation of adaptation action in developing countries”. Rich countries will finance the response to climate change; $10 billion a year over the next three years and rising to $100 billion dollars by 2020. This signals an unprecedented commitment to support mitigation and adaptation actions aimed at reducing vulnerability and building resilience in developing countries.
There is a commitment to establish the Copenhagen Green Climate Fund, an operating entity of the financial mechanism of the Convention, to support activities in developing countries related to mitigation including Reducing Emissions from Deforestation and Forest Degradation (REDD-plus), adaptation, capacity building, technology development and transfer.
Delivery of reductions and financing by developed countries will be measured, reported and verified in accordance with existing and any further guidelines adopted by the Conference of the Parties, and will ensure that accounting of such targets and finance is rigorous, robust and transparent. Similarly, mitigation actions in developing countries that receive international support will be subject to international measurement, reporting and verification in accordance with guidelines adopted by the Conference of the Parties.
Copenhagen yielded no concrete and legally binding agreements. But Copenhagen marks a historic global consensus and represents real potential for progress from post Kyoto. Copenhagen has demonstrated the scale of the challenge we face, as well as what can and must be done through pragmatic coalitions.
The road from Copenhagen will be long. And we must set forth at the dawn of this new beginning.
The big emitters, China and the United States of America, know what they must do to forestall further anthropogenic interference with the planet’s climate system. But they will not act because they are constrained by economic and political risks.
Was Copenhagen a total disaster? Trying to answer this question will undoubtedly generate more heat that light. But we certainly can embark on sense-making through examining what went wrong while also recognizing the achievements of Copenhagen.
Convening the heads of state meeting on climate in parallel with the United Nations negotiating process was at the heart of the chaos and confusion that marked the final days of the Copenhagen Summit. It was absolutely difficult to harmonize the formal United Nations negotiating process with the informal gathering involving more than 100 presidents and prime ministers.
The two-track nature of the Copenhagen Summit was problematic, contributing to a ludicrous denouement driven by political brinkmanship and economic interests. In the end Copenhagen was held to ransom by a powerful coalition. For instance, despite the support of a critical coalition of developed and developing countries, China vetoed an agreement on 50% reductions in global emissions by 2050 or on 80% reductions by developed countries.
Essentially, the United States, China, India, Brazil and South Africa struck a deal and presented the rest of the world with a fait accompli. The EU could have prevented this from becoming adopted as a global climate deal by refusing to endorse it. They did not. Ethiopia's Prime Minister Meles Zenawi was enlisted as the champion of France and the United Kingdom as they sought African support for their finance proposal. Zenawi delivered the African Union. The deal was then presented to the greater body of countries on a take-it-or-leave-it basis by small the United States and China.
Questions must be asked about the structure and process of future climate negotiations. The principle that global environmental issues can and should be tackled on a co-operative international basis has taken a crippling blow. It is now debatable whether the UN framework convention on climate change is relevant, or whether powerful countries will unilaterally, or in a small group, decide by how much they are prepared to cut carbon emissions.
But Copenhagen did produce a new beginning with significant and positive outcomes. For instance, the Copenhagen Accord “recognizes” the scientific case for keeping temperature rises to no more than 2 degrees Celsius and that deep cuts in global emissions will be required. The accord recognizes that although socio-economic advancement is the overriding priority of developing countries, sustainable development and a low-emission development strategy are inextricably bound together.
The Copenhagen Accord also agrees that “developed countries shall provide adequate, predictable and sustainable financial resources, technology and capacity-building to support the implementation of adaptation action in developing countries”. Rich countries will finance the response to climate change; $10 billion a year over the next three years and rising to $100 billion dollars by 2020. This signals an unprecedented commitment to support mitigation and adaptation actions aimed at reducing vulnerability and building resilience in developing countries.
There is a commitment to establish the Copenhagen Green Climate Fund, an operating entity of the financial mechanism of the Convention, to support activities in developing countries related to mitigation including Reducing Emissions from Deforestation and Forest Degradation (REDD-plus), adaptation, capacity building, technology development and transfer.
Delivery of reductions and financing by developed countries will be measured, reported and verified in accordance with existing and any further guidelines adopted by the Conference of the Parties, and will ensure that accounting of such targets and finance is rigorous, robust and transparent. Similarly, mitigation actions in developing countries that receive international support will be subject to international measurement, reporting and verification in accordance with guidelines adopted by the Conference of the Parties.
Copenhagen yielded no concrete and legally binding agreements. But Copenhagen marks a historic global consensus and represents real potential for progress from post Kyoto. Copenhagen has demonstrated the scale of the challenge we face, as well as what can and must be done through pragmatic coalitions.
The road from Copenhagen will be long. And we must set forth at the dawn of this new beginning.
Sunday, December 20, 2009
Why Africa is Smarting from Copenhagen
The Copenhagen Accord has been described as an essential beginning or meaningful or fruitful or a coup d’état or a suicide pact.
Many stories will be told for many generations about what went wrong and who is proximately or ultimately responsible for this global debacle. In hindsight it is hard to understand how such a delicate and complex negotiation process could be accomplished amidst the multitude of delegates, chaos and confusion that that descended upon Copenhagen.
Carbon, the culprit in global warming, is inextricably bound with the wealth and might of nations. National interests, especially economic growth and national development, naturally triumph over any notions of ‘good faith’ negotiations and planetary responsibility. It is all about sovereign rights. How much carbon a country spews out into the atmosphere is easily a matter of national sovereignty, entangled with entitlement and national obligation to deliver material prosperity to respective national constituencies. Barack and the Wen Jiabao are merely elected representatives of their nations and must ultimately watch the public opinion needle.
National carbon emissions are strongly correlated with GDP. African countries are the least emitting. African countries have the lowest GDP. African countries are the poorest on the planet. And African societies and fragile economies are the most vulnerable to the impacts of global warming. Yet Africa has contributed the least to greenhouse gas emissions. My heart bleeds for Africa. But what has held Africa from polluting its way to progress just like everyone else?
Global warming and its impacts, like all things that have held back and tripped Africa’s march to progress and prosperity, such as slavery or colonization or apartheid or corruption or poverty or disease or hunger or desertification or drought or illiteracy or war have been caused by others (especially the west, and lately China and very soon India and Brazil and Africa’s very own South Africa).
And so, Africa delegates and heads of state descended upon Copenhagen united in victimology, rights and entitlement. The African position was built on the demand that huge sums of money be made available by the rich nations to increase Africa’s adaptation to the impacts of global warming. Lumumba Stanislaus Di-Aping, the chief G-77 negotiator and a Sudanese reckons that developing countries need short term financing to the tune of $400-$500 billion annually, including $200 billion in special drawing rights in IMF, to address climate change.
Then enter Judas Iscariot who for 30 pieces of silver urged for scaling down on payments ($50 billion down from $400 billion). Meles Zenawi argued that his “proposal dramatically scales back our expectation of the level of funding in return for more reliable funding and a seat at the table in the management of such fund.” I do not endorse Meles Zenawi stranglehold on Ethiopia’s political space but I think his was a more open minded, realistic and flexible position. Ethiopia’s Prime Minister and African Union spokesman in Copenhagen Meles Zenawi has been accused of selling out on Africa’s interests.
A US-lead initiative dubbed the Copenhagen Accord seems to have derailed Africa’s gravy train. Under the Copenhagen Accord, countries will spell out their pledges for cutting carbon emissions by 2020 by February 2010, rich countries will deliver $30 billion in aid for developing countries over the next three years and most importantly, the accord recognises the need to limit global temperature rise to no more than 2 degrees Celsius above pre-industrial levels.
The UN Secretary General Ban Ki-moon welcomed the accord as an “essential beginning”. US President Barack Obama described the accord as meaningful. The Chinese Premier Wen Jiabao said the conference yielded significant and positive fruits.
But Lumumba Stanislaus Di-Aping was scathing and somewhat undiplomatic in his assessment of the Copenhagen. According to Lumumba, the draft text of the accord “asks Africa to sign a suicide pact, an incineration pact in order to maintain the economic dominance of a few countries. It is a solution based on values, the very same values in our opinion that funnelled six million people in Europe into furnaces”. Equally disappointed but much less vitriolic were the small island states such as the Maldives and Tuvalu. Venezuelan delegate, Claudia Salerno Caldera thought the outcome a coup d’état against the authority of the UN.
Why does Africa think climate change compensation payout is the universal panacea that will solve the deep socio-economic and ecological crises wrought by decades of corruption, ineptitude and misrule? Similar cash transfers (handouts or aid) have been made to Africa for HIV/AIDS relief, universal primary education and child and maternal health intervention. The evidence is that this model only benefits a kleptocratic political and business elite. There is so much Africa can and must start doing now to ameliorate the effects of global warming that does not need external financing. These actions include panting trees, water storage, breeding for drought tolerance and better coordination and disaster preparedness.
Africa now has an excuse and something and someone to blame for all of its ills. Copenhagen and Meles Zenawi, Judas Iscariot.
Many stories will be told for many generations about what went wrong and who is proximately or ultimately responsible for this global debacle. In hindsight it is hard to understand how such a delicate and complex negotiation process could be accomplished amidst the multitude of delegates, chaos and confusion that that descended upon Copenhagen.
Carbon, the culprit in global warming, is inextricably bound with the wealth and might of nations. National interests, especially economic growth and national development, naturally triumph over any notions of ‘good faith’ negotiations and planetary responsibility. It is all about sovereign rights. How much carbon a country spews out into the atmosphere is easily a matter of national sovereignty, entangled with entitlement and national obligation to deliver material prosperity to respective national constituencies. Barack and the Wen Jiabao are merely elected representatives of their nations and must ultimately watch the public opinion needle.
National carbon emissions are strongly correlated with GDP. African countries are the least emitting. African countries have the lowest GDP. African countries are the poorest on the planet. And African societies and fragile economies are the most vulnerable to the impacts of global warming. Yet Africa has contributed the least to greenhouse gas emissions. My heart bleeds for Africa. But what has held Africa from polluting its way to progress just like everyone else?
Global warming and its impacts, like all things that have held back and tripped Africa’s march to progress and prosperity, such as slavery or colonization or apartheid or corruption or poverty or disease or hunger or desertification or drought or illiteracy or war have been caused by others (especially the west, and lately China and very soon India and Brazil and Africa’s very own South Africa).
And so, Africa delegates and heads of state descended upon Copenhagen united in victimology, rights and entitlement. The African position was built on the demand that huge sums of money be made available by the rich nations to increase Africa’s adaptation to the impacts of global warming. Lumumba Stanislaus Di-Aping, the chief G-77 negotiator and a Sudanese reckons that developing countries need short term financing to the tune of $400-$500 billion annually, including $200 billion in special drawing rights in IMF, to address climate change.
Then enter Judas Iscariot who for 30 pieces of silver urged for scaling down on payments ($50 billion down from $400 billion). Meles Zenawi argued that his “proposal dramatically scales back our expectation of the level of funding in return for more reliable funding and a seat at the table in the management of such fund.” I do not endorse Meles Zenawi stranglehold on Ethiopia’s political space but I think his was a more open minded, realistic and flexible position. Ethiopia’s Prime Minister and African Union spokesman in Copenhagen Meles Zenawi has been accused of selling out on Africa’s interests.
A US-lead initiative dubbed the Copenhagen Accord seems to have derailed Africa’s gravy train. Under the Copenhagen Accord, countries will spell out their pledges for cutting carbon emissions by 2020 by February 2010, rich countries will deliver $30 billion in aid for developing countries over the next three years and most importantly, the accord recognises the need to limit global temperature rise to no more than 2 degrees Celsius above pre-industrial levels.
The UN Secretary General Ban Ki-moon welcomed the accord as an “essential beginning”. US President Barack Obama described the accord as meaningful. The Chinese Premier Wen Jiabao said the conference yielded significant and positive fruits.
But Lumumba Stanislaus Di-Aping was scathing and somewhat undiplomatic in his assessment of the Copenhagen. According to Lumumba, the draft text of the accord “asks Africa to sign a suicide pact, an incineration pact in order to maintain the economic dominance of a few countries. It is a solution based on values, the very same values in our opinion that funnelled six million people in Europe into furnaces”. Equally disappointed but much less vitriolic were the small island states such as the Maldives and Tuvalu. Venezuelan delegate, Claudia Salerno Caldera thought the outcome a coup d’état against the authority of the UN.
Why does Africa think climate change compensation payout is the universal panacea that will solve the deep socio-economic and ecological crises wrought by decades of corruption, ineptitude and misrule? Similar cash transfers (handouts or aid) have been made to Africa for HIV/AIDS relief, universal primary education and child and maternal health intervention. The evidence is that this model only benefits a kleptocratic political and business elite. There is so much Africa can and must start doing now to ameliorate the effects of global warming that does not need external financing. These actions include panting trees, water storage, breeding for drought tolerance and better coordination and disaster preparedness.
Africa now has an excuse and something and someone to blame for all of its ills. Copenhagen and Meles Zenawi, Judas Iscariot.
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