The Discussion is Here to Stay-Angel Africa on Trade vs Aid

Hi, I just wanted to highlight a very beautiful discussion that I witnessed and participated on recently. The discussion took place on Angel Africa. It all seemed to start when Emeka Okafor of Timbuktu Chronicles commented about TED. From there, Amini Kajunju, the director of Angel Africa chimed in with her thoughts on why trade is so relevant in Africa right now and from there the conversation got quite interesting. Hopefully, they don't mind me doing this but I will post part of the conversation below.

Emeka:

For a taste of where the Aid debate is going take a look at the Andrew
Mwenda vs Bono encounter at the recently concluded TED Global event :

On the first day of the conference, the discussion between Andrew
Mwenda and Bono electrified the audience and those following the conference via
blogs.Here's what bloggers both inside and outside the conference had to
say:

Felix Salmon's Market Movers blog for Portfolio.com gives an
overview:

... the conference kicked off with[William] Easterly-by- proxy Andrew
Mwenda. Ethan Zuckerman was there tohear Mwenda run down the standard Easterly
talking points –- but at TEDconferences, the points have a way of talking back.
And when Mwendachallenged the audience to name a country where aid had led
todevelopment, Bono, of all people, stood up and named Ireland, in thedays of
the potato famine.
Bono was scheduled to speak [in Session] Two, and he
devoted his time not to his own ideas but to rebutting Mwenda's. ...

And a report on the confrontation as it went down comes from fifthculture:

Andrew Mwenda [is] a journalist and socialcritic (read troublemaker –
my kind of guy), and passionate speaker.... [A]ccording to Andrew, all of us
bleeding hearts from richcountries are doing the absolute wrong thing by giving
aid to Africancountries. Andrew asked "has anyone in this room benefited or had
arelative who benefited from aid?" A surprise answer came from Bono (allI could
make out of the comment was "bullocks," but Bono would elaborate a little
later). Liz Dolan from the Huffington Post reports in
detail:

Addressing the growing feeling that debtrelief will not get African
nations nearly as far as western directinvestment, Bono said "You'd think
somebody farted in here when thewords 'debt relief' came up -- ooh, that's so
uncool. Well, I will tellyou that 20 million children in Africa are going to
school today as adirect result of debt relief, 3 million right here in Tanzania
alone.
David McQueen reports on the talks and the
reaction:

... Talking to a number of peopleafterwards there were many mixed
messages. Most believed that tradeshould be the primary focus but with incumbent
governments still verydependent on aid that the focus should change. Personally
I lean moreto the position of Mwenda. Here is a man looking at the situation
fromthe ground, and with possible prison sentences hanging over him fromhis
native Uganda. OK he may not have all the solutions but his disdainfor people
looking down at Africa trying to solve issues from theoutside in definitely
resonated with me and many others.

Ecorica-Blog offers some more background on
Andrew Mwenda's analysis:
One important remark: He admits that aid can bring
humanitarian relief and can save lives, but he does not believe in the idea that
aid can support long-term development of asociety.

Live-blogging hero Ethan Zuckerman writes at length about both Mwenda's and Bono's talks. (The title of this blog post is borrowed from his
indispensable blog.) White African also offers a good look at the talks, as does Ramon Thomas.

Technorati tags: Africa, Andrew Mwenda, Bono, TEDGlobal, TEDGlobal2007 ..."

From Nvalaye Kourouma:

Folowing up on Emeka's email, this an article that further expand on what
Afirica really needs. I believe entrepreneurship and business is what is
needed adn any aid has to be directed towards creating the right environment for
business to serve people. Any thought?
____________ _________ _________
_________ _________ _________ _________ _________ _________ _________ _________
_________ _________ _______

What Does Africa Need Most: Technology or Aid?

By JASON PONTIN for New York Times

I AM just back from Tanzania in East Africa.

"...Very poor farmers and their children stared curiously at me as I
passed.

In the afternoons, I attended the TEDGlobal 2007 conference, held by the
Technology, Entertainment and Design organization in the modern Ngurdoto
Mountain Lodge. The contrast between the two experiences troubled me.

TED conferences, mostly held in Monterey, Calif., are invitation-only
affairs, are attended by the aristocracy of Silicon Valley and are known for
their adventurousness in drawing together wildly disparate trends in technology,
business and the arts.

On this occasion, Bono, the Irish rock star and champion of African
causes, had persuaded the conference's organizer, Chris Anderson, to invite the
usual crowd, as well as African entrepreneurs, activists, health care
professionals and artists to this tropical, leafy region midway between the
Serengeti Plain and Mount Kilimanjaro.


But beyond this Panglossian message, however much a corrective to the
common images of African misery and however flattering to the pride of TED's
African attendees, was something that everyone at the conference knew (and which
I saw every morning on my runs). Whether measured by per capita income or by the
gross domestic product of its nations, Africa is the poorest place on earth. The
question that the conference was really exploring was this: How can we make
every African family richer?

At TED Global 2007, I witnessed one small skirmish in a larger ideological
conflict between those who believe that Africa needs more and better
international aid, and those who think entrepreneurialism and technology will
lift the continent out of poverty and thus reduce its miseries.

Predictably, TED's attendees and speakers were spellbound by technology and
entrepreneurialism and, at the same time, distrustful of international aid.
"What man has ever become rich by holding out a begging bowl?" asked Andrew
Mwenda, an Ugandan journalist and social worker, now a research fellow at
Stanford in California.
Mr. Mwenda argued that $500 billion in international
aid over 50 years had achieved nothing in Africa and that the persistence of
African poverty could be explained, in part, by aid. Charity, he said, had
"distorted the incentive structure" and had persuaded the brightest Africans to
work for corrupt governments. He called upon African entrepreneurs to build
African businesses and the American investors in TED's audience to finance them.

Echoing Mr. Mwenda, Russell Southwood, the publisher of Balancing Act, a
newsletter about technology in Africa, implored African entrepreneurs and
Western business leaders to "invest in shortages." Africa, he said, could
"leapfrog" the industrial technologies that Westerners use and build truly
21st-century technology systems and networks.
As an example, Mr. Southwood
pointed to a near absence of telephone landlines in sub-Saharan Africa; cellular
networks for mobile phones could quickly bring modern communications to hundreds
of millions of Africans.

At least one of the African attendees of the conference was representative
of the kind of technological entrepreneurialism that the show advocated.

Alieu Conteh, the chairman of Vodacom Congo, was born in Gambia, in West
Africa, 55 years ago and moved to Congo in 1981. For years, he was a successful
coffee buyer and exporter.
Congo is about the size of Western Europe and has
an estimated population of 65 million people. It is one of the least-developed
nations in the world, with less than 300 miles of roads, most of them in poor
condition.

MR. CONTEH is building a telecommunications network where none existed
before. With 600 employees and 5,000 contractors, Vodacom Congo is one of his
country's biggest employers. If he realizes his ambition to create a stock
market and offer shares in his company, he will have created new wealth. But the
tale of Vodacom Congo also illustrates the difficulties of creating new
businesses in Africa and the limits of entrepreneurialism as an alternative to
international aid.

Mr. Conteh accepted risks that few businesses would, and for many years he
found it impossible to attract more than a few eccentric investors. More
significant, it has taken Mr. Conteh more than a decade to provide
telecommunications to less than 10 percent of the country. While the existence
of Vodacom Congo may one day help build other businesses, the country's general
poverty is not alleviated by the existence of the company.

In truth, Africa will need both investment in entrepreneurialism and aid,
intelligently directed toward education, health and food..."

And from Amini Kajunju:

"...Africa needs entrepreneurs like the men who started Vodacom or Celtel.
It does not need aid. We need investors. Here is the truth of the matter as Mr.
Mwenda said:

Mr. Mwenda argued that $500 billion in international
aid over 50 years had achieved nothing in Africa and that the persistence of
African poverty could be explained, in part, by aid. Charity, he said, had
"distorted the incentive structure" and had persuaded the brightest Africans to
work for corrupt governments. He called upon African entrepreneurs to build
African businesses and the American investors in TED's audience to finance
them

Frankly, if it was up to me, I would put a 30 year moratorium on
aid to Africa. I would create a world where African goverments only accept "free
trade" and investors. No AID. No Bono..."

And here is a section of my comments:

"...Thinking further let me say that Pontin's argument pre-supposes that it
almost sounds as if Mr. Pontin thinks that all 900 million plus on the African
continent face poverty. Of course we know this to be grossly inaccurate.
Furthermore, by default hisargument seems to lump all of Africa's poverty into
thecategory of being situational (resulting from one-timecatastrophies) , again
we know this to be untrue aswell. In fact, though I dont have figures I would
probably say that this would probably account for less than 15 percent of the
poverty that he talks about. So Mwenda and Ayittey do have a very solid argument
then, but it is only that I have not heard them address the types of poverty
resulting from natural or human disaster.

However in the vast majority of cases on the African continent where
communities seek to reduce or eliminate poverty, there is a strategy that is
being tested by organizations like Technoserve, which I think will help
immensely..."

Also, for the record I believe that trade and investment on the African continent will continue to be the driving force for reducing the income gap between some of the continent's lower producers and some of the world's middle and upper income nations. However, in when it comes to tackling humanitarian issues aid makes more sense. I will say that the number of disasters on the continent is smaller than the media will have you think. Thus, more trade than smart aid is needed.

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