What Does ‘Sustainable Development’ Really Mean?

The model for ‘sustainable development’ as espoused in official UN documents cannot withstand a serious critique. A real sustainability requires a change of economic paradigm, not a continuation of the industrialist/capitalist/consumerist economic model that is dependent on unimpaired profits.

An Attempt to Define Sustainability

There is a conflict among the different ways people understand sustainability and sustainable development. The definition of the 1987 Brundland Report of the United Nations is classic: Sustainable development is one that attends the needs of present generations without endangering the capacity of future generations to attend to their needs and aspirations. This concept is correct, but it has two important limitations: it is anthropocentric (it only considers human beings) and it says nothing about the community of life (other living beings that also need a biosphere and sustainability).

Let’s make a formulation that is as inclusive as possible: Sustainable development is every action destined to maintain the energy, information, and physical-chemical conditions that make all beings sustainable, especially the living Earth, the community of life and human life, seeking their continuity, and also to attend the needs of present and future generations in such a way that the natural capital is maintained and its capacity of regeneration, reproduction and eco-evolution is enriched.

Let’s rapidly explain the terms of this holistic vision:

To make sustainable all the conditions necessary for the creation of all beings: they exist starting with the combination of energies, of the physical-chemical and informative elements that, combined together, give origin to everything

To make sustainable all beings: this is about completely overcoming anthropocentrism. All beings emerge from the process of evolution and enjoy an intrinsic value, independent of human use.

To especially make the living Earth sustainable: the Earth is much more than a «thing» (res extensa), lacking intelligence, or a mere means of production. She does not contain life; she is alive, she self-regulates, self-regenerates and evolves. If we do not guarantee the sustainability of the living Earth, called Gaia, we take away the basis of all other forms of sustainability.

To also make the community of life sustainable: the environment does not exist as something secondary and peripheral. We do not just exist: we coexist, and are all interdependent. All living beings are carriers of the same basic genetic alphabet. We form the net of life, microorganisms included. This net creates the biomass and the biodiversity that is necessary for the subsistence of our life on this planet.

To make human life sustainable: we are a singular link of the net of life, the most complex being in our solar system and a spearhead of the process of evolution as we know it, because we are carriers of consciousness, sensibility and intelligence. We feel that we are called upon to care for and to guard Mother Earth, to guarantee the continuity of civilization and also to be vigilant of our destructive capacity.

To make the continuity of the process of evolution sustainable: all beings are conserved and supported by the Basic Energy or the Source that Creates all Beings. The universe possesses an end in itself, by the simple fact of existing, of continuing to expand and create itself.

To make tending to human needs sustainable: through the rational and caring use of the goods and services which the cosmos and the Earth offer us, and without which we would cease to exist. To make sustainable our generation and the generations that will follow ours: the Earth is sufficient for each generation so long as a relation of synergy and cooperation with the Earth is established, and goods and services are distributed equitably. The use of those goods must be guided by generational solidarity. Future generations have the right to inherit a well preserved Earth and nature.

Sustainability is measured by the capacity to conserve natural capital, that it may renew itself and, perhaps through human genius, that it may be enriched for future generations. This widened and integrating concept of sustainability must serve as criteria for evaluating whether or not we have progressed along the path of sustainability, and should serve equally as inspiration or idea-generating for making sustainability a reality in the different fields of human activity. Without it, sustainability is pure rhetoric of no consequence

Durban Conference: Questionable Expectations

As the world meets in Durban, South Africa, for what has become a yearly attempt to secure a global response to climate change, let us look back on 20 years of events that have brought negotiations to this point.

1988. The IPCC is born
The Intergovernmental Panel on Climate Change (IPCC) is established in response to record heat levels, droughts and studies that point to carbon dioxide as a factor in global warming. Set up by the World Meteorological Organization (WMO) ant the United Nations Environmental Program (UNEP), the panel is seen as both a political and a scientific body. Through the review and assessment of the scientific, technical and socioeconomic information, it aims to enhance global understanding of climate change and the consequences thereof.

1990. Experts warn of a pressing need to tackle global warming
In its first assessment report, the IPCC predicts a rise in global mean temperature of some 0.3 degrees Celsius per decade throughout the 21st century. The increase would be greater than the experienced over the previous 10,000 years. The panel warns that the trend towards serious global warming can only be stopped if ‘strong measures’ are put in place to tackle it.

1992. US shows first signs og going it alone
Rio de Janeiro hosts the Earth Summit which leads to 154 nations signing the United Nations Framework Convention on Climate Change (UNFCCC). The aim of the convention is to reduce emissions from industrialized countries to 1990 levels by the year 2000. While the majority of signatories call for mandatory limits on greenhouse gas emissions, US President George W. Bush insists that any targets or timetables must be entirely voluntary and non-binding.

1995. Berlin mandate paves the way for the Kyoto Protocol
In the spring of what is the hottest year on record thus far, Berlin hosts the first UNFCCC Conference of the Parties (COP). Industrialized nations agree on the need for longer-term action to prevent climate change, and the session results in the Berlin Mandate. Under the terms of the declaration, which lays the groundwork for the Kyoto Protocol, legally binding obligations commit industrialized nations to reducing greenhouse gas emissions. By now, economic growth in China means it is en route to become the largest greenhouse gas polluter by 2010.

1997. Kyoto Protocol is adopted but not ratified
On December 11, the Kyoto Protocol is adopted in the Japanese city of the same name. According to its core principle of «common but differentiated responsibility,» industrialized countries responsible for climate change have to do more to solve the problem than developing nations. The document agrees legally binding emissions cuts for industrialized nations and sets a target of reducing 1990 levels by 5.2 percent before the year 2012. The USA says it will not ratify the Protocol until it sees developing countries do their bit.

2001. President George W. Bush pulls the US out
Despite campaign promises to tackle the problem of America’s greenhouse gas emissions, when George W. Bush enters the White House, he pulls the US out of the Kyoto Protocol, which he describes as «fatally flawed in fundamental ways.» He justifies the move on the grounds that Kyoto fails to address two major pollutants –black soot and tropospheric ozone– and would have «a negative economic impact.» The Bush administration’s decision not to ratify the Protocol forces the delays of its implementation.

2002. Russia is put in a decisive position
In order to come into effect, Kyoto has to be ratified by nations collectively responsible for 55 percent of emissions from the industrialized world. European Union countries and Japan press ahead with ratification, but with the US no longer in the game, there is little room for anyone else to back out. Australia follows Bush’s lead, leaving Russia holding the final card.

2004. Moscow finally agrees to ratify Kyoto
After a long period of uncertainty, on November 18, Moscow ratifies the Kyoto Protocol. Although there are fears that the agreement could have a negative impact on economic growth, talk of stronger EU support for Russia’s bid to become a member of the World Trade Organization helps to tip the scales.

2005. Kyoto comes into effect but its limitations are clear
Kyoto comes into effect seven years after it was agreed. Ratified by 144 countries, the treaty aims to reduce the emissions by 5.2 percent by 2012. Major developing nations, such as India and China, are not yet required to meet targets. The European Union launches its Emissions Trading Scheme (EU ETS), limiting levels of greenhouse gases from large industrial emitters of carbon dioxide. Under the scheme, companies are given emissions allowances to buy and sell among themselves. The plan is to cut allowances gradually to reduce emissions.

2007. Bali talks start a critical countdown
Tensions reach a boiling point at the 2007 Climate Conference in Bali. Countries’ failure to reach consensus on a successor to Kyoto proves too much for UN climate chief Yvo de Boer, who dramatically breaks down in tears. Nerves fray as China appears to walk out and the US chief negotiator is openly jeered. The world eventually agrees to pursue two tracks of negotiations: one on extending Kyoto and another on a potentially new agreement. Delegates give themselves two years to settle the question.

2009. Copenhagen descends into farce
Hopes abound that Copenhagen will conclude with a tough legally-binding agreement for the planet. Not since the Paris Peace Conference of 1919 have so many world leaders come together in one place. With Barack Obama in the White House, there is speculation of grater US commitment and many hope China and India will sign up to targets. The talks end instead in acrimonious chaos. The most to emerge are references to significant financial incentives for poor countries, and grater –if voluntary– pledges to cut emissions under the Copenhagen Accord.

2011. The death knell for Kyoto
Government representatives and climate experts meet in Durban for COP17. With the first phase of the Kyoto agreement due to expire at the end of next year, the need to decide on its future looms large. Japan, Russia and Canada have said they will only sign if all major economies, including China (now the world’s largest emitter) and the US are bound by mandatory targets. UN climate chief Christiana Figueres has already made clear that it is too late for Kyoto and that an interim solution will have to be found.

Business and Human Rights, a difficult bridal

After six years in office the UN Special Representative for Business and Human Rights, Professor John Ruggie, acknowledges that he has made ​​progress in his job since his appointment in 2005, but he has been mainly driven by many NGOs that accused for decades the companies’ manners in some countries, particularly international businesses. Carlos Lopez, a senior legal advisor to the International Commission of Jurists, an NGO based in Geneva, reports that national and international corporations – and the states from which they originate – are opposed to excessively restrictive obligations or texts.

These firms consider that these rules could affect their ability to compete against other companies from China, India or Russia, which have different standards. But precisely a hundred years ago, the International Labour Organisation was created to establish standards that everyone would agree to meet.

It goes now beyond the rights of workers. Some suggest e.g. a set of standards, such as the right to a healthy environment. But businesses and their respective states do not want to hear about it. They say we must leave the markets go without putting rules that may impede business operations. Otherwise, facing too many binding rules (eg. taxes), they are afraid they will make less profit. There’s the rub.

A country where standards should urgently be implemented is the Democratic Republic of Congo. Navanethem Pillay, the High Commissioner for Human Rights, has repeatedly criticized the serious violations of human rights in the region, breaches connected to the mining activities and the extraction of natural resources, which are often contracted with transnational industries.

Many armed groups control these areas and they do it for economic reasons. They want to make a lucrative profit because these regions are rich in minerals. It is very well described in the meddling report to the Office of High Commissioner for Human Rights. It is precisely in these pockets controlled by armed groups that mining is organized. They manage resource exploitation in situations of terrible abuse that could be defined as international crimes. In addition, international companies and companies located in other countries buy these minerals and are therefore involved in transactions. So there are different levels of involvement of foreign companies. And the international community does little to change that.

Yet the situation in DRC is closely followed by the Security Council. It has established codes of conduct and asks corporations to pay particular attention to the fact that minerals mined in the DRC do not benefit armed groups and do not help fueling the conflict. Companies should have clearer objectives in terms of respect for human rights. It should set more rules to ensure that the entire chain, all activities in any way, do not violate human rights. And that in addition they do not contribute to ensure that others do so.

Last June John Ruggie’s mandate ended. The first Special Representative of the UN for Business and Human Rights has succeeded anyway adopting common principles. However, he did not want that these principles were binding. Thus, only the goodwill shall prevail. That is a bit thin in the competitive world of these often lawlessness areas where victims have often no remedy at law.

Do Reforms Inhibit or Support African Development?

THE AFRICAN GOVERNANCE CRISIS (4/4)

After the analysis of decades  of public sector reform in Africa with special focus on Ghana, one can draw the conclusion that the  external support during the 1980ies has been  vital,  but  to  some  degree  harmful  due  to  a  “faulty  diagnosis  and  prognosis” (1). The African public sector during that time cannot be described as too big, but as expanding. This growth was a direct result from the new-won independence and was therefore a necessary step of taking control.

In order to overcome the economic decline in the 1980ies African states were dependent on foreign investments. While the IMF, the World Bank and individual donors did provide the money, they also set unfitting goals and an unrealistic time schedules. Instead of strengthening the existing system of public administration, Western NPM methods of downsizing, retrenchment and cost cutting were introduced. As has been stated in the above, African states did not have an oversupply of qualified civil servants, but a demand for the latter. Instead of ensuring their loyalty and providing a better education for them, many positions were cut and the crucial increase of salaries was implemented with reluctance (2).

The results of these reforms of the public administration of the 1980ies in Ghana and other countries were modest to say the least. From a different point of view, one could even assert that they were modest from a short-term perspective, but fatal in a long-term perspective, because they focused on technicalities in order to save money – that actually weakened the civil service (1) and ignored the core aspects of successful public sectors. While it might make great sense to concentrate on cost-cutting and downsizing of the public administration in Western countries like the UK or  Germany – where  a  certain ethic belief may  be  attributed  to  the  public officials because of centuries of institutionalized rules and norms – African bureaucracies were nowhere near this point of development. If one observes the economic progress of Asian tiger states whose economies greatly strengthened during the past decades, one is also able to attribute this success to strong systems of public administration (3).

As there is no such history in African public management, it seems obvious that an emphasis has to be laid on the establishment of civil service ethics and accountability. One could conclude, that the reforms of the 1980ies in Africa skipped one step, because they  aimed  at  shrinking  something  that  wasn’t  even  stable  to  begin  with.  Only technicalities were at focus. Therefore, one is drawn to argue that reforms from this time period inhibited the development of committed reformers in Africa.

Of course, this statement must be handled with care, as one does not have the possibility of comparison with an African country that did not follow the NPM reforms at all. However, cutting costs at the wrong places led to the “unfolding challenges” (4) African countries encountered during the 1990ies and even in the new millennium. While techniques for more ethical behavior and accountability are decided on, their implementation must be coordinated among the African states. Instead of relying on external help, the more successful countries have to set an example and support  the weak links.

Dealing with these problems, the UN concludes:

“For poor, resource-constrained countries, the reform challenges are daunting, not because the countries do not know what to do, but because they lack the resources to initiate and sustain a comprehensive programme of change.” (4)

Financial aid is thus still vital today. But instead of forcing these different systems to adapt Western ideals of public administration reforms, the support should be engaged on the  education  of  civil  servants,  hence  human  capacity  building  and  training.  In combination with a rise of public official salaries, the two core weaknesses identified in this work would be tackled. While the downsizing of the public sector has already taken place, one could attempt to stabilize this system now. Therefore, the current trend of African civil service reform can no longer in any way be attributed with an inhibition of the countries’ development.

On the whole, it has been clear that the reforms of the NPM-wave during the 1980ies did   little   to   promote   sustainable   development   in   African   public   sectors   and consequently in the countries’ economies (1) (2). Despite these negative experiences and the sentiment of wasted money, external support is a sine qua non in Africa now. The necessary strategies can only be implemented after the application of sophisticated analyses and diagnoses and with the involvement of all stakeholders, especially the civil servants in regard to more ethical behavior (2).

Only by doing so, policies – such as the liberalization of markets, vital for a more successful participation in global trade – can be implemented.

In order to highlight the difficulties encountered by Ghana and other African states in establishing an efficient and sustainable civil service resulting in a stronger economic development, this paper concentrated on the introduced governance crisis (2). However, there are of course great interdependencies between the public administration and the central government of a country. The best governance system would only get so far without a stable, organized and constitutional government (4). It would be interesting to analyze these realities for African states, as it seems logical that weak governments are another trigger for underdevelopment.

On the whole, one can conclude that reforms of the 1980ies were not customized for African   developing countries and most probably inhibited a quicker economic development. The second  wave of reforms however, is much more focused on the involvement and training of civil servants, which is – as seen in the cases of Developed Countries and Tiger States – crucial for a stable public  administration and economic growth. If provided with the necessary financial aid, reform-committed African states like Ghana could indeed face an overcome of economic underdevelopment.

Related posts:
· The African Governance Crisis (1/4) · A sift inventory of Africa’s development problems
· The African Governance Crisis (2/4) · The Consequences of Reforms on the African Civil Service
· The African Governance Crisis (3/4) · Rehabilitating the African Civil Service
· Millennium Development Goals: Fragile states claim summit outcome off-target

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(1) Olowu, B. (1999). Redesigning African Civil Service Reforms. In: The Journal of Modern African Studies 37, 1 (1999). Cambridge University Press.
(2) Adamolekun, L. (2005). Re-Orienting Public Management in Africa: Selected Issues and Some Country Experiences. In: African Development Bank – Economic Research Paper Series No. 81.
(3) Evans, P. (1995). The State as Problem and Solution: Predation, Embedded Autonomy, and Structural Change. In: Politics and Society.
(4) United Nations. (2005). Public Administration and Development – Report of the Secretary General.

Rehabilitating the African Civil Service

THE AFRICAN GOVERNANCE CRISIS (3/4)

The customary  problems  of  public  sector  ineffectiveness  due  to  erroneous  reform movements – leading to a reduction instead of a reinforcement of the system – and the ongoing  danger  of  corrupt  public  officials,  give  reason  to  speculate  about  more successful policies for the reinvention of the African public administration. In order to do so, public service ministers came together in Stellenbosch, South Africa in 2003 to respond to “unfolding challenges” in African public administration (1).

In accordance with some reform approaches of the late 1990ies, the aim of new reforms is to switch to home-grown and demand driven methods directed at specific problems and challenges instead of the donor-pressured goals of broad downsizing and cost- cutting (1). While the UN observes that contemporary reform methods do still aim to improve business and customer satisfaction techniques –“a  carry-over from the early days  of  New  Public  Management”  (1),  intangible  reform  topics   such   as  the implementation of norms and values as well as public service ethics and accountability play a vital role.

Since African countries like Ghana do not possess the financial assets necessary for a much needed rise of public servant salaries, it seems crucial to at least stabilize the employees feeling of normative obligations. Despite negative experiences citizens have encountered with corrupt public officials so far, the latter must still be expected to have a  special  awareness  for  accountability  since  they  belong  to  the  directly  elected government of the country (2). Von Maravic argues that ethics in public management influence the quality of decisions made in public administration as well as the trust the citizen has in the system. (3). Hence, if one could ensure the ethical comportment of public officials, African (and more precisely Ghanaian public administration) could highly improve.

However, at this point another problem must be faced: the lack of resources. In this way, the UN states:

“In many countries, public administration remains weak largely owing to a shortage of human resources and to deficiencies in staff training and motivation.“ (4).

When speaking about the amelioration of African public services, one must be cautious not to attempt to apply the same public sector reform logic to all African countries. The differentiation of Adamolekun provides a possible classification of African states that has been mentioned before when referring to Ghana as a reform-committed country.

The above  table  or  a  similar  one  could  be  used  in  order  to  ensure  a  sustainable improvement  of  African  public  administration  systems.  In regard to this, the UN highlights the necessity of information sharing among reforming African states (4). Implementing the homegrown, but still NPM influenced methods of public sector reform in combination with the support of ethical and accountable changes in countries of the “virtuous circle” could be a first step (5). While the public service ministers all attempt to work on similar criteria they must accept countries like Botswana, Namibia or South Africa as a ‘primus inter pares’and a focal point of orientation. Moreover, it is obvious that foreign investments are still necessary; however one must not repeat the mistakes of the 1980ies and let donor schedules pressure the implementation of reforms.

Related posts:
· The African Governance Crisis (1/4) · A sift inventory of Africa’s development problems
· The African Governance Crisis (2/4) · The Consequences of Reforms on the African Civil Service
· Millennium Development Goals: Fragile states claim summit outcome off-target

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(1) African Press Organization. (2008). 6th Conference of African Ministers of Public Service Opening Remarks.
(2) Solinski, H.M. (1993). Ethic-conscious outlook behavior in public administration in Switzerland. Considerations and suggestions for the introduction of an ethics understanding based on the American experience. Reports and contributions of the Institute for Business Ethics at the University of St. Gallen.
(3) Von Maravic, P. (2009). Ethical challenges in administrative action. 5/4/2009.
(4) United Nations. (2005). Public Administration and Development – Report of the Secretary General.
(5) Adamolekun, L. (2005). Re-Orienting Public Management in Africa: Selected Issues and Some Country Experiences. In: African Development Bank – Economic Research Paper Series No. 81.

The Consequences of Reforms on the African Civil Service

THE AFRICAN GOVERNANCE CRISIS (2/4)

 “Since the late 1980s, many African countries have been reforming their civil services (…) Unfortunately, these reforms have not been very successful because of faulty diagnosis and prognosis. They have failed to tackle the major problems confronting African civil services.” (1)

Before the analysis of African public administration reforms can be undertaken, one must remember that the landscape of Africa’s civil service was not build from scratch. With its independence from British colonial rule, countries like Ghana inherited a system of public management that fulfilled tasks of “assuring the continuity of the state and maintaining law and order” (2). However, the civil service was doomed to re-orientate after independence in order to follow national interests instead of the ones of former colonial rulers. The African Development Bank thus asserts  that  an  enormous  expansion  of  the  civil  service took  place  until  the  grave economic decline at the  end of the 1970ies leading to a full-scale development crisis (2). This is when reforms of the civil services this paper aims to concentrate on were launched. Ghana shall be utilized as a hands-on example in this work, because it may be identified as a reform-committed country (2) that demonstrates strong efforts to rehabilitate its public service despite tremendous economic shortfalls. Therefore, a lack of commitment can be dismissed as a possible inhibiting factor to a successful development of Ghanaian public administration.

The goal of the following chapter is thus to properly understand why policies from the 1980ies aiming at the economic stabilization and development of African states such as Ghana have shown little success (1). One of these policies is the liberalization African markets (3). Taking this as the initial point of  this  work’s  analysis,  one  is  more  likely  to  comprehend  the  nature  of  reforms launched  during  the  1980ies.  The question whether the latter actually inhibited or actually reversed Ghanaian administrative, hence ultimately economic progress shall now be at focus.

NPM-Waves in Africa

Influenced by donor countries providing the necessary financial support for reforms (4), the ideal of New Public Management began gaining ground as a leitmotif for reforms in Ghana and other SSA countries. In general one can follow Bamidele Olowu in asserting that “African civil services [were] originally modeled on their metropolitan precursors.” (1). Although New  Public Management does not  translate  into  the  same  dogmatically  closed  catalogue  of  instruments  in  every country, in this work NPM shall be understood as a business interpretation of administrative action, hence a trend toward micro economic behavior in public management.

According to Peter Evans, this phase of reforms in developing countries may be seen as market-centered (5). After decades of viewing the state as the ultimate instrument of development, reforms in the 1980ies were initiated under the sentiment of negative experiences with the central government, hence a thrive for a reduction of the state.

As mentioned before, Ghana like many other African countries experienced a great expansion of the civil service sector after the 1960ies (1). After the global oil crisis, African economic decline and the ideal of a business-oriented reform wave  of  the  public  administration,   this   growth  of  the  state  was  to  be  ended (2). Donor countries provided African states with the necessary financial aid for the cutback of civil services (4). To make this more accessible, one must look at some exact data, in this case from Ghana.

The shrinking of the Ghanaian public administration was tackled through a myriad of reforms steps. The most important ones for the analysis in this paper are as follows. A grand movement of organizational restructuring led to a reorganization of government ministries eliminating four agencies during the reform efforts. Hence, seemingly unnecessary agencies were cut.  Another method, which was very well received by donor countries, was Ghanaian retrenchment. The core goal of this policy may be seen in the cutback of unneeded civil servants in order to shrink the countries’ public administration system. Therefore, Ghana reduced its civil servants from 131 089 in 1990 to 80 000 in 1995 (1).

Despite the reduction of civil servants, the payment of the latter was to be increased. Therefore Ghana foresaw decompressing wages and providing higher salaries for public managers. While information on the actual increase varies depending on the source, it is safe to say that actual salaries in Ghana did not rise significantly. Although still higher than for many African countries, the increase during the reforms in Ghana was modest (2).

These three aspects of Ghanaian public sector reform are sufficient for the following line of argumentation. However it shall be noted that Ghana was also at the forefront in regard to privatization and decentralization of public services (1). Due to its British past and organizational influence, reforms like the latter were faster implemented than in other African countries (1).

Evaluation of the NPM Reforms in Africa

The crucial part now lies in the evaluation of the New Public Management reforms and their effect on policy-making capabilities of the African civil service.

As mentioned above, the size of the Ghanaian public administration was decreased in regard to the number of agencies as well as the number of employees. Donor countries favored this approach due to  the conviction that a smaller public sector would work more  efficiently  as  for  instance  experienced  in  the  UK  (3). Moreover, the state’s involvement was seen as one of the core problems in developing countries after the 1970ies (5), thus the idea of a roll back of the state was widely popular (6).

However, the African civil service was never abnormally big in comparison to other regions (1).

      Figure 1: Government Employment as a Percentage of Population (various recent years)

Source: Olowu, 1999, p. 9.

As visible in the above chart, the central as well as the local government in sub-Saharan Africa is much smaller than the OECD average. While the observation that there was an enormous growth of the latter may very well be correct, this must be viewed as a post- colonial necessity. It seems rather logical that a growing economy must increase its public administration capacities. In regard to the number of public employees, the UN states that the African public administration “is significantly understaffed in professional and managerial areas, and perhaps overstaffed in semi-skilled and unskilled areas.” (4).

Therefore, one must conclude that a reduction of Ghana’s civil service at all levels was contra-intuitive and defeating the purpose of a more effective public administration.

The retrenchment in the civil service in general has proven to be more costly than expected in the beginning. More precisely, the research on the proper identification of cost saving possibilities mostly exceeded the actual ex-post cost saving (1).

Ghana is once again a perfect example for this miscalculation as the country actually encountered cumulative losses as a result from downsizing in the 1980ies. Although  Ghana  has  been  classified  as  a  committed  reformer,  the  former  head  of Ghanaian civil service, Robert Dodoo asserted his dissatisfaction in regard to the reform movement. According to him, the reason for the lack of improvement of the country’s development lay in the “donor time-tables, agendas and conditionalities” (7). While external support was necessary and vital for an improvement of the African  civil  service  the  provision  of  money  came  with  unreasonably  short-term expectancies.  It  does  not  seem  surprising  that  a country in  danger  of  loosing  all monetary  support  decides  to   hustle  through  a  reform  and  risk  less  successful implementation instead of the loss of crucial financial aid.

There are two core weaknesses to be identified after this ex-post evaluation of the first part of African civil service reforms: (1) the way reform was embarked upon, along with (2) the goal of the reform.

The first point has been made quite clear with the previous statements of Robert Dodoo. The pressure for success coming from donor countries was in no way beneficial for the improvement of the Ghanaian civil service. As one of many, Ghana had agreed to reduce the cost of the public sector and implement questionable structural adjustment programs: “This was an explicit condition for financial support from the International Monetary Fund and the World Bank.” (2). Although the size of the civil service was reduced, the results in cost saving were modest.

But why reduce the African public administration at all? As demonstrated with the graph, the African civil service was in no way bigger than ones from many other states. While it was indeed expanding after the colonial rulers granted independence, this was a vital step toward a functioning economy and a sustainable development of countries like Ghana. State and market building are mutually dependent; hence a strong state in combination with a functioning market could be seen as the more adequate policy for Africa at this delicate time (3).

The World Bank itself states that

‘An effective  state  is  vital  for the  provision  of the  goods and  services  – and  the  rules  and institutions – that allow markets to flourish and people to lead healthier, happier lives. Without sustainable development, both economic and social is impossible.’ (8)

The problem  of  the  1980ies  believe  that  effectiveness  would  be  achieved  through downsizing is  made clear in the above. However, it now becomes tangible that the effects of the 1980ies reforms may very well have resulted in lacking capabilities to implement crucial policies for the countries’ development, i.e. the liberalization of markets. If there are too few agencies and employees to oversee the realization of liberalization, this process is doomed to fail.

The third reform step that shall be evaluated here is the alteration of salaries in the civil service. While there was indeed some increase in the salaries of civil servants in Ghana, they are still stunningly low (1).  When being confronted with unattractive   employment   opportunities, the reaction of workers is universally comparable. High-qualified human capital either leaves the country in order to find better-paid jobs or the employee opens him – or herself to corruption. A report by the IMF shows a strong correlation between wages in public administration relative to wages in manufacturing: “It is estimated that government wages needed to be 2×8 (…) times higher to make corruption negligible.” (The Economist 1997, Reasons to be venal).

Corruption is another major weakness of African public administration and must be seen as another NPM-influenced repercussion (1). Peter Evans asserts in this regard that methods of personalism and plundering at the top levels of African civil service destroy all possibilities of rule-governed behavior in the lower levels of public administration (5). More precisely, in order to make a living less qualified officials go along the example set at the top.

Another fatal repercussion of corruption for these countries is not only the waste of financial  resources,  but  also  the  cancelation  of  international  aid  programs  as  a punishment (5). Weak public administration with corrupt officials therefore results in a vicious circle for the whole country.

After evaluating the three vital reforms in Ghana, the downsizing of the public sector as well as an insufficient rise of civil servant salaries, in the following, this paper aims at observing some of the latest reform movements. By doing so, the goal is to make a recommendation as to where the development of the Ghanaian and African civil service should be headed in order to guarantee more capable ways of implementing policies for an improvement of the countries’ development.

Related posts:
· The African Governance Crisis (1/4) · A sift inventory of Africa’s development problems
· The African Governance Crisis (3/4) · Rehabilitating the African Civil Service
· Millennium Development Goals: Fragile states claim summit outcome off-target

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(1) Olowu, B. (1999). Redesigning African Civil Service Reforms. In: The Journal of Modern African Studies 37, 1 (1999). Cambridge University Press.
(2) Adamolekun, L. (2005). Re-Orienting Public Management in Africa: Selected Issues and Some Country Experiences. In: African Development Bank – Economic Research Paper Series No. 81.
(3) Chaudhry, K. A. (1993). Myths of the Market and the Common History of Late Developers.
(4) United Nations. (2005). Public Administration and Development – Report of the
Secretary General, Sixtieth Session.
(5) Evans, P. (1995). The State as Problem and Solution: Predation, Embedded Autonomy, and Structural Change. In: Politics and Society.
(6) Goldsmith, M. J. & Page, E. C. (1998). Farewell to the British State? In: Public Sector Reform by Jan-Erik Lane. London: SAGE Publications.
(7) Dodoo, R. (1996). The Core Elements of Civil Service Reforms. In: African Journal of Public Administration and Management
(8) World Bank. (1997). World Development Report. New York: Oxford University Press

A sift inventory of Africa’s development problems

THE AFRICAN GOVERNANCE CRISIS (1/4)

Index of African Governance Human Development © European Statistical Laboratory

The underdevelopment of developing countries and the attempted overcome of the latter are at heart of international debates ever since development politics began gaining ground in world politics in the 1960ies. Today, African states receive special attention in regard to possibilities of an amelioration of their economic status quo.

Core problems  of  these  so-called  Least  Developed  Countries  (LDCs)  are  a  highly restricted  access  to  basic  human  needs  such  as  food,  water,  energy  resources  or medicine.  Moreover “social services and infrastructure have largely collapsed  owing  to  a  lack  of  resources  for  their  upkeep.”  (1). Although the Millennium Development Goal aiming at a worldwide reduction of extreme poverty by 50% is expected to be reached until 2015, this data must be considered with caution in regard to Africa. While countries such as India or China, who are also targeted by the UN agenda  do  indeed  face  an  incredible  improvement  of  public  wealth,  sub-Saharan countries are at risk of being left behind permanently. More precisely, the UN today expects goals such as the reduction of extreme poverty to be reached in Africa no sooner than in 150 years (1).  This vicious circle of underdevelopment is well highlighted in the Human Development Index. From the 1980ies until the end of the millennium 13 of 22 countries that suffered large setbacks were African (1). Among a great number of possible explanations for this economic disaster, one of the most plausible ones is the conviction that “governance and public administration  weaknesses,  [and]  the  failure  to  reflect  poverty  concerns  in  budget allocations…” (1) generate economic gaps. This analysis thus aims to demonstrate that so far weak governance institutions are one of the main causes for the above-depicted underdevelopment of some African countries.

But how exactly does the public administration system of sub-Saharan LDCs affect their (economic) development?

Many theories regarding the economic improvement of these poorest countries have been launched and abolished. Sub-Saharan Africa (SSA) has been at the receiving end of a myriad of developmental experiments ranging from modernization concepts to self-help and good governance approaches. The core train of thought driving these, mostly Western models of development, has been the ideal of market liberalization (2) as  a  motor  for development.  But  what  is  often  forgotten  when  dealing  with  the  approach  of  free markets is the vitality of  strong governance institutions. Kiren Chaudhry and Peter Evans acknowledge that market building and state building must go hand in hand (2)(3). More precisely, they hereby avert from the idea of a simple roll back of the state of New Public Management (NPM) reforms launched during the 1980ies (4).  The UN General Assembly corroborates: “With challenges of poverty and growing inequality (…) organized and constitutional Government becomes the only guarantee of personal and collective security.”  (1).

Although development aid or development strategies in general may have fallen into some disgrace during the last decades due to little trickle down effect and images of corrupt African leaders wasting  Western money for their personal pleasure,  increased  financial  aid  might  be a sine qua non at this crucial time of development of African governance institutions. A lack of financial resources leads to dramatic human capital flight in the African public administration (1). Further, NPM-like cuts in administrative resources in order to minimize the size of African public management could have led to a setback and to less development in the target countries.

The reforms of the civil sector in Africa so far have been mainly concerned with technicalities, such as the reduction of the size and the cost of the public sector (5).

However, this approach fails – as I shall argue later in more detail – to comprehend the crucial task of building lasting human and institutional aptitudes.

This contribution therefore aims to concentrate on the civil service sector of underdeveloped sub-Saharan countries. Questions such as: ‘What kind of reforms were implemented?’ must be answered before diving into the complex task of evaluating the latter and discussing a different approach to possible improvement in the civil service, hence in the countries’ development. Thus, in a first step, this paper will focus on some major reforms in reform-committed African countries such as Ghana and underline the weakness of the attempts to change the system of public management (6).

A second step will then be dedicated to suggestions of a new direction for the handling of the African public administration.

In a last step, this paper then aims to draw a conclusion and answer the initial question whether public sector reforms in Africa so far actually inhibit or support development.

Related posts:
· The African Governance Crisis (2/4) · The Consequences of Reforms on the African Civil Service
· The African Governance Crisis (3/4) · Rehabilitating the African Civil Service
· Millennium Development Goals: Fragile states claim summit outcome off-target

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(1) United Nations. (2005). Public Administration and Development – Report of the Secretary General. Sixtieth Session.
(2) Chaudhry, K. A. (1993). Myths of the Market and the Common History of Late Developers.
(3) Evans, P. (1995). The State as Problem and Solution: Predation, Embedded Autonomy, and Structural Change. In: Politics and Society.
(4) Goldsmith, M. J. & Page, E. C. (1998). Farewell to the British State? In: Public Sector Reform by Jan-Erik Lane. London: SAGE Publications.
(5) Olowu, B. (1999). Redesigning African Civil Service Reforms. In: The Journal of Modern African Studies 37, 1 (1999). Cambridge University Press.
(6) Adamolekun, L. (2005). Re-Orienting Public Management in Africa: Selected Issues and Some Country Experiences. In: African Development Bank – Economic Research Paper Series No. 81.

High Food Prices Endanger Food Security

Along with officers from the Food and Agriculture Organization, mankind is only two bad seasons away from a disaster on a global scale.

This spring already, the previous year’s deficient harvests contributed to the social unrest in North Africa. Even though the World Bank asserts that rising food prices have not initiated the protest movement in the Arab world, the price ramble however contributed to an intensification of tensions. Exploding prices are a main headache for political and economic decision-makers across the globe. One thing is clear: A search for solutions needs to be made a top priority.

The developments in the markets over the past year certainly give full reason for concern: Within the past decade, prices for agricultural goods rose by 83 percent. In 2010, inclement weather proved a major challenge for food security: In the spring, heavy rainfall in Canada destroyed a quarter of the wheat harvest. During the summer drought and bushfires in Russia, the Ukraine and Kazakhstan lowered yields. In China drought and sandstorms have made life difficult for farmers ever since last spring and significantly decreased their income from wheat sales. In early 2011, strong snowstorms threatened winter wheat plants in the leading export nation, the United States. In the southern hemisphere in 2010, La Nina led to drought and losses for soya beans and maize plantations. Floods in Australia made half of the planted wheat there unfit for human consumption. The wheat price has doubled since last summer. Lower wheat supplies led consumers to switch to maize. The maize price shot up by 73 percent as a result in the second half of the year. Meanwhile numerous Mediterranean countries like Egypt, Algeria, Morocco, Lebanon, Jordan, Libya, and Turkey have engaged in panic-buying and hoarding large stocks of wheat. China is expected to follow suit sometime later in 2011. This will further push up prices in the world markets. It is not only climate change and the bad weather that is responsible for the increasing shortage of food stuffs. In many emerging countries, changing consumption patterns – especially increased reliance on meat as a dietary source – encourage prices escalate. Moreover, additional agricultural land is lost to planting crops for biofuel instead of food stuff. According to the International Food Policy Research Institute, one third of the price rise needs to be attributed to the increasing use of grain as a biofuel.

Despite these disquieting numbers, it is not predictable that the United States, the European Union, or Brazil will in the short-term abandon their biofuel projects. Neither can consumption patterns worldwide easily be changed. The developments observed therefore point that supply shocks caused by bad harvest today can more easily upset the delicate balance in the increasingly globalized food chain. Structural changes render it difficult for the system to deal with such shocks at the present time. In order to prevent further upset on the supply side, much more investment in agriculture is needed today. It is necessary to be better prepared for the challenges posed by climate change. It is high time to coordinate on a global level in order to stabilize agricultural markets in such a manner that external supply shocks will not automatically lead to systemic consequences and social unrest.

Development, Democracy and Human Security

An approach to the concerns on democracy promotion.

There is a great debate about the principles that should guide promotion of democracy abroad.  There are sensitivities involved in promoting democracy and we should be mindful of how its democracy assistance is perceived in recipient countries.  Others should raise the importance of democratic assistance to Western interests and values.

Many analysts see democracy promotion as a key foreign policy responsibility and suggest that Western states should focus on a holistic approach with a specific focus on developing civil society and establishing long-term goals. Western countries need to be accountable for their actions abroad. They can best promote democracy by leading by example.

Other analysts note that Western countries should only engage in democracy promotion activities when invited by other states, arguing that democracy must take root from within.  Still others felt that democracy promotion was best left to NGOs with indirect support from Western governments.

Significant elements of democratic governance

There is a wide variety of elements of democratic governance.  Some think that developed countries should focus on civic education of children (particularly girls) and youth while others think the establishment of democratic institutions and rule of law are of greater importance.

There is a great debate on what should come first: democracy or development – yet, no consensus is formed. Views diverge on whether economic development is sufficient to bring democracy to other countries.  Many specialists suggest that a market economy is not a precondition or impetus for democratization. Some others focus on the need for an empowered civil society, human rights and free media as essential elements of democratic governance.

How developed countries can promote Democracy

Following along from the discussion of guiding principles above, one should agree that democracy is best cultivated using a bottom-up approach:  hence, the important distinction between democracy promotion and imposition.

In this light, West can promote democracy through its participation in international or regional forums (i.e. by sharing best practices).  In that way, EU missions abroad could support democracy promotion by engaging citizens who had previously lived in the EU.

Developed countries could assist with enhancing the elements of democratic governance.  For example, contributing to dynamism of civil society, supporting the logistics of a free media, encouraging forums of assembly, giving support to international exposure of grassroots democratic struggles, promoting human rights and generally providing consultation and support for countries who request it.

Barriers such as conflict and state fragility, poverty and authoritarian regimes are often interlinked.  Western countries can work to increase transparency and accountability through their efforts to strengthen corporate social responsibility, meet an Official Development Assistance (ODA) level of 0.7% of GDP and restrict financial support to countries with authoritarian regimes (Note that some countries just focus their resources on one region of the world.)

Other analysts mention that it could best assist democracy by focusing at home and implementing, for example, a proportional representation electoral system.

This graphic is world imports in 2002, Colors reflect the level of democracy (blue) or autocracy (tan) in each of these countries (based on the POLITY IV indicators).

What is most notable about this cartogram is the disappearance of the African continent: Africa is almost invisible in terms of global trade patterns, a continuing point of contention in (barely) ongoing global trade negotiations.

© Department of Political Science, Duke University

Main obstacles to democracy promotion

The state, whether authoritarian or exaggeratedly bureaucratic, is the main obstacle to democracy promotion.  In these situations, it is highly recommended to support the community-based democratic initiatives and a strong focus on the mobilization of civil society and a strong middle class.

Lessons learned from South Africa

In this regard, it is interesting to note the South African experience. According to the South African Institute for Security Studies, four critical elements are particularly important to strengthening democracy:

1. Fairness of elections and electoral processes;
2. Freedom to form and participate in an opposition party;
3. Adherence to limits on time served in office as outlined by constitutions; and,
4. Independence of the judiciary.

Another remarkable action is the relative success of US NGO involvement in the colour revolutions (1) that occurred in three countries of the former Soviet Union.  But note that although this method was an example of productive outside intervention, it may not be appropriate in other areas of the world.

Sources:

· David Held, Models of Democracy, Polity and Stanford University Press, 1987.
· New Institute for Multiparty Democracy (IMD).
· openDemocracy.
· Rights & Democracy.
· Samantha Power, Professor of Practice of Global Leadership and Public Policy at Harvard’s John F. Kennedy School of Government. Take a view on her very interesting approach at http://www.youtube.com/watch?v=wUUOO5cCNVg.
· Wikipedia.

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(1) Participants in the colour revolutions have mostly used nonviolent resistance to protest against governments seen as corrupt and/or authoritarian, and to advocate democracy. These movements all adopted a specific colour or flower as their symbol. The colour revolutions are notable for the important role of non-governmental organizations (NGOs) and particularly student activists in organizing creative non-violent resistance. So far these movements have been successful in Serbia (especially the Bulldozer Revolution of 2000), in Georgia’s Rose Revolution (2003), in Ukraine’s Orange Revolution (2004), and (though more violent than the previous ones) in Kyrgyzstan’s Tulip Revolution (2005). Each time massive street protests followed disputed elections and led to the resignation or overthrow of leaders considered by their opponents to be authoritarian.

More than 70 cities sign pact in Mexico to fight against global warming

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Over a thousand local and regional representatives from 114 countries get together, from November 17 to 20, in Mexico, during the third World Congress of Cities and Governments (UCLG) that will go on Sunday 21 with the first World Summit of Mayors on climate in which will be signed the first International Register of sustainable initiatives in cities. The document will be presented to the UN Conference on climate, from November 29 to December 10 in Cancun, Mexico.

The mayor of Mexico City, Marcelo Ebrard, said that the “Pact of Mexico” would be signed November 21, during the first World Summit of Mayors on climate, by which cities around the world undertake to adopt figured and tangible targets on reduction of their CO2 emissions to fight against global warming. Hence, Los Angeles, Dakar, Mexico, Amsterdam, Jakarta, Sao Paulo, Paris want to commit to carry out ambitious climate policies – hoping that many other cities will join them.

The Mexico agreement will be presented at the 16th UN Conference on climate Nov. 29 in Cancun (Mexico). “This agreement is a way of pressuring governments that have not listened to the cities at the Copenhagen conference, ended in total failure”, said M. Delanoë, the mayor of Paris.

The claim of the presence of cities in climate negotiations is more than justified: more than half the world population lives in urban areas, which generate between 60% and 80% of CO2 emissions. Moreover, many cities have already committed more ambitious approaches than their countries’: “It is in the cities that the battle to curb global warming will be won. Yet we have not even been invited to Cancun”, Ebrard said.

Beyond this symbolic recognition, direct access from the cities to financial instruments to fight against climate change is at stake – future “green fund” and clean development mechanisms. At the end of the deal: billions of dollars that local officials hope to capture in a significant split – while in Copenhagen, states had decided to create an aid fund for the South without stating how money will be provided nor who will be granted to get hold of it!

It is with this objective that the Pact of Mexico wants to make local climate policies “measurable, reportable and verifiable”, according to UN criteria. Then the Pact must list them in a climate inventory of cities, called “Carbonn”, located in Bonn, Germany.

To set an example, the mayor of Mexico City has agreed a 14% reduction of greenhouse gases in the city by 2012. The “Green Plan” of the Mexican capital – launched in 2007 – plans to fall CO2 emissions by 7 million tons in 2012. This program has already helped cut greenhouse gas emissions by 4% (2,000,000 tons). Car traffic was limited, water pipes refurbished, bike paths and bus lanes built. Next step: to double the recycling of garbage, replace 45,000 polluting taxis, inaugurate a twelfth subway line and extending to 30,000 m2 area of rooftop gardens.

However, not all the signatory cities to the (not compulsory) pact will lead to similar commitments: most of them lack access to technologies to assess their reductions of greenhouse gas emissions. Yet, these cities need adequate training and technology to grow without polluting. The initiative, in short, is complicated because of the heterogeneity of urban areas in terms of size and richness. Its success will depend on transparency and decentralized cooperation between the cities of South and North.

Millennium Development Goals: Fragile states claim summit outcome off-target

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From September 20 to the 22nd, world leaders gathered at the United Nations Headquarters in New York to assess progress and challenges in achieving the Millennium Development Goals (MDGs). Adopted at the Millennium Summit in 2000, the eight goals represent a global commitment to reducing poverty and improving the lives of citizens in poor countries including through improved education and health.

What are the Millennium Development Goals?

* Goal 1: Eradicate extreme poverty and hunger
* Goal 2: Achieve universal primary education
* Goal 3: Promote gender equality and empower women
* Goal 4: Reduce child mortality
* Goal 5: Improve maternal health
* Goal 6: Combat HIV/AIDS, malaria and other diseases
* Goal 7: Ensure environmental sustainability
* Goal 8: Develop a Global Partnership for Development

The eight MDGs break down into 21 quantifiable targets that are measured by 60 indicators.

These goals are unique – unlike many summits and partnerships, they committed governments to specific and clear targets to be achieved by 2015. However, in the lead-up to the Summit it became clear that many of the identified targets would not be met in the next five years, despite real progress in several areas. Of particular concern is the group furthest from achieving the MDGs, fragile and post-conflict countries.

What distinguishes so-called fragile states from other low-income countries? These are the countries struggling with the legacy of conflict, and hampered by weak government legitimacy in addition to chronic poverty, particularly persistent in fragile states. According to the World Bank, 54 percent of the population in fragile countries lives in poverty, compared to an average of 22 percent for all low-income countries. A recent report by the Center on Global Development identifies the ‘MDG laggards,’ those furthest from achieving the goals. As the report notes, “Not surprisingly, the list of MDG laggards consists mainly of post-conflict countries or fragile states.” Eight of the twelve currently have UN peacekeeping operations, one of the clearest signs of fragility.

This is no surprise. Shaken by customary cyclical violence, the institutions of government and their ability to deliver services are often severely weakened or shattered. Limited infrastructure and, frequently, corruption and poor governance breed significant obstacles to the realization of the MDGs, as the basic foundations for development are missing.

In fact, the preeminence of the MDGs as a guide for aid to fragile and post-conflict countries is questionable. In the group of fragile states, not one has achieved even a single MDG. The emphasis by international aid and development institutions on achievement of the MDGs has also shifted attention – and financing – away from other, urgent needs in fragile states. This reality challenges long-held assumption about development, raising the question of whether these are the right – or the only – global goals for this set of particularly vulnerable countries.

Recognition of this incongruence has led to efforts to enhance the MDGs with specific goals for post-conflict countries. In Afghanistan, a ninth goal – security – was adopted after Afghan citizens identified insecurity as their greatest challenge, emphasizing that basic security is a prerequisite for achieving the MDGs. In 2010, the International Dialogue on Peacebuilding and Statebuilding, which brings together representatives from fragile states, donors, and international aid and development organizations, identified a set of goals for post-conflict countries “as stepping stones to achieve progress on development” that could serve as the foundation for further articulation of peacebuilding and statebuilding goals. As the Minister of Finance in Timor-Leste, Emilia Pires, recently noted at a side event to the MDG Summit on fragile states, “Aid is given based on MDG criteria, and from our experience we have found out that before we can get the MDGs, we have to do a few things first. We have to have peace and stability.”

Debates in the overture of Summit saw a split between those advocating for a particular focus on the least developed countries and those in favor of additional focus on middle-income countries that have demonstrated progress towards the MDG. Institutional support has either sought to focus on those areas that have demonstrated results, or those that are most in need. However, these distinctions fail to depict the specific needs of fragile states, identified in the Outcome Document of the Summit, which recognizes “the specific development challenges related to peacebuilding and early recovery in countries affected by conflict and the effect of these challenges on their efforts to achieve the Millennium Development Goals.”

As leaders return from the Summit, reflecting on progress made and challenges ahead, it is critical that they stop to assess current efforts in fragile and post-conflict states. These countries are furthest from achieving the MDGs, the most in need, and those most at risk of setback to conflict or failing – presenting real security challenges both regionally and globally. Any action plan moving forward requires a specific focus on the MDG ‘laggards’ to ensure that they are not left out of any ‘big push’ for the achievement of the MDGs over the next five years.

Related posts:

· The African Governance Crisis (1/4) · A sift inventory of Africa’s development problems
· The African Governance Crisis (2/4) · The Consequences of Reforms on the African Civil Service
· The African Governance Crisis (3/4) · Rehabilitating the African Civil Service
· The African Governance Crisis (4/4) · Do Reforms Inhibit or Support African Development?

Sources:

· Together for a Better Peace
· Center for Global Development
· UNDP
· Eurostep
· Sustainable Public Financial Management
· IPS
· Guardian Development Network

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The Ideology of Economic Growth

The end of the continuous economic expansion

The never ending economic growth within a finite planet is basically impossible. A child can understand that. But the belief in economic growth bringing peace and prosperity to everyone is tough enough.

How is this mystification possible? How political and economic elites can maintain the deceit? What is the interest of everyone to consider or pretend to accept the assertion as true?

Economic growth involves extra consumption of energy, natural resources – water, oil, mineral substances … – constantly further waste, pollution, and aggravation of global warming, loss of biodiversity in sum, and poses ultimately the question of the mankind survival.

The persisting and tiring arguments put forward by the “green skeptics” to give support to economic growth, despite the obvious damage, is that of technical progress, the use of renewable energies or that we are entering a new economic era on information, digital and services supposed to have no impact on the biosphere.

Technological progress has improved (and will go on improving) the energy and resources outflow consumed to produce an object (former televisions and cars did consume more energy and resources than today’s). But this theoretical efficiency gain does not compensate for practical and concrete bulimia of consumer populations – and the most technologically advanced countries make ample evidence since their citizens exercise the biggest environmental pressure so far.

What’s more, renewable energy handled on the margin can not solve the problem of the finiteness of fossil resources and of ecological disaster under way.

Finally the different adjectives joined to the so-called new economy do not change the assumption of more and more physical resources: everyone wants a car, a television, a computer, a mobile phone … and to renew it all as quickly and as often as possible! The new economy, whatever its name, has not diminish at all the environmental impact of industry, agriculture or chemical engineering. Quod erat demonstrandum.

Why are we growth addicted?

The ideology of growth points to the quasi biblical reign of plenty. Everyone expects to get more, and the widespread accumulation of material resources would supposedly stop the social violence. Traditional societies, however, had not lost sight that the accumulation is quite a factor of social tension and violence. Facts and reality clearly show it, but the belief in a society of growth bringing abundance and peace is constantly pushy.

Takis Fotopoulos explains well enough the dynamic of the growth economy:

“The growth economy can only survive through its continual reproduction and extension to new areas of economic activity.” And doing this, the growth economy opens to new action scopes introducing “new discoveries, improvements in efficiency, possibilities for substitution, and technological innovations” in the mature growth economies – or through a destructive approach of geographic expansion of most self-reliant economies in the world. (1)

Economic growth is measured by the number of dollars per head. Everyone runs under this benchmark, being understood that the logic that prevails is to climb the highest and fastest possible in the income pyramid.

International institutions, such as the World Bank, are concerned about the fate of that billion of human beings whose regular earning is less than $ 1 per day, thus representing the stage of absolute poverty. These billion human beings located primarily in rural areas therefore benefits from the attention and interest of institutions to help them out of their extreme conditions, and tools such as micro-credit are highlighted.

Armatya Sen, Nobel Laureate, demonstrated in the late 1990s that one could live in the heart of the richest state in the world, in New York, at Harlem, and have a life much more miserable that within the poorest state of the planet, in the state of Kerala in India – measured on criteria as simple as that compelling example of life expectancy.

The facts show abundantly that many peasants, who abandoned their land in return for income in the city, live in subhuman conditions. The difference between this real city misery and that of peasants living autonomous on their land is that the former are involved in the growth of the economic pyramid (including miserable income not allowing to live with dignity), unlike the latter who do not give further support to the consumer society.

Hence the interest of the institutions to worry for the rural population who do not receive income.

Economic growth requires everyone’s participation as the system does not leave aside several billion people representing potential consumers, and thus substantial growth.

The terrible conclusion is that economic growth creates more miserable individuals than people who could reach a decent revenue.

And regarding those luckier people whose revenue allow them to live in dignity, the mechanical construction of their earnings is disastrous both for the environment and social issues.

Economic growth does not lead us to abundance and peace, but to war and continuing shortage, i.e. insufficiency of absolute vital assets such as land or water.

Our blindness on this reality, our unwavering support to the tyranny of the growth economy, derives from our relative and provisional material well-being, and from our indiscriminate faith in the saving science.

As Marie-Dominique Perrot (2 )says:

“We confuse the quantity and quality and we consider the accumulation of anything as a synonym for progress”.

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(1)  In Takis Fotopoulos, Development Or Democracy? SOCIETY & NATURE,  Vol. 3, No. 1 (issue 7), 1995

(2)  From the Graduate Institute of International and Development Studies, Geneva

Africa Underrepresented

Beyond Africa, Developing World should have more say in key forums. African officials dismayed not to have a bigger voice in key global economic forums.

When world leaders meet to tackle the global financial crisis, Africa is represented only by South Africa. African officials argue that the continent need better representation, given the effects that the turmoil is having in Africa as well as the continent’s growing financial importance. The complaint could apply equally to other developing countries.

The global crisis has come just as many African economies were turning a corner, carrying on  improvements in governance, technological change, debt relief, higher prices for their exports as well as inflows of funds from Asia and from Western investors seeking higher yields. Many African countries have spent decades gearing economic policies to attract more private capital and chase away a reputation as unreliable investment destinations.

But turmoil on world markets has cut the supply of money as the world’s biggest banks shift funds from new projects to shoring up balance sheets, leaving African governments wondering how their infrastructure will get built.

But should Africa be better represented?
Compared to its own recent history, African economies have been doing extremely well, but they are still small in global terms. As Africa’s biggest economy, South Africa will be attending, together with representatives of the main developed and developing countries. Is that enough? What advantage might Africa gain from having a bigger voice at the key summits? What about the world’s other poorer regions? Should they have more say too?

Current Crisis,  Cure or Croak

The real economic situation is constantly in a state of fluctuation and the ready made solutions in the classical or neoclassical patterns avoid an enduring and secure solution to the current crisis. Over the years the very concept of ‘economy’ has undergone a sea change. The models that concentrate on national economies of olden years have become redundant and they don’t go beyond a transitory solution suppressing the real economic forces, side tracking the long term perspectives. The durable solution needs a fresh debate among the political economists to come out with an integrated co-operative model, keeping in mind the linkages of the so called developed and the developing economies, in which the monetary and the fiscal policies play a incidental role.

Simon Kuznets was a far sighted development economist who could foresee more than half a century ago that “poverty anywhere is a threat to development everywhere”. The ‘national economy’ is a misconception today and an attempt to resolve the existing depression at the national levels will always contradict the expectations, specially of the developed countries, and they are likely to slip from devil to the deep sea.

I look at the present crisis as a consequence of too much monetarism of the developed countries for maintaining their growth rates overlooking the potential development of South Asia, Africa, Latin America and the Middle East. This might lead to persistent speculative tendencies, playing down the primary role of money and ultimate crash down of core economies of the world creating a worldwide economic chaos.

The retrieval from it might take a century.

The Complex Game of Wrong Impressions – A First Balance on Copenhagen

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Beyond the political and scientific debate, economists make different analysis on a meeting that brought together more than 180 countries whose commitments regularly lacked of consistency: some advocate the growth model through expansion, other propose corrective measures more or less significant.

U.S. and Chinese positions, though contradictory, are no less obvious and essential, since it is impossible to imagine a positive outcome to the climate challenge without the support of both countries.

And what about the help of more than 7,000 million promised by the European Union that seemed initially to account for and optimistic output of the summit?

The rush of numbers is exhausting and often unnecessary. In this case, let us aim at misconceptions…

First: Macro meetings as Kyoto and Copenhagen have a realistic chance of success? Unfortunately, not (not always). In Kyoto, the aim was to limit the effects of the emission of greenhouse gases by 2012: Russia agreed to limit at 33% – in fact it simply did 0% – Spain promised to increase up to 15% – and did so by 54%. We better look after more realistic goals…

Second misconception: China is the leading global polluter. True, in gross terms, false in relative terms. Just remember that each Chinese pollutes four times less than an American. Furthermore, much of China’s pollution is the result of production for developed countries.

US is self-centred and does not make a move. Fascinating misinformation – manipulation? During this time American industry continues to invest in green energy. The Obama plan is a firm commitment to renewable energies, with volumes going from 1 to 20 in contrast to what Europeans planned – the ineffective French stimulus plan, for example. Many U.S. states have long acted individually. And since a decade, the US public opinion has evolved. What is more, American industry and business circles have changed their frame of mind. American employers face two opposing clans: on the one hand, polluters with hard entrenched positions – the powerful coal industry provides over half the energy consumed in this country, so huge interest which one cannot imagine in Europe – and on the other, a group of companies that calls repeatedly the federal government to establish clear standards and set uniform federal marks in order to harmonize practices rather than lead to a patchwork in which the industry – and in fine jobs — cannot develop properly. They also wish to clarify the price of oil in the mid term so as to know what kind of investments they will perform. The inimitable Sarah Palin issued an article in the Washington Post that gives a good idea of the hardness of the debate in the U.S. …

Europe is exemplary. Overall yes, Europe has played the game and has done more than other continents. On the other hand: no. Austria, Italy, Belgium, Holland, Spain have not achieved at all what they promised. And let us speak of Denmark, the summit’s host, which boasts of making 20% of its electricity from wind power, forgetting that 80% comes from highly polluting hydroelectrics.

Transportation segment is the main cause of GHG emissions. False. The main polluter is the production of energy itself. Even worse, agriculture, which in developed countries represents every day a smaller portion of its GDP, is one of the most important sources of CO2 emissions, even greater than the automotive: a cow produces 3.4 tonnes of  CO2 per year, while a usual car produces 1.8 Tn.

Some may point out miracle solutions to survive. i.e. renewable energy, electric car. All it takes to be convinced of the contrary is to recall that those energies and devices represent only 2.5% approx. of global electricity consumption. That consumption is projected to be 10% in 2030 but nothing is less certain. Regarding the electric car, its theoretical part is expected to be of 10% of the fleet in 2020 – the most reasonable analysis expect it to reach 3%

When the true ideas?

Just in case: Would you prefer that your car emits less CO2 or would you rather prefer to lose your job? It is not necessary to go against climate progress to choose the correct check box.

Related Posts:

Countdown to Copenhagen
Climate Change: Preparing a New Protocol (I)
Climate Change: Expectations for the New Protocol (II)
Climate Change: Upcoming meetings (III)

The Impact of Economic Crisis on Poverty in Latin America

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The report “Social Panorama of Latin America 2009″, presented by the Economic Commission for Latin America (ECLAC), projected that about 9 million people fall into poverty, the 2009 product of the economic crisis, which means an increase of 1.1% over the 2008. This figure marks a reversal in the trend shown in the period 2002 to 2008, representing 25% of the total population that had escaped poverty.

The current global crisis will cause nine million people in the region to fall in poverty this year, according to the ECLAC report Social Panorama of Latin America 2009, released November 19.

Source: Economic Commission for Latin America and the Caribbean (ECLAC), based on special tabulations of national household surveys.

a/ Estimates for 18 countries in the region plus Haiti. The numbers on the top part of the bars represent the percentage and total number of people living in poverty (poor and indigent).

In the study, the Economic Commission for Latin America and the Caribbean estimates that poverty in the region will increase by 1.1% and indigence by 0.8% with regard to 2008. Thus, people living in poverty will reach 189 million by the end of 2009 (34.1% of the population), compared to 180 million in 2008. Also, indigence will reach 76 million (13.7% of the population), up from the 71 million last year.

These numbers depart from the trend towards poverty reduction until now prevalent in the region. The nine million poor and indigent represent almost a fourth of the population that had already overcome poverty between 2002 and 2008 (41 million people), due to greater economic growth, the expansion of social spending, the demographic bonus and better income distribution.

The study was presented today by ECLAC Executive Secretary Alicia Bárcena, who stressed the urgency that the region develop a new long-term social protection system.

“We can’t say that all that was attained between 2002 and 2008 has been lost. It is not a lost period. However, the rise in poverty calls us to action: we need to rethink social protection programmes with a long-term, strategic perspective and measures that make the most of human capital and protect the income of vulnerable families and groups,” she said.

The projected increase in poverty for 2009 will delay the compliance of the first Millennium Development Goal of eradicating extreme poverty and hunger by 2015: the 85% of progress on this goal in the region in 2008 will drop to 78% by the end of 2009.

Some countries may experiment a greater increase in poverty than the regional average, such as Mexico, due to lower GDP and deteriorating employment and salaries.

The current crisis will nevertheless have less impact on regional poverty than prior crises, such as the “Mexican crisis” in 1995, the “Asian crisis” in 1998-2000 and the Argentinean and “dot.com crisis” in 2001 and 2002. For now, the region has been able to maintain the purchasing power of salaries and low inflation.

Income distribution in the region improved significantly from 2002 to 2008. During that period, inequality improved in seven of the 18 countries included in the study and worsened in only three.

Governments in the region have made great efforts to increase social spending. Between 1990 and 2007, public social expenditures per capita rose from 43% to 60% of average total public expenditures in Latin America.

“This shows that it is possible to grow and redistribute, expand social spending and be fiscally prudent to significantly improve living conditions of the population. Latin America is not condemned to be poor or unjust,” stated Bárcena.

For the future, ECLAC suggests reforming social protection systems and adopting both urgent short-term measures as well as strategic long-term ones. In doing so, governments should avoid fiscal irresponsibility and rigid labour markets, increase taxes progressively, redistribute social spending and extend coverage of social services.

Likewise, ECLAC recommends strengthening government assistance transfer programmes, among them conditional transfer programmes (CTPs). There are CTPs in place in 17 countries in the region, encompassing over 100 million people; that is equivalent to more than half the population living in poverty in Latin America.

ECLAC proposes a set of measures as a guide for countries to offset these results:

South is the First Victim of Global Warming

Several surveys confirm that poor countries will be the first victims of climate change, even if, being low emitters of greenhouse gases, they are less responsible.

A report published early September 2009 by Maplecroft –  a British cabinet expertise on global risks – shows that the most vulnerable countries to global warming are Somalia, Haiti, Afghanistan and Sierra Leone. Twenty-two of the 28 countries exposed to “extreme risk” are located in sub-Saharan Africa.

In the meantime, the Asian Development Bank presented in Manila the results of a conclusive report: melting of Himalayan glaciers threatens the food security and water availability of 1.6 billion inhabitants of South Asia. In New York, Rob Vos, director of the UN  Department of Economic and Social Affairs (DESA), ruled that ” If we do not reduce significantly GHG emissions, the damage to the [economies of] poor countries as a percentage of GDP[ gross domestic product] will be up more than ten times greater than in the United States and most other developed countries ” [1] . Mr. Vos commented on the report by his department. According to the conclusions, investments should be done every year in climate change mitigation and adaptation to its effects by 1 % of world’s GDP, i.e. more than 500 billion dollars.

A few months earlier, in May 2009, the United Nations had issued a report about the international strategy on risk reduction -launched in 2000. The document operates the first synthesis of knowledge about natural disasters that have occurred between 1975 and 2008. Even if he admits the document is not exhaustive, the text nevertheless represents a unique body of knowledge.

Between 1975 and 2008, 8.866 disasters have killed 2.284.000. Regarding flooding, the risk of death increased by 13% between 1990 and 2007. The picture is not, if we dare say, equally catastrophic. The absolute number of human or economic losses increases throughout the period, but it remains proportionately stable because of demographic and global GDP growth.

But according to UN experts, the situation would deteriorate because of climate change and ecosystems degradation. The latter is a factor too often ignored. Albeit not apple to apples, ecosystems manage to cushion the impact of natural disasters. Regarding climate change, it will increase the risk of disasters. The vulnerability of populations is one of the other factors that accentuate the risks. Action by Governments (earthquake standards, etc.) becomes crucial: Japan and the Philippines suffer roughly the same number of typhoons, but they cause 17 times more deaths in the Philippines than in Japan.

Have a look on Mr. Rob Vos’ press conference here enclosed:

[1] 2009 World Economic and Social Survey: Promoting Development, Saving the Planet.

Sustainable Cities for Freedom and Environment (3)

The city and its operation

Previous articles outlined the way to configure cities in order they become sustainable or not. Sustainability depends on the city functionality itself as well – the aim of this third article.

Adam Smith in his invisible hand hypothesis stated that market optimizes the distribution, enabling better allocation of resources without public intervention. It can also operate by creating unwanted situations to market players (cases of monopoly, cartels, lack of coordination, etc.) and then worsening the social scene.

For instance, the decision to travel by private car instead of using public transport can outcome the worst case scenario. In this direction, several investigations have revealed that it would take less to London bus users – as in any other city – than motorists to move from one place to another if there were less cars. Hence the idea of Mayor Livingston of an expensive access to London downtown by private car in order to provide greater flexibility to surface and underground public transport.

Urban planning is therefore absolutely essential for coexistence and progress. Consequently, European citizens from the early nineteenth century claimed to eliminate obstacles (walls down!). They claimed broaden their cities, which became progressively constrained by sea, hills, and old walls – now absolutely unnecessary, with severe communication problems, crowding and hygiene.

In this context, it was clear to Ildefonso Cerdà when designing the Eixample (urban expansion) of Barcelona that the city should be open, cosmopolitan, outside connected by well done road and rail networks… But above all, it had to be habitable for citizens. The city would grow in small islands: city blocks chamfered, with large inner garden patios, thus uniting the best of countryside life with the advantages of the city. Even then, many Barcelonans turned these courtyards into dedicated warehouses, small factories, and even buildings.

The Cerdà’s pioneering urban planning (1860) through areas, gardens and building expansions – quite different from the internal reform of Haussmann (1852) in Paris – is our daily bread. Managements of urban municipalities generally deal with this responsibility. They have to operate with long-term vision – avoiding short-termism that under-sizes capabilities and services with serious further quicken consequences. In this direction, planning must address a number of priority issues on water, air, noise, energy, waste, health, housing, and transportation.

Cleaner Water
Human intervention in water availability has quantity and quality implications as water used in cities floods back to environment, thus closing a cycle already enforced. Thus, sewage without any treatment, returning to their natural environment, creates serious pollution of rivers and aquifers. To avoid such an issue, the European Water Charter (1968) marked a series of objectives that have been largely completed in the EU-15 – while it remains outstanding work in some of the new 27 Member States of the Union.

In addition, water consumption has to be rationalized: in most large cities, a cubic meter of clean water is less expensive than a Coke at a bar, then increasing produced waste. Consequently, it is essential to charge water waste, starting with a low prices block about 60 liters a day – subsequently changing basic allowance – and then becoming gradually more expensive.

Air
The topic is most evident in cities where sustainability is not shining for its excellence. The most valuable asset – what we breathe 24 hours a day – is consumed in very inadequate conditions. The air of London in the mid 1950s, with frequent smog waves, became suffocating. Following these situations a clean air policy arose, with the first laws, specifically British, in 1955. European Countries came after with further regulation mechanisms.

In summary, the most essential is to ensure clean air, with sensors networking and a very long series of measures that would not exceed the allowable cap, forcing the phasing out of most harmful emission sources.

Noise
Everyone agrees – starting with psychologists and psychiatrists – that noise is one of the environmental factors that affect most the quality of life. From small discomforts, more or less anecdotal, to levels of irreversible disorders in the human mind.

Definition of noise is well known:

“The sound, or set of sounds that are perceived by human beings, and that alter the acoustical medium within they normally move.”

…with the additional peculiarity that everything depends on the inevitability of impact also. Regarding the latter, a noise is obliged to be heeded, and even foreseeable at the time – as when a summer storm occurs, or when the passage of a train at a fixed time takes place, or when children voices arise from the playground in the courtyard of a school near you – and then the sound waves seem justified, and the trouble is diluted. Not at all when the roar of an uncontrolled neighbor turntable in its 50 watts comes to you, or when it deals with crying on Friday night in usually quiet streets, on these occasions everything just become the most detestable.

Among the most aggressive acoustic dealings, the continuous traffic of suburban highway (along with hundreds of miles of noise barriers) should be condemned – and what about major arteries within metropolitan area, and even in the formerly quiet streets in ancient downtowns?  In these ways, some motorists “do their best” traveling at full speed – as if they were in Silverstone. And it is certainly no less remarkable ambulances, day or night roistering circulating, carrying patients or not, whose sirens wailing penetrate your eardrums at completely unnecessary noise levels.

But most of all, among the most inconvenient and unnecessary noises, the urban cleaning must be pointed: the unpleasant scavenging machines in the vicinity of 100 dB, apart the absurd beep when they reverse or their stressful light pollution – equipments that go together with by “air gun carriers’”, top-mask and earplugs outfitted, raising dust clouds in the din with a volume of noise just about unbelievable – especially when you compare with the very human scavengers who still survive. All these issues must be fought, and there are many resources to do so, starting with the municipalities – now the main causing actors of noise.

Otherwise, cities as microcosm would become unsustainable.

Related posts:

>>Sustainable Cities for Freedom and Environment (1) – An Overview on Urban Developmental Evidences
>>Sustainable Cities for Freedom and Environment (2) – Prospects, Proposals and Local Agenda-21

Drug trafficking and imperialism

US imperial mentality in the fight against drug trafficking

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At a recent conference [1], the original and always rightly incisive Noam Chomsky, referred to US military bases installed in Colombia, with the official purpose of assisting the Government of Bogotá in the war on drugs.

Mexico's Federal Police officers escort suspects of working for a drug trafficking gang, as they are shown to the media in Mexico City

He called to consider a similar case but with different actors. Suppose, he said, that Colombia, China or any other country claim their right to establish military bases in Mexico, in order to fumigate and destroy US tobacco plantations in North Carolina or Kentucky, traditional breeders of this plant. The plan would be enhanced by blocking the production areas through the action of air and naval forces, while sending inspectors to verify the overall elimination of such plantations. All this would aim to prevent tobacco trafficking towards countries suffering its effects.

Chomsky points out that smoking has provided evidence to be more lethal than alcohol, which in turn is more harmful than the use of cocaine or heroin, and these are, in turn, more harmful than cannabis. If in addition to the number of deaths caused by harmful products inhaled by smokers, we take account of those caused to “passive” smokers – though their number is difficult to determine – it is quite sure that the overall lethal outcome of nicotiana tabacum will exceed that of the remaining drugs as a whole. It would be quite logical to pursue more actively tobacco growers than coca’s.

Clearly this assumption is not plausible in the reality of today, not only because tobacco in most countries is not a banned substance while many drugs are. However, when facing this relentless logic, what should be asked is why this happens. Why the US, who say they feel adversely affected by drugs that come from south of the Rio Grande, naturally attributed the right to deploy their armies in Colombia to combat coca growers in the area, and it is even conceivable that no other country could do likewise when its interests are affected similarly.

For Chomsky, the answer is simple and it has an unquestionable bottom: the imperial mentality that exists in the US, so deep-seated in North American minds that it pass unnoticed. Should we add here that this frame of mind also exists – on a smaller scale – in many Western countries.

However, the results so far obtained seem to justify the effort committed. The “war on drugs” has lasted more than four decades in Colombia and has intensified over the past ten years, neither the food nor drug trafficking have declined. The reasons offered by Chomsky leaves no doubts. Several studies show that well-funded prevention and treatment of drug addiction are much more effective than coercive measures used in this endless war. And the preventive or curative treatment of drug-consumers in this business-has a performance cost-effectiveness improved over 20 times to the attacks against growers supplier-side-in “chemical warfare” waged to destroy the fields of drugs.

According to Chomsky, only two scenarios would explain the current situation: Either the US leaders have been consistently fools for 40 years, or the purpose of the war on drugs is very different than what is proclaimed. If one excludes no further the hypothesis of insanity, then what may be the real reasons for this alleged war?

Inside the US two main facts are obvious: the cleaning of the socially less useful (which has led the US into the world’s first place on top of prison population rate) and, as with the “war on terror”, dependence and subjugation of a population terrorized by the danger of drugs, to stop showing its angry opposition to economic policies that have led to the largest social imbalance that the US has ever suffered.

Meanwhile, abroad, the war on drugs is a way of hiding in Colombia – and other countries –some of the most iniquitous antisubversive operations. Colombia is the second country in the world (after Sudan) with more population driven out their homes, while local oligarchies and multinationals occupy the land abandoned by farmers and transform them into mining, agro-industrial production, intensive livestock or infrastructure for industry – whose benefits hardly benefit to concerned populations.

Now it’s time to ask whether Obama will follow the winding road – yet partly covered by his predecessors but in opposition to which he has not revealed much indignation as he showed with e.g. Guantanamo – or on the contrary, he has enough support, resources and intentions to leave the swamped problem that Chomsky clearly presents and whose resolution is difficult and complex, since it not only depends on the White House decisions, although they can point the beginning of a new path.

[1] Noam Chomsky, Militarizing Latin America. In chomsky.info. August 30, 2009

Sustainable Cities for Freedom and Environment (2)

Prospects, Proposals and Local Agenda-21

The first part of the analysis did consider the cities’ future –an analysis on ancient and current cities in a world becoming increasingly overpopulated.

This time we look after the portfolio of proposals on sustainable ages about the so-called Local Agenda 21. I would stress the importance of the issue, its impact on the social debate: while the 19th century witnessed social debate focused on class struggle, the latter part of the 20th century has been polarized on the ecological risks –which are no longer tied to a specific place of origin but their nature, pose a threat to all forms of life on the planet. That was precisely the widespread thesis at Stockholm-72 by Barbara Ward and Rene Dubos in their book ”Only One Earth”. With themes already raised earlier, in 1972, by Philippe Saint Marc in his unforgettable book “Socialisation de la nature” (Socialization of Nature, now exhausted, even in French).

In other words, the ecological risks are above classes, to the point that, even sarcastic tone has been said that “poverty is hierarchic, while smog is democratic”. The ultimate consequence lays on the social dynamics of ecological threats that has overcome the traditional debates on income or social position – fighting the global warming, the Kyoto Protocol and the future Copenhagen Protocol.

In 1993 the Expert Group on the Urban Environment and the European Commission launched the first phase of the Sustainable Cities Project for the period 1993-1996, in order to (1) contribute to further reflection on sustainability, (2) encourage a wide exchange experiences and (3) circulate best practices of local sustainability. In the long term, the idea of making recommendations on local and regional issues of Member States and the European Union itself. This, in line with what was requested in 1991 at a resolution of the Council of Ministers of the EC.

Once constituted, the EGUE worked over three years in developing a European Sustainable Cities Report, with the help of Euronet, who played the role of scientific and technical secretariat. The EGUE was organized in a number of specialized committees on:

• Social integration
• Mobility and urban access
• Planning and public spaces
• Dissemination (i.e. Distribution of projects between the public)
• Sustainable Social Systems
• Leisure, tourism and environment quality
• Technical management of cities
• Holistic urban management
• Urban Regeneration (Rehabilitation of neighborhoods and housing)

With so many nuances in plain view, the Report group focused on the relationship between institutional and environmental aspects in order to estimate the chances of local governments. Somewhat transcendent, against the attitude of state or semi-federal lands, as German Länder, Spanish Autonomous Communities and most of regional governments that hold so much power and sometimes behave as new centralist outbreaks. These bodies take up often resources more than anything needed by cities for multitasking – that anyone but they must assume, mostly in extremis.

The above circumstances require a thorough review of public policies to make them less authoritarian, rational and supportive, bearing that as a result of the ecosystems theory, the city is a complex whole, characterized by continuous change and development processes. In this approach, aspects such as energy consumption, waste generation, traffic and public transport are relevant.

But the EU obviously was not the only to deal with the issue and some experiences deserve to be stressed by far. Beginning with 1987, when eleven European cities (that number has grown to fifty so far) founded the Healthy Cities Programme for the World Health Organization OMS/WHO, intended for improving health conditions and interactive environment.

Furthermore in 1990, the United Nations Centre for Human Settlements – Habitat (UNCHS), started its own program of sustainable cities, aiming to provide developing countries with better systems for planning and environmental management.

Also in 1990, representatives from more than 200 local authorities around the world founded the International Council of Initiatives on Local Environment (ICLEI), promoting sustainable future, while counting with the sponsorship of the United Nations Environment Programme (UNEP). The ICLEI, which is based on the UN HQ in New York, is a local network for exchanging experiences, disseminating best examples of environmental do. ICLEI also promotes the Model Communities Program of Local Agenda 21 – a matter under discussion shortly below.

In August 1991, 130 cities have signed the Toronto Declaration on World Cities and Environment committed to develop sustainable development plans –incidentally, Canada, with Toronto and Montreal, is one of the most active countries on the issue at hand.

Meanwhile, in May 1992, 45 cities participate in the World Urban Forum – relied to the United Nations Conference on Environment, signed the Commitment of Curitiba (Brazil) in defense of sustainable urban development. A document outlining the guidelines for action to follow when developing plans for sustainable development, always in collaboration with authorities and citizens.

Likewise, the scheme of Urban Management UNDP (United Nations Development based in Nairobi) and the World Bank (1993) should be mentioned.

To complete the list of proposals made on sustainable cities, a mention is necessary conc. the Urban Program OECD (1994), aimed to improve knowledge on ecosystems in urban areas, evaluate examples of good work, and measure the effectiveness of local authorities policies and other public institutions, private or volunteer at various levels of government. Within the Urban Program, the Ecological Cities Project deserves specific mention in this analysis (will shape a further article).

In the same line of initiatives for sustainable cities, the EU Member States committed themselves at the Lisbon European Council in June 1992 to develop national plans of implementation of Local Agenda 21. An action plan born in the United Nations Conference on Environment held in Rio de Janeiro in 1992 (Earth Summit) and later developed at European level in the Aalborg Charter where the fundamental notes of the process of Local Agenda 21 were adopted:

• Sustainability, as an idea of preservation of natural capital. This requires that the consumption of natural resources, water and renewable energy does not exceed the capacity of natural systems to replenish them – and the speed at which we consume nonrenewable resources do not exceed the rate of replacement by sustainable renewable resources. Environmental sustainability also means that the rate of emitted pollutants does not go beyond the regeneration capacity of air, water and soil on which they work. Environmental sustainability also means the maintenance of biodiversity, public health and air quality, water and soil at levels sufficient to sustain human life and welfare, as well as the flora and fauna.
• Working within ecosystems, with regards to their capacity, and always linking the systems created by humans with natural ecosystems, and taking them as management models.
• Citizen participation. Sustainable development means making important decisions between conflicting objectives and major changes in the way of life of communities and therefore can not be imposed from above.

The collaboration of citizens is a direct consequence of the principles of partnership and shared responsibility in terms of:

• Acceptance and social support to the Plan.
• Assumption of commitments and responsibilities on the part of society.
• Acceptance of certain actions and proceedings which entail some sacrifice in the population, it was an overall context would be difficult to raise and take politically.

Anyhow, the impact of Local Agenda 21 has not reached its potential, which is enormous. In a way, because the municipalities fear citizens who might assume progressive grasp on cities – that is, jeopardizing hierarchies.

Sustainable Cities for Freedom and Environment (1)

An Overview on Urban Developmental Evidences

Matters of environment and nature conservation are to be considered when planning and developing construction projects.

The policy approach on sustainable cities is essential because in the process of urban development there can be no operations as often happened in the past, improvised, or at the mercy of powerful real estate groups, without taking into account the most basic in terms of sustainability. Then there is the new context, revealing that in 2008 more than half of the 6,700 million human beings, in a trend of (still) population growth living in cities, so that the quality of life for most inhabitants of the earth depends on whether or not those cities are sustainable. Moreover, in 2050 there will be 9,000 million inhabitants in the planet – 70 percent of them will be urban.

There is no civilization without cities, because since humans became sedentary in the Neolithic, human settlements began to better provide satisfaction to the needs of their communities. And over time, these early settlements became towns, centers of attraction and stimulus for social mobilization as well as for commercial exchange of ideas, and personal relationships. Ultimately, as stated by Marsilio Ficino in the fifteenth century, the city is not made only of stone but also and above all, human beings organized to co-exist indefinitely.

In this direction, the city is “the place of a particular human group,” according to historian Marc Bloch. As the philosopher Claude Lefort, in an essay on urban civilization in Europe, explained well how, at the end of the Middle Ages – then next to coming into the Renaissance – European cities formed broad areas of trade and freedom.

On that path slowly and around the birth of the market, an emerging social class, the bourgeoisie was creating a new order in Europe that would eventually undermine the feudal power: serfs emancipating from the masters found protection in urban habitat increasingly free. The expression of this change is summarized by Max Weber, “town air makes free.”

That freedom of the city, as Lefort writes, means the dissolution of personal dependence ties of feudalism, and the possibility, therefore, to change one’s condition: promoting work, the capacity of initiative, education and other opportunities. This direction (urban development as a critical element of progress in Europe) explains the significant leap forward, which the Renaissance involved for a great number of issues.

The improvement of former European cities did contrast with what happened elsewhere, e.g. Chinese cities, which became the nucleus of the bureaucracy and the mandarin feudal organization, which of course did not prevent the Celestial Empire becoming the greatest world power for centuries – something often ignored by the prevailing Euro centrism. But the gaps above mentioned prevented China from setting up a large middle class and therefore they avoided the necessary industrial revolution to operate there in the eighteenth century.

From an everyday approach, the city can be qualified as a place to live, grow, work, study and live together in society; thus – according to Roberto Camagni – becoming significant sets, autonomous socio-economic entities. In this regard, management and improvement of quality of life for residents requires a specific spatial planning; on vital issues such as infrastructure, urban planning, public transport, landfill management, solid waste collection and energy management , CO2 emissions, and always transcendental subject of the marginalization of certain social groups.

Prevention through environmental impact assessment (EIA)

In the direction above pointed, the sprawl of cities tends to set conurbations (Giddens dixit) or megalopolis, as happened in the United States firstly with San-San (San Francisco / San Diego), Chipitts (Chicago / Pittsburgh) or BosWash ( Boston / Washington). On the other hand, the provision of advanced services, the concentration of scientific and technical qualifications, and expertise of the workforce and the existence of large consumer markets as well, have a decisive influence on the emergence of new international centers (international hubs) that operate on a continental scale and in some cases even worldwide. Providing distinction between knowledge hubs (knowledgehubs), capital cities (established capitals), or new capitals (re-invented capitals).

From the viewpoint of conceptual development, urban sustainability is based on the definition, widely accepted that it was first built in the Brundtland Report, World Commission on Environment and Development, 1987:

Sustainable development is one that meets current needs without compromising the ability of future generations to meet their own problems.

Another complementary definition, offered by the IUCN – World Conservation Union (Environment Program of United Nations and World Wide Fund for Nature, 1991) pointed that:

Sustainable development means improving the quality of life with respect to the limits of ecosystems.

More specifically, sustainability involves a number of essential criteria:

• There is no infinite growth with finite resources: it is necessary to acknowledge limits to the expansion in material terms, in order to prevent the destruction of ecosystems and the overall deterioration of the biosphere.

• In production, you have to incorporate such damages to the biosphere as costs, treating, at business and government as particularly sensitive part of the profit and loss account, or budgets, respectively.

• It requires the systematic use of environmental impact assessment (EIA), for reasons that can be summarized by “prevention is better than cure”.

• It is important that government admin and private organizations have their respective environmental budgets, where evaluate annually the ecological balance – to assess whether or not they are generating natural capital reductions.

• The development model must be ecological, permeating all sectoral intervals as patterns of respect for nature.

Biblio:

Marc Bloch, La Société féodale (Feudal Society), Albin Michel, Paris, 1998.

Claude Lefort, L’Invention démocratique (The Democratic Invention), Paris, Fayard, 1981.

Claude Lefort, Europe as an urban civilization, Revue ‘Esprit’, Paris, 2004

Max Weber, General Economic History, Cosimo, New York, 1986

Roberto Camagni, Economia Urbana, Barcelona, 2005

Financial Crisis is Delaying African Development Goals

Education needs to be made available to more African children

Many development analysts assumed in relation to the last G20 summit in Pittsburgh that it might not forget about Africa in its talks on the financial crisis. Developing nations on the continent are being especially hard hit at a time when things were starting to look up.

Africa’s developing countries are suffering even more from the financial crisis: not only are they having to make do with less development aid funding, but the amount of money that emigrants are able to send back to support their families at home is much smaller.

The economic crisis will make it harder to reach development aid goals

The crisis is threatening the hard-won progress made in Africa’s developing countries at a time when the situation was starting to improve. African national economies were showing an average growth of 5 to 6 percent in recent years. Kenya, for example, has seen the development of a middle class that invests in its own economy. Outside money, including from newly industrialized countries such as China, Brazil and India, had considerably upped the level of foreign investment. The International Monetary Fund (IMF) estimates that foreign investment and credit for Africa increased to $53 billion (40 billion Euros) – five times the amount in 2000. But Donald Kaberuka, president of the African Development Bank, warns that the crisis could unravel this progress.

“We have to distinguish between the financial crisis and the economic crisis,” Kaberuka said. “Until now, (the financial crisis) has not hit a single African bank, but it has affected national economies. For 2009, we’re expecting an average maximum economic growth rate of 4 to 4.5 percent, no more. And it could well turn out to be smaller. We have to mobilize inner-African capital. We have very rich and very poor countries in Africa. On the regional level, the African Development Bank has already managed to mobilize capital, but not for the continent as a whole.”

Fears of a setback

Ad Melkert is a UN under secretary-general and an associate administrator of the UN Development Program (UNDP). He also fears that Africa will suffer a setback.

“This is all happening after a considerable number of African countries have, over the past few years, experienced significant economic growth and an increase in jobs and investment,” Melkert said. “Now, there’s a reversal. That means when the international community – the G20 – meets in April in London for its financial summit, they have to work out an international agenda there. They have to ensure that they factor in Africa, because this is an international financial crisis that is having effects worldwide.”

Growth rate of 3.4 % expected for sub-Saharan Africa

International institutions such as the Organization for Economic Cooperation and Development (OECD) are calling for multilateral risk management for the financial markets. In Davos, some major actors called for the creation of global economic council. The inclusion of developing countries in such bodies will be decisive, says Melkert. The UNDP representative is hoping for a clear statement from the G20, as otherwise, the UN’s development goals will be in danger of failure.

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“The crisis has created a totally new starting position,” he said. “It really does mean a setback, even for really successful countries like China, for example. We’ll have to really go the extra mile now if we’re to reach our development goals.”

Despite the crisis, some industrialized countries as Spain and Germany have committed themselves to raising development aid bit by bit to reach 0.7 percent of their gross domestic product. Melkert advises other wealthy nations to also maintain their development aid goals.

“There’s no alternative to investing in development goals,” he said. “I hope that the G20 summit will help, I hope that the new American administration under Obama will support the Millennium goals even more. I hope that the Europeans keep their promises and invest more in development policies each year. And I hope that the growing middle classes in Africa, Brazil or in India pay their taxes and use this tax money to fight poverty.”

Poverty remains a major challenge

Although the global fight against poverty has made progress, the percentage of poor people in Africa hasn’t gone down at all, due to the continent’s fast-growing population. With a poverty rate of around 50 percent, the share of extreme poverty in the total population hasn’t changed, and Melkert fears it could even get worse.

“We have to be really ambitious here and take the problem of poverty really seriously,” he said. “With this financial crisis, more people will be forced into poverty than in years past.”

There are worries that more Africans will slip into poverty

The IMF has revised its growth projection downwards and has forecast an economic growth rate of just 3.4 percent for sub-Saharan Africa. But all African governments have to take political responsibility, says Melkert. He points to examples from Latin America, saying Africa should learn to also create effective social security systems and incentives for development.

“Good systems have been established in Latin America,” he says. “There, families get money if they send their children to school or get them vaccinated. Africa should follow this example. The World Bank, the UN or bilateral donors could financially support such a system. That would help the poorest people to have a minimal income to buy food, send their children to school or care for their health.”

He advises the international community to be patient and take a long-term view when it comes to supporting development goals – despite the global financial crisis.

“You don’t make development progress from one year to the next – it’s a question of 10 or 20 years,” Melkert said.

NGOs and Microfinance in Africa: the Awakening Experience of ‘Rwanda Works’

Interesting interview that Josh Ruxin–founder of the new NGO Rwanda Works, Professor at Columbia University, and Director of the Millennium Global Village Project in Rwanda, just had with BigThink.

In the interview, Ruxin describes his current work in Rwanda helping to promote access to healthcare and sustainability, as well as his profound insights into the policies that actually work to advance international development. Among the many current practices that Ruxin explains are simply not working, include the widely-praised spread of microfinance loans, which Ruxin believes are not nearly the “panacea” many believe them to be, and are not actually creating any significant progress in much of the developing world–particularly not sub-Saharan Africa: http://bigthink.com/joshruxin/the-case-against-microfinance-loans

Ruxin also discusses the urgency of developing sustainable agriculture in the developing world as a way to solve an array of problems, and describes some of the creative new approaches to affordably promoting sustainability in Rwanda and surrounding countries that currently being refined to meet these challenges: http://bigthink.com/joshruxin/the-key-to-developing-rwanda

Ruxin also examines how an increase in women’s reproductive rights is one of the key issues in international development and why government officials investing in foreign aid should provide far more funding for family planning: http://bigthink.com/joshruxin/the-link-between-womens-rights-and-economic-success

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Spanish version here below:

ONGs y microfinanzas en Africa: la experiencia reveladora de ‘Rwanda Works’

Interesante entrevista (en inglés) que Josh Ruxin ha concedido a BigThink.  Josh Ruxin es el fundador de la nueva ONG Rwanda Works, Profesor de la Universidad de Columbia, y director del Proyecto de la Aldea Global del Milenio, en Rwanda.

En la entrevista, Ruxin describe su trabajo actual en Rwanda para ayudar a promover el acceso a la asistencia sanitaria y la sostenibilidad, así como sus reflexiones lúcidas sobre las políticas que funcionan realmente para promover el desarrollo internacional. Entre las muchas prácticas actuales que Ruxin considera simplemente inoperantes, incluye la propagación del muy encumbrado sistema de microcréditos. Ruxin los juzga de tal forma que cree que no son ni la “panacea” que muchos quisieran, y no son, puesto que no representan en realidad un avance significativo en la mayor parte de el mundo en desarrollo – en particular, para África subsahariana: http://bigthink.com/joshruxin/the-case-against-microfinance-loans

Ruxin también razona sobre la urgencia en desarrollar la agricultura sostenible en el mundo en desarrollo como una manera de resolver una serie de problemas, y describe algunos de los enfoques nuevos y creativos para promover la sostenibilidad asequible en Rwanda y países vecinos que actualmente se está perfeccionando para enfrentar estos desafíos: http://bigthink.com/joshruxin/the-key-to-developing-rwanda

Asimismo Ruxin examina cómo un aumento en los derechos reproductivos de las mujeres es una de las cuestiones clave en el desarrollo internacional y por qué los funcionarios de la administración que desean invertir en ayuda al desarrollo han de proporcionar muchos más fondos para la planificación familiar: http://bigthink.com/joshruxin/the-link-between-womens-rights-and-economic-success

The impact of the global financial crisis on African development (& 2)

The potential recovery from the financial crisis is very limited

In light of the potentially weakening effects, it is crucial both for African and world leaders and policy makers to discuss the possible responses to diminish the impact of crises on the continent.

One way of responding successfully to the crisis is to give priority to building African markets. In particular, policies to strengthen the African markets and institutions necessary to promote growth and ensure that African economies are more resistant to external shocks. There is also a need for tighter regulation of African financial markets. Moreover, creating a more conducive business environment to reduce costs and limitations associated with doing business in African economies to raise their profile as a business destination less expensive, less risky and more profitable, helping to attract more Foreign capital flows and investment in the context of a capital market has become considerably more risk averse following the onset of the financial crisis. The reforms that encourage foreign direct investment and portfolio flows and the measures that raise the level of confidence in financial systems in Africa can have an equally positive impact.

Sub-Saharan Africa is dropping behind in infrastructure

Source: Preliminary results AICD 2008. African Perspectives and Recommendations to the G20. Committee of African Finance Ministers and Central Bank Governors. 21/03/09

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The expansion of trade with other developing countries represents another potential means to ease the severity of the negative effects of the crisis on African economies. Global trade statistics suggest that trade between developing countries as percentage of total world trade, and therefore world trade has been increasing for quite some time. In fact, trade in goods among developing countries grew at an average annual rate of 13 % between 1995 and 2007 and in 2007, represented a fifth of total world trade flows. It is vital for Africa to increase their share of this link between South-South trade to offset some effects of the anticipated decline in demand for their commodity exports. Along with this is the need to increase intra-regional trade flows and trade in Africa in order to reduce the dependence of African economies in overseas markets. [3]

Similarly, measures to improve South-South economic cooperation, particularly in terms of investment, financial flows and joint efforts to stabilize foreign exchange rates and debt, should be investigated. In particular, South-South several measures to address potentially available for African countries to tackle the worst effects of the global financial crisis. First, the increased funding of regional development banks could offset the anticipated slowdown in international aid and donor funding for African economies. Secondly, regional stimulus packages could be implemented to help sustain the market and sustain economic growth. Similarly, regional agreements could be used that are specifically designed to mitigate the impact of financial shocks through, for example, the provision of international financial liquidity through swaps. Finally, African countries burdened by high debt levels, measures to diversify foreign exchange reserves could be adopted whereby the purchase of other developing countries “that debt.

Globally, according to the World Trade Organization Director General Pascal Lamy said reaching a global trade deal that represent a relatively simple way to alleviate the effects of the crisis. The promise of such a comprehensive agreement “is particularly attractive to African economies, which are perhaps amongst the most threatened by the prospect of increased protectionism arising from the crisis. Specifically, the new national protectionist measures, mainly in the form benign appearance, the political crisis linked to the encouragement of the government and relief campaigns, the exchange rate devaluations, antidumping and countervailing duties and ‘buy local policies that discriminate against foreign firms and workers can suppress the export sectors in Africa even more. It is therefore essential for African politicians to push for a global agreement that keeps opening up markets and prevent a flood of new crisis linked to protectionist measures.

Furthermore, following the emergence of the global financial crisis, it is clear that there is an urgent need to reform the multilateral financial architecture, particularly in terms of ensuring greater representation of African countries in international financial institutions. Despite the financial crisis that originated in Africa, the continent has been excessively exposed to its effects. This has led to strident calls for a more inclusive multilateral governance that provides a greater voice “to African countries in international financial institutions. Countries is important for developing countries, and Africa in particular, to play a role most important of these institutions and the economic crisis management.

Domestic fiscal and monetary policy responses should also be explored by African countries with the capacity to implement them. For example, in African countries with relatively large foreign exchange reserves may be possible to use these reserves to cushion the worst effects of crisis and decline to fund any capital flows. Alternatively, African countries that operate under systems of fixed exchange rate may have some leeway to adopt more flexible exchange rate regimes in order to “allow the nominal exchange rate to absorb some of the impact of external shock and reduce the actual effects in the national economy. “In terms of fiscal stimulus options, the expansionary fiscal policies such as reducing taxes or increasing government spending may help boost demand and employment in African economies. The usual argument against the expansionary fiscal policy – that it crowds out private sector investment – is unlikely to apply, given the climate of reduced appetite for credit and a drastically reduced risk among investors.

Finally, while Africa is certainly feeling the effects of the global economic slowdown, the impact of what is likely to deteriorate further, the credit crunch in the world’s most advanced economies may actually create opportunities in terms movement of capital into emerging economies. For example, sovereign wealth funds before investing in the financial systems of the United States and Europe are now increasingly looking to the developing world to possible locations for investment. However, for this to happen in Africa, the continent’s countries have to implement measures to improve its ratings on investment risk.

Africa is facing a large and growing economic gap

The fact that many African countries are relatively detached from the global financial system has softened the continent from some of the consequences of the global financial crisis. However, the initial view proposed by many commentators that Africa would be “spared” from the effects of the financial crisis that originated in several advanced economies in the world has proven to be unfounded. Prices and demand for African exports of commodities have dropped significantly amid a sharp decline in world industrial output. Moreover, the climate of declining credit arising from the crisis is likely to lead to a substantial decrease in international financial flows to African countries in the form of private investment and capital flows, trade credit, financing donors and remittances from Africans in the diaspora. These factors have led to predictions of sharp fall in growth in sub-Saharan Africa.

It is evident that African countries and their leaders should try to take initiative and economic policy measures and reforms to mitigate the effects of the crisis on African economies. These should include interventions to strengthen the African markets and institutions, expand “South-South trade and economic cooperation, including increase or intra-regional trade to reduce dependence on overseas markets, and implement expansionary monetary and fiscal policies to boost demand and employment. In addition, globally, African leaders must push for reform of global financial architecture to include greater representation of African interests in the forum of the international financial institutions. Furthermore, it is extremely important that the continent supports efforts to conclude a global trade deal that maintains the openness of markets and the safeguards against the proliferation of new crises linked to protectionist measures.

Related Posts: The impact of the financial crisis on African development (Part 1)

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[1] South-South  trade  could  soften  impact  of financial crisis for vulnerable economies. UNCTAD.  2009.

[2] Impact of the crisis on African Economies. Sustaining growth and poverty reduction, African Perspectives and Recommendations to the G20, by The Committee of African Finance Ministers and Central Bank Governors. 21 March 2009

[3] World Bank to Help Mitigate Impact of Global Financial Crisis on Africa’s Development.  19 November 2008

[4] International Monetary Fund. 2009. What the Global Financial Crisis Means for Sub-Saharan Africa. Speech by Takatoshi Kato, Deputy Managing Director, IMF, 12th AU Summt, Addis Ababa, Ethiopia, 3 February 2009.

The impact of the financial crisis on African development (1)

Because of the existing overall crisis, the projected growth for 2009 should move down to the lowest rate of decrease in 60 years. In 2008, the drop in demand resulting from the financial crisis together with synchronized crashes in manufacturing and industrial production, credit problems in traffic finance and consumer reliance caused a fall by 4 % in the growth of global trade.

Initially, many analysts believed that the world’s emerging economies, mainly those in Africa, would rather be protected from the effects of the crisis that came from the advanced industrialized countries. However, in the developing world the impact of financial instability and uncertainty in industrialized countries are beginning to take hold. Access to emerging markets for trade and investment is unlikely to diminish. In fact, UNCTAD estimates that exports of developing countries could decline by 9.2 % in 2009 [1]. The fall in commodity prices that went along with the downturn is particularly troublesome to African economies, many of which are greatly dependent on fresh commodities and raw material exports as the main source of export income. Moreover, the market for trade finance has seriously declined over the past six months; the crisis has aggravated the lack of liquidity to finance trade credit. Emerging economies are also expected to experience ongoing financial contamination, particularly in the form of capital flight and capital flows.

Even though these potentially weakening effects, the G20 predictions suggest that over 80 % of potential world economic growth depends on emerging market countries. In the same way, while the International Monetary Fund (IMF) has predicted that developing countries will increase by 3.3 % in 2009, it is expected that advanced economies will decline by 2 % roughly [2].

GDP Growth by Country Group

In this context, measuring the impact of the crisis on African economies and the accessibility and adequacy of measures to alleviate the effects of crises on the continent, are decisively imperative considerations for prospect growth scenario in Africa.

The Impact

The impact of the global financial crisis is expected to differ among African countries in line with their exposure to international financial system, its production and export structure and its aptitude to employ policy instruments to lessen the adverse effects. Overall, the short term in many African countries can be mitigated by the fact that most countries on the continent are relatively detached from the global financial system. Moreover, emerging banking systems in many African countries are generally characterized by simple structure, conservatism, the rules of prudent financial management, foreign exchange controls and a very limited exposure to subprime loans and the Credit default swaps, has protected the continent’s financial structures of all the effects of the crisis. In fact, Benedicte Christensen, deputy director of IMF’s Africa Department, went so far as to state in late 2008 that “there is no systemic risk that we see in any African country in terms of banking.” [4]

This does not mean that Africa is immune to the effects of the crisis. It is in the medium and long term effects of the crisis on African economies will be realized. The slowdown in global growth linked to the crisis could drive millions of Africans in the line of poverty. This possibility was highlighted in the report of the IMF, World Economic Outlook April 2008, which stated that a fall in world growth of just one % could result in a decrease of 0.5 percentage points of gross domestic product of Africa. Already, the IMF predicts that growth in sub-Saharan Africa will be reduced from about 5.25 % in 2008 to about 3.25 % in 2009. [4]

The slowdown in global growth, together with a sharp drop in world industrial production, has reduced the demand for African exports, reflected especially in the downward spiral of prices and demand for commodity exports. This is alarming given the fact that exports of commodities represent the main source of export earnings of most African countries. Moreover, the fall in export earnings is likely to have negative repercussions in terms of reduced government revenues, thus. Worsening already precarious budgetary situation in many African countries.

Prices of commodities for sub-Saharan Africa

The global credit crunch following the crisis has also caused a huge reduction in the flow of private investment and bank financing, thereby reducing capital inflows and a restriction on the availability of trade finance. This is likely to be reflected in a substantial decrease in international financial flows to African countries, most prominently in the form of reduced foreign direct investment, portfolio flows and remittances from the Diaspora living in the developed world. Regarding the latter, a long-term reduction of remittances from Africans living abroad is likely to be particularly difficult to feel, as these funding streams currently contribute an estimated $ 10 billion annually across the continent .

The effects of reduced foreign investment in Africa to countries that are funding large current account deficits could be especially devastating. For example, South Africa depends to a large extent, at least in the short term, on private capital flows to finance its large current account deficit – equivalent to about 8 % of the country’s total GDP. The projected reduction in capital flows means that South Africa will be responsible for their substantial current account deficit. Other African countries operated relatively large current account deficits, such as Uganda and Tanzania are likely to be similarly affected. These problems may be compounded by the prospect of expanding the deficit caused by the crisis itself. In fact, the IMF has forecast the current account deficit of the entire sub-Saharan African region will expand by more than 4 % of GDP to reach 6.75 % of GDP in 2009.

Saharan Africa: the current versus pre-crisis growth forecasts, 2009

The projected decline in private capital flows can also have a long-term impact on investment in infrastructure projects in African states, many of whom may face funding shortfalls. Since many African capital markets are small, even the relatively limited withdrawal of foreign investment can have a significant potential impact.

Furthermore, African countries may face increased pressure for debt repayment as international institutions and Western banks, not only to strengthen their lending policies, but try to shore up its reserves. Along with this there is the possibility that the global financial crisis will result in a slowdown of foreign aid and development funding to African countries due to the global credit crunch.

Spanish version over here.

Related Posts: The impact of the global financial crisis on African development (Part 2)

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[1] South-South  trade  could  soften  impact  of financial crisis for vulnerable economies. UNCTAD.  2009.

[2] Impact of the crisis on African Economies. Sustaining growth and poverty reduction, African Perspectives and Recommendations to the G20, by The Committee of African Finance Ministers and Central Bank Governors. 21 March 2009

[3] World Bank to Help Mitigate Impact of Global Financial Crisis on Africa’s Development.  19 November 2008

[4] International Monetary Fund. 2009. What the Global Financial Crisis Means for Sub-Saharan Africa. Speech by Takatoshi Kato, Deputy Managing Director, IMF, 12th AU Summt, Addis Ababa, Ethiopia, 3 February 2009.

Africa’s Economy at the Crisis Crossroads

The United Nations Conference on Trade and Development (UNCTAD) published on June 25 the “Economic Development in Africa 2009” [1]. It is focused on the promotion of economic integration in the region, which should become a key factor for boosting and diversifying economic growth, expand markets and attract more foreign investment, especially in the context of current global financial crisis.

Regarding the effects of the financial crisis in the African region, it was noted that the main channels are through the fall in exports, reduction of investment flows and lower revenue collected by governments. In this regard, according to the projections of the African Economic Outlook (AEO) in May, it is pointed that the region could grow 2.8% in 2009, much less than the growth rates of 5.1% in 2008 and 6% in 2007.

The impact of the global financial crisis would already be reflected in exports and reduction in prices of raw materials. A study of the organization ActionAid, says that the financial crisis will cause African economies lose up to 49 billion dollars during 2009 due to the drop in international aid since the fall of exports, among others. The report said that countries that liberalized their markets and that were large enough to attract significant investments will be most affected by the financial crisis, starting with South Africa that could see a drop around 20%. However, they also state that Africa is now better prepared to face the crisis than it was 10 years ago.

[1] Economic Development in Africa 2009. Strengthening Regional Economic Integration for Africa’s Development. UN. June 2009.

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[1] Economic Development in Africa 2009. Strengthening Regional Economic Integration for Africa’s Development. UN. June 2009.