When Africa was the Future

There’s an interesting article comparing the development of Asia and Africa in The Liberal, a new UK magazine. It suggets that Africa once set the standard for Asian countries to aspire to:

IN 1962, when the World Bank extended its first development loan to South Korea, the bank’s directors famously asked their researcher whether there was any chance of this impoverished and war-torn country ever catching up with the living standards of such wealthy African countries as the newly liberated republics of Ghana, Nigeria and Senegal, with their huge endowments of gold, oil, diamonds and forest products. Today, South Korea’s national income per head is 35 times higher than Ghana’s and three times that of Africa’s richest country, Botswana. Meanwhile, China, which as recently as 25 years ago was less prosperous than even the poorest African nations, now has an economy five times larger than the entire African continent.

Why have almost no African countries managed to achieve the sustained economic development which has lifted billions of people out of extreme poverty in east Asia?

The author’s answer: war, corruption, the curse of natural resources and China.

The Liberal has only been around for a few issues but Slavoj Zizek has already written for them. I believe that will soon be mandatory by law for all new cultural magazines.

8 thoughts on “When Africa was the Future

  1. I’m not sure if the answers provided “war, corruption, the curse of natural resources and China” fully explain everything.

    War? I guess you could say that the Cold War was pretty much a stalemate in Asia, giving countries like South Korea and Taiwan room to develop. But the stalemate is fairly recent: there were pretty terrible wars in Vietnam, Laos, and Cambodia, which often spilled over into neighbors.

    Corruption? I have to say, the Asian countries are pretty corrupt as well, including South Korea, Indonesia, China, and Taiwan. There is actually no evidence that corruption hurts economic growth.

    The Cure of Natural Resources? But the Middle Eastern countries have the same curse and most of them, while not wealthy, do have a growing middle class (see Iran and Dubai).

    China? Now here we’re getting somewhere. Despite all the terrible things that Mao did, the Chinese Communist Party does have one lasting legacy: they unified mainland China into a coherent state for the first time in modern history. This was the pre-condition for China’s recent economic growth: to have a strong, unified state without internal rivals (very different from the long period of warlord rule that preceeded 1949).

    And in fact, if we look at Asia as a whole, we see the importance of a strong centralized state towards economic development: because of the structure of the cold war in Asia (both sides creating armed fortresses unified by nationalism) and perhaps also as a legacy from pre-modern times, Asia had many more unifed states: South Korea, Taiwan, China, and even Indonesia (this last to be sure filled with internal divisions but held together).

    The situation in Africa was very different: the white settler colonist who ruled Africa till the 1950s weren’t interested in state-building (their political loyalities lay in Europe). Nor were the national boundaries created by de-colonization congruent with any rational pattern of nation-states; quite the reverse: tribal lands often followed very different settlement patterns than national boundaries. And the Cold War in Africa was fought by proxy regimes that wanted to redraw boundaries, causing even more instability.

    I think the lesson is clear: the most important factor for economic growth is the existence of strong state whose claims to legitimacy can’t be challenged externally or internally. Only such a state can provide the stablity that makes economic growth possible. Of course, emphasizing the importance of a strong state is deeply unfashionable at this moment in history, but that doesn’t make it any less true.

  2. Just to add to what I wrote above: It could be argued that Mao’s most lasting legacy was that he created the pre-conditions for the triumph of capitalism in Asia. Oddly, this reflects badly on both Mao and capitalism.

  3. What caught my eye about that article was its recollection of a time when African states were seen as a model for other countries, rather than the particular reasons the author gives for Africa’s current woes. Now that you bring it up thought, it is interesting to ask what the real pre-conditions of prosperity are.

    You dismiss many of the author’s points by mentioning one or two counter-examples. Is that really fair? By that standard, someone could point to the fact that Rwanda’s borders did in fact follow traditional tribal lines, or that Ethiopia was hardly colonized at all (by Italy from 1935 to 1941), to “disprove” your point about colonial borders being a significant cause of Africa’s curent woes.

    As for centralized governments, my understanding is that in Zimbabwe, currently Africa’s most economically devastated nation, Mugabe did in fact inherit a functioning state from the Rhodesians (along with tribal division, it’s true), one he has subsequently made all too centralized, all too powerful. Applying your counter-example method, that would suggest we can dismiss centralized states as an explanation for why some countries achieve prosperity.

    Of course such an approach would only show we have misunderstood the difference between a necessary and a sufficient condition. It is necessary for prosperity that a country had a functioning centralized government, but that is not the only thing it needs. It also needs civil peace, low levels of corruption and other things the author points to.

    I find it strange that you would think that it is “deeply unfashionable” to stress the role of government as a necessary condition of development. With the exception of a few stray anarchists, every political movement I can think of affords government the same role you stress (“a strong, unified state without internal rivals”).

  4. The question of why Asian countries have developed economically where African countries have not is a complex one that deserves careful, multifaceted treatment. I very much doubt we’ll get to the bottom of this in a few posts. I would like to respond to Jeet, however, on a few points.

    First, there is considerable reason to believe that corruption hurts economic growth, both on theoretical and empirical grounds. For example, China’s economy would be growing at an even faster rate were it not for the corruption contributing to its environmental woes – and the economic harm on this score will be even greater in the future (see Elizabeth Economy on this). Corrupt politicans in Africa who pad their own pockets or buy weapons instead of investing in schools and public infrastructure demonstrably hurt development and growth. Extensive corruption in Japan – especially in its public sector and in its financial sector – greatly exacerbated its bubble economy in the 90s. There is also the linkage with social capital: corruption erodes trust and confidence and thus discourages investment. One could go on. See the interview with President Ellen Johnson-Sirleaf of Liberia on the Transparency International website (www.transparency.org) on the challenge of overcoming corruption in her country.

    Second, Asia, with 60% of the global population, is not emerging as an economic power for the first time. In 1820, Asia’s share of global GDP was 60%. As my friend Jean-Pierre Lehmann argues, it is not emerging, it is re-emerging.

    The story hardly begins with Mao. I think the Hong Kong bankers’ joke better provides a sense of perspective: China has had a couple of bad centuries and is back in business! Or as Indian author Ashutosh Sheshabalaya puts it, India and China are determined “to return to their nineteenth century status, when they accounted for well over half of world economic output.”

    There are plenty of other issues to consider: the degree of regional integration, how economic growth can discourage conflict (Taiwan’s success influenced policymakers in Beijing, and Vietnam was influenced by Thailand), the educational system, the degree of regional economic integration, whether property rights can be safeguarded, and how easily, and so on.

    As I say, this is a complex (and hugely interesting) topic. There are some interesting discussions of economic growth, governance and regional politics on the Evian Group website: http://www.eviangroup.org.

  5. About corruption: it makes sense to say that corruption hurts economic growth. It seems plausible and even common sensical. But, on the other hand, there have been plenty of corrupt regimes that have witnessed very high growth rates. Perhaps China, South Korea, Indonesia, and Japan would have grown even faster if there had been less corruption. Or perhaps a rapidly growing economy can “absorb” a certain amount of corruption in a way that would be fatal to a smaller, more delicate economy. I say this not to defend corruption, of course, but because I’m skeptical of the degree to which anti-corruption campaigns have become a central plank of development policy. Fighting corruption is worthwhile and admirable, but there are other areas that are even more important, I think.

    About China. Yes, it’s true to say that China is now returning to the position it once held in the world economy (as is India). The question is what is allowing this to happen; what hampered China from say 1820 to the 1980s? I would say that for most of the period the lack of a strong centralized state was the biggest problem. China was divided into feudal territories with little security of persons or property. Then from the 1950s to the 1980s, Mao’s economic and foreign policy (both isolationist in a sense) also hampered growth. But the existence of a strong state has been the pre-condition for China’s re-emergence as a global power. (At a guess, I’d also say that China, South Korea, and Japan have benefitted from the fact that they have historical traditions of national unity that go far back into pre-modern times, including traditions of centralized bureacracy).

    About the unfashionableness of looking to the state as an agent of development. Let’s compare the reconstruction of Japan and Germany from 1945 to 1950 with the reconstruction of Iraq from 2003 to the present. In the first two cases, priority was given to state-building: maintaining the army and civil service, and getting a fuctioning bureacracy in place to supply basic needs. In Iraq by contrast, reconstruction has emphasized privitization and investment (there were plans to give Iraq a flat tax), and the state has been effectively dismantled (and is only slowly being put back together). I would say that these two different types of reconstruction speak to two different ways of seeing the role of the state. For a variety of reasons, the state is now given less attention in development policy and there is a greater focus on civil society. I think this change in focus, understandable as it is, leads people to ignore the elephant in the room: the absolute centrality of a strong state as a pre-condition for economic growth.

  6. In Asia they took sweatshops for North America. In Africa they haven’t.
    This is a part.
    I can’t speak to corruption in Asian countries over the last fifty years, but I just returned from east africa, and its hard to imagine worse corruption. You really can’t build an economy without infrastructure and you can’t build infrastructure with that kind of massive corruption. In Kenya, for example, Daniel Arap Moi was president for some twenty years after Kenyatta. He was widely praised for giving up power in an almost peaceful and almost democratic fashion. But he also is rumoured to have left as the RICHEST man if Africa. The highways of Kenya just have to be seen to be believed. It makes Tanzania and Uganda look First World.
    As for stable states, many African nations have had fairly strong states. For example, Tanzania has had a stable, very centralized government since the Brits left. Their economy is unbeleivably bad. Uganda is wealthy by comparison. They probably have the most dicatorial government in East Africa but their economy has boomed since Amin was booted, and part of that was cutting red tape, reining in corruption and emphasising foreign investment. In Tanzania by contrast, they built a vast socialist bureacracy in the 70’s that is still in the process of being dismantled. If you read any articles on starting businesses in that country, you’ll find its a nightmare of red tape, delays, fees and of course, bribery at every turn.

    To sum up: corruption, big problems.
    Sweatshops wanted.

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