Some thoughts on development

Saw this piece in the Guardian yesterday, on a new scheme between a British supermarket and the African farms that provide it with produce:

Fruit growers in South Africa have seen more than £330,000 ploughed back into their communities over the past year by the supermarkets group Waitrose, which is hoping to raise a further £500,000 to fund educational projects over the next six months.
The cash has been raised as part of the food retailer’s initiative to return a sizeable proportion of profits it earns on sales of citrus fruits to the farmers who grow them.

From there I followed a link to an op-ed by Larry Elliott, who takes the view that trading with poor countries on an equal basis is better than simply providing aid. Bono did a piece on the same theme on the Guardian‘s Comment is Free, a sign that orthodox thought on poverty relief and the big campaigners are getting behind this position. The Live8 campaign for debt relief yielded some disappointing results, but maybe governments will listen to the trade-not-aid viewpoint.

Or maybe not. Tim Worstall, commenting on the Larry Elliott piece, offers this opinion:

Err, how do you reconcile those two statements? Either trade barriers should come down as they are a serious impediment to development or they should stay or go up as an antidote to liberalising imports. Can’t have both now, can we?

As I mentioned in a comment on that post, the harmful effexts of economic liberalisation occur when it is unequal. For its “structural readjustment” packages, the IMF insists on countries lowering their trade barriers to developed countries, who then simply undercut domestic markets. (A big culprit at the moment is China – not strictly a “developed” country but one of the biggest exporters.) This is the kind of thing that destroys a country’s fledgling industries. If we look at the most successful economies in the world, the U.S. included, they were all heavily protectionist at first.

Going off at a slight tangent, why have some post-colonial states developed so well, whie some have done disastrously? This grew out of a debate over attitudes towards Western and Japanese imperialism, where East Asia and Africa were presented as two opposite extremes. While I don’t want to get into the imperialism debate (you can see these posts for some good discussion) I will say that while Japan’s colonies tended to be whole nations (Taiwan, while being historically part of China, was a province neglected by the mainland), Western colonies in Africa and eleswhere were carved up along arbitrary lines, either disregarding ethnic and national groupings or taking advantage of them to promote imperial power. When Britain and others pulled out, we left nation states containing differing, and often competing, groups who had little identification with the state as opposed to their own identity. Often these groups had been deliberately played off against each other by the colonial power – see Rwanda for the most tragic example of this tactic.

Which leads me to the main difference between post-colonial Asia and Africa. A main feature of post-war Asia was “the developmental state” – including Japan, South Korea, Singapore and Hong Kong, they were run mainly for the purposes of industrial development by an educated elite, with highly protectionist economies. Democracy didn’t get much of a look-in (except in Japan, in a highly formalised version), but living standards gradually rose, and when enough of a middle class had developed, the demand for freedoms grew louder. South Korea and many other Asian countries have joined the club of democracies, and some are now part of the developed world. So where did Africa go wrong?

The answer may be found in this article on why poor countries stay poor; corrupt elites who rob the country to enrich themselves. For an Asian example, see Indonesia under Suharto – incidentally, also a country with a diverse ethnic grouping created by colonial policy. When people have little identification with “the nation” as a whole, they turn to smaller groupings. The neighbourhood strongman, tribal leader or militia commander will protect you, at the expense of anyone outside the group. For an instant snapshot of this kind of situation, look at Iraq right now.

Once beyond these primary loyalties, a civil society develops that allows the rule of law, which in turn allows trade, which increases prosperity and development. This is not a process which can be artificially started or speeded up. Some African countries are already there, some are on their way. For those that are stuck there is little we can do, unless they are complete basket cases like Mugabe’s Zimbabwe, and even then there is little support for direct intervention. I don’t have the answers, but in my lifetime these problems will have to be addressed.


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