Paul Collier and Dambisa Moyo on Africa
Allan Gregg Conversations
Collier-The Plundered Planet –(notes/quotes)
“Natural resources can transform the developing world or tear it apart. They are potentially a huge opportunity to help, and also a huge possibility to destroy. Natural assets have no natural owners. The contest that can ensue in the scramble for these natural resources can tear a country apart, and it had. Because there are no owners, a contest for these assets controls the very poorest societies. This scramble turns crooked and violent. The normal business of government, to provide public goods, is abandoned for the patronage systems that are needed to maintain power in these countries, such as Nigeria under Sani Abacha. There are two types of plunder-the few stealing what should belong to all citizens, and the present generation burning up assets that should belong to the future. The ethical responsibility is to harness nature to reduce poverty.
There are two huge holes in governance; the first is huge amounts of natural resources facing weak governments, and the second being the natural resources that transcend governments, ie: migratory fish stocks.
What is to be done? First, the natural assets need to be priced, and the value needs to be captured by the government. Now, the typical way that an asset is sold by a government is under the table, or undervalued, or given away on an undervalued basis as a result of the lack of information. Auctions need to be run to combat this problem. The genius of auctions is that the market values the assets. It is vital that governments have geological information to be able to have an idea of the assets under their soils before these auctions, however.
The revenues that come out of natural resource depletion are not sustainable. As you run down these assets, you need to build up other assets, such as schools, roads, ports, etc, or you are cheating the future generations on a rate of return.
Dambisa Moyo
Dead Aid –notes/quotes
The premise: foreign aid has been a disaster for Africa, and must stop.
Why is aid part of the problem? There is a completely different model of growth and development for the industrializing nations such as China and African nations. Africa has become addicted to aid. In some countries, over 70% of the budget is aid sourced. From this, the incentives for alternative economic development are reduced. In addition, there is outright theft and corruption that is accepted. The real source of cash in these governments comes from controlling the state; when you control the state, you control the cash. This creates a destabilizing issue. The image that is perpetuated by the western aid agencies is self-perpetuating and negative. By giving free mosquito nets to the continent, we are breaking local manufacturers of mosquito nets. This is the example of the big problem in today’s aid business. What the Chinese have done in Africa is tremendous, in terms of infrastructure development. Their approach is an equal approach. They are coming to do business, unlike the auspices of pity of the aid industry. African governments need to act on behalf of the interests of the people.
Allan Gregg Conversations
Collier-The Plundered Planet –(notes/quotes)
“Natural resources can transform the developing world or tear it apart. They are potentially a huge opportunity to help, and also a huge possibility to destroy. Natural assets have no natural owners. The contest that can ensue in the scramble for these natural resources can tear a country apart, and it had. Because there are no owners, a contest for these assets controls the very poorest societies. This scramble turns crooked and violent. The normal business of government, to provide public goods, is abandoned for the patronage systems that are needed to maintain power in these countries, such as Nigeria under Sani Abacha. There are two types of plunder-the few stealing what should belong to all citizens, and the present generation burning up assets that should belong to the future. The ethical responsibility is to harness nature to reduce poverty.
There are two huge holes in governance; the first is huge amounts of natural resources facing weak governments, and the second being the natural resources that transcend governments, ie: migratory fish stocks.
What is to be done? First, the natural assets need to be priced, and the value needs to be captured by the government. Now, the typical way that an asset is sold by a government is under the table, or undervalued, or given away on an undervalued basis as a result of the lack of information. Auctions need to be run to combat this problem. The genius of auctions is that the market values the assets. It is vital that governments have geological information to be able to have an idea of the assets under their soils before these auctions, however.
The revenues that come out of natural resource depletion are not sustainable. As you run down these assets, you need to build up other assets, such as schools, roads, ports, etc, or you are cheating the future generations on a rate of return.
Dambisa Moyo
Dead Aid –notes/quotes
The premise: foreign aid has been a disaster for Africa, and must stop.
Why is aid part of the problem? There is a completely different model of growth and development for the industrializing nations such as China and African nations. Africa has become addicted to aid. In some countries, over 70% of the budget is aid sourced. From this, the incentives for alternative economic development are reduced. In addition, there is outright theft and corruption that is accepted. The real source of cash in these governments comes from controlling the state; when you control the state, you control the cash. This creates a destabilizing issue. The image that is perpetuated by the western aid agencies is self-perpetuating and negative. By giving free mosquito nets to the continent, we are breaking local manufacturers of mosquito nets. This is the example of the big problem in today’s aid business. What the Chinese have done in Africa is tremendous, in terms of infrastructure development. Their approach is an equal approach. They are coming to do business, unlike the auspices of pity of the aid industry. African governments need to act on behalf of the interests of the people.
