Sunday, April 08, 2007

Africa and China

I recently purchased a book called "The White Man's Burden - Why the West's Efforts to Aid the Rest have done so much Ill and So little good" by William Easterly. This book is very interesting and will provide insight for more than one post. I highly recommend this book to all of our readers.

The author is an economic professor who used to work at the World Bank who has travelled around the world. His basic thesis is pretty self-explanatory: the West is spending a lot of money and "feeling good" about their efforts to save Africa and the poor but their results in fact have been marginal. He believes that the "Planners" who believe in top down planning have screwed up the process while the "Searchers" who are on the ground and trying local development in local conditions have achieved much more impact with much less in the way of resources.

One of the countries he mentions is Tanzania. Tanzania is one of the poorest countries on earth, despite the billions of dollars in aid that has been received from western donors. Per Eastery's book:

"Foreign aid donors spent two billion dollars in Tanzania during the past twenty years building roads. The road network did not improve. Roads deteriorated faster than donors built new ones, due to lack of maintenance... The "growth industry" in Tanzania is actually bureaucracy. Tanzania produced more than 2,400 reports a year for its aid donors, who sent the beleaguered recipient one thousand missions of donor officials per year."

Later in the text Easterly says that the reason that the roads are so bad is that the donors keep trying to get the local recipient to "do their part" and step up and maintain what has been built. Yet the local government never invests in trucks, spare parts, fuel, nor is it organized enough to systematically do something as complicated as road maintenance for a large country. Thus even though money is being spent and roads are being built, the underlying problem of the terrible infrastructure for transport is not being solved.

On a parallel note (bear with me here), I saw this magazine called "Monocle" at the local Borders. I immediately purchased it because I like to patronize new and interesting magazines and how often do you see a magazine that would write on a foreign affairs topic such as the current state of the Japanese Navy (something that does interest me, a lot).

The magazine focuses on foreign affairs as well as business and fashion. The magazine utilizes excellent photographers and pithy articles (similar to the Economist) and is very well laid out. I highly recommend paging through an issue if you see one at your local bookstore, and my $10 was well spent.

I have heard about how the Chinese are starting to invest in Africa and their bilateral trade is increasing. The Chinese need raw materials for their booming economy; the Africans need technical know-how and development. In addition, the Chinese are amoral; they don't judge the recipient of their contracts and are totally indifferent to corruption and how the dictators treat their citizenry, as long as it doesn't stand in the way of business.

An article called "Chinese Cheques" visits Tanzania, Kenya and Angola, where they have very interesting photographs of Chinese construction sites and methods of development. Unlike the west, where they try to get the locals to "help themselves", the Chinese just do it themselves.

"China's relationship with Tanzania goes back more than 40 years... Chairman Mao sent Chinese contractors here to construct Tazara, the Tanzanian Zambia Railway Authority, whose trains carried copper exports... now the contractors are back, this time to build a new stadium... China has put in more than 60 percent of the funding. Chinese workmen drive forklift trucks, weld metal frames, and lay cables. More than 700 Chinese workers, supported by 300 Tanzanians, are toiling to complete the stadium within the next three months."

Tanzania is valuable to China for its mineral wealth. Angola is valuable to China for its oil wealth. Angola is one of the most war wracked countries on earth, and adjacent to Namibia (see my recent post on Namibia). Per the article:

"Despite not even being finished yet the quality of both the roads (in Angola) and the railways put Kenya's hotch-potch, patched up excuse for a road and rail network to shame... it is here that you realize exactly why Chinese aid is so appealing. It comes not simply in the form of a check, but also in the form of men like Shao Quon, a supervisor on the new railway... we make everything for the train... Chinese technicians make the concrete and place it in the mold, while a couple of dozen Angolan workers do the manual labor."

Easterly's book shows the failure of the western approach to poverty aid, and requests some modest improvements. But he doesn't even get close to the scale of the Chinese approach, which just focuses on getting it done, fixing the transportation, and getting the mineral wealth out of the countries to foreign markets. The Chinese are going to tackle the valuable parts and leave the chronic areas to the West, by not focusing on poverty, corruption, or violence. Easterly is almost like the economic planners under Communism that were focusing on incremental improvements within a broken system, such as the way East Germany was the best performing country within the Warsaw Pact, rather than just realizing that the whole edifice was shoddy and these tweaks weren't the answer.

Watch the Chinese method blow away the Western method, since we are bound to the idealist groups that monitor their spend and heavy bureaucratic reports, and documented failures. Maybe in this case it will shock us into changing our methods to something that works, rather than continuing failure.

1 comment:

Annie said...

I find this extremely fascinating. I've emailed a link to this blog entry to a friend who has a vast knowledge of economics and is interested in world trade. I hope he comments, because I'd love to hear his views.