13 Mar 2013

Fail (and some win) in a nutshell

The Economist has some of the best editors and writers around, which makes it easy to learn important ideas in a short time (few people have the endurance to make it through 500 pages of Adam Smith, let alone three volumes of Marx). Their recent, REALLY GOOD, survey of Africa had two great examples of bad policies:
A programme to subsidise fuel alone cost the government $6.8 billion in theft in three years (on top of the billions wasted on the market-distorting subsidy itself). Shady deals between officials and oil companies have swallowed an estimated $29 billion in the past decade. Yet more than half of all Nigerians live on less than $1 per day and get almost no electricity because the grid has collapsed... Nigeria is famous for corruption, yet at issue is more than thievery. Members of the elite systematically loot state coffers, then subvert the electoral system to protect themselves. Everybody knows it, and a few straight arrows in the government talk about it openly. Perhaps half the substantial (but misreported) oil revenues of Africa’s biggest oil producer go missing. Moderate estimates suggest that at least $4 billion-8 billion is stolen every year, money that could pay for schools and hospitals. One official reckons the country has lost more than $380 billion since independence in 1960. Yet not a single politician has been imprisoned for graft. The day that Nigeria works properly, the battle for Africa’s future will have been won...
Oh, and don't forget that Nigeria's dysfunctional fuel subsidies belong to the same family as subsidies to renewable energy that take your money to create waste.

And here's how land grabs work in Ethiopia [read my paper PDF]:
A few years ago foreign investors rushed into Ethiopia to lease agricultural land for commercial farming but encountered a series of obstacles. Land-lease periods were reduced retrospectively from 100 to 50 and then to 25 years. The government often seizes land to hand to investors, rarely consulting or compensating the residents, who are resettled without any say in the matter. Sometimes security forces are deployed to clear land. Army units are accused of beating, raping and torturing villagers who refuse to leave. Some of them fight back. Along the Omo river near the Kenyan border local tribes are battling against a sugar plantation on land they used to inhabit. Fighters wearing body paint and lip rings sit under an acacia tree holding their AK-47s. On December 28th government forces killed 147 of them. Would-be Western investors understandably worry about becoming implicated.
Note that the survey has many examples of SUCCESS in Africa by Africans.* Read it.

* And here's an example of how activists in Manila got water to the people, overcoming resistance from the local monopolies that did not care to.

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