Thursday, April 25, 2013

The Rise of Africa - a fairy tale?

During my recent trip in East Africa, I saw a frenzied building activity in Dar es Salaam, Nairobi and Kampala. I saw an industrial park outside Kampala, and even between Mwanza and remote Tabora in Tanzania a new road was built. Oil drilling is set to commence in Uganda and gas pipelines are built from gas fields off the coast of Kenya and Tanzania. It seems like a lot of money is spent and investments are high. So far you could say that I witnessed the Rise of Africa – an increasingly popular narrative. 

Africa is now sometimes referred to as the New China. Africa’s booming economic growth fuelled by a rigorous focus on government and citizen accountability will boost poverty reduction and prosperity, according to the World Bank’s latest Africa’s Pulse, the twice-yearly analysis of the economic trends and latest data on the continent.
“The broad picture emerging from the data is that Africa’s economies have been expanding robustly and that poverty is coming down,” says Shanta Devarajan, the World Bank’s Chief Economist for Africa, and lead author of Africa’s Pulse. Throughout Sub-Saharan Africa, the report found, economic growth remained strong at an estimated 4.7 percent. Excluding South Africa, the region’s largest economy, the remaining economies grew at a powerful 5.8 percent—higher than the developing country average of 4.9 percent.”

This "Africa Rising" narrative has been recently also been taken up by cover stories in Time Magazine and The Economist.

And as I said, there is building going on. But....
To compare Africa’s current development with China’s is nonsense in my view. China was always an industrial powerhouse – its GDP was much bigger than the whole of Europe before European imperialism. It has just undergone a temporary slump. In contrast Africa was never industrialized and it has been plundered for centuries, most importantly of its biggest resource – its people. Colonization certainly didn’t help.

For how long have you seen “made in China” on products you buy in the shop? And how often do you see “made in Nigeria/Kenya/Uganda/Zambia” on anything you buy? Even in African countries themselves, most industrial goods are imported from China, Thailand, India, USA or Europe. South African supermarkets are increasingly dominating the shopping scene in East Africa, and in their shelves most stuff is imported. And all those wonderful East African textiles – made in Bangladesh.

The industrial park I saw outside of Kampala seems to house mainly import/export companies. And looking in my own field of expertise, agriculture, it is still mainly dependent on manual labour with very low productivity.

Africa attracts a lot of investments  now. Part of it is from the African diaspora. Foreign remittances are said (of course data here is extremely fuzzy) to be bigger than total aid. Of course, all this money pouring in will have to be spent. Of course it will trigger economic growth, but there is no guarantee for a lasting development.

 “The idea of development as industrialization has been completely abandoned in the last few decades. Free market economics has come to advise poor countries to stick with their current primary agriculture and extractives industries and "integrate" into the global economy as they are. Today, for many champions of free markets, the mere presence of GDP growth and an increase in trade volumes are euphemisms for successful economic development. But increased growth and trade are not development”.

The data behind the Rise of Africa narrative is also questioned. Morten Jerven’s research, Poor Numbers, in various Anglo-phone African nations suggests that the data supplied by national records and statistical offices are highly unreliable, with figures that substantially misstate the actual state of affairs.

Also, an economic growth rate of 5% per year is not so impressive when it is put in relation to the growth of the population. After all it is the growth per capita that counts when it comes to poverty reduction. Again, compare China with a 8% economic growth with almost no population growth with Sub-Saharan Africa with a population growth that is almost as big as economic growth. Between 1980 and 2010 GDP per capita in 2005 International dollars increased only from 1,800 per person to just above 2,000, albeit with a drop down below 1,500 in the early nineties (source).

Some are terrified by the growth of population in Africa, but by and large Africa is not much populated compared to Europe and Asia. Perhaps, this population growth also holds a promise for the future. The biggest shift in Africa’s demography resulting from the population boom is the increase of the working age population. In 2010, 34 per cent of Africans were aged between 25 and 59. They represent 34 per cent of the population or 353 million people. By 2050 this number is expected to reach 892 million people, representing 45 per cent of the population. This would represent a dramatic shift in the world’s labor force, with Africa likely to replace China as the biggest contributor to the global workforce.

Historically, a big work force has been one of the major drivers for economic development. But historical relations might no longer hold: in an industrial development with increasing automation the importance of the size of the workforce will perhaps be less pronounced. We already see that industries are to some extent coming back to the USA and Europe. In general, it seems like industries are going the same way as farming, a constant over-production as a result of that increase in productivity is quicker than growth of demand. This means that the industrialization path for development will be increasingly narrow and hard to go for newcomers.

Of course, there will be spots and pockets than can thrive without either industrial development or agriculture productivity growth; living on tourism or mining for instance. And there are countries which can – and have already – developed industries. After all Africa has 54 countries with varying conditions. But for a large scale development of Africa it needs both agriculture growth and industrialization. And both seem hard to get.

Tuesday, April 23, 2013

Peak Child - Peak capitalism?

The ideal family is no longer big
World population continues to grow, but the number of children in the world has now reached its peak. In 1960 we were 1 billion children below 15 years of age and we were 35% of the world population. Now there are 1,9 billion children in the world, but they are but 27% of world population. In 2050 there will still be an estimated 1.9 billion kids.

The good news is that populations are actually stabilizing. We doubled global population between 1960-1990 – but this will most likely never happen again.

In all major rich countries – with the USA as a remarkable exception – population is stabilized or would even fall were it not for immigration. In many other countries birth rates have plummeted. Remains a number of poor countries with still very rapid rates – just come home from East Africa which is one of the regions with still increasing population. It is worth noting that population growth rates in Africa are still not as rapid as they have been in Asia.

The era of colonization of the globe of human kind is rapidly coming to a close, with nature resources sucked up and population now filling space after space. With this closing, our economic system is also bound to change. 

Capitalism as we know it can’t manage a steady-state economy and it has also big problems to work with a stable population as things look like. After all, growth is the lifeblood of economic system and in that sense it probably doesn’t matter much if the growth is from increased consumption per capita or by increased population.

Perhaps "Peak child", "Peak oil" and "Peak soil" don't spell the end of capitalism, but they at least form "Peak capitalism". 

Wednesday, April 3, 2013

Anything too big to fail is too big!

Why on Earth is it Eaarth with an extra ‘a’? Perhaps it is a smart trick to draw attention to the book: Eaarth: Making a life on a Tough New Planet. However I do realize that Bill McKibben has chosen this to convey a very serious message—the message that the blue-green grand oasis we have seen on the pictures taken from Apollo 8 has become a very different planet; our old familiar globe is suddenly melting, acidifying, flooding, and burning in ways that we never experienced before. “It’s a different place. A different planet. It needs a new name. Eaarth”, he says.

In the first half of the book McKibben makes a strong effort to justify this dramatic expression. He does that well, I must say. The ice caps are melting, species are becoming extinct, wildfires are raging, record heat is being recorded every season and strong storms and floods are growing more frequent and severe, washing away our roads and bridges. He says that even “on the old stable planet” we are falling hopelessly behind. Today, one in every four bridges in the United States needs major repair or upgrades. And it's all going to get worse, even if we curb emissions today–which we clearly don’t.

Like many modern writers, McKibben focuses a lot on the connection between energy and economic growth. The more you produce the more energy you need and the more energy you use, the more things you produce. I believe this link is now well established.

Some people think we shouldn’t paint too gloomy a picture of the situation, as it may make people depressed and thereby passive. McKibben is clearly not in this camp. Neither am I. But even my appetite for doomsday meets its match here. I am afraid that spectacular weather events are somewhat overused to prove that global warming is here and that it is going to be hell. He claims that the “great boreal forest of North America is dying in a matter of years”. I remember that I sat crying in my spruce forest some 30 years ago when we had a rapid dying of forests in Sweden and other parts of Europe. The whole forest would be wiped out we were told. Today we have more trees than ever before!

It takes a few examples like these to undermine the story. But I don’t want to do that. McKibben is basically right, even if he might be wrong in some details, and uses too many “events” and not enough science to build the case.

Perhaps he is also overemphasizing on climate change being the single most pressing issue for our civilization. He does point to peak oil and a few other indications to show that the system has reached its limits, but climate change stands out as clearly the number one issue to be solved. While I dread climate change, I do think human civilization can survive it. But it will cost. And when energy is scarce and many other resources are depleted, we might not be able to afford the things we need. Having said that, climate change is certainly a threat that needs immediate action and attention.  

On page 99 he shifts attention to “after the flood”. Because there will be an after.
”the trouble with obsessing  over collapse, though, is that it keeps you from considering other possibilities...There is no real room for creative thinking....The rest of this book will be devoted to another possibility – that we might choose instead to manage our descent. That we might aim for a relatively graceful decline.” From there McKibben tries to explain how such a new civilization would look like and how we would reach there.

And it is this part of the book that is most interesting—at least for someone who no longer needs to be convinced of global warming. While our current civilization heralds risk, speed, complexity and expansion, the new world will be built on robustness, dependable technologies, locality, and resilience. McKibben builds a credible case for how the local, slow and close will help us out, “we’re talking walk or trot or jog, not canter or gallop”, comparing the shift with the difference between a thoroughbred and a workhorse of sturdy build.

Written in the aftermath of the biggest bail-out in history (the book was first published in 2010), McKibben says that anything too big to fail is by definition too big, advocating smaller units and less complexity. His own small state of Vermont, small scale farming, farmers markets and distributed power (people producing their own power from wind, sun, biogas etc.) are examples of how smaller units can work well—and bring other qualities. For instance, on average, people visiting a farmers market have ten times as many conversations per visit than those visiting a supermarket. The change will partly be driven by us choosing to do things, buying local for instance, and things we are forced to do such as repairing the local road because the central government can’t afford it, or fixing a local power source when the central supply has collapsed.  

Bill McKibben sees mostly good things with the transition that will come, the transition that has to come regardless of whether we want it or not. But he is not immune to the advances of contemporary society and its value.

”... our national and global project has been about more than accumulation and expansion, more than cars and factories. It’s also been about liberation – the slow but reasonably steady progress of valuing more and more people....The process that made us anonymous to our neighbors carried real benefits not just costs”.

The Internet is the savior here; it is both a global project that knits us together and something that allows restless globetrotters such as McKibben and myself keep in contact with the rest of the world without necessarily accruing air miles. But is the Internet really so resource saving? I have my doubts about it.   

Much of what McKibben advocates make sense. My main concern is that he overlooks the effects of the enormous inequalities in societies and the logic of the capitalist economy. The models of communities working nicely together are not applicable for a civilization where one percent has fifty percents of the assets and where half of the population shares a mere one percent of all wealth. Capitalism is both a cause and a result of this unprecedented period in history and it seems unrealistic to believe that capitalism can survive the descent into a steady-state economy with a smaller footprint. And it seems even more unrealistic to expect that it will bring us there! Without addressing this, the graceful descent is not likely to come true, or at least not be graceful.

It is worth reading on both sides of the Atlantic, on both sides of the Pacific as well as at the shores of the Indian Ocean.  

Check out Bill McKibben's Official Site for much more information about Eaarth.
Bill McKibben (born 1960) is an American environmentalist, author, and journalist who has written extensively on the impact of global warming. In 2010, the Boston Globe called him "probably the nation's leading environmentalist" [3] and Time magazine described him as "the world's best green journalist."[4]
In 2009, he led the organization of, which organized what Foreign Policy magazine called "the largest ever global coordinated rally of any kind," with 5,200 simultaneous demonstrations in 181 countries.