If you read the headlines, Africa is a basket case.
For example, today’s NYTimes headline says: Cost of Africa’s wars is equal to all aid money.
But there is another side to Africa that rarely gets in the news.
Last week in Minneapolis, there was a Pan African Trade and Investment Summit. It was to try to connect local businessmen, especially those of the African diaspora, with small businesses in African countries.
You see, development has to be done at many levels. As the Chinese saying goes: Give a man a fish, he eats for one day. Give him a boat, and he feeds his family for a generation.
And after a generation where the western elites insisted that socialism was more suited to Africa (because tribal land is owned in common) the failures of the socialist paradigm are now making some Africans stand up and say: But African traders and market women and skilled workers are also part of our heritage.
But the new paradigm for Africa is not the exploitation of cheap labour by multinational corporations, but the grass roots growth of small and medium sized businesses that are slowly making things better. And some African governments are starting to help their local economies grow.
For example, much of Africa (or Asia for that matter) are small farmers.
You need government to help small farmers with subsidies to buy fertilizer and get high yield seeds for their crops so that they have a surplus to sell…and use the money to send one’s children to school.
Mary Kalika certainly thinks the subsidy policy makes sense. Ms. Kalika and her five children farm a little less than a hectare of land in this nine-house village in central Malawi. “We harvested 42 oxcarts of maize this year; that is the most ever for this land,” she said. “It’s very good news, and it’s because of the subsidized fertilizer.”
Ms. Kalika has already sold some of her surplus to buy seeds and tools to plant tomatoes to sell in town for cash. She may put a new roof on their house, and buy the children school uniforms if the tomato crop does well.
So in one generation, we will have two things: Farmers limiting families (because it’s expensive to send kids to school, and when there is enough food, all your kids live). But all those kids won’t keep farming. They’ll move to the city and get office or factory jobs.
So the next step for development: Once you have excess grain, you have to allow merchants to buy the grain, transport it, and then sell it elsewhere. So Malawi is selling surplus grain to Zimbabwe.
Such transportation takes an infrastructure, which again is the government’s job. One problem in the past was that roads were built, but not used. Now, a smart country will allow locals and businessmen to have input in to where to put the roads, getting the money from things sold overseas.
And the small farmers will of course benefit. People will have money to spend, so there will be a market for other things, such as bottled softdrinks, or a second dress, or red sandals, or headscarves, or a magazine.
Ironically, the best hope for a prosperous Africa in the future is China.
As people get a little extra money, people will buy clothing, plastic dishes, shoes, and all sorts of things that China is willing to sell and distribute cheaply to the world. China needs raw materials, but will work with local businesses to get their products into small rural shops…One of the undercovered stories of globalization is a China that sees plans as long term, and has a millenium of experience in trade, will invest in infrastructure, knowing the resulting prosperity will mean more customers in the future.
But in the short term, the greatest danger to African economic growth is actually the eco friendly emphasis on using things grown and manufactured locally.
Much of America’s “off season” fresh food comes from South America, thanks to NAFTA. Africa hopes to do the same, but is finding their crops blocked by the gospel of ecology:
“Fresh vegetables from Africa” have for several years been one of the main focuses of environmental and anti-globalisation activists…Already in 2003, airlifted baby carrots and garden peas from South Africa were highlighted in energy budgets of imported foods. For carrots, “it will have taken 68 calories of energy in the form of fuel to air freight each calorie of carrot energy,” while “fresh peas require approximately two and half times the energy to produce, package and distribute as those sourced locally,” the British daily ‘Guardian’ reported….
The dirty little secret, as the article points out, is that the same grocery stores that discourage imported African crops think nothing about selling subsidized European food to China.
Even Tesco, being concerned about CO2 emissions of transported foods, shows its real face when it comes to exporting from Europe. Only two weeks before its much-publicised marketing campaign on “carbon counting” labels, the UK retailer… announced the opening of ten supermarkets in China, where it will be selling popular European grocery products.