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Valuing Knowledge: The Impact of Human Capital Accounting on Global Economic Governance

Published by Anonymous (not verified) on Mon, 12/10/2020 - 5:14pm in

Since the 1990s, with the rise of endogenous growth theory, the internet and the new economy, knowledge – or ‘human capital’ – has been widely understood as the central factor underpinning growth and competitiveness in advanced post-industrial economies. There’s just one problem: no one has known how to measure it. Recent efforts to develop monetary estimates of human capital are deeply problematic, however, because they capture only a narrow measure of value, and push countries with supposed deficits of human capital towards market-oriented welfare and labour market policies.

Post-GDP accounting

Human capital measurements for a long time remained crude – unmonetized indicators of educational attainment, such as the % of the population with a college degree. Standardised comparisons of school pupils’ performance attempt to measure skill attainment directly, but still fail to measure the economic value of these skills. This means that, unlike the produced and financial assets that show up in the balance sheets in the national accounts, human capital has not had a monetary value and cannot enter growth accounting models or other types of economic analysis.

As I explored in a recent article published in RIPE, this has been changing over the last decade as global economic governance institutions have sought to develop a more formal accounting framework for estimating the monetary value of a country’s ‘human capital stock’. As a recent UNECE document indicates:

Understanding and quantifying human capital is becoming increasingly necessary for policymakers to better understand what drives economic growth and the functioning of labour markets, to assess the long-term sustainability of a country’s development path, and to measure the output and productivity performance of the educational sector.

We can situate this measurement agenda within a broader ‘post-GDP’ movement in global economic governance that has sought to adjust national accounting systems to better capture the realities of post-industrial economies and societies. Under this governance agenda, the ‘wealth accounting’ approach to sustainable development has emerged as dominant since the late 2000s, with the publication of a key UN, Eurostat and OECD report as well as the Stiglitz commission on the reform of global socio-economic statistics.

According to this framework, to account for all the non-produced assets and resources that modern economies increasingly rely on (‘natural capital’, ‘human capital’ and ‘social capital’), we should extend national balance sheets to show whether ‘total wealth’ across all asset classes is being preserved or depleted. A recent UN taskforce suggested that:

If these stocks are calculated using a common measure and assumptions are made about the substitutability of various capital stocks, changes in the total stock of wealth (per capita) will provide information on the sustainability of the development path of each country.

This is an elegant idea: a way for economic analysis to internalise the externalities that GDP growth relies upon, re-embedding the market economy in its ecological and social context.

Knowledge as capital

Regarding human capital, however, operationalising this framework is fraught with methodological difficulties. The way in which global governance organizations have confronted these valuation challenges is little understood, buried in technical accounting manuals and methodological appendices – but it exerts an ever-increasing influence on development discourse and policy.

Most notably, emerging international standards for valuing human capital – used by the UNECE and the World Bank – are heavily influenced by neoclassical capital theory first outlined by Irving Fischer in the 1900s. This views the accounting value of a capital asset as the discounted market income that its owner can expect during the lifetime of the asset.

The conceptual sleights of hand needed to translate this methodology to the valuation of human knowledge are heroic. For instance, we must assume that knowledge and skill are something separate from, and ‘owned’ by their bearer. This has meant that ‘knowledge’ is quickly reduced to formal qualifications in these frameworks, since these can (if one squints hard enough) be seen as something owned by the student, unlike informal skills gained on-the-job. Perhaps most bizarrely, cost-based estimates require accountants to assume that ‘like physical capital, human capital depreciates over time’, due to ‘the wear and tear of skills due to aging’, in a manner analogous to the deterioration of aging physical equipment.

Even with more commonly used output-based methods, which value knowledge based on discounted future wages, the human capital of the unemployed falls to zero (as this ‘asset’, the skills of the worker, is no longer generating an ‘income’ stream) and that of the elderly close to zero. They also assume that education spending is pure investment – that there is no intrinsic pleasure or ‘consumption’ aspect to learning and that it is something endured purely for the enhanced wage prospects it offers the student.

Human capital metrics and the commodifying of care

Methodological choices made on these issues would be of academic interest if monetary estimates of human capital were confined to experimental papers in economics journals. But increasingly they are used by global governance agencies to pathologise certain countries and judge which welfare regimes and labour market policies are deemed ‘sustainable’.

An illustration of this is the use of human capital wealth estimates by the World Bank, within its Human Capital Project (HCP) launched in 2018. Based around ‘using policy and results-based lending to support critical human capital reforms’, this agenda plays a central role in the Bank’s wider development strategy for poverty eradication by 2030. In 2019 the Bank launched human capital plans for the MENA region and Africa, to support the HCP. In MENA, human capital targeted financing is set to increase from $1.119bn in 2019 to $2.5bn by 2024, while in Africa it is set to reach $15bn by 2021-23.

In both strategies, these regions are pathologized on the basis of comparative analysis of their human capital wealth. For instance, the MENA human capital plan laments how ‘with the lowest percentage of human capital as a share of total wealth per capita of any region in the world (35%), MENA faces a severe human capital gap’. This is, moreover, linked explicitly to their relative lack of labour commodification and an insufficiently developed free market economy. By comparison, Bank analysis of human capital in China applauded the ‘very rapid increase in urban human capital from the mid-1990s, in part because of the transition to a market-oriented economy’.

In the MENA region as well as in Africa the World bank strategy outlines a number of ‘priority interventions that can help build, protect, and utilize human capital’. These involve using targeted funding and policy consultancy to adapt education systems to competitive job markets, encourage entrepreneurship and focus teaching on young people’s employability in the private sector.

An interesting feature of this agenda is the way in which it interacts with the Bank’s discourse on gender equality and female empowerment. Human capital estimates are used to justify the commodification of care work, by bringing female labor market participation up to parity with male workers. The MENA strategy prioritises ‘closing the gap in female employment by improving conditions that facilitate women’s insertion into the labor market to realize their potential as productive workers’.

This is not of course to suggest that moves towards gender parity in labour markets are unwelcome. Notably, however, human capital estimates render one particular means of achieving this (full-time employment for both genders in the context of commodified care provision) as a contribution to the national balance sheet, while other routes (for instance, job sharing and work redistribution or commons-based care networks) cannot.

As this case illustrates, currently dominant human capital accounting methodologies naturalise the assumption that ‘sustainability’ depends on a particular market-oriented development trajectory. These policy recommendations are a tautological result of methodological choices. Because the value of a nations’ human capital wealth has been made to depend upon its projected contribution to labour market income, countries with higher levels of de-commodified care provision will necessarily have lower human capital wealth.

Global governance discourse frames these policy recommendations as neutral, technical assessments of how to build human capital. However, by unpacking the black box of the concepts these valuations rely on, we see that they are based on highly contentious assumptions grounded in neoclassical wealth accounting theory.

Dr David Yarrow is Lecturer in International Political Economy at the University of Edinburgh. His research examines the impact of post-growth ideas on global economic governance, most recently by investigating the rise of alternative accounting practices in international statistical agencies. More broadly he is interested in how economic ideas frame the challenges of automation and post-industrialism in democratic politics.

 

 

The post Valuing Knowledge: The Impact of Human Capital Accounting on Global Economic Governance appeared first on Political Economy Research Centre.

Book Review: The Economics of Belonging: A Radical Plan to Win Back the Left Behind and Achieve Prosperity for All by Martin Sandbu

Published by Anonymous (not verified) on Tue, 29/09/2020 - 11:57pm in

In The Economics of Belonging: A Radical Plan to Win Back the Left Behind and Achieve Prosperity for AllMartin Sandbu seeks to address the extent to which many citizens of western democracies feel ‘left behind’ by recent economic changes, proposing a detailed plan for creating a just economy where everyone can belong. While finding this a highly readable and carefully argued book that offers a number of persuasive policy prescriptions, John Tomaney questions whether it provides a fully convincing programme for the left-behind. 

If you are interested in The Economics of Belonging, you can listen to a podcast of author Martin Sandbu discussing the book at an LSE event, recorded on 17 June 2020. 

The Economics of Belonging: A Radical Plan to Win Back the Left Behind and Achieve Prosperity for All. Martin Sandbu. Princeton University Press. 2020.

Over recent years, readers of Martin Sandbu’s thoughtful Financial Times column, ‘Free Lunch’, have watched his attempts to wrestle with the backlash against globalisation that has swept across liberal democracies. His ideas have now been brought together in The Economics of Belonging: A Radical Plan to Win Back the Left Behind and Achieve Prosperity for All. In conceiving the political upheavals in the west in terms of ‘the end of belonging’ (8), Sandbu seeks to capture the way that many citizens of western democracies have been ‘left behind’ by recent economic changes, no longer feeling they have a place in the economy and consequently lending their support to a politics of ‘illiberalism’. Sandbu’s aim is to defend an open, liberal-democratic, market-based order against its detractors. While critical of recent policy directions, like John Maynard Keynes he comes not to bury capitalism, but to save it.

For Sandbu, the period after the Second World War in the west saw the extension of individual rights, the rule of law, free elections, the social market economy and political and economic ‘openness’, in ways that underpinned broadly rising living standards, declining inequality and assured security and social respect for the working class. Now we see rising inequality, declining incomes and slowing productivity growth. Within a generation, a radical redistribution of global income has occurred at the expense of western workers, providing the basis for a ‘populist’ politics of ‘usurpation’, which declaims that the right to earn a living has been stolen by ‘foreigners’. Sandbu’s purpose is to defend globalisation, claiming: ‘Economic openness is not just compatible with a domestic economics of belonging; with the right policies, more globalisation can make it stronger’ (208).

Economic changes, rather than shifts in cultural attitudes, explain the rise of populism in this account. Being economically left-behind creates psychological stress that erodes personal control, propelling voters into the arms of populist leaders, which helps to explain why electoral revolt is concentrated in places vulnerable to restructuring. It is not globalisation that has driven these processes, according to Sandbu, but structural change and (national) policy. The shift to a service economy and the decline of collective bargaining has undermined the post-war social settlement, while tax reforms favoured higher income groups and the owners of assets. Economic risk was transferred to the individual and created the conditions for the emergence of a precariat. The global financial crisis of 2008 – the consequence of a bloated and poorly regulated financial sector – precipitated a steep fall in living standards, exacerbated by austerity, leading to the unravelling of the economics of belonging.

But globalisation, in Sandbu’s telling, is the scapegoat for other causes of our present predicament. Skill-biased technological change and the shift to a knowledge economy are a bigger cause of manufacturing job loss than trade; immigration has little impact on jobs and living standards; and financialisation, while destructive, is not constitutive of globalisation.

Sandbu offers a paean to the Nordic model, where the survival of collective bargaining limits income inequality, wage compression is the motor of productivity growth and high quality training facilitates shifts between jobs as industries expand and contract. While replicating this model in detail is impossible, extending its principles is realistic, Sandbu argues, making a case for implementing high minimum wages, universal basic income, limiting monopoly power and strengthening workplace rights. He proposes reforms to the banking system to enable a shift from credit lending to equity financing to encourage more productive forms of investment. For Sandbu, policymakers overlook the costs of weak effective demand, especially on the left-behind, and he accuses central banks of ‘learned helplessness’ in macroeconomic management (165). In the realm of taxation, he advocates net wealth taxes, more effective corporation taxes and higher taxes on negative externalities (notably, carbon emissions), and he proposes a trade regime based on common labour and environmental standards to promote ‘economic togetherness’ (8).

Particular attention is paid to ‘left-behind’ places where the populist revolt is strongest, and Sandbu calls for compensation for places affected by economic restructuring, measures to connect them to successful agglomerations and physical and financial investments to maintain aggregate local demand. In particular, he calls for targeted business extension measures, customised job training, new roads, public transport and better broadband, improved ‘social infrastructure’, investments in cities to attract knowledge workers and efforts to ‘globalise’ lagging regions by nurturing their export potential. He acknowledges that not all places will benefit from this approach, which raises the question of what happens to those that are left even further behind. The reference to ‘social infrastructure’ is undeveloped, but it is suggestive of debates about the ‘foundational economy’.

The Economics of Belonging is an important contribution to the debate about the ‘left-behind’. Sandbu offers a highly readable and carefully argued narrative, which marshals evidence adroitly and proposes a range of policy prescriptions, many of which are persuasive and deserve serious attention. But does it amount to a convincing programme for the left-behind? Among the obvious gaps, Sandbu has little to say about the contemporary geopolitics that are reshaping patterns of international trade. China and Russia currently present themselves as ‘civilisational states’ with strategic interests that may limit the effects of his proposed policies. Crucially, Sandbu never really presents a clear definition of belonging: the term does not appear in the index. In practice, his analysis rests on a methodological individualism in which utility-maximising individuals respond to (social) market signals. He overlooks the affective and collective dimensions of belonging and the complex ways people form attachments to place and the uses they make of them.

Sandbu’s analysis also rests on assumptions about the essentially ‘illiberal’ culture of left-behind communities arising partly from an overdrawn distinction between the economic and cultural. In fact, we lack deep, qualitative understandings of the complex interplay of cultural and political change in such places. Left-behind places come in many shapes and sizes and this will likely confound well-meaning technocratic solutions. Bruno Latour has argued recently that belonging to a territory is the phenomenon most in need of rethinking. That rethinking must include listening to what the ‘left-behind’ actually want from the economy and polity.

Image Credit:Image by MetsikGarden from Pixabay.

Note: This review gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics. 

 


Book Review: Employment in India by Ajit Kumar Ghose

Published by Anonymous (not verified) on Tue, 29/09/2020 - 9:30pm in

In Employment in India, Ajit Kumar Ghose offers a concise guide to understanding different aspects of employment in India, written using accessible language for a general audience. With the book’s analysis supported by rigorous empirical work and up-to-date data, Varsha Gupta recommends it to researchers of labour economics. 

Employment in India. Ajit Kumar Ghose. Oxford University Press. 2020.

Employment in India by Professor Ajit Kumar Ghose is a primer to understanding the Indian employment scenario since Independence. Part of the Oxford India ‘Short Introductions’ series, it’s a concise guide to different aspects of employment in India, written using accessible language for a general audience. The insights and facts presented are up-to-date, using the 2016 employment data, while the epilogue provides statistics using the Periodic Labour Force Survey (PLFS) 2017-18 data.

The book is divided into five chapters, with the first two chapters introducing the various definitions and concepts used in the book to underline the nature and characteristics of employment. The third chapter is empirical and charts the trends for six decades using four sources of data: the Employment-Unemployment survey by the National Sample Survey Organisation (NSSO); annual data on employment by the Labour Bureau; organised sector data by the Directorate General of Employment and Training (DGET); and the Census. In the fourth chapter, the reasons behind the trends are explained, while the concluding chapter outlines an optimal strategy to meet the employment challenges of India and discusses the future.

The author begins by outlining the growth strategy since Independence, which has been more inclined towards the service sector and is driven more by domestic demand than exports. The Indian economy skipped the growth in manufacturing where returns to scale are higher and positive spillovers can be attained. Before delineating the employment patterns using data, the second chapter discusses the various terms often used in labour studies and this book, including the modern sector, the traditional sector, wage and self-employment as types of employment, the formal and informal sector, structural change etc. It provides the reader with clarity on these concepts before they are used in further analysis. Details on the Lewis model (which shows that as a country develops, there is movement of labour from agriculture to the modern sector), the interlinkages between the modern (formal) and traditional (informal) sector and the role of employment in connecting economic growth and development constitute the rest of the chapter.

In the third chapter, trends of employment indicators are brought out for the period 1950 to 2016, alongside a list of all the various data sources used. It is an exhaustive list for early career researchers in labour economics. It is highlighted that the low unemployment figures, which are often taken to be a positive reflection of the labour market, do not present a bright scenario in a developing country like India as it does not indicate full employment. Being unemployed is a luxury here, and only a few can afford it; the rest take up whatever employment is available to them. Three pieces of information emerge from the analysis; the unemployed in India are less poor and more educated; the rate of unemployment increases with education level; and it decreases with age as some individuals get employed while others leave the workforce altogether.

In addition, on pages 53-54, the author talks about low female employment and the reasons behind it. Reduction in distress participation (work undertaken in times of economic hardship) along with poor demand for female labour are major factors. The author mentions that ‘withdrawal from poor jobs did not have to mean withdrawal from the labour force’, pointing towards the unavailability of better jobs for women.

Furthermore, trend analysis on pages 57-80 draws out the structure of employment. Self-employment has gone down, while the share of wage employment has increased in total employment. This is in line with the iron law-importance of agriculture in employment declines and wage employment’s share rises as a country experiences economic growth. The share of formal employment in India went up until 1973 and declined thereafter. It went up again between 2005 and 2012. The Employment Quality Index, developed in the author’s previous work to statistically measure employment conditions, is calculated for the period 1955 to 2016 and on average presents a slight decline.

In the fourth chapter, the author explores the relationship between economic growth and employment. While growth hasn’t been poor in India, employment indicators reflect a poor scenario. Decent growth was experienced by the Indian economy, especially after liberalisation reforms in 1991 were introduced, due to overseas finance and remittances. The service sector took the lead: an enigma which is peculiar to India. The process of structural transformation, brought about by growth in the modern or non-agricultural sector, did not occur in India. This is reflected in the statistical indicator ‘employment elasticity’ (percentage change in employment associated with a 1 percentage point change in economic growth) of non-agricultural growth. It declined during the period 1978-2000 and 2000-12, implying that labour was not pulled out of agriculture at a fast rate. The failure of the manufacturing sector and the low employment intensity of the service sector are two factors behind this. Within the service sector, the skills-intensive areas of ‘communication, finance and business services’ led the growth. This eventually led to slow absorption of the abundant low-skilled labour available in the country.

After drawing out the employment situation in India and the explanations for it, the author provides a roadmap to achieve development via employment generation in the last chapter. India needs to create 12.5 million jobs per annum with a focus on low-skilled workers in order to enable the economy to reach the point where there are no surplus workers (the Lewis turning point). While research often highlights the significance of employment creation for the educated and the skilled, the author places emphasis on low-skilled employment. Employment generation in the non-agricultural modern sector and productivity increases in existing jobs in agriculture are required. A structural transformation process where growth is concentrated on manufacturing rather than service-led can bring the desired changes in the Indian job market (138-40). The concern regarding automation replacing low-skilled labour in manufacturing is also discussed. Up until now, this has occurred primarily in capital and skill-intensive sectors of manufacturing. So, the strength of manufacturing in employment remains, even in the twenty-first century.

This book offers a comprehensive analysis of employment in the Indian economy. The nature of the employment challenges faced by India and the growth pathway required to meet them are summarised. However, it’s a long read for a non-specialist reader. Since it touches upon the various aspects of employment using data, this can detract from the larger narrative for the reader. That being said, the information provided in various boxes is useful for researchers in labour economics, with definitions given for various concepts and indexes used in the analysis. Throughout the book, the analysis is supported by rigorous empirical work and the epilogue updates it with the latest available data. Employment in India is recommended for students in labour economics.

Note: This review gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics. 

Banner Image Credit: Working professionals in a co-working space in Delhi. Copyright ILO/L. Mitul 2018 (ILO Asia-Pacific CC BY ND NC 2.0).

In-text Image Credit: Image by Nandalal Sarkar from Pixabay.

 


Book Review: Country Frameworks for Development Displacement and Resettlement: Reducing Risk, Building Resilience edited by Susanna Price and Jane Singer

Published by Anonymous (not verified) on Tue, 08/09/2020 - 9:39pm in

In Country Frameworks for Development Displacement and Resettlement: Reducing Risk, Building Resilience, editors Susanna Price and Jane Singer bring together contributors to offer a deep exploration of evolving national frameworks that seek to mitigate the risk and deprivation faced by vulnerable communities displaced by the global competition for land. The chapters in this thought-provoking and comprehensive book carefully build a rigorous documentation of policies and legal practice to form a vital resource for academics, students and specialists working with land rights, writes Indrani Sigamany.

Country Frameworks for Development Displacement and Resettlement: Reducing Risk, Building Resilience. Susanna Price and Jane Singer (eds). Routledge. 2019.

Susanna Price and Jane Singer’s edited collection, Country Frameworks for Development Displacement and Resettlement: Reducing Risk, Building Resilience, is a deep exploration of evolving national frameworks, such as safeguards, protection, laws and regulation, in response to the global competition for land by public and private sectors. The central question the book addresses is how countries use frameworks and legal norms to respond to and mitigate the risk and deprivation faced by vulnerable communities displaced by the expropriation of land. The inclusion of cases in the fifteen chapters covering Asia, Africa and Latin America contributes to the rigour of this thought-provoking and comprehensive book.

The cases contained in this book, drawn from around the world, are an attempt to answer questions regarding the necessity for states to have powers of eminent domain (the right of governments to expropriate private property for public use with compensation) as well as the human, social and environmental costs of economic development afflicted with poor financing and weak implementation. The stated objective for countries triggering forced migration is to take responsibility for the protection of their citizens with social and environmental safeguards. The three sections in the book address national challenges and conceptual frameworks, offering rich evidence through case studies to support the analysis.

The general agreement of all the authors is that country frameworks are important for accountability and national ownership around social and environmental safeguards for land displacement. They question, however, whether national standards of implementation strictly adhere to human rights. Currently, frameworks do not match implementation on the ground. The book points to the inaccurate assumptions made by the World Bank (WB) in 2017 when it based its conclusions regarding the readiness of countries to adopt national frameworks on poor evidence. The WB emphasised achieving ‘objectives materially consistent’ with WB policy, without acknowledging that regulatory frameworks on eviction and displacement are, as Price points out, ‘rarely able to achieve objectives materially consistent with the Environment and Social Framework (ESF)’.

One brutal conclusion is that existing safeguarding systems can exacerbate gender disparities, exclude indigenous communities and create poverty. Country frameworks are therefore unable to guarantee a fair or just outcome concerning livelihoods, or economic and tenure security for communities being forced to migrate. Price and Singer conscientiously connect their analysis to the United Nations Sustainable Development Goals. They advocate ‘pre-emption’ in relation to the ecological footprint of projects and policies; ‘equity’ in the choice of development strategies; and resilience for communities by strengthening social and natural capital.

In Chapter One, Ruwani Jayewardene points out the need for national laws to protect citizens against profit-oriented globalised industry which leaves citizens vulnerable. In the light of state laws being weak, however, and not protecting citizens, the author advocates for improving both national laws and access to international courts. Salamón Nahmad Sittón, in his chapter, highlights the importance of Free and Prior Informed Consent (FPIC) for indigenous peoples facing land dispossession, though this is often offset by unequal power relations and authoritarian bureaucracy. In Mexico, in lieu of mitigating laws and regulations on displacement that allow the violation of community rights, public policy has helped create a space for self-determination of indigenous communities.

Chris De Wet’s chapter argues that laws and policies should be country-specific and locally appropriate, and in South Africa, for example, they should be shaped by and have the buy-in of local government, civil society and multilateral development banks (MDBs). Russell Rhoads and Onesmus Mugyenyi similarly highlight community empowerment for the improvement of policy and country frameworks, stressing environmental and social risks and also the importance of local capacity building for implementation.

Sek Sophorn examines the clash between international and national legal norms in which national land laws take precedence and are not necessarily interpreted from a rights-based perspective. Forced displacement without FPIC has occurred with a loss of customary social, cultural and economic lives. Similarly, Jeanne W. Simon and Claudio Gonzáles Parra illustrate that international standards have no consequence when protecting customary land rights of indigenous peoples in Chile. Hydropower and energy infrastructure supersede customary land rights and human rights in a context of poor local legal protective frameworks. In Timor-Leste, as in Melanesian and neighbouring countries, customary land rights remain unrecognised. Bernardo Almeida refers to the 2017 Land Law in Timor-Leste, which has not yet begun to be implemented, and therefore only promises tenure security to certain groups, excluding informal urban dwellers and communities displaced in 1999 during the secession from Indonesia. Discussing safeguarding policies for infrastructure projects, Almeida concludes that international institutions provide better protection than the national government for displaced communities.

Examining the potential for national and international legal frameworks in Southeast Asia, Andreas Neef argues that in five Southeast Asian countries – Cambodia, Indonesia, Laos, Myanmar and the Philippines – legal frameworks have been designed to facilitate expropriation by corporations and political and economic elites, providing poor protections for customary landowners. Celine Salcedo-La Viña echoes this in her claims that liberal investment laws do the same in countries such as Tanzania and Mozambique. Price and Nicholas Tagliarino contradict this claim of compulsory acquisition in Indonesia and the Pacific and Lao PDR with examples of negotiated settlements, strong constitutional protections and landowners’ ownership of the process of development of their lands. Laos is used in this book as a contradictory example in separate chapters as having both strong protections and weak ones, which confuses the issue of compulsory displacement.

Price and Tagliarino stress that monitoring is vital for the sustainability of protections of land, livelihoods and wellbeing, as does Nadine Walicki, who emphasises government responsibility for monitoring the situation of people internally displaced (IDPs) and for building local capacity to compile data. Walicki’s focus is on country data informing national laws and policies, especially since figures on IDPs are difficult to compile or do not exist.

Asmita Kabra and Budhaditya Das point out that India’s Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR), ranks among the best country safeguard systems for land in the Global South. Kabra and Das highlight evidence from LARR’s implementation of national safeguards which are liable for local scrutiny and more rigorous accountability standards, proving that litigation and local judicial processes have resulted in a jurisprudence that has favoured communities vulnerable to development-induced displacement and resettlement (DIDR). India also has the Forest Rights Act 2006, which unfortunately is not mentioned in this book, and which has in place full legal and regulatory measures offering ownership and title rights, community forest rights, usufruct rights and rights to rehabilitation and relief, among others. Price and Singer’s claim that no ‘country has in place the full legal and regulatory measures to enhance the lives and livelihoods of those developmentally displaced’ disregards and contradicts the full legal measures of India’s FRA.

Salcedo-La Viña, writing on gender justice, discusses how inherent ambiguities in legal frameworks cause an intersectional discrimination which disproportionately violates women’s rights when dispossessed of community lands. Systemic patriarchy resulting in women not being named as heads of households excludes them from ownership rights to property and to FPIC. The three countries discussed in this chapter differ from India’s more equitable legal rights for women under the FRA; since this is not discussed in this book, this might skew the impression of women’s land rights in national frameworks.

In Sri Lanka, Sam Pillai writes about the Land Acquisition Act (LAA) which is still used as the benchmark. This is detrimental to the compensation of land loss, despite a gender equitable resettlement policy of 2001 being approved by the Cabinet, which unfortunately is non-justiciable. In Vietnam, Singer explains that legislation governing dam resettlement since 2014 appears more generous, but it is not comprehensive and falls short on livelihoods and benefit-sharing protection for IDPs. In China, similarly, the Land Administration Law (LAL) land compensation, using multiples of annual average output value, does not facilitate the re-establishment of livelihoods. Duan Yuefang, Brooke Wilmsen and Zhao Xu, engaging with state encouragement for urban resettlement, conclude that rural to urban resettlement entails risks of social disintegration, social unrest and impoverishment resulting from unemployment, food insecurity and debt.

The primary purpose of the volume is to introduce a topical arena that has had little attention or reflection from busy practitioners as a means for continuing discourse on these crucial issues. The combined fifteen chapters in the book carefully build a rigorous documentation of policies and legal practice and contribute to an eclectic discussion of country frameworks relating to DIDR. The book comprises a vital resource for academics, students and specialists working with land rights, and lays out powerful and clearly stated conclusions advocating development strategies being inclusive of displaced communities in order to circumvent impoverishment.

Note: This review gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics.

Image Credit: Uma Daro, one of the longhouses located in the Sungai Asap Resettlement Area at Belaga District, Sarawak, Malaysia (yukarifukui CC BY SA 2.0).

 


London and Jersey: still planning to fleece developing countries for money they should not be paying

Published by Anonymous (not verified) on Mon, 07/09/2020 - 7:22pm in

Time was when I spent much of my time looking at shady finance in developing countries. Now I do so closer to home. But that does not mean that the issues in developing countries have gone away: far from it, in fact. As the Tax Justice Network has reported they are alive and well, aided and abetted by London, of course, plus its friends in Jersey. As the Tax Justice Network reported last week (and which I think worth sharing in full to show just how pernicious finance can plan to be at cost to people in developing countries):

From Ghana Business News:

On the last days before Ghana’s Parliament went on recess the government laid before it for approval some agreements
. . .
Parliament hastily went through those bills, ‘debated’ and approved them on Friday August 14, 2020.

The bill, which is not law yet, is a strange, murky, and exceptionally unpopular arrangement. Ghana’s Attorney-General described the deal as “unconscionable.” A group of civil society organisations has said it “lacks the basic minimum of transparency.” A think tank calls it “broad daylight robbery.”

Essentially, a mysterious company based in the UK tax haven of Jersey, Agyapa Royalties, has inserted itself into the middle of what looks like a highly unwise financing arrangement. In exchange for an up-front payment from ‘investors’, variously forecast between $500 million and $1 billion, Ghana will be signing away over three-quarters of its future gold royalties to Agyapa — forever.

We have obtained a little information about Agyapa from Jersey, which, combined with some leaked documents from Ghana outlined below, paint a pretty shocking picture.

Mortgaging the future

This is far from the first time an African country has exchanged future mineral revenues for an up-front cash injection. Angola has since the 1980s set up a series of oil “prefinancing” arrangements where it has taken often large loans from consortia of western banks in exchange for future oil cargoes secured by its state oil company Sonangol. During the war, these loans were used to secure urgent weapons deliveries – with plenty of money going missing along the way. However, while those Angolan loans have for years rightly been criticised for their opacity, this Ghana deal seems to have added a further element: the insertion of this mysterious private party into the middle of the financing streams, under opaque terms. Even Angola rarely went that far (with one spectacularly murky exception involving Russian debts, for true connoisseurs of shady dealing.)

Shadow Banking and the Wall Street Consensus

The Ghanaian financing arrangements are consistent with, and are a twisted version of, what the shadow banking expert Daniela Gabor calls the “Wall Street Development Consensus” (a close relative of the Wall Street Climate Consensus that we’ve written about recently.) Under the overarching Wall Street Consensus (which is supported by the World Bank, development banks and others,) the solution to “development” issues in Africa and elsewhere (and the solution to funding the climate transition) is to maximise the amount of finance flowing in to countries and projects by tapping into the vast pools of liquidity in the hardly-regulated shadow banking sector. Getting “investment” money into poor countries may sound like a great idea: but what matters is the terms and conditions under which money will subsequently flow out via repayments, interest and other channels.

Agyapa would seem to be an example of this: an apparently large injection of up-front money to Ghana’s budget, in exchange for likely vastly larger sums flowing out at a later date.

Unfortunately, this broad consensus has a growing chorus of allies and cheerleaders: even in supposedly pro-African bodies such as the African Union and the UN Economic Commission for Africa (UNECA.) The latter has lobbied hard for African countries to create an “enabling environment” for private equity, public-private partnerships, and other ‘innovative’ shadow-banking practices which have appallingly predatory records in countries at all income levels. This is all the more strange, given that the same document strenuously highlights the risks of illicit financial flows.

This Wall Street Consensus involves pushing domestic financial market reforms to make countries more hospitable to securitisation and other shadow-banking practices; and for states and taxpayers to underwrite risks and costs, while maximising rewards for investors. As one analysis puts it:

such reforms would involve a wholesale reorganization of the financial sectors and the creation of new financial markets in developing countries in order to accommodate the investment practices of global institutional investors.

In other words, making “development” serve the interests of financial players, rather than the other way around.

Put crudely, a large part of shadow banking essentially involves creating ever cleverer tools for providers of capital to maximise rewards for themselves, while shifting risks, costs and losses onto the shoulders of others. This kind of financial ‘inward investment’ can be likened to a crowbar: a tool for providers of capital to jimmy open the national safe and make off with the proceeds. African countries are generally recipients of capital, not providers of capital: there is no discernible net ‘development’ benefit to this formula — while there are a large number of risks.

An Agyapa-related “Indemnity Letter” that has come to our attention contains pages and pages of such risk-shifting language — and its header contains this:

What fees would such players earn? At this stage, we cannot know.

More and more questions

The Agyapa deal raises clouds of more specific questions, of which this article can only cover a few.

Question 1: Is this good value for money? An internal Ghana government document from last month outlining the details of what it calls “Project Kingdom” justifies it like this:

There is no way for us to know if it is will be good value for money, or what the future royalty payment projections are, which would be needed as an initial basis for calculating appropriate financing costs, and we don’t know what the actual financing costs will be either. We have no idea. An opposition statement describes this as an agreement in perpetuity: an unverified but credible document we have seen essentially supports this: the agreement ends when the gold runs out.

Even that crazy Angola-Russia deal never went quite that far. What is more, the document says that under the agreement,

“Royalty rates in Ghana are 5% for some mines and 3 to 5% for others depending on the gold price.”

Ghana is a stable, long-term, low-risk gold producer: why are these rates so low?

What about tax? Well, look at this astonishing set of carve-outs, as outlined in an August 2020 Finance Committee report (to aid understanding, ARG Royalties Ghana is a wholly owned local subsidiary of Agyapa):


The sheer brazenness of all this is breathtaking.

In addition, it is worth noting that

London’s courts and tribunals, in the discreet pursuit of what some call “competitiveness,” have since the age of imperialism proved highly favourable to the interests of mobile global capital, especially when it is pitted against sovereign governments like Ghana’s. And one of London’s several advantages is, as a law firm put it:

arbitration in London is chosen by many parties because of the confidentiality advantages that are provided.

What is more, Agyapa’s location in Jersey could place important parts of Ghana’s future before the courts of Jersey, which has just as much, if not more, of a pro-capital, anti-sovereign bias than London’s, and on past records may be prone to “unusual rulings” in this respect – as we have noted before (see e.g. p5 here, under “Jeffrey Verdon”).

There are many other reasons why Agyapa appears likely to be an exceptionally bad deal for Ghana.

  • The stunning absence of transparency, over project terms, and project ownership: the information we have is based on leaks, not on official publication. Indeed, an opposition statement said that the government’s decision to withhold documents is “in clear violation of Article 181(5) of the Constitution.”
  • It is election year in Ghana — so incumbents are likely keen to maximise personal rewards up front before they may perhaps lose power.
  • A statement by Ghanaian Civil Society Organisations estimates that these future royalties are being sold off at 30% of their true value. This is admittedly speculative, in the absence of transparency, but still.
  • An opposition party statement slammed “the indecent haste with which these high-stakes agreements were being rushed through the parliamentary approval process” — they had four hours to scrutinise a deal which was two years in the making.
  • more generally, the astonishing potential for mischief in international financial arrangements, especially those run through tax havens, with lenders typically holding large information advantages over borrowers, and the ease with which conflicts of interest can be hidden.
  • A range of other criticisms is available here.

And all that is even before we get into the next question.

Question 2: What is Agyapa and who owns it?

Good Question. The above document calls it a “Gold Royalty Company.” The Jersey Financial Services Commission provides this data:

We note, in passing, the role of Ogier, an “offshore magic circle” law firm, in the transaction. (We sent them a detailed list of questions with follow-up: nothing has come back so far.)

The underlying Annual Return (under a previous name, Asaase Royalties Limited) registered on February 28th 2020 provides helpful information on who the directors are:

It does, however, provide details of an “authorised signatory” as company secretary:

And this, apparently, is he . . .

The annual return says, slightly more helpfully, that it is a company made up of 5,000,000 shares of which just one share has been issued, worth £0.01, under this ownership structure:

The Minerals Income Investment Fund (MIIF,) according to the Project Kingdom document, was

“established from the passing of the MIIF Act December 2018 to hold and manage the equity interests of the Government of Ghana (“GoG”) in mining companies, to receive mineral royalties due to the GoG from mining operations, provide for the management and investment of the assets of the Fund, finance further developments in the mining sector and monitor and improve flows into the mining sector.”

So that is alright then. Or is it? Well, the same document says:

“Government of Ghana through MIIF will be the majority shareholder with at least 51% of the shareholding.”

(Other documents and media reports say “49 percent” instead of “at least 49 percent.”) So somebody else will retain the remaining 49 percent. But who?

There is plenty of speculation in the Ghanaian media about who will benefit from this, which we won’t indulge. But we will note that the annual return above states that under Jersey law any members who hold one percent or more of the vehicle should be disclosed. However, the documents also state that the 49 percent of shares not held by the Ghana government will ultimately be listed on the London and Ghana Stock Exchanges.

That way, it would be easy for shareholders of Agyapa to hide their identities. For example, imagine that one powerful Ghanaian somehow obtains all that 49 percent equity. He or she sets up 50 companies, each in an opaque tax haven, all of which she owns, and each shell company then owns a slightly less than one percent share of Agyapa – and therefore squeezes under that Jersey threshhold of one percent.

There are several other features of Jersey law that enable secrecy to be assured for Agyapa. We won’t get into details here, but this document provides an overview of some loopholes that Agyapa may be taking advantage of. Jersey certainly isn’t unique in this respect: this is how offshore business so often works.

We will also note, in passing, the presence of a couple of Ghanaian names in the documents registered at the Jersey FSC. For example, in the incorporation documents, we find this:

These people are unlikely to be the real players: a source familiar with Ghanaian politics, shown these names, told TJN:

These are fairly prominent party hacks, but it’s the people behind the people that is probably more interesting.

Illicit Financial Flows: the Jersey Connection

Jersey ranks 16th out of 133 jurisdictions on the 2020 Financial Secrecy Index (for comparison, Ghana ranks 117th). Jersey also ranks 7th on the most recent Corporate Tax Haven Index (Ghana is 60th). Between them, the two indexes capture the global risk of illicit financial flows posed by each place.

Think of a list of the risks that are posed by financial secrecy, for a country with major natural resource wealth. Now imagine that the government of that country, working with a major international law firm in a leading secrecy jurisdiction, has come up with a scheme that appears to tick every item on the list.

That’s where Ghana now finds itself – facing the threat of a deal that could strip the country of revenue and, through powerful contractual terms enforceable in London and Jersey, taking away from future governments the possibility to democratically reverse the decision.

The law firm Ogier advertises itself as ‘the only firm’ to advise on the law of five particular jurisdictions: BVI, Cayman Islands, Guernsey, Jersey and Luxembourg. Aside from Jersey, the jurisdictions rank 9th, 1st, 11th and 6th respectively on the Financial Secrecy Index; and 1st, 3rd, 6th and 15th respectively on the Corporate Tax Haven Index.

A country like Ghana with natural resource wealth faces a range of risks of illicit financial flows (IFF). Together, these can result in major losses of tax revenue, and also do significant damage to the standards of governance and effective political representation. Financial secrecy is at the heart of each IFF risk.

A lack of transparency about the value of a country’s natural resources, or of the resulting profits, creates the risk that fair values are not achieved; that fair revenues are not received; and that private interests may gain unfairly.

A lack of transparency about the ownership of assets and income streams related to a country’s natural resources create the additional risks that contracts may be entered into opaquely, in which public resources are transferred to private hands without appropriate scrutiny; and that political decisions over resources may be taken with parliamentary oversight.

In Ghana’s case, the existing sovereign wealth fund provides the mechanism, and the necessary transparency and parliamentary scrutiny, to minimise all such risks. This makes it especially strange to see the government invest so much time, effort and political capital in creating a new structure that appears to raise the risks of illicit flows in each dimension.

We have seen a number of other documents surfacing, related to this deal, but this is enough to highlight the problems. Nothing about this deal makes any sense to us, except under certain logics which we shall not allude to here.

Recommendations

First, the Government of Ghana should urgently cancel and repudiate this entire deal — and investigate all the parties involved for possible corruption and self-dealing. Given the Attorney-General’s silence on this affair, after having initially raised serious concerns, we won’t hold our breath, until at least after the election. However, there is positive news here.

We hear that this deal is politically wobbly, and vulnerable. As a sign of that, yesterday, a senior Ghanaian official announced that the deal had been suspended pending further consultation – but within hours the Finance Minister overruled him, saying it had not been suspended.   It is therefore essential that maximum domestic and international pressure is now exerted, to ensure the deal is cancelled and repudiated.

Second, there is good evidence that one should treat the “transnational network of plunder” as a unit of analysis, including from a legal and criminal perspective. Is Agyapa such a unit? We don’t know, because we don’t have all the details. International legal bodies where Agyapa touches down — and this includes London and Jersey – should open investigations into Agyapa, and if wrongdoing is found, prosecute accordingly.

Third, Jersey should open up further to scrutiny. It should:

  • urgently publish its beneficial ownership registry, and not just in 2023;
  • demand beneficial ownership definitions should include any individual who directly or indirectly owns or controls at least one share, regardless if listed or unlisted;
  • publish all legal owners online even if they own less than 1% of shares immediately, and not only once a year;
  • publish annual financial statements of all companies incorporated in Jersey.
  • Publish details of the directors of all companies

Book Review: Property, Institutions and Social Stratification in Africa by Franklin Obeng-Odoom

Published by Anonymous (not verified) on Tue, 18/08/2020 - 9:48pm in

In Property, Institutions and Social Stratification in Africa, Franklin Obeng-Odoom offers a new comprehensive exploration of inequalities within Africa and between Africa and the rest of the world, drawing on stratification economics. The book offers compelling and crucial insight into the deficiencies of mainstream economics when it comes to addressing the roots of poverty and inequality in African countries and provides new evidence of neocolonialism and exploitation of African resources across the continent, yet the challenge remains of how to bring African countries the rewards of their past, present and future property, writes Heba E. Helmy.

Property, Institutions and Social Stratification in Africa. Franklin Obeng-Odoom. Cambridge University Press. 2020. doi:10.1017/9781108590372

‘Don’t advise me on my poverty. Just give me my property.’ From the very first page of Franklin Obeng-Odoom’s new book, Property, Institutions and Social Stratification in Africa, till the very last, the reader perceives as if Africa is bitterly uttering these words to the Global North, its former coloniser and the source of the entire economics establishment. Even though the author never states it so simply, this is the main thrust of the argument that resonates powerfully in his 364-page book.

‘Don’t advise me on my poverty. Just give me my property’ first emanates in Part One, or ‘The Problem’, where Obeng-Odoom introduces the problem at the heart of the book – the failure of neoclassical development economics, new institutional economics and all Marxist alternatives to provide a panacea for improving African countries’ living standards. Even with the recent resurgence of economic growth in Africa, the effect of growth has not steadily reduced poverty levels nor increased the share of Africa’s GDP in the global economy.

Obeng-Odoom ends this section of the book by proposing the Georgist tradition (based on the theories of Henry George) and Stratification Economics as alternatives for alleviating Africa’s economic plight. Georgist economics is ‘simply the systematic reconstruction of political economy (currently largely centered on capital and profit) to re-centering it on land and rent in their relationship with capital and labor’ (40), while stratification economics ‘examines the structural and intentional processes generating hierarchy and, correspondingly, income and wealth inequality between ascriptively distinguished groups’ (William Darity, 144).

‘Don’t advise me on my poverty. Just give me my property’ echoes louder in the reader’s ears when she delves into Part Two, which elucidates how mainstream economics has failed Africa, especially with its advice on the titling and privatisation of communal property (Chapter Two) and conducting national land reform programmes (Chapter Three). Rather than rejecting privatisation altogether, Obeng-Odoom proposes a type of land communing based on the principles of Georgist land economics, which is distinct from Marxist concepts of the nationalisation of land. According to George (1871), as cited in Obeng-Odoom, ‘for land already taken, taxing the socially created rent would prevent the ongoing problem of privatizing publicly created rent or value (and, hence, the descriptor, ‘‘land value tax’’)’. George’s second proposed policy is to inhibit continuous speculative land expropriation and, instead, put an end to the annexation of land (54).

‘Don’t advise me on my poverty. Just give me my property’ reverberates in the following three chapters; in Chapter Four, where Obeng-Odoom questions neoclassical theory of human capital as higher investment in human capital leads to widening rather than narrowing social stratification in Africa; in Chapter Five, where he challenges neoclassical free trade factor endowment theory, which espouses free trade and foreign direct investment conducted by Transnational Corporations (TNCs), for having led to rising debt in African countries; and in Chapter Six, where he underscores how the neoliberal discourse that prioritises high economic growth rates has led to ecological disasters that undermine real improvement in African wellbeing.

‘Don’t advise me on my poverty. Just give me my property’ is magnified in Part Three, titled ‘Alternatives’, where Obeng-Odoom tackles two solutions: Socialism, which the author rejects, citing some questionable African socialist experiments, and Africanism, which the author supports, and which comprises addressing past appropriations of African property through all means (such as going to the International Criminal Court (ICC)) for Africans to be ‘compensated for their dispossession by paying them the present value of rent accruing to that land until now’ (240). Africanism would also include reparations for African countries for forcing them to undertake transactions on the volatile euro and US dollar.

As for the current and future expropriations, Obeng-Odoom recommends dissolving current monopolies, preventing the creation of new ones and disseminating opulence throughout the economy by adopting a tax on land values that transfers the resource rents to the public sector. Through this tax, Africans can compromise between the need for foreign technological assistance and the costs of accepting it. Finally, Obeng-Odoom suggests substituting happiness for economic growth as the prime objective of African economies.

Obeng-Odoom is very compelling in articulating the deficiencies of current mainstream economics when addressing the roots of poverty and inequality in African countries. Though the issues raised by Obeng-Odoom may be the common challenges confronting developing countries in general, especially with respect to the exploitive techniques of TNCs and the unfair rewards accruing to developing countries from free international trade, the author is prolific in citing a new – and in many cases shocking – wide gamut of evidence on neocolonialism and exploitation of African resources from countries stretching from the north, south, east and west of the continent. Additionally, Obeng-Odoom may be one of the few authors who has provided an unequivocal exposition of the long-ignored Georgist economics, and how its implementation can act as a potential panacea for Africa’s development crisis.

Although offering fascinating and crucial insights on the shortcomings of mainstream development economics with respect to Africa’s predicament, Property, Institutions and Social Stratification in Africa also comes with some notable limitations. The main limitations I believe lie in the ‘Alternatives’ section where the author proposes Africanism based on the Georgist tradition and stratification economics as a better route for Africa’s development. However, both the efficiency and the feasibility of many of the solutions proposed under this alternative remain questionable.

Obeng-Odoom overestimates the efficiency of the Georgist land tax in improving income and wealth distribution when there are many doubts on the efficacy of the tax in securing sufficient resources for development. While the author cites examples of the large oil TNCs, a quick glance at the world’s largest companies in 2006 and 2019 reveals how the top ten companies in 2019 in terms of market capitalisation are in the technology, consumer service and financial industries (with no companies in the energy industry), whereas thirteen years before it was the energy companies that made their fortunes from the exploitation of land and natural resources. Hence, a tax on land would probably have brought sufficient revenues in 2006, but much less in 2019 and in the years to come.

World Largest Companies (2006 and 2019)

2006

2019

Rank
Company
Sector
Rank

Company

Sector

1
Exxon Mobile
Energy
1
Microsoft
Technology

2
General Electric
Industrials
2
Apple
Technology

3
Gazprom
Energy
3
Amazon
Consumer Services

4
Microsoft
IT
4
Alphabet
Technology

5
Citigroup
Financial
5
Facebook
Technology

6
Bank of America
Financial
6
Berkshire Hathaway
Financial

7
Royal Dutch Shell
Energy
7
Tencent
Technology

8
BP
Energy
8
Alibaba
Consumer Services

9
Petrochina
Energy
9
Visa
Financial

10
HSBC
Financial
10
JPMorgan Chase
Financial

 

Sources: 2006: The Rise of the Superstars and 2019: World’s Largest Companies 2019. 

This is not to imply by any means that land is an insignificant factor in income and wealth distribution, but probably that attributing most inequality to land ownership inequality, and assuming that the mitigation of income inequality can only be achieved through a land tax, may be an oversimplification of a much more intricate and hydra-headed problem.

In fact, the only actual real-world application of Georgist economics of a one tax policy levied only on land property, which took place in the city of Altoona, Pennsylvania in 2011, was unsuccessful; consequently, the tax was abolished permanently in 2016 after being described as both ineffective and confusing. In other states, variants of the tax were used to supplement rather than substitute the land tax (Annika Neklason, 2019)

Georgists tend to attribute low revenues from land taxes to a methodological error in the definition of land rent itself. According to the Henry George Institute website, the collected land tax does not ‘include rent that is paid in local property taxes, is capitalized into selling prices of land (this income is recorded as “capital gains”) or is counted in the value of corporate assets’ (Michael Hudson, n.d.). But capital gain resulting from the selling of the land may result from a rise in its price originating from either intellectual property or land property. If the tax is to swallow the gain in both cases, it may pose a threat and have an enduring negative impact on all future private investments, especially in the technology industry, the investments in which entail enormous resources for the aim of paying back windfall revenues later.

Obeng-Odoom also proposes the idea of strong democratic control which provides workers full control of surplus allocation and the reinvestment of surplus. However, under such system, there is a risk that workers experiencing overwhelming and supreme control will turn to new capitalists and siphon – or divert to themselves – the generated surplus. In fact, the proposed model seems akin in some respects to the former Yugoslav workers’ self-management model, in which workers’ councils controlled the enterprise. Nevertheless, these councils ended up increasing social stratification of workers by empowering managers, engineers and white-collar workers over the lower-skilled working class (James Robertson, 2017)

At the same time, Obeng-Odoom rejects other policies, such as those followed by the Four Asian Tigers, on the grounds that if Africa follows the same protectionist policies to achieve growth until infant industries grow (Ha-Joon Chang’s argument of kicking away the ladder), this would entail that Africans ‘colonize others, rob others, plunder the resources of others, or institutionalize global wage and rent theft systems’ (283). However, the experience of the Asian Tigers does not support the author’s claim. In fact, none of these countries has robbed or plundered the resources of others.

Apart from somewhat ineffective solutions, some proposed solutions, despite being commendable, are very difficult to materialise, such as getting reparations for African enslavement, colonisation and neo-colonisation. This – too good to be true – proposal has been promulgated for many years, but no country has yet responded to it. The possibility of obtaining a verdict through the ICC, as Obeng-Odoom suggests, is moot given the fact that powerful countries will simply not comply with any verdict not to their advantage. Most importantly, the recent threat by the US to the ICC for potential investigation of both US citizens and citizens of US allies will ‘imperil accountability for grave international crimes’, according to Human Rights Watch.

Forming cartels or regional blocs to get better deals from TNCs is also an easier said than done solution. Regional blocs face challenges in their inception resulting from pressure from the major world powers. Even if such regional blocs succeed in coming into being, their ability to follow a unified policy remains inconclusive. Cartels like OPEC are continuously subject to pressures from the major powers on their mostly authoritarian members to come up with decisions not in their favour, but which benefit developed countries and their affiliated TNCs.

Obeng-Odoom also suggests dissolving monopolies by appointing local managers to occupy the leadership of the TNCs in an effort to ‘indigenize TNCs and return the commons to local control’ (255).The problem here is that TNCs will never allow host countries to appoint local managers, and even if this happens based on agreement between the TNC and the host country, the TNC will guarantee that appointed managers are the ones who promote its interests. In the worst-case scenario, regimes unwilling to comply are easily replaced by complicit alternatives through coup-d’états, which has been a common experience in African countries.

‘Don’t advise me on my poverty. Just give me my property’ is the overarching message of Property, Institutions and Social Stratification in Africa. Regarding the message’s first part, Obeng-Odoom has been successful in promoting ‘Africanisms’, or African socialisms, which hitherto did not have one meaning, yet can be a basis for a viable and unique conceptualisation of an African economic development paradigm. Yet what is more problematic, not only for Obeng-Odoom’s study but for all African nations, is how to implement the second part – to bring to Africans the rewards of their past, present and future property.

Note: This review gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics.

Image One Credit: Aerial shot of Accra, Ghana (Photo by Virgyl Sowah on Unsplash).

Image Two Credit: Cape Town, South Africa (Photo by Douglas Bagg on Unsplash).

 


Book Review: In Fading Light: The Films of the Amber Collective by James Leggott

Published by Anonymous (not verified) on Thu, 25/06/2020 - 9:31pm in

In In Fading Light: The Films of the Amber Collective, James Leggott offers the first full-length scholarly study of the films produced by the Amber Film & Photography Collective through over five decades of engagement with the working-class communities of North East England. This is a valuable and insightful contribution to a neglected area of British film history, writes Tom Draper, that will hopefully inspire further work building on this foundational text.

In Fading Light: The Films of the Amber Collective. James Leggott. Berghahn Books. 2020.

The Amber Film & Photography Collective first came together as a meeting of like-minded film students at Regent Street Polytechnic in 1968. Spurred on by the efforts of founder-member Murray Martin, the group soon departed the capital for Newcastle upon Tyne, kick-starting what has become more than five decades of engagement with the working-class communities of North East England. Despite earning plaudits at international film festivals and receiving support from Channel Four throughout the 1980s, there remains a sense that Amber’s contribution to British film history has been underappreciated. James Leggott’s In Fading Light: The Films of the Amber Collective, the first full-length scholarly survey of their films, aspires to offer a corrective to this lack of recognition. This welcome book aims to ‘heighten the collective’s standing within international film culture, and thereby encourage further viewing and discussion of this remarkable body of work’.

Amber’s multifaceted legacy has attracted a range of scholarly approaches. Significant work has been done on the collective’s radical practices and unique egalitarian wage structure, participatory-based decision-making and vertical integration model. Amber’s ‘early manifesto for an ideas factory’ (‘Integrate life and work and friendship. Don’t tie yourself to institutions. Live cheaply and you’ll remain free. And, then, do whatever it is that gets you up in the morning’) has appealed particularly to sociologists. Less attention has, however, been placed on the films themselves. Leggott’s objective is to give ‘the unfamiliar reader an entry point into a body of work that is potentially intimidating in its range and diversity’. The task is to trace the threads which run through 50 years of documentaries and dramas, and explore the shifting concerns provoked by changing historical circumstances.

If there is a grand narrative which structures Amber’s work, it is the North East’s troubled economic history: deindustrialisation and decline, struggle and hardship, deprivation and poverty – recurrent concerns which may account for their obscurity. ‘The question remains of whether Amber have flown beneath the cultural and critical radar, willingly or otherwise, as a result of being perceived as “regional’’,’ writes Leggott. Or from another perspective: ‘it is easy to imagine how a casual observer of Amber’s work and reputation might align it within the apparently regressive school of “northern realism’’.’

Such readings usually bring the attendant charges of nostalgia, romance and parochialism: criticisms which have dogged the collective over the decades. In Fading Light wants to move past such easy judgements. Leggott’s in-depth analysis of individual films demonstrates that there is more to Amber than a mere celebratory nostalgia for a bygone age. The collective’s sustained experimentation with the form of documentary and drama, and ‘commitment to authentic and responsible representation of people, places and experiences’, warrant detailed critical engagement and scholarly interest.

Since Amber’s back catalogue offers ‘a simultaneous sense of coherence and idiosyncrasy’, Leggott believes that it is appropriate to discuss the work through the lens of auteurism. This might seem to ‘undermine the claims made elsewhere for Amber’s non-hierarchical, collectivist identity’, but enough commonality of purpose is found in the collective’s work to justify such an approach. Their ‘commitment to being credited, on screen and in promotional discourse as a collective’ has arguably been another obstacle to recognition. Amber’s members have themselves acknowledged that their ‘“old fashioned” policy of collectivism has bamboozled critics and left them in “marketing limbo’’.’ The elevation of a figurehead would likely help to improve the collective’s standing. Murray Martin is usually proposed as such a candidate. Leggott, however, devotes a whole chapter to the films of Sirkka-Liisa Konttinen. The rest of Amber’s work is discussed collectively.

In Fading Light divides Amber’s history into distinct periods. Leggott’s method is broadly chronological and yet there is space to discuss the thematic bonds shared by individual films. ‘The number of cross-references I give between films, and across chapters, is testimony to the manner in which many productions have developed organically out of, or in tandem with, other projects,’ he writes. Amber’s first decade constitutes an ‘apprentice period’, in which craft skills are acquired and the concerns which will animate the next four decades of output are identified. This includes a commitment to oppositional politics and a recording of changing working-class communities, an interest in the impact of structural economic forces on individual lives and an experimentation with both documentary and dramatic impulses. Amber’s early short documentaries predominately focus on traditional industries in decline, the lost worlds of shipbuilding, coal mining and glass production ‘salvaged’ by the filmmakers.

The 1980s through to the early 1990s were one of Amber’s most prolific periods. Leggott devotes three chapters, the bulk of the book, to this moment in Amber’s history, citing ‘the sheer range of experimentation’ and ‘intense flowering of ideas, commitments and, at times, some very personal preoccupations’. The financial security supplied by Channel Four enabled the collective to pursue several different trajectories. The Current Affairs Unit (1983-87), a ‘means to develop film and photographic work in quick response to local and current issues’, culminated in the release of T. Dan Smith (1987), ‘one of the most singular and ambitious documentaries of the 1980s’, and From Marks & Spencer to Marx and Engels (1989); two films given ample coverage in the book. Konttinen’s Byker (1983), Keeping Time (1983), The Writing in the Sand (1991) and Letters to Katja (1994), deeply personal works grounded in her photographic process, shifted Amber’s focus from the working world of men towards leisure and the feminine sphere, while dramatic features such as Seacoal (1985), In Fading Light (1988) and Dream On (1991) eschewed the experimental programme of the films above. They are among Amber’s most accessible and recognisable films and fit ‘relatively comfortably within the tradition of British social realist cinema’.

Subsequent decades would bring a turn to the periphery, towards the former mining communities of East Durham whose struggles are recorded in four dramatic features, as well as a retrospective look at the collective’s own history. It is telling that Amber have recently engaged in the type of contextualisation and analysis of the past usually conducted by independent film critics and historians. Scholarly distance allows Leggott to discuss some of the criticisms absent from Amber’s own publications and historical short documentaries, despite his desire to support and celebrate their achievement. This book has introduced several lines of inquiry which will surely intrigue scholars working on the visual representation of the North. In Fading Light offers a valuable and insightful contribution to what has been a neglected area of British film history. The hope is that further work will build upon this foundational text.

Note: This review gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics. 

Banner Image Credit: Kendal Street, Byker, 1969. REF: 032-001-LBW (© Sirkka-Liisa Konttinen courtesy of Amber CC BY NC ND).

Feature Image Credit: Photography from ‘Step by Step’ collection (1980-1989), exploring mother-daughter relationships through a dancing school in North Shields, REF: 059-001-LBW (© Sirkka-Liisa Konttinen courtesy of Amber CC BY NC ND).

 


Book Review: Dispossession without Development: Land Grabs in Neoliberal India by Michael Levien

Published by Anonymous (not verified) on Tue, 23/06/2020 - 9:27pm in

In Dispossession without Development: Land Grabs in Neoliberal India, Michael Levien examines how the shift from state-directed capitalism to neoliberalism in India from the 1990s has led to a new regime of dispossession, in which land becomes ‘for the market’ rather than ‘for production’ and rural residents lose their land and livelihoods. Using the case study of Rajpura to evidence the consequences of Rajasthan’s transition to a ‘land broker state’, this rich, theoretically engaged book is sure to remain at the centre of academic discussions of development, dispossession, resistance and neoliberalism, writes Nikhil Deb.

Dispossession without Development: Land Grabs in Neoliberal India. Michael Levien. Oxford University Press. 2018.

In Dispossession without Development, Michael Levien expertly demonstrates how the ‘shift from state-directed capitalism to neoliberalism in the early 1990s led to the genesis of a new regime of dispossession’ (32) in India. This regime, as Levien argues, can be characterised as one of ‘land for the market’ instead of ‘for production’ as the Indian government dispossesses people and uses or sells the land for non-labour-intensive purposes. Such a shift brings about the question of whether dispossession of land by the government is predatory or beneficial for the nation’s development as the discrepancy between the farmer’s compensation and the market appreciation of the land is astounding. Levien’s theoretical engagement with classic to contemporary scholars and his employment of ethnographic insight exhibit a powerful example of the ways in which the global and the local can be integrated into a sociological analysis.

Of the two types of dispossession in postcolonial India, developmental and neoliberal, Levien argues that the driving causes of land dispossession changed dramatically during the latter regime. During the developmental period, India dispossessed people of their land for public projects. However, as the economy started to become more liberalised, creating a new level of demand for privately owned rural land from the 1990s onwards, the pressure of competition within the state and the temptation of legal and illegal rents provided the government with incentives to start dispossessing land for any reason that could be thought of. The neoliberal regime of dispossession reached its peak in the mid-2000s with Special Economic Zones (SEZs), which were effectively governed by private corporations, and became integral to the neoliberal Indian state (47-48).

Government dispossession of land in India increased after the end of colonialism, despite a cry for more significant social reform in Congress (33). This government seizing of public land is legally permissible under the Land Acquisition Act of 1894, which was passed during British rule to take private lands by force for public purposes (34). After its independence in 1947, India set on the path for development. Eventually, it undertook the Nehruvian model, which deepened the colonial legacy by perpetuating the exploitation of land and adding profit to private organisations without resettling the dispossessed or underprivileged.

Development dams — ‘the paradigmatic form of state-led development and potent symbols of national progress’ (35) — were the largest source of dispossession in postcolonial India. People were asked, as India’s first Prime Minister Jawaharlal Nehru told the oustees of one dam, to ‘sacrifice for the nation’ (42). However, as bad as this was, at least more of the land was for public use rather than private (43). In the early 1990s, with the neoliberal reckoning, demand for private land grew exponentially. Post-liberalisation growth was fuelled by Information Technology (IT) and Business Process Outsourcing (BPO), along with Major Multinational Corporations (MNC) like American Express, British Airways and General Electric.

After offering a concise account of the context of dispossession and the major theories of dispossession in the introductory chapter, in Chapter Two Levien discusses in depth how the shift from state developmentalism to neoliberalism in India dramatically changed the Rajasthan state government (a northwestern Indian state) into ‘a land broker state’. The chapter begins with an emotion-evoking story of a man, Mohanlal Saini, who had lost his land due to dispossession for the Mahindra World City (MWC), which was the ‘first and largest private SEZ to be built in Rajasthan’ (31). The local government confiscated around 3,000 acres of land to give to the MWC, which would then sell portions of the land ‘to private companies and build high-end residential and commercial real estate’ (31).

In Chapter Three, the author outlines in a ‘historical perspective the agrarian milieu of Rajpura’ (63), a village in the modern state of Rajasthan that is referenced throughout the book. Rajpura was a monsoon-dependent village with a population reliant on diverse farming. A combination of the strict caste system and political suppression, before and during British colonisation, rendered people in Rajpura without a historical tradition of fighting for themselves and collectively organising uprisings or protests. Therefore, it was easy for the Indian government to set up a SEZ in 2005 and take advantage of the land without much resistance.

To elaborate further on the village’s history, through almost half of the twentieth century, Rajpura operated under a feudal caste system with a hereditary monarchy guiding central power over the region. Many villages of Rajasthan, including Rajpura, utilised the jaghirdari system of land management to guide the hereditary passage of land, furthering the inequities of the caste system from generation to generation. Until 1947, Rajpura’s political system centred on exploiting the peasant class of the caste system to extract grain and labour (64). Following the colonial era, the new government’s attempts at equitable land distribution failed, largely reinstating the prior power dynamics. For example, the scheduled caste (‘untouchables’) made up about 35 per cent of the population in Rajpura, yet owned just 15 per cent of the land.

Women, in particular, faced unjust treatment and lacked equal rights in Rajpura as women carried the burden for reproductive, household, agricultural and nonagricultural work, yet were unable, in most cases, to own land. These inequities are exacerbated by the existing class and caste divides within Rajpura society, which installed ‘a deeply patriarchal system of landownership and pattern of social relations’ (80). 29 per cent of women in Rajpura are literate (74) compared to 59 per cent of men (and 46 per cent of rural woman in India), and a strict gender-based division of labour is perpetuated in agriculture and other sectors, while women receive few benefits despite their substantial agricultural labour and unrecognised reproductive labour (76).

Local leaders came from the castes which previously held money and power, establishing policies and systems to hold on to both despite an independent India. Being a mostly unequal agrarian society, the people of Rajasthan lacked ‘a strong history of political mobilization’, which partially facilitated the concentration of power in the hands of a few (79). Finally, the combination of Rajpura’s lack of history concerning peasant insurgency and its vastly unequal agrarian structure resulted in ‘Big Men Politics’ (local politics being undertaken by powerful men), which served as an additional factor in setting the ideal stage for the arrival of the SEZ.

In Chapter Four, Levien details the effect of the Rajasthan government agreeing to transform Rajpura into a SEZ. This chapter highlights how the government came up with a scheme to make land prices go up, enticing ‘indebted lower-caste farmers’ (82) to sell their land. As they did so, the Rajpura government then sold it to the MWC. The Rajasthan government systematically took over the land in Rajpura by first offering settlements and compensation land plots to the farmers, eventually using the police to dispossess the residents forcibly.

The chapter divides the actions taken into three phases: compliance; accumulation; and disaccumulation. Compliance relates to the first step needed to create the MWC, offering farmers the option to sell their land for compensation in order to ‘soften opposition’ and ‘buy consent’ (83). This shifted the action of accumulating land from a transaction between the people and the state broadly to one between individual landowners and the market. However, this process often left farmers with less than their land was worth, and disproportionately affected people of lower caste and lower socioeconomic status. Thus, the next stage was turning this land, previously used for agriculture, into the ideal industrial MWC. Though the SEZs were intended to promote manufacturing, the MWC quickly became a centre for the IT industry to flourish, enjoying tax breaks and other benefits. Also, the MWC developed ‘lifestyle zones’ in order to facilitate consumption by middle-class and white-collar workers. Instead of focusing on labour-intensive industries to create more jobs, the MWC was disproportionately inhabited by the ‘knowledge economy’ (Chapter Six), which left many working people without a place in the new market.

Chapter Four also details that the farmers who previously inhabited the area and lived off subsistence farming lost their land and livelihood, as well as ‘intangible forms of social wealth’ (96). Furthermore, the area has now lost arable land and livestock and is currently experiencing water shortages and contamination. Rajpura’s farmers, as the author elaborates in the following chapters, lacked the necessary social and cultural capital for inclusion in the industry dominated by technological knowledge. Those who were illiterate were harmed the most by the dispossession of land, although these people were promised education in order to keep them working and financially stable once the MWC had been completed. In other words, the people of Rajpura were promised jobs and training, and the government failed them.

Levien uses the case study of Rajpura to effectively establish that India’s transition from a development state to a land broker one for private industry was made possible by state agencies. Instrumental in this transition was the large-scale dispossession of rural Indians, a practice that increased significantly as India continued to liberalise throughout the 2000s. Statistics alone can make these changes appear like development on the whole, but what these fail to capture is how any process in which millions of people lose their homes and face far worse conditions than what is commonly considered impoverished can be beneficial to a country. Although the book’s historical context is South Asia, it has significant implications for multiple disciplines and other societies in the Global South. Dispossession without Development has already sparked discussion, and due to its rich empirical relevance and profound theoretical engagement, it is sure to remain at the centre of academic dialogues concerning development, dispossession, resistance and neoliberalism.

Note: This review gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics.

Image Credit: Aerial shot of Jaipur, Rajasthan, featuring World Trade Park shopping mall (ParasharPankaj  CC BY SA 4.0 Wikimedia Commons).

 


New Thinking in the News

Published by Anonymous (not verified) on Sat, 16/05/2020 - 3:47am in

These are the latest reflections from new thinkers around the on what should have been done already, what must be done next, and what the near future may look like:


1 | New Study Reveals Stark Picture of Bay Area Poverty Leading up to Covid-19 Pandemic, in Tipping Point Community, by john a. powell.

Known for its progressive politics and rich diversity, the San Francisco Bay Area is no exception to patterns of systemic racial and economic inequality found across the nation,” said john a. powell, Director of the Othering & Belonging Institute at UC Berkeley. “In fact, the Bay Area’s hot housing market and booming economy may exacerbate these trends, making it harder for low-skilled workers to find affordable housing and pay their bills. This study, drawing upon an original survey of Bay Area residents and census data, gives us a vivid portrait of poverty and inequality, and what we should do about it, even before the COVID-19 pandemic occurred. Now this research is more urgent than ever.”

2 |30 million Americans are unemployed. Here’s how to employ them in Vox, by Pavlina Tcherneva

“But the program will actually stabilize these fluctuations. There are reasons unemployment feeds on itself. If you have this kind of preventative program, where people trickle into other employment rather than unemployment, their spending patterns are stabilized, so you have smaller fluctuations in the private sector. We see this in countries that have active labor-market policies, that do a lot more public employment than we do.”

3 | Messages from “Fiscal Space” in Project Syndicate by Jayati Ghosh

“Well before the pandemic arrived, it was evident that the financialization of the global economy was fueling massive levels of inequality and unnecessary economic volatility. In this unprecedented crisis, the need to rein it in has literally become a matter of life or death.”

4 | The ‘frugal four’ should save the European project in Social Europe by Peter Bofinger

“It is therefore crucial that the frugal four [Austria, Denmark, Sweden and the Netherlands] abandon their opposition to a joint financing facility at EU level. Only in this way will the European project be able to survive and Europe respond to this terrible crisis in a manner as effective as in the United States. For, as the US economist Paul Krugman has put it, paraphrasing Franklin Roosevelt, ‘The only fiscal thing to fear is deficit fear itself.’”

5 | Making the Best of a Post-Pandemic World, in Project Syndicate, by Dani Rodrik 

“It is possible to envisage a more sensible, less intrusive model of economic globalization that focuses on areas where international cooperation truly pays off, including global public health, international environmental agreements, global tax havens, and other areas susceptible to beggar-thy-neighbor policies. Insofar as the world economy was already on a fragile, unsustainable path, COVID-19 clarifies the challenges we face and the decisions we must make. In each of these areas, policymakers have choices. Better and worse outcomes are possible. The fate of the world economy hinges not on what the virus does, but on how we choose to respond.”

6 | Two Rounds of Stimulus Were Supposed to Protect Jobs — Instead We Have Record Unemployment with Tom Ferguson in the Institute for Public Accuracy

“We all know that the U.S. response to COVID-19 has lagged far behind other countries. But now a real trap is closing. The public premise of the government stimulus programs was that they would be needed only for a short period and channeling aid to businesses would enable them to retain workers on their payrolls. So vast sums were handed out while the Federal Reserve intervened massively in financial markets. But now unemployment is soaring, in a country whose health insurance system is keyed to the workplace. Small businesses are collapsing and plainly never got much aid. Workers are also dropping out of the workforce in enormous numbers while a major health and safety crisis rages. Government policy has got to address these issues before it’s too late. It can’t simply grant blanket immunity to businesses for the sake of a hasty, premature reopening. A major re-calibration of policy is in order.” 

Every week, we share a few noteworthy articles that showcase the work of new economic thinkers around the world. Subscribe to receive these shortlists directly to your email inbox.

The post New Thinking in the News appeared first on Economic Questions.

Book Review: Nairobi in the Making: Landscapes of Time and Urban Belonging by Constance Smith

Published by Anonymous (not verified) on Wed, 13/05/2020 - 11:31pm in

In Nairobi in the Making: Landscapes of Time and Urban Belonging, Constance Smith explores how the residents of Nairobi’s Kaloleni estate interact with materials and structures from the city’s past in order to establish themselves in its present and future. In demonstrating how urban landscapes are locations shaped by history and generated through lived experience, this impressive book should be essential reading for anyone looking to understand the complex realities of urban areas, writes Daniela Schofield.

Nairobi in the Making: Landscapes of Time and Urban Belonging. Constance Smith. James Currey. 2019.

African cities are repeatedly heralded as locations of opportunity, as underdeveloped gateways to the global economy and as repositories of economic and commercial real estate potential. Yet, such visions often have a fantastical gleam of macroeconomic prosperity that overlooks the materiality of urban history, as well as the lived realities and ambitions of current residents. In Nairobi in the Making: Landscapes of Time and Urban Belonging, Constance Smith examines how, through their everyday actions, the residents of the Kaloleni estate interact with materials and structures from Nairobi’s past to establish themselves in its present and future.

Smith’s exploration of belonging in the Kenyan capital, Nairobi, is situated in Kaloleni, an estate in Eastlands built by British colonial authorities in the 1940s and slated for urban renewal under Vision 2030, Kenya’s development programme. Smith draws on an ‘in place’ ethnography (30) during which she lived in Kaloleni. Nairobi in the Making is richly informed by observations and interactions with Kaloleni’s residents. Smith uses material as a conduit for exploring the inconsistency of everyday life, moving fluidly between Kaloleni’s past as an intended model community based on British suburbs, its present where residents have ‘rescripted these colonial intentions’ (37) through everyday actions and its future through both the ambitions of its residents and Vision 2030.

Smith deftly weaves a deep knowledge of urban and anthropological scholarship, Kiswahili and Kenyan history with conversational accounts of discussions with Kaloleni residents that provide a tangibility to the abstract theoretical concepts presented. Smith’s use of photos, as well as her skillful utilisation of linguistic imagery that does not overburden her prose, supports her demonstration that city-making in Nairobi, while political, is very much a generative process shaped by materials and people. This process is not finite, but a constant churning of accumulation, decay and repurposing over the long term where the formal and informal are ‘deeply enmeshed but highly asymmetrical’ (24).

The book is divided into two sections, each comprising three chapters. The first section consists of Chapter One, which explores life in Kaloleni and how placemaking is shaped by residents’ perspectives. This introductory chapter importantly introduces the uncertainty of the estate under Vision 2030, which threatens its possible demolition. Chapter Two delves into the materiality of the estate, tracing the decay of its infrastructure and historic municipal mismanagement to examine the implications of material accumulation. Chapter Three focuses on the interface of residents’ management of materials, their relationship to the estate’s past and how ownership on the estate is accessed through performance, countering official histories.

The second section shifts to a larger scale consideration of urban belonging. Chapter Four examines generative processes at work in rural-urban connections and notions of urban success, Chapter Five considers security and exclusion in the city’s architecture and Chapter Six looks at residents’ efforts to secure an urban future in the ‘shadow of Vision 2030’ (30). All six chapters reinforce one another, and I welcomed Smith’s invitation for readers to form their own linkages between these six areas beyond the scalar shift set out in the presented order of the chapters. Given this encouragement to seek linkages between the chapters, the division of the book into two distinct sections, while not ultimately disruptive, struck me as unnecessary.

Following Smith’s invitation, I found linking Chapters Three and Six useful to think through the relationship between the lived experience of Kaloleni’s residents and high-level policy and planning as well as to support Smith’s proposal that urban space is ‘felted’ (29) rather than woven. Grouping these two chapters allows for a consideration of the ambiguities, synergies and dissonances of this relationship. Together, these chapters work to respond to the question that Smith sets out in the book’s introduction:

Surrounded by collapsing urban infrastructures and amid fantastical promises of hypermodern, globalised futures, how do ordinary Nairobians try to ensure a place for themselves in the city’s future? (3).

Chapter Three examines how Kaloleni’s residents enact urban belonging through the management of material. Smith recounts how one resident’s physical interaction with the structure of his house during an interview allowed him to overcome an initial reticence to convey detailed stories from his past as he ‘traced his fingers across a surface’ (86). Through this and other accounts, Smith shows how the performance of maintaining, extending and managing physical structures in Kaloleni, as well as a ‘forensic’ (99) recordkeeping of documentation by the Kaloleni Residents’ Association, generates an ownership of the estate. Smith argues this generative process results in the development of ‘minor histories’ which assert ‘alternative claims’ (96) to ‘formal narratives’ and counter official histories (96). In undertaking incremental alterations, in the absence of state services, residents are not only engaging with the city’s past, but ‘forging it anew’ (81), establishing their ownership through a ‘performative sense of property’ (107) and securing their place in the city through their labour.

As a result, Kaloleni’s residents see themselves as stakeholders in the future of Nairobi, a status often not formally recognised. To engage with Vision 2030, residents sometimes strategically deploy formal language and planning approaches. Chapter Six considers why residents would want to engage with a planning vision that holds an ‘aspirational uniformity’ (162) for Nairobi. Vision 2030 does not take into consideration historical specificities or distinguishing features of the city, seeking to mould it after other global cities and risking ‘further marginalisation of Kaloleni’s significance’ (81) and its possible demolition. The uncertainty of Vision 2030 thus results in understandable anxiety for residents, but is also met with acceptance and even approval.

To understand this, the ‘minor histories’ presented in Chapter Three prove useful. The labour of Kaloleni residents, channelled into modifying the estate across decades, results not only in a sense of ownership, but also an expectation of inclusion in and benefit from any renewal efforts. Residents’ expectations of Vision 2030 contrast with the high-level planning ideals, demonstrating that the relationship between everyday reality and high-level planning is not a simplistic binary, but complex, with a ‘messiness’ that Smith argues ‘is based on particular disjunctive temporal experiences in which present and future become entangled’ (167).

In thinking through the entanglement of urban histories and futures, the significance of material accumulation and decay, Smith argues urban belonging is something that is ‘crafted’ (32). She demonstrates that the city is sculpted not only by present actions, but also the ‘powerful afterlives’ (183) of its past, which link to expectations and anxieties for the future. As mentioned above, Smith uses an analogy of felting to describe the combination and layering of urban afterlives with the present and into the future.

Smith proposes felting as a more apt analogy for the city’s constitution than an urban fabric. An urban fabric implies the weaving of parallel fibres resulting in a ‘systematic […] grid-like relationship’ (29): an image that fails to accurately represent Nairobi’s improvisational contingencies. Felt is a textile with fibres that do not adhere to a structured linear pattern, but which are coarse, composite pieces matted together and bound by friction into a new form. Smith proposes that “‘felted’ urban space’ (29) captures the reality of Kaloleni as reconstituted using remnants of its past. In articulating felting as a concept, Smith succeeds in her aim to explore how ordinary Nairobians try to establish their place in the city today and into the future.

While Nairobi in the Making is both an enjoyable and impressive text, I would have liked to have read more about how difference, particularly in terms of gender and age, shapes residents’ encounters with the material landscape. Far from treating residents homogenously, Smith carefully details the circumstances of individuals and their experiences support her points throughout the book. Smith does briefly touch on gender and urban masculinity (see Chapter Four), but the space given to exploring this is limited. It would have been interesting to examine how urban belonging is enabled or constrained by gender and age, and whether performative ownership offers opportunity for transformational change to traditional gender roles.

With an estimated 60 per cent of the world’s population living in urban areas by 2030, the futures of urban areas will be increasingly important. In Nairobi in the Making, Smith demonstrates how urban landscapes can be understood as locations shaped by history and generated by lived experiences. This will be vital to present understanding, but also to the increasingly urban composition of the world we are moving into. Although an academic text, this book will be informative for a wider audience including planners, consultants and policymakers. It should serve as essential reading for those undertaking planning in cities, particularly in sub-Saharan Africa, and as a primer for understanding the complex realities that shape urban areas.

Note: This review gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics.

Image Credit: Nairobi skyline, Kenya (Nina R CC BY 2.0).

 


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