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Africa is suffering as a result of our economic indifference, yet again

Published by Anonymous (not verified) on Thu, 23/06/2022 - 5:00pm in

It is easy to think of the economic crisis that we are facing as a purely domestic issue. It is not. As the FT notes this morning:

Steep rises in international food and fuel prices since the Russian invasion of Ukraine have left millions more Africans facing hunger and food insecurity this year, the UN, local politicians and charities have warned.

They published this chart:

Africa is moving into crisis again. This will be greatly exacerbated by increases in dollar interest rates as the debts of most African countries are denominated in that currency. Another African debt crisis might follow.

It is  as if we never learn.

And it is as if we perpetually want to punish the poorest for the economic folly of a so-called elite.

You might almost think it deliberate, but casual indifference is probably a better explanation.

Neither is readily forgivable.

Orange Lotus. A

Published by Anonymous (not verified) on Wed, 25/05/2022 - 7:51am in

Orange Lotus. A few houses have been built in, around, behind and on top of this remnant Sydney Sandstone facade, likely quarried locally, dating back to the 1870’s-early 1880’s. Balmain.

Helping ease food insecurity and starvation requires governments to ban bankers speculating on food prices

Published by Anonymous (not verified) on Thu, 21/04/2022 - 5:40pm in

I keep reading reports of the rising risk of food riots as food prices soar around the world and vulnerable nations and communities are faced with increased food insecurity, which is a technical term that international agencies use, that actually means risk of starvation. At the same time, governments allow hedge funds to take speculative positions on food as a traded commodity which has been shown to not only increase food prices but also divert supply into storage (long positions) while the ‘investors’ create artificial supply shortages and market instability – while people are being denied their staple food products (for example, corn speculation). There are many things that governments must do in this regard – including investing in sustainable agricultural systems to create local supply certainty, improving the quality of diets (banning high sugar and salt levels), and more. But one of the most significant things that governments could do to keep food prices down and increase food security for vulnerable nations is to cooperate on a global scale to outlaw any food speculation by hedge funds and the big investment banks. It is not only economically destructive to have large proportions of populations living with the constant threat of starvation. It is also unethical.

Last week (April 13, 2022), the World Trade Organisation published a joint press statement with the IMF, World Bank and United Nations World Food Program – World Bank, IMF, WFP and WTO call for urgent coordinated action on food security.

The fact that they thought it necessary to issue such a release tells me that the capitalist system is broken, if the aim is to enrich all.

It is, of course, highly successful, if the aim is to enrich a few at the expense of the rest of us.

The Press Statement referred to “growing threats to food security”, especially in “vulnerable countries”.

They implore governments to act by:

… providing emergency food supplies and deploying financial support to households and countries, facilitating unhindered trade, and investing in sustainable food production and nutrition security.

Of which, I agree wholeheartedly.

These organisations noted that:

The fallout of the war in Ukraine is adding to the ongoing COVID-19 pandemic that now enters its third year, while climate change and increased fragility and conflict pose persistent harm to people around the globe. Sharply higher prices for staples and supply shortages are increasing pressure on households worldwide and pushing millions more into poverty. The threat is highest for the poorest countries with a large share of consumption from food imports, but vulnerability is increasing rapidly in middle-income countries, which host the majority of the world’s poor. World Bank estimates warn that for each one percentage point increase in food prices, 10 million people are thrown into extreme poverty worldwide.

Energy and fertiliser inputs to farming are also rising in price, as a result of supply shortages.

They consider the crisis may lead to “social tensions” – aka food riots like we saw in 2007-08.

The world can produce enough food. It just cannot distribute it to where it is needed while gluts appear in rich nations (and gluttons get fat).

By any measure that is a major failure of the system.

Richer countries should make sure the poorer nations have sufficient capital (financial and physical) to produce sustainable food supplies.

The IMF obsession with turning subsistence agriculture into export cash crops is a failed strategy.

Instead, overseas aid should be focused on creating sustainable (both in supply and ecological terms) food producing sectors that provides security to local communities.

Countries should never be left without the capacity to purchase imported food where necessary.

That should be the role of the IMF and the World Bank, rather than the destructive role they now play in producing conditions conducive for foreign capital to extract massive surpluses from poor nations without commensurate capacity development.

You will also note that none of these organisations mentioned the role that financial markets play in driving up food prices and causing starvation.

I wrote about food speculation in these blog posts:

1. Food speculation should be (mostly) banned (January 18, 2012).

2. We should ban financial speculation on food prices (May 27, 2011).

3. Ending food price speculation – Part 1 (October 17, 2016).

4. Ending food price speculation – Part 2 (October 18, 2016).

The – Chicago Board of Trade (CBOT) – is one of the first “futures and options exchanges” in the world and in 2007 merged with the Chicago Mercantile Exchange (CME) to form the CME group, which comprises four derivative exchanges.

It is one of the largest exchanges for derivative trading.

CBOT traditionally allowed buyers and sellers of commodities to interact to fix future prices and quantities to take out the uncertainty of production and sales.

For food products, a farmer would use the exchange to hedge on the sale price as harvest approaches by selling ‘forward’ for future delivery at a fixed price.

This person would be considered risk-averse and in purchasing such a contract would achieve certainty in ultimate price, which helped them in their production planning and cost management.

On the other side of the futures contract, would be the risk-taking speculator, willing to guarantee the price to the farmer in the hope (bet) that the ‘spot’ price on the day of delivery would be higher.

If so, the speculator could offload the physical product at the higher price in the spot market and make a profit. They would incur losses if the spot price turned out to be lower than the agreed future price. So the risk is taken by the speculator.

Another type of speculative trade is when a flour mill wants to ensure they are not short of supply of wheat and they hedge by entering a futures contract to guarantee delivery of a certain volume at a fixed price.

These examples of speculation are consider beneficial to real producers because it gives them certainty.

But increasingly, this type of productive speculation has become a minute proportion of the total speculative transactions in financial markets.

In the 1990s, as financial markets were deregulated in the interests of the large investment banks, commodities future trading in the US was freed up and so-called institutional investors (aka large gamblers) were able to flood the derivatives trading markets.

The proportion of commercial traders entering futures contracts has decreased relative to the speculative traders running bets against each other.

So for a particular commodity, like wheat or corn, in any one season the value of the speculative transactions will exceed the actual value of the harvest by many multiples.

In particular, trading in so-called ‘commodity indexes’ (which are calculated using the future contract prices for the various commodities that comprise the index) boomed after deregulation.

Derivative financial products, devised by investment banks that are linked to the commodity index but do not require the ‘investor’ to actually purchase any physical commodities, have also proliferated since the turn of the century.

A US Senate Committee Report (published June 24, 2009) into – Excessive Speculation in the Wheat Market – found that:

The total value of the speculative investments in commodity indexes has increased an estimated tenfold in five years, from an estimated $15 billion in 2003, to around $200 billion by mid-2008.

Before this rapid rise in speculative activity, future prices tended to track the spot (cash) price for the commodities.

There was normally a convergence between the future price as the date of the contract delivery approached and the price in the cash market.

But impact of this rapid increase in speculative trading in wheat (and all agricultural commodities) before the GFC had the effect of driving future prices higher and ultimately undermining the ability of the farmers etc to hedge against uncertainty.

The investment banks generate massive profits from these bets in largely unregulated derivatives markets.

Not only has this speculation creating instability for producers (the opposite of the original purpose of the futures exchanges) but it has also pushed up world food prices, which then impacts on those with little income.

In some instances, the speculative activity leads to prices tumbling, which then undermines the farm income, at a time when the IMF has been pushing governments in poorer nations to transform their subsistence agricultural sectors (which generated food security mostly) into export cash crops dependent on world markets.

We have seen a vicious cycle of rising foreign debt to achieve the transformation, prices falling in world markets, and then more IMF/World Bank debt to cover the inability to pay the original debt.

These two reference reports from Global Justice UK, which emerged after the last major food crisis in 2007-08, are worth consulting if you are interested in more detail:

1. Broken markets – How financial market regulation can help prevent another global food crisis

2. The Great Hunger Lottery – How banking speculation causes food crises

At present, it is clearly rising food prices that are causing havoc.

The latest report from the FAO – The State of Food Security and Nutrition in the World 2021 (released July 12, 2021) – reported that there was:

… a dramatic worsening of world hunger in 2020 … around a tenth of the global population – up to 811 million people – were undernourished last year …

Already in the mid-2010s, hunger had started creeping upwards, dashing hopes of irreversible decline. Disturbingly, in 2020 hunger shot up in both absolute and proportional terms, outpacing population growth: some 9.9 percent of all people are estimated to have been undernourished last year, up from 8.4 percent in 2019 …

Overall, more than 2.3 billion people (or 30 percent of the global population) lacked year-round access to adequate food: this indicator – known as the prevalence of moderate or severe food insecurity – leapt in one year as much in as the preceding five combined.

In Australia, it is estimated that “between 4% and 13% of the general population are food insecure” and “22% to 32% of the Indigenous population, depending on location.” (Source).

Australia is one of the richest nations in the world yet it cannot even feed a significant proportion of its population properly.

The FAO recommends governments:

1. Introduce social protections to “prevent families from selling meagre assets in exchange for food.”

2. “Scale up climate resilience across food systems” – which should include ramping up permaculture investments in all nations.

3. Ensure the most vulnerable have access to cash transfers and work if they are able.

4. “Intervene along supply chains to lower the cost of nutritious foods” – helping growers get to markets etc. While the FAO is silent on this, governments should make speculative trading in food (other than the forward contracts directly made with producers) illegal.

Simple legislative act would end the ability of investment banks to make huge profits through starvation.

5. Reduce poverty – the first thing that should be done is create full employment and then provide adequate cash transfers to ensure income security is enjoyed by all.

6. Change consumer behaviour – outlaw trans fats, reduce sugar and salt content etc.

None of that will happen unless we demand our governments to act.

At present they are captive to the big food speculators and big farm corporations.

Conclusion

This list would be easily implemented by governments and would improve nutritional levels, food supply and increase productivity.

But it should include the banning of food speculation – one of the more indecent ways in which the top-end-of-town seek to profit.

That is enough for today!

(c) Copyright 2022 William Mitchell. All Rights Reserved.

Myopic meanness – Australia’s ODA cuts to its neighbours in the Pacific

Published by Anonymous (not verified) on Tue, 05/04/2022 - 4:36pm in

Tags 

Development

Neoliberal governments and their supporters have a habit of spruiking gee whiz solutions to the world’s problems, where gee whiz means make it easier for corporations to make profits and harder for workers to get pay rises, claiming that the destiny of individuals is in their own hands (denying systemic failures), and reducing regulations that ensure equity is enhanced. Australia added another dimension to that list (which is not exhaustive) – being mean spirited when it comes to the less well-off nations in the world. The problem with this approach is that it does not live up to promise – it certainly enriches those who are already well-off – but when the rest of us realise something is wrong, the horse has already bolted and picking up the pieces becomes more ‘costly’ than before. In the last few weeks, our government has been bellowing again about China. China is a threat, China is a crook, China is this, China is that. The trigger point this time is the revelation that China’s external strategy has come to the Solomon Islands and the anti-China paranoid gang within the Australian government has a problem. The Solomon Islands are less than 1,700 kms from our mainland and the fear that China will establish a military base there is sending shivers up the spines (euphemism) of our conservative government. Perhaps if we had have been more generous to this region, the Chinese would not have so easily been able to invest there.

Background reading

1. Australia’s Overseas Aid cuts reveal a nation that has lost its spirit (May 15, 2017).

2. Australians have plenty of reasons to be ashamed – ODA is one of them (December 29, 2016).

3. Australia’s generosity to other nations is collapsing (April 9, 2015).

4. Advanced countries should invest in fair trade ventures (without ownership claims) (March 22, 2022).

I have written about the way the privatisation of the water utilities in the UK have brought poor results.

1. British floods demonstrate the myopia of fiscal austerity (January 4, 2016).

2. The myopia of fiscal austerity (June 10, 2015).

I have written about how the privatisation of the electricity generating and retailing system in Australia has been destructive:

1. Market manipulation and electricity blackouts (February 13, 2017).

2. Welcome to the world of privatised electricity and canned music (October 3, 2012).

I am currently working on a large project about aviation firefighting services which are under attack again from the Australian government, who is trying to cut investment and let the ‘market’ work.

Next stop: a major aviation disaster!

There are countless examples from the last several decades of where privatisation, outsourcing, funding cuts, imposing so-called ‘contestability’, etc has been a disaster.

And the cuts in foreign aid are another example.

One of the ways the Australian government has attempted to cover its tracks on the ODA front has been to divert ODA funding from hospitals, education, infrastructure etc and pump it into maintaining the privatised prisons on Manus Island and Nauru, where we have been sending people seeking refugee protection.

We lock these people up indefinitely without rights and then say that the ODA budget is rising.

For Australia, running prison camps is ODA!

China’s foreign policy exposing our lack of generosity

Reportedly, China is about to sign a treaty of some sort with the Solomon Islands, the details of which I am not privy to.

There is some evidence that these sort of treaties that China has been establishing with materially poorer nations have been somewhat problematic for those nations.

But equally, there is evidence they have improved material prosperity for the citizens.

So the jury is out I would think on whether the – Belt and Road Initiative – has been a sound development strategy.

The Solomon Islands joined the Belt and Road Initiative in 2019, which signalled the Chinese government’s growing involvement in the Pacific (Kiribati also joined the initiative around then).

Australia, of course, likes to think of itself as the king pin in the region – bullying nations that helped us during the Second World War against the Japanese aggression in the region.

The way we have treated Timor-Leste in the last several decades, for example, has been a disgrace (geographical note – TL is not in the Pacific but it is still a close neighbour).

Our own global obligations

In 1970, the 25th Session of the General Assembly of the United Nations passed a – Resolution on Financial resources for development – (Paragraph 43) that said:

… Each economically advanced country will progressively increase its official development assistance to the developing countries and will exert its best efforts to reach a minimum net amount of 0.7 percent of its gross national product at market prices by the middle of the decade.

The commitment was not met by many advanced nations, including Australia.

Thirty-two years later the UN reaffirmed the goals – Report of the International Conference on Financing for Development – at the Monterrey meetings (March 18-22, 2002) stating:

… we urge developed countries that have not done so to make concrete efforts towards the target of 0.7 per cent of gross national product (GNP) as ODA to developing countries …

The – The 0.7% ODA/GNI target – a history – is worth reading (short).

The ODA/GNI ratio tells us how much the government of any country is allocating to ODA relative to the size of the economy (the nation’s total income).

The latest OECD – Development Co-operation Report 2021 – tells us that Australia’s:

… official development assistance (ODA) as a share of gross national income (GNI) has declined in the past decade

The data

The OECD publishes fairly reliable data on ODA.

The next graph shows the movements in the ODA/GNI ratios between 2000 (red triangles) and 2020 (blue columns) for selected (advanced) OECD nations.

The dotted line represents the 0.7 per cent target.

In 1970, when Australia signed up to the 0.7 per cent target, we devoted 0.37 of GNI to ODA and we were a considerably poorer nation in material terms then (1970).

The following graph shows Australia’s ODA/GNI ratio history since data was first collected in 1960 by the OECD.

Since the mid-1970s, which is when the fiscal deficit paranoia really began in Australia we have progressive cut the proportion of GNI that we devote to foreign aid.

It is now at record lows and successive governments have shown no inclination to reverse the downward trend.

Australia likes to claim it “punches above it weight” when it is winning some sporting event but when it comes to something important (and I love sport) like feeding starving children we largely ignore our international responsibilities and commitments.

We can always seem to find $A millions to buy military equipment and invade nations with the US though.

The following graph uses data from the ANU Development Policy Centre’s – Australian Aid Tracker – which was first published in 2016 and provides an invaluable source of data “about the state of Australia’s aid efforts”.

The raw data is from the Commonwealth – Department of Foreign Affairs and Trade.

In terms of the Asia-Pacific region – Australia’s immediate neighbourhood – “the vast majority of Australia’s bilateral aid goes to countries in East Asia and the Pacific region.”

You can also explore an excellent visual resource – HERE.

The following graph shows Australia’s total aid to the Asia-Pacific region in constant $A millions.

After the GFC, the ODA budget took a hit.

There was some temporary injections during the early stages of the pandemic but that has ended.

So not only is Australia failing to meet its UN obligations in terms of the ODA/GNI pledge, it is also cutting its ODA in level terms on an inflation-adjusted basic.

The next graph shows the real ODA from Australia for the Solomon Islands.

It replicates the pattern in the previous graph.

In real terms, our ODA to the Solomon Islands has fallen from a peak of $A342 million in 2009-10 to a projected $A161.1 million in 2022-23, a decline of 52.9 per cent.

In 2010, the population of the Solomon Islands was 527,861.

So in per capita terms, the Australia ODA was equal to $A649 (per person).

In 2020, the population had grown to 686,878 and the per capital Australia ODA outlays in real terms had fallen to $A268.

By 2022-23, with the estimated population growth, the per capital Australian ODA outlays in real terms will fall further to $A217 per person.

Stingy is not the word.

And remember, the Solomon Islands were a major theatre of conflict during the Second World War (between 1942 and 1943) as the Japanese Imperial forces attempted to protect their Southern exposure and set up to invade Australia (Source).

The islands were significantly destroyed during the conflict and many civilians lost their lives as the attempt to invade Australia was defeated.

My own father was involved in that conflict.

Many civilians died protecting Australian soldiers.

Gratitude is not something the Australian government seems to remember.

And so, with the void left by the withdrawal of Australian ODA and a growing population, the Chinese government obviously saw an opportunity.

While the investment that China is making is shifting from ODA to loans, the fact remains that if Australia had been more generous, it is probable the Chinese government would have had less chance to enter these deals with the Solomon Islands governments.

There is a lot of shady stuff going on between China and the Solomon Islands MPs (alleged) but Australia only has itself to blame for its declining influence in the Pacific.

Conclusion

Another negative fall out from the neoliberal austerity mindset when applied to fiscal policy design.

That is enough for today!

(c) Copyright 2022 William Mitchell. All Rights Reserved.

Lecture: Making India a Prosperous and Happy Nation at 100

Published by Anonymous (not verified) on Thu, 31/03/2022 - 7:11am in

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Development

Distinguished Public Lecture on “Making India a Prosperous and Happy Nation @100”, by Dr. Ajay Chhibber, Distinguished Visiting Scholar, Institute for International Economic Policy, Elliott School of International Affairs, George Washington University on Tuesday, 22 March 2022.

Paper: Fragility and Resilience in Green Development in Africa: Intersections and Trade-offs

Published by Anonymous (not verified) on Fri, 18/03/2022 - 5:59am in

Tags 

Development

Fragility and Resilience in Green Development in Africa: Intersections and Trade-offs
Abstract

1. The outbreak of the COVID-19 pandemic has been a significant disruptor and risk multiplier that has exacerbated fragility in Africa by further weakening states and their capacity to meet the population's basic needs, as well as to withstand shocks that impact multiple sectors of development.

2. The most critical "drivers of fragility" include the rising impacts of climate change, increased land degradation, growing losses of biodiversity, and widespread energy poverty. These drivers disrupt socioeconomic systems, making livelihoods and society much more fragile, as reflected in growing social inequalities and hard to close critical social gaps. Both the deficiencies in response systems and the weak capacity to act hinder decisions in favor of moving towards low-carbon development.

3. The fragility of the continent's ecology and economy has been further compounded by the outbreak of COVID-19, persistent inequalities, trade deficits, and resource depletion. Economic fragility exacerbates underlying instabilities, which conspire to produce new forms of conflict and insurgency, as well wiping out progress towards the SDGs.

4. The multidimensional risks faced by African economies and societies threaten a cascade effect, which in turn has negative impacts on environmental systems. Addressing these intricately linked challenges requires going well beyond the "green transition" towards the restoration of functioning ecosystems, in which the bonds between humans and the environment are firmly re-established.

5. Investing in resilience-building and addressing the underlying causes of fragility will greatly support the recovery process, help build back better, and secure the stability of development efforts.

6. "Greening" is a highly promoted paradigm to fundamentally redefine and redesign the relationships between economic, environmental, and social systems. It could bring about a much-needed transformation by reducing fragility and building system stability, provided this transformation is built into the strategic direction adopted for "greening".

7. The potential benefits of greening include diversification of economies, job growth, and greater resilience in all essential systems so that more substantial buffers are created to withstand shocks and reduce vulnerabilities.

8. However, it is important to recognize that the "green transition" is not a universal panacea. It is affected by major inhibiting factors, such as how to finance the transition, how to put social justice at the heart of adaptation measures, identifying choices to manage the energy transition, and implications for loss of fiscal space and risk of stranded assets.

9. Africa has contributed the least to greenhouse gas emissions but is suffering the most from the adverse impacts of climate change, now exacerbated by the COVID-19 outbreak. The continent has the highest potential to leapfrog its energy systems by using low-carbon options to drive economic development and thereby contribute to global mitigation goals under the Paris Agreement. It is therefore vital that Africa can access global mechanisms to leverage investment in transformative low-carbon energy systems.

10. As underscored in the NDCs of most African countries, successfully realizing their ambitions depends on the means of implementation. As the global region with the greatest proportion of its population living on incomes below US $2 a day, it has also seen even more people pushed into extreme poverty due to COVID-19. Africa can contribute significantly to reducing global GHG levels mainly by aligning its future development along low-carbon development pathways, provided it is given adequate support for implementation.

11. In parallel, African governments must increase the domestic share of climate funding, ensure that climate responses are built into national budgetary processes, and establish government leadership of measures to address climate change impacts on national development agendas. This includes creating the governance framework and enabling environment for private-sector participation and increasing the roles of nature and nature-based solutions in national development.

12. While the recent COP26 re-affirmed the centrality of multilateral processes, the mitigation gap remains large. Greater ambition is needed from all the world's nations to engage in the massive time-critical actions embodied in the Paris Agreement and to push for decarbonization of the global economy. At COP27, to be held in Egypt, African countries must push for particular attention to be paid to meeting their priorities.


Paper: Digital Access and Economic Transformation in Africa

Published by Anonymous (not verified) on Tue, 15/03/2022 - 6:50am in

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Development

An overview of the current digital access landscape in Africa

Introduction

This document provides an overview of the current digital access landscape in Africa. It considers the intersections between digital access, rights, economy, and transformation, using evidence from a series of country case studies that illustrate the various themes, and depict the dynamics faced by different countries when it comes to the digital landscape.

To understand the state of digital access in Africa, one has to delve into the key interests driving investment in this sector. The World Summit on the Information Society (WSIS) in 2003 was one of the early global platforms where internet access and its potential were discussed. The WSIS sought to inform and address the issues raised by information and communication technologies (ICTs). It followed a structured and inclusive approach at national, regional, and international levels and engaged a multiplicity of different actors, including governments, the private sector, technologists, academia, and civil society.

By 2015, the cross-cutting contribution of ICT to the Sustainable Development Goals (SDGs) and poverty eradication had been recognized by the UN, and it noted that “access to information and communications technologies has also become a development indicator and aspiration in and of itself” (SDG, 2016). This statement further supported the 2011 stance of the United Nations which noted that disconnecting people from the internet is a human rights violation and against international law (Kravets, 2011). In 2016, the UN General Assembly declared internet access a human right through a non-binding Resolution, meaning that states would not face penalties for failing to provide access. The Resolution instead focused on stopping governments from “taking away” access (Barry, 2020).

Various strategies have consequently emerged to align state ICT policy strategies, global best practices, and the SDGs. Among these is the recently adopted African Union (AU) strategy on Digital Transformation which aims to erase the digital divide and narrow the gender digital divide (African Union, 2020).

Across the world, technology is quickening the pace of social, political, and economic development. Increased access to broadband is fuelling this change which is accompanied by ever-quicker shifts in how technology is being used by the broad spectrum of digital citizens. However, these shifts also impact those who are not yet online in ways that are yet to be fully understood.

The global South is undergoing rapid social and economic change as a result of the confluence of mobile and Internet technologies. There is mounting evidence that broadband directly contributes to job creation and stimulates economic growth. Further, it is confirmed that an increase of 10 percent in mobile broadband penetration in Africa would yield an increase of 2.5 percent in GDP per capita, and a 10 percent drop in mobile broadband prices would boost adoption of mobile broadband technology by more than 3 percent (ITU, 2019).

Although significant progress has been made since the “digital divide” first became apparent, the problem of digital access and use remains big, complex, and multidimensional. However, many countries on the African continent still suffer from a mix of progressive and regressive policies, over-regulation, mixed implementation of frameworks, poor political will, and in some instances, continued instability. All of these factors impede the realization of potential gains from increased digitization, in addition to increased access to information and freedom of expression.

At the November 2021 Africa ICT Ministers’ Forum, it was stressed that media freedom and access to information are important pillars for sustainable development, and are fundamental to the attainment of international human rights, as per the United Nations Declaration on Human Rights (UNESCO, 2021).

It is hoped that more decisive digital transformation approaches and practices will help bridge the digital divide and also address some of the gaps affecting digitalization on the continent. In recent years, various tools and initiatives have been introduced at global, regional and state levels to advance this ambition, ranging from frameworks guiding increased internet access to the curation of data privacy and open data standards.

Unshackling India for Economic Revival

Published by Anonymous (not verified) on Fri, 25/02/2022 - 3:07am in

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Development

Ajay Chhibber, Distinguished Visiting Scholar at the Institute of International Economic Policy, George Washington University, and India's first Director General of Independent Evaluation with the status of Minister of State in 2013-14, discusses his co-authored book, Unshackling India, about what needs to happen for India's economy to take off.



VIDEO


Transcript

Rob Johnson:

(singing). Welcome to Economics & Beyond, I'm Rob Johnson, president of the Institute for New Economic Thinking. (singing). I'm with Ajay Chhibber today to discuss his new book Unshackling India: Hard Truths and Clear Choices for Economic Revival, he coauthored the book with Salman Soz. And I guess I should say I'm very excited to see you again after meeting in India when you were the evaluation minister, and I think it was about 2013 or 2014, as I recall, and I followed your work and your writings closely. And I had the good fortune when you presented in Washington and my friends, Martin Wolf and Kaushik Basu were commenting and I thought it was an extraordinary presentation, and I wanted to obviously then be able to share it with the audience of this podcast, and the Young Scholars Initiative at the Institute for New Economic Thinking.

Rob Johnson:

I want to say this particularly for the young scholars, this is the kind of model of what I think we need to do. Everybody knows how to whine about what's wrong. You are creating a pathway to a constructive future and a vision based on a lot of experience in the Indian government, at the United Nations, at the World Bank and many dimensions, which we can talk about in bits and pieces. But I really want turn it over to you, but before we I say glide down the pathway of your vision, what inspired you to write this book?

Ajay Chhibber:

Well, thank you Rob, it's so nice to see you again and so glad you were able to attend the U.S. book launch that you talked about, and I'm so glad to be here with you today. The book, well, I'll just hold it up just for a second so that people can see what it kind of looks like. But there are two big motivations to write the book Salman Soz and I, we come from the same in college in Delhi and we worked at the World Bank together, but not together, actually, I never knew him either in college or in the World Bank. He's a little bit younger than me that's why I didn't know him in college, but somehow our paths never crossed. So we met each other about two years ago and we liked each other's views and we said perhaps we'll write a book, but then suddenly we had the pandemic and then we said, "Now we must write the book because we have time on our hands and motivation to write."

So there were two big things that were in our mind, one was that both of us have worked in many countries around the world and in India, and so Salma also worked on a range of middle income countries so did I. And we said, look, whenever we go back to India and there are some problems and you say here's a solution that others have tried that has worked, the response you get in India is always, "Well, this is never going to work in India. India is so different. India's very unique in some way." But lo and behold over time you find that people would come back to those solutions struggling, but often very late.

And people also in India like to say, "We're doing much better than we were 10 years ago or 20 years ago," which is true to some extent, but then the rest of the world hasn't stood still, they have gone much further ahead and we know China and South Korea, so many countries have gone way past India. So you sort of say, well, you've got to bring a perspective that India is doing okay in some areas, badly in others, but where is it relative to what the rest of the world is doing? And so we try to do this book as a bit of a benchmarking exercise, a kind of backward indexation which Indians love to do, but also a lateral indexation, so where are we and why are we where we are? That's one motivation for the book.

The other motivation for the book is that India had very big reforms in 1991 when Dr. Manmohan Singh was the finance minister of India, and India got into a huge crisis after 40 years of pretty dangerous socialist policies, and then came a huge balance of payments crisis and that triggered the wave of reforms that Dr. Manmohan Singh brought about. But when he brought his reforms about, he had a clear vision of how things come together and which other buttons that I have to press now at this stage for India to propel it forward. So over a period of three to four years he was able to press those buttons with a competent team around him and move things forward. So you've come now some 20, 30 years later and those reforms have run out of steam, and for the last 10 years India has been drifting, especially since the global financial crisis.

And then you've got a new government that comes under Prime Minister Modi, and you think, wow, this is the man who's the big reformer, he's going to carry out some big, big reforms. And what you find and what we've documented in the book is that you've got these very one off piecemeal kind of things, because there's nobody there either in his team or around him with that kind of comprehensive vision of what are the different wheels that have to move in some sort of tandem, whether it's on education or labor reforms or other reforms.

So one reason to write the book we thought was let's present a picture of how things come together to produce certain outcomes, and why does India have such a distorted structural transformation, just to give one example. So the part of the book was let's present a picture of where India has been over the last 75 years that has brought it to this point at its 75th year of independence, and then where does it need to go over the next 25 years, and how does the different parts of that sort of gear box have to be moved in a way that will make it move forward in the right direction? So that's the second motivation for the book.

Rob Johnson:

So when you look at as you were saying things kind of leveled off or stalled out a little bit, obviously the pandemic is a bit of a shock, the urgency of climate change on the horizon is facing us all. But how would I say, how much do those specific factors play into your design and how much was what you might call related to a structure that wasn't functioning well before all of this came to the surface?

Ajay Chhibber:

Absolutely Rob, so what we show in the book is that what the pandemic has exposed in stark terms, what the bigger problems were, the problems were there already, the economy had already since about 2016 had started to slow down. And particularly the last two years before the pandemic, the growth of the Indian economy had gone back to pre 1990 days when India was growing at a very slow rate. One famous old economist, who was my professor at the Delhi School of Economics and I caught him in the book, Professor Raj Krishna used to say, jokingly call it the Hindu growth rate 4%, four, 5%. And what had happened was that in the last two years before the pandemic we had gone back to now four, 5% growth. So we were back to jokingly I would say back to the Hindu growth rate and obviously not a very good thing to say to a Modi government, that is kind of Hindu majoritarian is their ethos anyway, so I said, "You've brought us back to the old Hindu growth rate."

But what the pandemic did is then exposed those problems and why we were in that situation, even before the pandemic we had very high rising inequality. If you look at Piketty's book, India is either the most unequal or the second most unequal country among the large economies of the world, maybe in some Gini coefficient measure slightly less unequal than Russia, but if you look at the top 10% share of the income then India is actually even goes beyond Russia. And now what the pandemic has done is, has actually increased that inequality even further, the rich Indians have done much, much better, and the poor group have fallen even further behind. But what the pandemic has also exposed is certain things that were not so obvious such as how weak the capacity of the state was to handle the pandemic.

How many lives were lost that need not have been lost because of the weak capacity of the administrative capacity of the state. I think things needed a big change, but the pandemic has certainly been a huge wake up call that has exposed these problems to an even greater extent than was the case before. And the fact that India had a very vulnerable employment, about 80% of India's people who actually even work. A lot of people don't work because they can't find jobs, but even those who can find some job to do, 80% of them have what the UNDP calls vulnerable employment, that is they have no safety net, they have no social protection.

And that was exposed during the pandemic in spades, because when Mr. Modi did his drastic lockdown and then about over a 100 million people were then streaming back from the cities to the villages, it looked like some war or story that... scenes that we India had not seen since the partition of India and Pakistan-

Rob Johnson:

It's like The Wizard of Oz in reverse.

Ajay Chhibber:

... of so many people out on the streets. And it showed the vulnerability of this economy was huge. So I think what the pandemic has done is really exposed all this to a very great extent and the weak health system, the weak administrative capacity, the inequalities, the lack of safety nets. And that's what we say now we need to focus on these things going forward, but also somehow to be able to revive this economy from the slump that it had gotten into even before the pandemic. So today you will hear projections from the IMF that India this year will be the fastest economy in the world. Well, the main reason for that is that we had the biggest decline during the pandemic, so that's just a bounce back. They are projecting again that India will grow 9% next year, but I don't see where that growth is going to come from unless we do some serious reforms, and that's what we try and lay out in the book.

Rob Johnson:

So in your title is the word unshackling, so as we move into where India is and like you said to be silly about it, the unmasking that the pandemic has done has shown us some of the... I would say some of the needs, some of the fault lines, but what shackles be taken off to move us forward in India?

Ajay Chhibber:

The one very major point of our book is that the role of the state needs to be changed in very fundamental ways, that the state is not too large in terms of share of spending as a share of GDP. We have tables on that where we benchmark India against all the OECD countries plus several emerging market economies, so the size is not too large, but the scope of the state that is the number of things it tries to intervene into is too large. And what that does is it's a bit like in taxation you have the Laffer curve, if you try and tax at a very high rate, you start losing tax revenue. So here I use the Laffer curve sort of same methodology to show that if a state tries to do too many things it ends up doing most of them very badly, and so the effectiveness of the state starts to go down.

Rob Johnson:

So instead of being a catalyst or a channel upward, it's like throwing a net on top of things and stifling vitality.

Ajay Chhibber:

Yes. There's a famous writer in India, Gurcharan Das, he said India grows at night when the state is actually sleeping. So we actually devote the first three chapters of our book to what needs to be done here. And we argue that it's got to be a two part strategy, you can't improve the capacity of the state overnight, that'll take time, but the first thing you can do is reduce its scope, meaning make it focus on a fewer set of things. And Prime Minister Modi has a big slogan on this, he calls it maximum governance, minimum government, obviously, not an original one, probably taken from somewhere else. So we say, well, if that's your slogan, then the first thing you need to do is refocus the state on fewer things and things which you have neglected badly like health and education and even defense.

If you take out the pension component of the armed forces of India, we have a very large army, the actual spending on real defense spending as a share of GDP is one of the lowest since independence, which is amazing given the threats that India faces, we have China and we have a problem with Pakistan and loads of other issues that India has to deal with, but particularly China. And to have a nationalist strong man government have the lowest spending on defense because it's not able to move money from other various things involved in, like building toilets and things, which are not bad but that's not what a government's function should be, first focus on health, education, defense. So that's one big theme we have in the book, which is where partly the title unshackling India comes from.

But then we say that it's over centralized, China is a very authoritarian totalitarian state, but more than 50% of spending in China is done at the local government level, not even at the provincial level, certainly not at the central level, at the local government, at mayors and village communes and those sorts of level of government, in India that number is close to 4%. 4% of GDP is spent by mayors and village councils and things like that, over 50% in China to a level of... So we argue that part of the reason why this government is ineffective is that there's a... And I use a methodology that was developed by a famous public administration expert and apply that to India, where we show that when you have things, where the level number of transactions is too high, and the outcomes are not very specific like in health and education, then trying to do those things in a overly centralized manage manner means you are not going to get the results that you need.

So that's a big theme of our book that we show that much greater decentralization, much greater devolution to the lower level. And also that you will be able to get more for your buck at the lower level, because salaries at the lower level are much less than at the central level. So we lay all this out in the book in the first three chapters. And also that we have still while may have liberalized in 91, we still have about 250 state owned enterprises, public sector entities. We've just sold one, Air India, which is a marquee sort of airline, which was a bleeding ulcer rather than a crown jewel as Arun Shourie former minister who was in charge of privatization at one time describes it.

Just as we were writing our book, the sale of Air India was on the burner. And I said this should be a litmus test, can they do this or not? And they were finally able to do it and hand it back to the private company Tata from which they nationalized the airline. So that's another big agenda that they have to pursue, that we push for over the next 10 years or so.

Rob Johnson:

When I had been traveling to India quite frequently, 2010 to 2016, I noticed quite large variations in local spending in different regions, it was not as if there was a... even if it was centrally controlled, it wasn't allocated as though it was a national policy, it seemed kind of like there was a customized policy for each area and it appeared to me to be perhaps exacerbating inequality. And some of the leaders of regions that I would meet with would be very enthusiastic if they were in the inner circle and very despondent if they were outside.

And your fellow Indian countryman and leader Raghuram Rajan, who's a friend of mine, and I remember him starting work as he left the central bank on his book that I think became called The Third Pillar. We made a video together and he was talking about the at global levels, but also within India, at least in our conversation that the need for low government is because you're sensitive to what people need there. But at some level, the federal government has to unify things across regions, manage migration between regions and what you might call local officials can't insulate their population from all the shocks that occur, you do need the combination of the big overarching government and the sensitivity down in the fields of where people live and where their yearnings are identified.

Ajay Chhibber:

Yes. So we show in our book very similar that when it comes to natural disasters, we get lots of cyclones and earthquakes and various types of countries are hit. But being a large country, we are able to handle now a lot of those disasters on our own, unlike large parts of the developing world, India doesn't look for foreign assistance when it gets... Because you have a central government that is able to move resources and an agency like FEMA you have in the United States, we have the National Disaster Management Authority. So there are things that India is able to run an election across the whole country very well, India is able to have a pretty competent central bank, it has the manpower and the capacity to do that, but then you ask the question, why can't it deliver basic health and education?

Because it's tried to over centralize everything there, and these are attributes or kind of services that are best delivered at the local level, here is a country more diverse than the European Union. So if you're trying to do whatever you are trying to do in Norway and you're trying to do that in Greece, it's probably not going to work right. Similarly for us, you have states at different levels of development. And even within states you have some states which are the size... Andhra Pradesh would be of the fifth largest country in the world. So you have within states you have also huge variations, so you cannot do these things at a centralized level and that's what we try and show in the book, that you do need an overarching framework, but the implementation has to be left to the local level and the modification of that national policy has to be allowed.

We just passed the National Education Policy at the national level, but now if they try and ram that down to all the districts and all the states, it's not going to work, you have to say, "This is the framework. Now we are going to allow different districts, different parts of the country to implement this in a local manner that meets certain broad objectives and standards, but gets delivered in different ways in different states," so that's where we need to be.

Rob Johnson:

It's the old adage, different strokes for different folks, but that sensitivity to the variations in the regions I think is very important. I grew up in Detroit, Michigan, where after the devastation of the auto industry, many things were not performing and in many ways people in Detroit felt that the federal government had divorced Detroit. After the Voting Rights and Civil Rights Act were passed, democrats in the South didn't want to transfer a lot of money to an African American majority city in the North and so it was very, very dysfunctional.

And then people swooped in whether philanthropic or government officials to take over the education system, and it felt like to the people there they have no idea what they're doing, they don't see the problems, they don't feel the problems, and at the same time by the way they were building up the prison system. And then when a lot of black males were put into the prison system, which by the way, were privatized and had incentives to fill their beds, then dysfunctional families did worse in schools. And as Heather Ann Thompson wrote about, she's a professor at University of Michigan, all kinds of teachers who were being ranked on the standardized test scores of children left Michigan because they couldn't control their fate and it was calamity from a top down imposed thing.

Ajay Chhibber:

Absolutely. And just to give you a similar example, a friend of mine runs a very good, what Raghuram Rajan was describing a very good NGO, Seva Mandir which runs these schools in these villages. His school has one teacher and all the villages around in that area send their children to his school. And the government has nine schools with no teachers, the teachers never show up, beautiful buildings, computers, never even unpacked. This little NGO school, people are moving from other villages to this village in order to be able to send the children to this school. One teacher is running three shifts in a day, to be able to handle all these kids. So this is the reality that if you leave things down at the local level then people will know what to do.

Rob Johnson:

In the realm of education, when you take the temperature of what's happening across the country, I can understand being more customized, being more local, being more sensitive, but are there what I'll call mega or meta missing ingredients that you recommend in your book as a wholesale transformation?

Ajay Chhibber:

Yes. The most obvious is obviously is the amount of money. We have benchmarked India against all the neighboring countries and we are underspending hugely. For example, our public spending on health is only 1.3% of GDP, it should be at least 3% of GDP. Two thirds of the spending is out of pocket by people, they have no insurance and they go to half baked private clinics and hospitals. Same as in education, the amount of public spending in education, public schools, in the United States what we are calling public schools is very, very low, so most of the people have drifted into private education. And so you have these fly by nights little schools that come up, private sector schools, somebody will set up a school in their house in the locality and all the children will go there because when they go to the pub... at least here there's a teacher, there's somebody who's trying to teach you something.

Whereas in the public school the teacher may never show up and even if the teacher shows up, he may never bother to actually teach. So you have those sorts of issues as well across not just in the rural areas, but across the whole country. So you have a governance problem and a money problem at the same time, you have don't have enough resources and you need a governance structure which changes the whole incentives. Now what we have is we have seen an increase in enrollment, but the quality now we need to focus on, which is the direction we push for in our book, we have a very good NGO, which has been doing surveys for the last 15 years and produces the annual survey of education results, which tells you that if you went to class five or class two at what grade are these children able to perform?

And she shows systematically and does this by every state in the country how poor the core of the education is, so that's where we need to now focus hugely, and this is where this new education policy comes in, but again, it's how it gets implemented, will be very important.

Rob Johnson:

I was going to say from the distance, from my perspective, number one, with the advent of technology and automation, knowledge intensive human capital is becoming ever more important.

Ajay Chhibber:

Exactly.

Rob Johnson:

And secondly, when I have seen the products of the best parts of your education system, when I visited India, or when people from India come to the United States, this is not what you might call a genetic or some kind of failure, this is a missed opportunity. You have lots of brilliant people and if you were to increase the allocation of resources, the vitality, the productivity, the payoff to that input I think is almost guaranteed. And almost all of the parents I've ever met from India, really cherish seeing their children educated, so I think unleashing these resources is just a win, win, win for the system and individuals in the world.

Ajay Chhibber:

Exactly. Absolutely, but we trace back over the last 75 years why we came to this situation, and part of it is that in the beginning when we got our independence, we focused a lot of our resources on what I would call tertiary education, we established the famous IITs and the Indian Institutes of Technology and Science, et cetera. But most of those people, including Raghuram Rajan they all went there, they all leave the country. A lot of them just leave the country and we neglected primary education hugely, so we did not create a mass of people who were reasonably well educated. We had a small group of people who were in the best of the best, and then we had a lot of people with very, very poor or almost no education at all, so there was that problem, but that problem then is starting to being corrected now to some extent.

Rob Johnson:

I was going to say what's dangerous about that is that people who have what you might call faith in the parable of meritocracy are saying the talented ones emerged and the others didn't, but there's an awful lot of statistical data. I'm thinking now about work I see in the United States where students who test very well, but are in the lowest quarter of the income distribution, have much lower chance of getting a college degree than children who are in the upper 10% of the income distribution, who finish in the lowest 25% on standardized testing. So there are a lot of things other than what you might call measures of innate ability or aptitude at work here, and it seems that investment that you're talking about, the broad based uplift can make an enormous difference to this country, to your country I'm sorry.

Ajay Chhibber:

Absolutely. Exactly. And that's what we are seeing. Karthik Muralidharan who teaches at University of San Diego, he's a guy who does a lot of work and we quote him, he says, "The whole system is now basically a signaling device, it's not a system for learning." And the richer parents what they do is they know the child is not going to learn in school, so then they have afterschool tuition and they pay a lot of money to people who come and then teach their children what they should have been taught in school. And so you have this intense competition for very few jobs, you have intense competition for getting into a college, and so the way the richer parents do is they provide extra help to their children, which the poor cannot provide.

Then you have the digital divide, you have people who have computers and people who don't, and we show the numbers on that as well. So you think of India as an IT power, but there is a huge digital divide within India as well. And these days without knowing computers, without doing that kind of learning you nowhere, you cannot find the jobs in today's world unless you have that basic literacy, not just in reading and writing, but now in some at least basic computing. Now, of course, everybody has a cellphone these days, so through the cell phone and we have very low data cost, but very low speed also as we point out in the book. But nevertheless, people have at least access to cellphone, there are about a billion cellphones in the country. Pretty much everybody has access to something of that sort, so they're beginning to catch up, but we need to push in this direction.

Rob Johnson:

I remember when INET had various projects related to curriculum reform and I was in India and someone said to me, "Don't take the curriculum that you generate and put it in an ebook that we have to get on the internet, create an app for the telephone, so people in the cell zone can get this free textbook because it will be much more widely disseminated."

Ajay Chhibber:

Yes.

Rob Johnson:

That's fascinating.

Ajay Chhibber:

Absolutely.

Rob Johnson:

I've also heard that in many parts of African development in recent years.

Ajay Chhibber:

Exactly.

Rob Johnson:

The interesting thing to me here also just before we close out on education and you talked a little bit about it, and there's a lady who was a famous author in Canada named Jane Jacobs often wrote about cities, but her last book was called Dark Age ahead. And she spoke about the fear of unemployment that our ancestors talked about coming from the Great Depression and the need to educate citizens, rather than just credentialize people who were getting into school to get the job they were afraid they were going to miss in a very hierarchical society economically.

And it's kind of ironic because she was in Canada, which is less afflicted by these things, but she saw these trends coming. And the idea that comes back to my mind is you're talking about evolving the state, evolving the different ways in which things are done, bringing things to the local level, it feels to me like citizen education is very important as distinct from getting what you might call credentials as an input to production, both matter but the balance between the two of them I think is very important to the health of the society.

Ajay Chhibber:

Yeah. We need to have a system where people are actually learning rather than just attending, and we have ended up with a system where focus was on enrollment, so enrollment went up. They finally through the school lunch program and various other programs, they managed to bring the kids into the schools. But now whether they are learning that's the key and the learning can't be only in the school of course, but when somebody's there for five or six hours and they're not learning anything, that's a huge waste as well I think, so that's what we need to focus on.

Rob Johnson:

I once visited a conference on the theme of economic justice and the discussion among the group got to a place where it talked about health and education. Jim Heckman, who's worked a lot with INET, was the person who inspired me to join him and listen. But the notion of economic justice that was being used in the United States at that time is if you get paid more than your marginal product, you're being subsidized, if you get paid less than your marginal product, you're being exploited, if you get paid your marginal product that's economic justice, but you could be at a place of so-called economic justice where you couldn't support a family or a retirement or anything.

And the question became who is responsible for your marginal product and the systems of health and the systems of education have an awful lot to do with your productivity that was beyond your control, their system platforms, they're not individual laziness initiative or what have you. And the parable that it's all about the individual, I can understand assigning responsibility to the individual, but assigning responsibility in the context where if they are vital, give their heart to it, they get the ingredients, particularly health and education so that they are productive and can support a meaningful life, otherwise it's not socially sustainable.

Ajay Chhibber:

And I'm glad you brought up Heckman because I am a great admirer of Heckman. When he visited India in 2013, I was in the government and I was asked to chair several of his lectures for reasons unknown to me, maybe nobody else was important enough, wanted to do it, but I was very glad to do it because I learned so much from him. And one good thing that they have done in this education policy is that they have focused also on preschool education, early child from two to five, which is a very important message that Heckman delivered during his lectures in India. The point you're making about, so it's not just education, now we need to then say where do we find productive jobs for these people? And in our book, we show that our labor laws are so terrible, partly we inherited them from British times, but then we added even more complications to them so that it is very hard to actually employ people.

And what it does is it makes sure that 90% of the employment is in firms, which are smaller than 10 people. In fact, 80% are in firms of size one, which means it's just the one person, there's no other person being employed. And that's where the point about the marginal productivity comes in, that there are no jobs. And now we contrast India with Bangladesh next door, same basic structures, same institutions. Bangladesh then got rid of the labor laws, Pakistan did not, so Pakistan is still stuck. So when India became India, Pakistan, Pakistan and India kept the laws and both labor laws and then made them even worse. When Bangladesh got independence in '71, they threw out the labor laws.

So this big boom in textiles is now not just because of labor laws, there are other reasons too, but a very large part of it is. So you see a huge improvement in female labor force participation in Bangladesh and a decline in India, a decline in Pakistan. And so these girls who get some very big basic education now are able to go to the textile factories and get jobs and become far more productive, they're still getting exploited by the definitions you gave, but they're still getting far more productive and far better wages than they were working on the farm. So that's a big, big story and when you point that out to people that you're now being compared to Bangladesh, not just to Vietnam which are now... I lived in Vietnam as the World Bank director in Vietnam, and that's a completely different... they've gone to a whole different level, let alone China.

But even nextdoor Bangladesh now is saying... and their textile firms are seven to eight times bigger than Indian firms, they're able to now compete so well internationally, they're able to provide a lot of employment. I mean they're sweat shops, they're not the role model of a factory, but what was your alternative, well, your alternative was unpaid work on the farm basically. I'm not suggesting that we need to produce factories like Bangladesh, but we need to have a mass of manufacturing jobs, and India has what Dani Rodrik called and we point out in the book called premature deindustrialization. The service sector has boomed, but the manufacturing sector, which is where the bulk of the employment needs to take place. If you go back to Sir Arthur Lewis' dualistic transformation of how people move out of agriculture and out of the informal sector into more formal jobs, and more productive jobs and getting better paid, and having a wage that you know is not working poor.

In India you have a lot of people just working odd jobs, but they're still poor below the poverty line. So that's the kind of transformation that we need to have as we show and what would it take to do that, it would be education and basic health because a lot of kids are also malnourished. So what India has done is taken its most abundant asset, which is labor and made it very difficult to use it, it's taken its most scarce resource which is land and wasted it. And we show in our book wasted in two ways, one is that the floor area ratio in our urban cities is one of the lowest in the world.

So when your land is so scarce you start to urbanize and then you have these sprawling cities, Delhi is 30 miles by 30 miles, that city could absorb all those people in probably one third the area that it now occupies. So you take your most scarce resource and you use it badly, you take your most abundant resource and you don't use it at all, in fact there's so little employment in the country, so how do you compete with anybody? And then what we did was we took the third factor which is capital and we ended up with and we show in the book, the most inefficient banking system in the world, it compares to Venezuela and Russia, which are oligarch run systems. So we show that the intermediation ratio, which is what's the difference between the deposit rate and the lending rate in India is now five to 600 basis points.

And that's because what we've done is we nationalize the banking system then all the crony capitalists and the populist politicians started handing out free loans, or re-greening the loans of crony capitalists who are willing to pay bribes to politicians. So I write in the book that this is like Murder on the Orient Express, who's responsible for this and they'll say, "It's everybody, they all stuck the knife in." It's the regulator, it's the crony capitalist, it's this crooked politician or the populist politician and the bank manager, who's basically in a state bank, you're the bank manager because the politician wants you there to do his bidding. So we ended up with this huge non-performing assets and then the only way the bank can survive is by increasing the disparity between the lending rate and the deposit rate.

So this is where the reforms have to take place, the first generation reforms that Dr. Manmohan Singh did were basically what we call, economists call product markets. But the next stage of reforms which India needs to do are in labor, in land, in capital, and these cannot be done by the center alone because these are very heavily provincial state subjects. So we can't do these reforms like they were done before and a lot more discussion, dialogue, et cetera, has to take place between the center and the states to make this happen, and that's not happening.

Rob Johnson:

I'm reminded of one of my earlier podcast guests, a young woman I believe she's from Singapore, but is at University of Michigan, her name is Yuen Yuen Ang, and she wrote a book called China's Gilded Age: Paradox of Economic Boom and Vast Corruption. And she compared the Chinese with the 19th century Americans and the concentration in the railroads and concentration of finance and J.P. Morgan. And she was essentially saying sometimes the corruption is used as propulsion, but if you will create systemic growth or a step in the ladder onto better things, then it's okay. But when the corruption becomes stultifying it stops the system from feeling any possibility of promise or future prospect. When we finish this podcast, I'm going to send it to her, because I want to see what she thinks would be the recipe for India in light of your book. I'll get her a copy of your book-

Ajay Chhibber:

Thank you.

Rob Johnson:

... because it's a fascinating set of challenges that you're, how do I say, you're building this mosaic of many different dimensions that need to transform at least closely in time, not necessarily simultaneously.

Ajay Chhibber:

Corruption I call it not the second oldest profession in the world, I call it the oldest profession in the world. So we're not going to ever eliminate it altogether, but we need to get it to a level where it doesn't become, as you said, stultifying, so how do we do that, and we argue that one is massive deregulation. We used to have when we didn't have the mobile telephony, it was so difficult to get a telephone in India and then people would pay enormous bribes to get it, but now with the mobile telephone we don't need to get the landline so nobody pays a bribe there. Similarly, for many other things when you had these monopolies, but more competition, more transparency, more deregulation I think is the way forward to reduce corruption. When people will have other opportunities to get the service then by itself the corruption will come down and also more IT, a lot of the services are now done through the internet, so I think that makes a huge difference also to the level of corruption.

We do have very high political corruption in India, we have electoral bonds which are completely non transparent, you're not required to even reveal... so they've set up this electoral bonds and anybody can buy them, but you don't have to reveal who you are. So a company can buy BJP related electoral bonds or Congress party related bonds and never have to reveal who they are, except of course they inform the party concerned that they're buying their bonds and that a quid pro quo would be required. So suddenly all that corruption that was so visible has now become invisible to some extent, so you get the feeling that India is less corrupt, but it's just become more corporatized and regularized in some way, and in that sense I guess there's progress because it's going more the American way than before.

Rob Johnson:

I think in the United States, as I was listening to you just now, I can see all of these dilemmas because there are what you might call platforms with increasing returns that look like a monopoly, and then there's what you might call restrain of trade, which is increasing profit margins in reducing the dissemination of things that enhance our wellbeing. How we construct antitrust in the age of internet and technology platforms with those increasing returns characteristics is a very important challenge. And then how if we allow those monopolies, for society not to be what you might call subject to the whims of just a handful of people, when it's meant to be a democracy is another challenge.

Ajay Chhibber:

Yes. In our book we point out that we are probably headed towards a Latin American style or a plutocracy of some sort rather than a real democracy because the number of people now, who control a very large part of the economy is growing fewer and fewer, and are all well connected with the political party in power and have very vast ambitions. We are going towards the gilded age that America got out of eventually, but we are headed in that direction and very rapidly as the Piketty book shows the increase in inequality has been the fastest in India. James Crabtree, I don't know if you know him, he-

Rob Johnson:

I know his friends.

Ajay Chhibber:

... used to be the Financial Times correspondent in India, he wrote a whole book called The Billionaire Raj.

Rob Johnson:

Yes, I have actually have it.

Ajay Chhibber:

Yeah, there you go, so he saw it coming.

Rob Johnson:

The other person who is resonating with these thoughts is a man who encouraged me to watch for your forthcoming book Kishore Mahbubani, he's I believe originally from India but is in Singapore, he has a new book called The Asian 21st Century.

Ajay Chhibber:

Yes, I read it.

Rob Johnson:

And he talks about how the American leadership wants us to emulate them as the head of a world system, but with all of the problems that are occurring in the United States with concentration and what he says rule... I think he wrote an article with this title in the Straits Times, for the 1%, by the 1%, of the 1%, as the democracy that everyone's supposed to emulate in the U.S. China standoff. So he's concerned about the evolution of the structure of the United States, and an Asian model which is less focused on individual liberty, I'm talking about philosophically, the Daoist and Indian traditions and more aware of the common good. He's almost presenting in his previous book I think called Will China Win and in conversations I've had with him, that we are at a place where the tectonic plates of two different philosophical systems are in tension, but it's hard to see how given the performance of America that people are going to emulate that system given the stage that it's in.

Ajay Chhibber:

So I don't know Kishore at all actually. So what happened was that I read a talk he gave recently in India on why India can beat China, and it was one of the former president lecture, memorial lecture that he gave in India last year, when I read that, I really liked it and I quote him in the book. But then I sent him the book and said, "I really enjoyed your lecture, and by the way I put you in my book but here's my book, let me know what you think." And he said, "Oh, I love your book." He read it after two weeks, he said, "I love the book." And I said, "Will you endorse it?" And he said, "Yes, I'll endorse it." So he's endorsed the book. Where I differ with Kishore is on China, and the part that I differ with him is that he thinks China and India will get together, and I told him that what China wants is not an Asian century, China wants a Chinese century, they don't want India playing any part in it.

And the joke I tell him is that in the Forbidden City, the question that people should be asking is who lost India? And the answer is, it was not who it was Xi. Because there was no reason for us to have a problem with China, except China has become so belligerent and our former Prime Minister Rajiv Gandhi met Deng Xiaoping and we had a war with them in '62, so we had strained relations. And they both agreed that from now on China and India will focus on economic development and not on the disputes with each other.

So that stood for about 30 years until Xi Jinping has come to power, and Xi Jinping is the belligerent one in this, because Modi has tried very hard to... he's had seven or eight what do you call these peace summits with him, and somehow in the end still we've ended up with a problem. And it's not just with India, it's in the South China seats and with Australia, it's with everybody, so I told Kishore that this is not... Yeah

Rob Johnson:

And with the Belt and Road Initiative and in Africa, there's a sense... Some of my friends in India have often as they visited me in the last two or three years, expressed a lot of concern about feeling a bit surrounded. And surrounded isn't just large, it's about feeling threatened as well, the belligerence has got to be a part of that mix for it to be frightening, so I concur with what you're saying.

Ajay Chhibber:

But I like Kishore otherwise.

Rob Johnson:

Yeah. Well, I just pulled up his endorsement, I'm going to share with the audience, he said, "Can India have the largest economy in the world? Yes, it can, yet success is never easy. But Ajay Chhibber and Salman Soz have done India a huge service by documenting comprehensively, the reforms, both painful and painless that India should undertake. India should set aside its partisan divide heed their wise advice. India should not rely only on its 2.7 trillion market, when a global market of $80 trillion beckons. If overseas Indians can compete successfully in global markets, so can India. And if India bravely jumps into the global market, India's economy will explode and seize the moment." That's pretty enthusiastic, I'd say you've got A plus out of that one.

Ajay Chhibber:

But I must tell you that I'm a great admirer of Singapore. And in the book I provide a little anecdote of when Mrs. Indira Gandhi visited Singapore at the invitation of Lee Kuan Yew. And after she'd been shown around the city, this is in the '70s, and the pesky Indian journalist asks her, "Madam aren't you impressed with what you had seen." And she in her very haughty arrogant manner says, "Oh, but it's just a city, I can build 20 of these anytime." And the journalist says, "Madam, why don't you? It will totally transform our country."

Rob Johnson:

That's great.

Ajay Chhibber:

So Modi has this idea of building 20 cities along the coastline and they're starting with two big projects now, one on the West Coast, one on the East Coast, so they're picking up these ideas of Portland development, which is... But then at the same time, they're reversing the reforms that were done by Dr. Manmohan Singh, which is the trade reform, and that's the part I wanted to come to that this bit about returning to protectionism and not joining RCEP, not joining trade agreements, this reversal, what they call aatmanirbharata or self-reliance, is beginning to sound more like the import substitution which led us to the old Hindu growth rate.

And unless India gets out of this mindset they think that we have a very large domestic market. And I tell them that the second largest economy in the world is China, the third largest economy in the world is Japan, the fourth largest economy in the world is Germany, you're fifth or sixth. The number two, number three, and number four are the most aggressive exporters in the world. So why do they not think they have a large enough market? There's a $100 trillion dollar market out there in the world, why is your two, three, $3 trillion market, big enough? It's not.

Rob Johnson:

And the Scandinavians while they aren't on scale, the quality of life per capita is so high and they have that same strategy that you put forward too.

Ajay Chhibber:

Exactly. It's like why do you guys focus on your domestic market and think it's a large market, it's not. And Swami Vivekananda, when he came in 1850, when he came to Chicago at the World Forum of Religions, they asked him about India and its place in the world, and he said, "Look, we enter the world like a gymnasium to make ourselves strong." And the other example I give in the book is the cricket team of India. We learned cricket from the British and for a long time an Indian team could never win outside of India, it only won on Indian wickets, nasty wickets, but India's cricket team did not retreat into protectionism, it kept going out and trying to... and now we are the world's best. We can beat anybody, including England, anytime. So I said, "Learn from your own cricket team, why do you think you can... you will be world beaters in almost anything." And that's what Kishore is saying, "Look at the Indians who go out, they become the best everywhere so why won't you, if you opened yourself up." And that's why I like his article very much.

Rob Johnson:

I'm laughing because I'm hearing a story that just echoed with my past. There was a year when I sailed in the remote islands called the Lau Group of Fiji. And one day I was sitting with some people after a church service, had a beautiful choir, and they started talking about Indian cricket and how the Fijians had to get away from playing their local games on these remote islands and travel the world, so their cricket team I think they called them in the group where the team is seven they called them, "In the Sevens, if we learn someday we will be the champion."

And about six years later, I got up host card from a guy that was at that table and he said, "I looked up your boat and I found you through these people in Rhode Island," and he said, "we just won the Sevens." I think what you might my call your prescription for vitality, people use what you might call infant industry protection as a temporary way to get off the launching pad, but at some point you got to face the challenge or you're not going to evolve and grow and be at the cutting edge and I think you're right, you got to take that challenge.

Ajay Chhibber:

I'll tell you one quick to on this, when I was in FCCI the Federation of Chambers of Commerce and Industry, I won't name the person to you, but when I kept telling them, "Look why you guys want protection? If we could move the exchange rate 5%, that would give you more protection than tariffs and it would also encourage exports and discourage imports by itself." The guy looks at me and after a little while he smiles and he's says, "Ajay, I cannot control the exchange rate, but I can get a tariff put for my product quite easily."

Rob Johnson:

Yeah. Yes.

Ajay Chhibber:

So there's a whole powerful lobby of people who want these things and we have to find a way, we thought we'd gotten out of it, but now it's come back and that's a very dangerous thing for this country. There is no country in the world that has grown at 7% on a sustained basis unless it has had a major push on the export side.

Rob Johnson:

Yeah. It probably had major push on the export side and growth in population are both necessary conditions.

Ajay Chhibber:

Yeah. That's how you absorb a lot of the labor.

Rob Johnson:

I know people will call me if we don't explore the role of India in climate change. And I know that's a part of your book because I went through that in preparation, but let's talk a little bit about coal, transformation, scale, poverty, health systems, what are the highest and best uses of budgets and what role should the world play? I'm going to breathe the air and oxygen if you succeed. In other words, I don't think India should be alone in investing in India's climate transformation, energy system transformation, because you're contributing to the global public good, after the global north has burned most of the carbon that's put us in this CO2 problem. So what's the domestic policy and what's the international support that you envision is both just and vital for India's future?

Ajay Chhibber:

So Rob five years ago if you had asked me I would've been very despondent on India's position, but today and in the book we show and now of course Modi went to Glasgow and also made this announcement of 2070, and India is now leading the Solar Alliance also. The mood has changed in the country. The old mood was, "We didn't create the problem. Why do we have to solve it? We are still very poor. We need all this development," which is true. But now India has realized that it is... So I used to argue when I was in the UN to the Indian authorities, that it's like cutting your own nose to spite your own face because after all you're going to be the biggest losers as well.

We, India is going to be a big loser if climate change goes beyond whatever one and a half percent, because we have melting glaciers and I produced a whole movie on this, on the Himalayas and it was very popular, showed it to thousands and thousands of schools all over the world. And then we have several of our cities will go under water, we have typhoon... we call them cyclones in South Asia, what are call hurricanes in the Atlantic and Pacific, they call them typhoons in Japan and we call them cyclones, so all that. But now the mood has changed in India, there's no longer this sense that, oh, this is a Western or developed country problem, they are saying, "We are going to be part of the solution."

Then the question comes how serious, what has to be done, but I think the resistance has gone away. And now it's a question of what's the right path, how can we raise the money as you said, most people in India are very skeptical that the rest of the world is actually seriously going to provide much resources, because they say there's a lot of talk and we don't see the kind of money. But I do think that the discussion has changed and in our book we say that, in fact, India should focus on green growth for job creation also, but now I feel we are pushing on an open door in India and that this is the direction India will go.

I thought coal would still be 70, 80% of our energy mix by 2050, but I don't think that's true anymore, I think it'll be much less. And as we argue in our book, we say keep the damn thing the in the ground until you find a way to... that when you use it you can cap it, capture the carbon and reuse it. But right now I said that technology is too expensive, so we are best to leave it to the ground and put a huge push towards renewables, which is what I think they are doing, they doing that in spades now. So I'm very positive that India will not be like China, which will have such large grounded thermal coal, China is now the third largest emitter in the world, and they're not going to be able to do anything about it because they have such a large amount of installed capacity already and we don't.

So we can make choices and as we argue in our book, let's not follow the Chinese model, the pollute now and clean up later model, that's a nasty, expensive model and we can leapfrog now just as we've done in many other areas, so that's where I think India will go. And I don't see any kind of resistance to it anywhere because we don't have large grounded assets, 80% of our power capacity is still to be built, so we have choices we can make now.

Rob Johnson:

Now this is a big factor in the United States, which is I'll use my place of origin Detroit. People watched the transformation away from auto industry, globalization, automation, what have you, and they watched Detroit and Cleveland's people get crushed. So now people in West Virginia is saying, "Oh, it's great climate change, wonderful for the world. How you going to take care of us? You're not going to do to us what you did-" In other words, there's resistance to change, if there is an adjustment assistance. The old adage in free trade theory, we can make everybody better off and nobody worse off, requires transformational compensation and adjustments and education subsidies and all kinds of things, you got to do the whole thing. In India, you do have an advantage that you don't have a whole lot of a sector that's going to get buried because like you said 80% is new, and it's maybe the opportunity cost for the other sectors that they didn't get to grow into it, but you're not knocking down something was already built and so the resistance should be less, that's an interesting insight.

Ajay Chhibber:

We are hoping that it would be less. And also you see, we are realizing that a lot of the pollution is not just what you are emitting to the world, but now so many of our cities have very bad air, very bad water, and so it's in our backyard and we have to clean up the whole thing anyway, not just for the rest of the world, but for ourselves as well. So we have a whole chapter on this, we show this in a very systematic way and in a positive way going forward. But I have a feeling we are pushing on an open door on this, and the big industrialists in India are all going into renewables in a big way. The Ambanis and the Adanis of the world, their projected investments in renewable is huge. Now what we have to do is right now we are still very dependent on China for the manufacturing of many of these whatever is required for-

Rob Johnson:

Solar panels, wind turbines-

Ajay Chhibber:

... solar panels and things like that-

Rob Johnson:

... and all those kinds of...

Ajay Chhibber:

... and we have to move in that direction, so they have this PLI scheme, the Production Linked Incentive Scheme to push in that direction. Because I think now the feeling is that we cannot be reliant on China for a lot of our production.

Rob Johnson:

Well, how would I say, one hopes that the feeling that climate change is for the common good involves what you might call despite what other disputes, a collaboration on that front is we all lose if we don't collaborate, so I think it's treacherous, it's frightening a bit, but I think that is the end game logic.

Ajay Chhibber:

Yes. And for us you see, there's that movie I produced when I was at the UN on the Himalayas, so you have the North Pole and the South Pole, but the third biggest concentration of ice in the globe is the Himalayan ice belt. And that has huge implications for... I'm not a science guy but I've read little bit about out it, but on the monsoons, it has effects on climate that can be produced.. go at tripping points that can create irreversible situations, that can be very damaging. So for a lot of reasons, India must play a very positive role. But the interesting thing is and we had a presentation the other day, there's a lot of this fad about net zero, net zero, net zero.

But as a lot of these people are pointing out the path to net zero is very important too, because it's the accumulated emissions, not just getting to... So you could get to 2050 say in the Western world or China says 2060, but if China doesn't do anything until 2040 or 2050 and then starts to... it would have eaten up the entire CO2 balance that's left out there for us to get to. So people have become too over enamored with these net zero targets and the glide path is very important also to get to that. But I'm hopeful that India will be a positive force in the world on this issue going forward, not a recalcitrant player.

Rob Johnson:

Are there other dimensions that you'd like to explore?

Ajay Chhibber:

No, I'm good.

Rob Johnson:

Technology, governance, inclusion?

Ajay Chhibber:

There's all those of course, technology is a huge-

Rob Johnson:

I'm tempted to say, we shouldn't talk about quite everything so people have an incentive to get the book.

Ajay Chhibber:

Exactly.

Rob Johnson:

Because I found it both in listening to you at your speech in Washington and in talking you tonight and in reading the book, one of the most encouraging explorations. And I really want to pay tribute to you because it's not just optimism, it's thoughtful optimism, given your experience, your intellect, the depth of your research, it's credible optimism. And I think this book is an extraordinary contribution, not only to the path forward in India, but to the path forward for intellectuals to make a contribution to the calming of nerves and our future wellbeing, it's a really, really extraordinary piece of work.

Ajay Chhibber:

Thank you. I really appreciate and very much appreciate the opportunity you've given us to talk about our book with your audience.

Rob Johnson:

Well, the pleasure is mine, for sure, or ours there's a a community of listeners.

Ajay Chhibber:

Thank you so much.

Rob Johnson:

I look forward to perhaps in the coming months, creating a panel, perhaps with the woman about the Gilded Age in China and somebody from African continents and we can talk about these issues, where the analogies between what you're doing in India... I know lots of people, Michael Spence, who I worked very closely with is very interested, he's by the way been rereading W. Arthur Lewis recently, who you cited earlier in the presentation, he had gone to Princeton where W. Arthur Lewis was a professor. But I see people thinking about what's happening in other places, learning lessons from India, and perhaps India looks over its shoulder at what other people are doing well, and to invigorate that conversation with you very clearly at the head table is something I'd like to do as INET in the future.

Ajay Chhibber:

No, absolutely. We have to learn from each other and that's what we try to point out in the book, that you can't say India is sui generis, India culture is different, history is different, whatever. But people are people they react to the same incentives everywhere, of course this is embedded in the Indian system whatever change you will make, but you can't say that I can't learn from anybody else. The ideas are transportable, the actual implementation may change from one context to another, but the idea say cash... just to give you an example, quick one, cash transfer programs, for many years, I was pushing for those.

No, no, nobody can do this in India. And now for every scheme they call it Direct Benefit Transfer, DBT the terminology they use in India, but it's headed in every direction and many state governments are taking it on as well. So this kind of thinking across fertilization approaches, how do you approach a problem, easily transportable, actual implementation on the ground must be localized I think. But glad to do that anytime Robin, pleasure to see you again and I'm so glad we were able to have this conversation, and I learned from you and so much as well today. Thank you so much.

Rob Johnson:

Well, I want to close with one final thought in Northern California, near Sausalito in an area called Tiburon, there was a famous psychologist named Gerald Jampolsky, and he was very inspired by The Course on Miracles, which was a book that was created. And he wrote a book in response to that, a distillation, and it's not really just about romance, it's about something deeper and the name of the book was Love is Letting Go of Fear. And what I see is when people are learning from each other, but things break down, they get polarized, people can see failure on the horizon, the fear stops us all from moving forward.

And when you lead by example, and people can learn from you and you learn from them and you construct together what you might call a credible, but optimistic vision, what you see is that the fear dissipates, that there's more than just the logic going on, there's heart as well as head. And when you contribute with that constructive vision like your book does, you're contributing to all of our ability to help you or work in step with you all around the world. So thank you for what you've created as an example and as they say, if it's a pendulum between love and fear let's get rid of some of the fear and get on with the business.

Ajay Chhibber:

Exactly.

Rob Johnson:

Thanks for joining me.

Ajay Chhibber:

Thank you so much.

Rob Johnson:

We'll meet again for another chapter before too long and hopefully a panel in between now and then. And check out more from the Institute for New Economic Thinking at ineteconomics.org. (singing).

Francis Akindes : "We Africans Urgently Need a Different Approach to Economic Thinking"

Published by Anonymous (not verified) on Sat, 12/02/2022 - 3:10am in

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Development

In this interview, Folashadé Soulé and Camilla Toulmin speak with Professor Francis Akindes, Sociologist and Professor at the University of Alassane Ouattara (UAO), Bouaké, Côte d’Ivoire.

French text is below

Professor Akindes is President of the UAO’s Science Council, and also Director of Programmes, UNESCO Chair in Bioethics. His research interests are diverse, covering political transitions, political violence, the political economy of inequality, public policy analysis, and policies for crises exits.

For nearly two years now, the world has been reeling from the impact of the pandemic. Based as you are in Côte d’Ivoire, how do you assess the pandemic’s economic and social impacts on the country, and more importantly, for the youth? How do you evaluate the measures taken by the Government to address the crisis, and have the country’s economists, or even the Continent’s economists, been involved in formulating these measures?

To begin, in Africa, in Ivory Coast, the pandemic started in March 2020. Like everywhere else, progressively, everything came to a stop in African countries, too. A catastrophe was predicted, and we were all urged to maintain strict sanitary measures. Among Governments, the politicians were faced with imposition of progressively radical measures, “Should we lock down our people?”. Every country had to decide on such measures, with undoubtedly heavy social, economic, and political consequences. African countries took varying paths, but those who established strict bio-security measures such as total lockdowns or curfews witnessed clear and immediate impacts when you consider that the informal sector employs around 80% of the workforce.

These self-employed people, when they stop work, they have no income. Asking them to stay at home because of the pandemic threat is not a lasting solution. Two or three days after the imposition of lockdowns, we saw protests like those in Senegal and South Africa. Clearly, lockdown as an approach to containing the pandemic had its limits. Then came measures aimed at reducing the spread, such as wearing masks: which were very expensive and difficult to find at the start; and social distancing: as I have said previously on multiple platforms, maintaining physical and social distancing in Africa is a luxury. Lockdown works for the wealthy who live in small numbers in large houses. For everyone else, in crowded housing and neighborhoods, the population density is just too high. You find 7 to 10 people under the same roof, it’s impossible to ask people to both stay at home and to maintain distance from others in the house.

So for a large proportion of people, these rules could not be applied. Some countries, such as Benin, refused to impose a lockdown. Benin’s President said he could not take the political risk of demanding people stay at home, given that the country had no resources to make up for the constraints he had imposed on them. Instead, Benin brought in measures such as face masks, hygiene improvement, distancing in public places, as have many other African countries. Most African countries have perhaps chosen this path - putting measures in place but not being stringent about them – which allowed them to be seen as following international guidelines, especially those from the WHO. These governments put measures in place but, strategically, left the responsibility of complying to these measures up to individuals. So, there is this farce of national measures and controls, but their implementation is laissez-faire which also speaks to the weak powers of these Governments.

These Governments made decisions not to monitor and punish those who flouted the rules since they didn’t have clear, credible alternatives which would compensate for loss of incomes from strict adherence to the rules. By these means, governments could avoid risks of protests and the political cost of forcing measures to be applied. In so many countries, there exist already pockets of fragility, frustrations, scarred communities from previous crises which would be badly stirred up and exacerbated by unpopular and damaging new controls over peoples’ lives. African peoples already have multiple reasons to be tired of their governments, so heavy-handed restrictions to deal with the pandemic could provide the political opportunity for old anger and resentment to boil over.

Governments really fear these kinds of unpredictable situations, so they did all they could do, with great caution, to apply measures but not be too stringent about them. From an economic point of view, in the beginning, there was a global shutdown like I pointed out, some sectors such as tourism were especially hit as they depend on international migration of people. The leisure sector, such as restaurants – whether indoors or outdoors - cinemas, nightclubs and other places people go to enjoy themselves, all these businesses had to close. You can well imagine the social and economic risks associated with the loss of employment in these activities, with most of these being informal enterprises. In a city like Abidjan, food preparation and sale are dominated by women, and their little cafes and roadside stalls, known as ‘maquis’, were all forced to shut.

During the curfew, everyone had to get home by 9 pm, whereas it’s the nighttime when so many clubs and bars do the best business, so you can only imagine the cost for small enterprises. In fact, it was all business, small and large, across the country which suffered, in spite of their own strategies to minimize the pandemic’s impact. The ports no longer functioned normally, affecting all import-export businesses. Remember that for a country like ours, 90% of its trade comes by sea. Those ships from countries badly hit by Coronavirus were not coming anymore. So we began to see shortages of goods, even of real essentials.

With the uneven spread and evolution of the virus between Europe, North America, and Africa, we did not experience the catastrophe that had been predicted. After six months, different governments in Africa could see it would be impossible to continue with tight measures and had to relax them for the sake of the economy. Increasingly, people began to ask themselves, why should we be following the same COVID policy route as Europe and North America, if we were not suffering the same health impacts from the pandemic. This question was especially pertinent given the inability of African governments to compensate businesses and people for their income losses, as had been possible in North America and Europe.

France, for example, was able to do a lot for those businesses damaged by the lockdown. In a number of African cases, states made such promises but they were not able to do much in practice. There has been a lot of criticism on social media regarding the criteria used by the government to decide who should receive relief. One year on, there is no more talk of government support, and every business has been working out how best to run their enterprise, adapting to the requirements. Today, we’re faced with mutations of the virus, but for many people there remains a fundamental doubt about whether the virus exists at all. In a city like Abidjan, when you go from better-off residential neighborhoods to low-income areas, you find a big difference in mask-wearing. It’s much more common in Cocody than in Abobo or Yopougon.

At the beginning of the crisis, I went around a lot of low-income neighborhoods because I was being asked by a number of media channels to give them news of how ordinary people were coping with the health measures. As a result, I spent a good bit of time listening to people in wards such as Abobo and Yopougon. There was almost unanimous agreement that the virus didn’t exist, and was an ailment of white people, and those who spend time with them, those who travel. None of the people in these neighborhoods went by air and thus did not think the health measures the government wished to impose applied to them. The public authorities were conscious of the need to avoid annoying ordinary people, by forcing measures on them, for reasons I mentioned earlier, and opted for communicating the risks of the disease rather than forcing adherence to sanitary measures.

In these neighborhoods, in spite of their denial of COVID, there are of course people who are employed for domestic work (driver, servant, cook, etc.) for those who they reckon are at risk, due to them living like Europeans, or being in close contact with them. They go to work in areas like Cocody, a well-off neighborhood, and may contract the virus at work as a result, and then bring it home. Sadly, they don’t always think about the risk of moving between these worlds of work and home, and the associated risks of infection, even for “those who never take a plane” as they like to say. Such connections between neighborhoods have not been part of the public outreach and messaging aimed at changing people’s patterns of behavior relative to the pandemic.

Another angle that I would like to explore is the lack of research on why the predicted catastrophe did not occur. Currently, we can only hypothesize. First, we have the youthful composition of Africa’s population. Second, there is the climate, which may have been in Africa’s favor. Third, is the widespread use of chloroquine (used as anti-malarial treatment). At the moment, we can only speculate about the importance of these and other reasons for the lack of impact such as that experienced by Europe or America.

Africa remains weak when faced with this kind of threat. We have not yet taken on board that we must try to understand what is happening, using rational methods, as is done by scientific research. We often retreat into a narrative that states that we don’t have the means to do the research ourselves because we are poor and have other priorities. But I would say we are poor precisely because we don’t tend to set aside some resources to generate the knowledge which would help map out and prevent these risks. It's as though we have chosen to live in darkness and uncertainty.

What role have economists played in shaping public policy to address the pandemic?

In almost all countries, there has been a culture of “omerta” (or a pledge of silence) as regards how the pandemic has been handled. There has been no debate amongst scholars about the measures taken, and no one knows how decisions were taken. Let’s take the example of air-travel requirements between ECOWAS member states when the land borders were shut. Some governments slapped a tax on COVID tests. Take the case of Benin. While some member states of WAEMU agreed to lower the price to FCFA 25,000, Benin decided to keep it at FCFA 50,000. They also chose to test all arrivals coming into the country, regardless of where they came from, and even when they had a negative test result from their place of origin. This meant that tests were re-done in Benin as though tests done elsewhere weren’t considered valid, as though each laboratory everywhere was not using the same testing kit. It wasn’t until February 2021 that Benin stopped this practice, and it's not only Benin that has generated contradictory and ambiguous COVID health rules. There are a whole range of political, economic, and financial issues at stake, which remain to be explored, in how certain countries have addressed the pandemic.

Lastly, you have to ask whether it is really a question of managing infection risk at the border and preventing wider infection of the population, or whether it’s the revenue associated with carrying out these tests. You see, you have to ask what is the logic of these tests being free within the country, whereas those traveling to neighboring countries have to pay. It's likely that air passengers are considered amongst the privileged few, with sufficient purchasing power, and hence they are targeted as a form of racket. When I read in the media that African governments responded promptly and effectively to the COVID-19 pandemic, I beg to differ. It is true the catastrophe did not happen, but the choices made by each and every government should be analyzed further.

In your written work, you speak of the need for African countries to develop a model of economic growth more rooted in the African context, in which less attention is paid to the policy prescriptions of the World Bank and IMF, and greater focus given to satisfying national needs. You talk about the huge importance of the informal sector, in terms of both production and employment. Is it possible for this sector to furnish the foundations for a different growth model in many parts of Africa? What would this imply for the role of government, given its reliance on revenue from formal sources? What might be better forms of education able to respond more adequately to the needs of people for the economy of today and tomorrow?

The informal sector provides the foundations for the real, tangible economy in almost all African countries. It's quite wrong to call this the “informal” sector since it is highly visible, it just escapes the attention of government accounts. Government attitudes towards the informal sector are influenced most of all by a reflex to impose taxation, to increase its fiscal revenues, by targeting any and all activity. It may seem quite normal that, as soon as you start up some business, you must start paying taxes. But as the informal sector sees it, they cannot point to any help that the state provides them, so what are they paying for? Rather, they tend to be targeted and harassed by the state. Countries have always looked outwards, since Independence, seeking to make themselves attractive to foreign investors, and promoting SMEs which can feed into global value chains, as urged by the Bretton Woods institutions. Recentering policy towards addressing local, national, and regional needs requires a very different approach.

Economic policy can be read as a continuation of the colonial model. It's been difficult to reinvent the system to better address national priorities set in a regional context. What might we mean by “reinvent”? If globalization can be seen as an opportunity for national economies to face outwards, responding to local, national or regional needs has to think about local demand, and how to meet it. This includes strengthening abilities within the economic system, in terms of education and training, and the achievement of some degree of autonomy, as a means to assure sovereignty. Africa’s population structure represents a significant asset. Despite the demographic transition, Africa today accounts for nearly 17% of the total world population. While demographic growth rates elsewhere have fallen since the 1960s, to around 1% p.a., the African continent has seen its number of people increase by 2.7% p.a. Rather than see this growth in the number of people in Africa as a constraint and challenge, you could re-frame such differential growth rates as offering great potential, and a great economic opportunity. This would be possible if well thought out public policy could transform this human material into human capital, by re-centering economic models to meet internal demand. However, now, such a demographic evolution increases domestic demand, and based on our current model, we must seek external help to respond to domestic needs. We are almost entirely external-facing, we produce what we don’t consume, transforming very little raw material, and we consume what we don’t produce which is mostly brought in from outside. To find work for Africa’s unemployed, the World Bank recommends investment in training. But we need to ask – what kind of training? They say: professional and technical, and private professional and technical training schools have opened their doors in many an African city. They each offer more or less identical courses, training people in particular skills which they think correspond to the needs of business. This is how the training is sold to parents and apprentices. But there is then an over-supply of young people with this training. There is a failure to clarify what is meant by training and expertise, and many African counties lack a clear vision for what is needed over the forthcoming years and decades. The kind of skills identified are usually those which multinational companies and local businesses involved in export-led value-chains have put forward.

These training needs will likely evolve rapidly, and do not necessarily align either with the opportunistic vision of private training establishments, or with poorly framed state policy for education and training, neither of which show much flexibility. Overall, we see that rates of employment in the professional field for the newly trained – those coming out of the private schools – are just slightly ahead of the performance in the jobs market for those with classical training coming out of the university sector. We can observe that the currently existing solutions for youth unemployment neither respond to the needs of local goods and services nor to the reorientation of the system to respond to the actual needs.

Notably, reinforcing the informal sector capacity, all activities included, to improve its ability to meet day-to-day demands for goods and services at acceptable quality standards. Raising the quality and performance of the goods and services generated by the informal sector, which represents - as we have said - 80% of the real economic life of most countries, could in itself constitute a significant training program to strengthen expertise, create value add, and improve revenues for enterprise, and additions to the country’s overall wealth. By pursuing such well-thought-out policies, the state itself could achieve positive outcomes, in terms of society and equity. And in return, it could see its investment pay a good return through rising tax revenue which would stem from improved economic performance.

Without turning away from the world economy, African countries would nevertheless gain from pulling away from the neo-liberal pretense, and become more sovereign in their choice of economic policy, less subject to the catechism of the Bretton Woods institutions. Remember their mission is to promote economic orthodoxy, which in the case of countries in the South demands that their economies must adjust to neo-liberal norms, at the heart of which is the retreat of the state. Despite this, it is clear from the last thirty years of experience in south-east Asia that, by contrast to the World Bank, low-income countries can only exit from the poverty trap with massive state intervention and protection.

The Bretton Woods institutions know that they operate in situations of penury, a context of long-standing and permanent asymmetry in power between them and the national governments, the latter which is in desperate need of financial resources, for a majority of the time, to manage crises. These are not situations in which alternative ideas can flower and prosper. Let’s compare Africa with Asia or Latin America, all with different political histories. When the World Bank and IMF get off the plane in an African country, they come with expertise and conditionalities which accompany the immediate offer of cash. Given the urgent need for resources, the policy recommendations are bound to be accepted by the government. Within most African countries, no thought is given to ways of responding to internal domestic needs. For African countries, the Bretton Woods institutions know there is no space for reflection to think through economic alternatives, there are no alternative models.

So, the domination of international capital keeps national economies dependent on financial markets through debt, in turn strengthening the persistence of international capital – the reason why in many African countries, you have two economies working side-by-side with no interconnectedness. We have the informal economy which responds to the needs of domestic consumers, while the so-called formal sector which responds to essential needs but is external-facing, heavily taxed by the state due to its visibility, and is limited in scale. The Governments are dependent on the formal sector for fiscal revenues, while the private sector remarks constantly that the high tax rates are a burden – both ignoring the fact that they could overcome these different challenges if they would reinforce the capacity of the informal sector. But African Governments only see how they can impose themselves on the informal sector and not how to support them – the informal sector in Africa responds to the real needs of Africans in every sector, including health. In any African market, you will find stalls with local remedies, alternative medicines and so much else. People very often turn to the informal health sector when they cannot afford the cost of modern drugs, which in turn denies them access to health services. They depend on alternative medicine to continue to care for their health. If Governments really cared about their people, why would they not bridge alternative medicine and the high cost of modern medicine, to ensure the inclusion of people from all walks of life in access to health services taking into account the ethics of both medicine streams? Why not support, for example, a series of research activities to explore the attributes of traditional medicine, and work out questions of dosage? Solutions from traditional medicine can be very effective, however, what stops us from using science to back up prescriptions that can heal ten distinct illnesses at the same time, and guarantee a more inclusive, caring health system for everyone? Why don’t we start work on this? Because we’ve been captured by the interests of large drug companies, who want to protect their markets, and have no interest in what we might term “neglected illnesses”.

In all aspects of life, we have this kind of phenomenon. I chose the example of the health sector, but, equally, you could find the same forces at work in the agri-food business or in the big socio-economic sectors. We ignore the part of the economy which responds to the needs of the large majority and focus instead on those dimensions which insert the African economy into international dynamics, guaranteeing the government a certain basic level of revenue. This is usually just enough to enable it to function, but which demands that it must go into heavy debt in order to invest in the social and economic infrastructure needed to address people’s most basic priorities. I find this discrepancy in our thinking totally incomprehensible.

Many analysts we have spoken to agree that the pandemic has opened up space for African countries to rethink their development choices, speed up regional integration, diversifying their economies, and pursue green growth…. Do you think that we are indeed at a real turning point for economic transformation in Africa and what route would you recommend?

I noticed, that at the height of the pandemic, it was as though the world had ground to a halt. Wherever we were in the world, we began to understand that a big event had happened, and we had to change how we lived. Equally, fairly soon, I noticed that as soon as the sickness levels started to fall, many people were desperate to get back to pre-pandemic “normal”, as though COVID was just a short, bracketed phase in our lives. While the airplanes were nailed to the ground, we had said that we would build a different, better future, more in touch with nature and the environment. Having seen how people have contributed so much pollution, and what happens when it stops.

During lockdowns, we all had generous ideas for changing our lives and bringing us into greater harmony with nature and the environment. It was a time of repentance for the pattern of life we’ve been living, whether in Africa, in Europe, or in America. The pandemic has not hit us as hard as in America and Europe but, in Africa, as elsewhere, our conversations held many promises about living simpler, cleaner lives, and being more respectful of Mother Nature. We all accepted and believed that we had been trapped in a pattern of life that was a dead-end for humanity. But, what happened once the pandemic started to retreat? We went back to our old ways of life! We forgot every promise we’d made a few months before, as though we’d never had this moment for deeper thinking. Despite our ongoing travails with new variants – delta and now omicron – I see no sign at all of people putting such promises into action and living up to the alternative visions we dreamed of at the height of the crisis. I come back again and again to the phrase – reflection on alternatives – because alternative reflections have a cost and demand engagement. It presumes there is some kind of support that makes such reflection possible since thought about a better future cannot come from nothing. But I can detect no shift in fields of research or public policy in Africa as a consequence of the pandemic. Imagine that this thinking is nurtured in closed circles, we see no sign of any shift in approach to our patterns of life or economic system. We seem to find it too difficult to shift our model because we, perhaps, find the current system sufficiently comfortable, with its existing chapels, and prophets. We have not seen new niches emerging in which people seek out alternatives. It’s as though we are face-to-face with a big wall which we have no way of scaling, and the existing model and powers-that-be are securely seated on top of the wall. There is effective propaganda to ensure we all carry on without blinking. If we are to get beyond our current impasse, we must create the space, the determination, and political will, to reinvent ourselves in different parts of the world. But I see absolutely no evidence of this happening. African countries are especially poorly served given their relentless cycle of urgent crises. Political decisions are made almost always in haste, with thoughtful consideration of options seen as a luxury for rich countries alone.

Côte d’Ivoire finds itself in a difficult neighborhood, with a number of northern neighbors – Burkina Faso, Mali, Niger – who are engulfed by jihadist insurgency. What practical measures might countries like yours, Ghana, Benin, and Togo take to push back the threat of jihadism?

Extremist violence and its growth is a persistent threat in coastal West Africa, with some countries like Benin and Côte d’Ivoire having already experienced attacks both in their northern parts, and Côte d’Ivoire experiencing attacks even in its southern parts. This means that this extremist violence is no longer confined to the Sahelian hinterland, and is now moving into coastal countries which are proving to be equally vulnerable. Both types of countries, those who are engulfed by the extremist violence, and those who are only now beginning to experience it, have something in common – social and political fragility as a result of intercommunal tensions and identity crises, linked to either access to land and natural resources in a context of climate change, or the inequalities in the distribution of access to these resources. The forced idleness of youth, due to unemployment, is a fertile ground for jihadist recruitment. The economy of violence and conflict offers an alternative way of life for those with no clear future, and jihadism proposes itself as a means to address some of the big injustices found in our societies. Islamic religious arguments are no more than a front for those who are mobilizing this violent extremism, profiting from recrimination against the government and capitalizing on the multiple and diverse frustrations felt by populations in these countries.

In the Sahelian hinterland, governments are so weak that they are unable to respond to the needs of their people, especially those in marginalized zones. Often with a strong sense of social injustice, and no evidence of government support, these populations are falling prey to those using narrative, political ideology, and violence to establish an Islamic state or a return of the caliphate. The insurgents aim to dislodge Westerners and overthrow the corrupt, puppet states put in place by the Western powers. They finance themselves through a range of illicit activities, the workforce for which are large numbers of young people who would find the formal economy less attractive in terms of compensations. Violent extremism is above all a response to failed development models. A military approach in these areas has not been successful so far, given the continued spread of jihadism. Our modes of governance have failed, and we have not integrated into our understanding the great weakness and fragility of our states. Jihadism can root itself very effectively in the fertile soil created by those forgotten populations, seeking revenge for decades of neglect.

Français

Dans cet entretien, Folashadé Soulé et Camilla Toulmin échangent avec Pr Francis Akindes sociologue et professeur à l’Université Alassane Ouattara de Bouaké. Pr Akindes est président du Conseil scientifique de l'Université Alassane Ouattara, et Directeur des programmes de la Chaire Unesco de Bioéthique. Son champ d'intérêt scientifique est varié et comprend notamment les transitions politiques, la violence politique, l’économie politique des inégalités, l’analyse des politiques publiques et des politiques de sortie de crise.

1 – Le monde subit les effets de la pandémie depuis près de deux ans. Vous qui êtes basé en Côte d’Ivoire, quel regard portez-vous sur les effets économiques mais surtout sociaux de la pandémie dans ce pays, notamment sur les jeunes et leurs conditions socio-économiques ? Quelle évaluation portez-vous sur les mesures prises par le gouvernement ivoirien pour adresser cette crise et est-ce qu’il y a une implication des économistes ivoiriens voire africains dans la définition de ces mesures pour adresser la pandémie ?

D’abord, la pandémie vue d’Afrique, vue de Côte d’Ivoire, a débuté en mars 2020. Comme partout dans le monde, tout s’était progressivement arrêté dans les pays africains. Surtout qu’on y prédisait un développement catastrophique de la pandémie. Nous étions tous appelés au respect des mesures barrières. Pour les Etats, il fallait prendre la décision politique de prendre des mesures de plus en plus radicales : « Est ce qu’il faut confiner la population ou pas ? » Chaque pays se déterminait par rapport à cette décision qui s’annonçait lourde de conséquences sociales, politiques et économiques. Les pays africains l’ont diversement appliquée. Mais ceux qui ont tenté d’appliquer les mesures bio sécuritaires, soit en imposant le couvre-feu ou le confinement ont vu ce que cela a produit comme effets lorsque l’on prend en compte le fait que plus de 80 % des emplois sont dans le secteur informel. Ces personnes qui s’auto-salarient, s’ils arrêtent de travailler du coup, n’ont plus de revenu. Donc leur demander de rester à la maison parce qu’il y a une pandémie menaçante dehors, ne pouvait pas être une solution qui tiendrait dans la durée. Deux ou trois jours après les tentatives de limitation des mouvements, l’on a commencé à assister à des émeutes comme au Sénégal et en Afrique du Sud. Cette approche de la prévention de la pandémie a montré rapidement ses limites. Ensuite, il y a eu les mesures barrières recommandées : le port du masque qui fut une denrée rare et chère en début de pandémie, et la distanciation sociale. Et comme je le disais à l’époque sur plusieurs médias, la distanciation physique et sociale en Afrique est un gros luxe. Le confinement ne recouvre pas les mêmes réalités pour les privilégiés qui vivent en nombre réduit dans des maisons sur des surfaces plus grandes que pour les personnes vivant dans les quartiers populaires. Dans les quartiers populaires, la plus grande partie de la population vit dans des habitats de forte concentration humaine. Sous chaque toit, l’on dénombre en moyenne 7 à 10 personnes. Il est très difficile, lorsque vous demandez aux gens de se confiner en restant à la maison, de ne pas être dans une promiscuité à risque sanitaire. Ce sont des mesures, qui pour une catégorie de la population, se sont avérées très contradictoires dans leur application. Certains pays ont par exemple refusé d’imposer le confinement à leurs populations. Ce fut par exemple le cas du Bénin. Le Président béninois s’est démarqué en disant qu’il ne pouvait pas prendre le risque politique du confinement de sa population parce qu’il n’a pas les moyens de répondre aux contraintes liées aux confinements. Il s’est en revanche engagé à faire respecter les mesures barrières, ce qui fut la position de bien de gouvernements de pays africains lorsqu’il fallait prendre des mesures. Vous avez une catégorie de pays, et ils sont les plus nombreux, qui adoptent ces mesures parce qu’il fallait donner une réponse nationale à des mesures qui sont internationales, portées par l’OMS mais qui fermaient les yeux sur le respect de ces mesures par leurs populations. Tout se passait comme si les États avaient adopté une posture de laisser-faire stratégique, laissant chacun face à ses responsabilités. On fait semblant d’implémenter ces mesures au plan national mais en réalité on reste laxiste face au non-respect de ces mesures en interne. Cette posture est aussi révélatrice de la faiblesse des États. Ces derniers ont fait le choix implicite de ne pas trop surveiller et punir le non-respect des mesures à défaut d’offrir des alternatives économiques crédibles et soutenables aux risques de perte de revenus que peuvent induire une véritable politique de prévention par le strict respect du confinement en période d’incertitude sanitaire. La plupart des gouvernements ont évité de gérer des émeutes que pourrait entrainer le forcing politique dans l’application de ces mesures. D’autant plus que dans chacun des pays, il y a des poches de fragilité, des frustrations structurelles, des plaies de crise mal pansées par endroits qu’une trop grande insistance sur l’application de mesures impopulaires pourraient réveiller ou exacerber. Car les populations africaines ont moult raisons d’en vouloir à leurs États. Et si en période de pandémie ces États se mettent à leur imposer des restrictions, certains peuvent y voir une opportunité politique pour exprimer le ras-le-bol sur fond de vieux ressentiments. Les États ont une crainte de ce type de situation aux issues imprévisibles. Raison pour laquelle, ils se sont tous essayés, avec beaucoup de prudence, à l’application de ces mesures sans trop de zèle. Au plan strictement économique, comme je le disais dans mes propos liminaires, tout s’était arrêté en début de pandémie. Certains secteurs ont été très touchés, notamment les activités liées au tourisme parce que les migrations internationales n’étaient plus possibles. Tout ce qui était lié au secteur du voyage a été touché. Les segments d’activité touchant aux loisirs ont également été affectés : la restauration extérieure, que ce soit dans des lieux ouverts ou fermés, l’industrie du cinéma par exemple et les lieux festifs, les boîtes de nuit qui utilisent beaucoup de personnes. Tous ces commerçants ont été obligés de fermer leurs portes. L’on peut aisément deviner les risques sociaux et économiques liés aux pertes d’emploi dans ces secteurs dont les actifs se retrouvent dans le secteur informel pour bon nombre d’entre eux. Dans une ville comme Abidjan, le secteur de la restauration, dominé par les femmes, beaucoup de ‘maquis’ (appellation locale des restaurants populaires) ont été contraints de fermer. Pendant la phase de couvre-feu tout le monde était obligé de se retrouver dans les murs clos de la maison à 21 heures. Or c’est à la tombée de la nuit que ces lieux de loisirs fonctionnent le plus. Vous vous imaginez donc ce que cela a pu avoir comme conséquence au plan économique pour les ménages des petits opérateurs économiques ! Toutes les structures économiques de la Côte d’Ivoire ont été touchées malgré les dispositions particulières qu’elles ont dû prendre pour minimiser l’impact du covid-19. Les ports qui sont un poumon de ces activités, ne fonctionnaient plus normalement. Du coup, le secteur de l’import-export a été touché. Rappelons que dans un pays comme la Côte d’Ivoire, 90% des échanges commerciaux se faisant par voie maritime et les navires en provenance des pays fortement touchés par le coronavirus à partir de mars 2020 qui chargent ou déchargent d’habitude à Abidjan ne venant plus régulièrement, l’on a pu noter dans tous les secteurs des pénuries de biens de consommation, allant même jusqu’à la pénurie de denrées de première nécessité.

Avec la progression asymétrique de l’évolution de la pandémie entre l’Europe, l’Amérique du Nord et l’Afrique, la catastrophe annoncée n’a pas eu lieu. Au bout de six mois environ, les différents gouvernements des pays africains ont compris qu’ils ne pouvaient pas tenir plus longtemps et qu’il fallait lever progressivement le pied quant aux mesures sanitaires les plus contraignantes surtout pour les économies. Partout en Afrique, la question sur toutes les lèvres était alors de savoir, pourquoi allons-nous continuer à suivre la tendance en Europe et en Amérique et à nous aligner sur des mesures sanitaires si contraignantes pour la survie des économies si nous n’avons pas relevé les mêmes conséquences de la pandémie ? Surtout dans les situations africaines où les États n’ont pas les moyens de compenser les pertes de gains des entreprises et suppléer le déficit de revenu comme cela a été le cas aux États-Unis et dans les pays européens. Je pense à la France qui a fait cet effort en direction de ses entreprises sinistrées. Dans quelques pays africains notamment la Cote d’Ivoire, la promesse du soutien de l’État a été faite, mais elle n’a été tenue que partiellement. J’ai vu voir passer dans les médias et sur les réseaux sociaux des critiques adressées au gouvernement sur la méthodologie du soutien apporté aux entreprises sinistrées et le critère de choix des bénéficiaires de ce soutien. Un an après, tout ce débat sur la question du soutien de l’État aux entreprises s’est vite estompé. Les entreprises, à coup d’adaptation à la nouvelle donne sanitaire, ont essayé de reprendre leurs activités comme par le passé. On en est aujourd’hui à subir les mutations de la pandémie avec les variants du COVID, mais toujours sur fond de réserve des populations quant à l’existence réelle de cette maladie. Dans une ville comme Abidjan, lorsque vous passez des quartiers résidentiels aux quartiers populaires, vous constaterez le rapport différencié aux consignes du port du masque par exemple. L’on porte plus souvent le masque à Cocody qu’à Abobo ou à Yopougon. En début de pandémie, j’ai fait le tour des quartiers parce que il y avait beaucoup de médias internationaux qui m’appelaient pour savoir comment les populations percevaient-elles et vivaient-elles les mesures sanitaires ? Étant ainsi sollicité pour donner des avis, il fallait que j’aille sur le terrain constater et discuter avec les populations, notamment celles des quartiers populaires comme Abobo et Yopougon. La perception de la maladie faisait quasiment l’unanimité chez les gens ordinaires : la maladie n’existe pas, c’est une maladie des Blancs, une maladie des gens qui côtoient les Blancs, c’est-à-dire la maladie de ceux qui voyagent. Ne prenant pas les avions, ils ne se sentaient pas du tout concernés par les mesures barrières que préconisaient l’État. Les pouvoirs publics, conscients du fait qu’ils n’avaient pas intérêt à les titiller sur la question du respect des mesures sanitaires pour les raisons évoquées plus haut, ne faisaient que sensibiliser en évitant de gérer d’éventuelles tensions sur l’acceptation ou non du COVID comme étant une pandémie qui nous menace tous au même titre. Sauf que, dans le déni de la maladie, parmi ces habitants des quartiers populaires, certains travaillent comme personnel domestique (chauffeur, servante, cuisinier, etc …) chez ceux-là même qu’ils estiment être exposés parce que côtoyant les Blancs ou vivant comme les Blancs. Ils vont travailler dans les quartiers comme Cocody, un quartier résidentiel, contractent la maladie sur le lieu du travail et la ramènent chez eux. Malheureusement, obnubilés par les différences de conditions, ils ne font pas toujours le lien entre migration entre les mondes pour raison professionnelle et les risques possibles de contamination même pour ceux qui ne prennent pas les avions, comme ils aiment bien le dire. Cela n’a jamais fait l’objet d’une réflexion systématique qui aurait pu informer la communication pour le changement de comportement face à la pandémie.

Une autre dimension que je voudrais souligner est que si dans les pays africains, la catastrophe annoncée n’a pas été observée, à aucun moment la recherche n’a été interrogée sur les raisons pour lesquelles l’hécatombe ne s’est pas produite. L’on est resté au stade d’hypothèses. La première étant la jeunesse de la population. La deuxième hypothèse étant qu’un effet climat aurait joué en faveur des pays africains. La troisième hypothèse serait l’accoutumance à la consommation de la chloroquine qui aurait produit une immunité collective même partielle. En termes d’explication, l’on navigue encore entre ces trois idées qui ne restent encore qu’à l’état d’hypothèses. Jusqu’à ce jour, l’on ne sait toujours pas pourquoi cette pandémie n’a pas eu la même ampleur qu’en Europe et en Amérique. Voilà par exemple un point de grande fragilité de l’Afrique face à ce genre de risque. L’on n’a pas encore pris conscience qu’il est important de toujours chercher à comprendre de façon rationnelle ce qu’il nous arrive. Ce qui est la fonction et le but de la recherche scientifique. On se réfugie en Afrique dans le discours selon lequel, nous n’avons pas les moyens de financer la recherche parce que nous sommes pauvres et avons d’autres priorités. Justement, nous sommes pauvres parce que nous n’avons pas une culture d’allocation d’une part de nos ressources à la production du savoir qui permet aussi de prévenir les risques ou faire de l’anticipation. Tout se passe comme si nous avons choisi de vivre dans l’obscurité et dans l’incertitude.

Est-ce que les économistes ont accompagné tout ce qui se passait, les initiatives en thème de politique publique face à la pandémie ?

Si cela a été le cas, je ne suis pas au courant. Parce que dans quasiment tous les pays, il y a eu une vraie omerta sur la gestion de la pandémie. Les plans de riposte n’ont pas fait l’objet de débat ne serais-je déjà qu’entre sachants. L’on ne sait jamais comment les décisions sont prises. Je prends tout juste la gestion des mesures aux frontières surtout aériennes dans les pays de la CEDEAO parce que les frontières terrestres ont été fermées. Certains États y ont trouvé l’occasion de surtaxer le test COVID. Je prends l’exemple du Bénin. Pendant que l’UEMOA décide de faire baisser le prix variable d’un pays à un autre à 25 000 F, les autorités béninoises ont maintenu le prix du test covid à 50 000 FCFA. Non seulement elles ont maintenu le prix du test pour voyageur à 50 000 FCFA , elles font tester les voyageurs à l’arrivée au Bénin même lorsqu’ils disposent d’un test négatif au départ, quel que soit le pays d’où ils viennent. Ce qui veut dire que le test est refait au Bénin comme si le test effectué dans les autres pays n’était pas valable au Bénin, comme si ce n’était pas les mêmes objets de laboratoire qui sont utilisés dans quasiment tous les pays. Ce n’est qu’en fin décembre 2021 que le Bénin a mis fin à cette pratique. Il n’y a pas que le Bénin qui soit concerné par de telles ambiguïtés dans les politiques sanitaires de lutte contre la pandémie du covid-19. Il y a là des enjeux économiques et financiers ou des enjeux politiques de l’usage du COVID non encore questionnés dans certains pays pour en comprendre les logiques.

Finalement on se demande si c’est vraiment de la gestion sanitaire aux frontières, la prévention ou encore la protection de la population contre la contamination qu’il s’agit ou si c’est la manne financière liée au test qui est visée. Vous voyez, à des moments donnés, je me pose énormément de questions sur la logique des tests pour les voyageurs précisément parce que, à l’intérieur des pays c’est resté gratuit. Mais les voyageurs par voie aérienne sont considérés comme des privilégiés qui ont un pouvoir d’achat, et on a l’impression qu’on les rackette systématiquement pour cette raison. Lorsque je lis dans les médias que les États africains, pour une fois, ont réagi comme il se doit en mettant en place des plans de riposte contre la pandémie du COVID-19, j’émets quelques réserves. La catastrophe annoncée ne s’est pas auto-réalisée. Mais les réactions diverses et parfois controversées de ces États face au COVID-19 doivent se prêter à l’analyse.

2 - Dans vos travaux, vous parlez de la nécessité pour les économies africaines de développer un modèle de croissance plus endogène, dans lequel moins d'attention devrait être accordée aux prescriptions économiques néolibérales de la Banque mondiale/FMI et plus de réflexion sur la satisfaction des besoins nationaux. Vous constatez l'importance prépondérante du secteur informel, en termes de production et d'emploi. Est-il possible pour ce secteur de fournir la base d'un modèle de croissance différent dans de nombreux pays africains ? Qu'est-ce que cela signifierait pour le rôle de l'État – étant donné sa dépendance vis-à-vis des revenus du secteur formel – et des formes d'éducation mieux à même de répondre aux besoins des personnes dans l'économie d'aujourd'hui et de demain ?

Le secteur informel constitue l’essentiel de l’économie réelle dans presque tous les pays africains. Cette part de l’économie réelle est qualifiée à tort d’informel parce qu’elle se développe sous les yeux de tous mais échappe à la comptabilité nationale. La réaction de l’État vis-à-vis de ce secteur informel, est déterminée avant tout par une logique de ponction fiscale. L’État cherche à l’imposer, à accroitre son assiette fiscale en taxant les activités économiques dont se compose ce secteur et qui échappent son contrôle. Il paraît tout à fait normal que, dans un pays, lorsque l’on exerce une activité économique, l’on paie les impôts. Le problème est que les opérateurs économiques du secteur informel ne se sentent pas du tout soutenus par l’État. Ils sont plutôt traqués par ce dernier. En posture d’extraversion économique depuis les indépendances parce que préoccupés par l’amélioration du monde des affaires pour attirer essentiellement les investissements directs étrangers et favoriser l’émergence et le développement de petites et moyennes entreprises locales s’inscrivant dans la chaine des valeurs tel que le veulent les institutions de Bretton Woods, ces États ont de la peine recentrer les appareils de production sur les besoins nationaux et régionaux. En cela, les politiques économiques peuvent être lues comme étant une reconduction du modèle colonial. Elles éprouvent du mal à se réinventer en replaçant au cœur de la dynamique économique les priorités nationales pensées à l’échelle régionale. Que voulons-nous dire par réinvention ? Si la globalisation constitue une opportunité pour toutes les économies nationales, les réponses aux besoins locaux, qu’ils soient nationaux ou régionaux, doivent être essentiellement locales. Toute économie nationale viable doit d’abord prendre appui sur les capacités de réponses internes aux demandes locales. Le renforcement de la capacité de réponse de ces économies, en termes d’éducation et de formation jusqu’à l’atteinte d’une certaine autonomie doit être un domaine prioritaire de souveraineté. La structure de la population africaine constitue en cela un atout. Car, malgré la transition démographique, l’Afrique compte environ pour 14% de la population mondiale. Pendant que la croissance de la population mondiale se divise par deux depuis les années 1960 pour s’établir à 1% par an, l’Afrique subsaharienne voit sa population croitre de 2,7%. Au lieu de ne voir cette évolution démographique qu’en termes de contraintes et de défis, ce différentiel démographique peut être envisagée comme une potentialité et une formidable opportunité économique. A condition que de bonnes politiques publiques favorisent une transformation de cette ressource humaine en capital humain. Une telle évolution démographique structure de fait une demande interne qui rencontre des réponses plutôt extraverties, d’autant que les économies africaines ont tendance à se tourner vers des réponses extérieures pour la satisfaction de leurs besoins intérieurs, au point de finir par organiser durablement leur propre dépendance vis-à-vis de l’extérieur. Ils produisent ce qu’ils ne consomment pas et ne transforment que très peu (matières premières agricoles) et consomment ce qu’ils ne produisent pas et qui leur vient de l’extérieur. Pour résorber les problèmes de chômage en Afrique, la Banque mondiale conseille aux pays de former aux compétences. Mais à quelles compétences ? Professionnelles et techniques, répond-t-on. Des écoles professionnelles et techniques privées ouvrent leurs portes partout dans les villes africaines. Elles offrent presque toutes les mêmes curricula de formation. Formant aux mêmes métiers et le plus souvent à ceux qu’elles pensent correspondre aux besoins des entreprises, idée le plus souvent vendue aux familles et aux apprenants, ces modèles de formation finissent par saturer le marché de l’emploi. Ce sont là les effets du manque de clarification du concept même de formation aux compétences qui, dans les pays africains, manque cruellement de vision prospective. Les besoins en compétences dont il s’agit sont la plupart du temps ceux exprimés par les multinationales et les entreprises locales inscrites dans la chaîne de production tournée vers les marchés d’exportation. Ces besoins qui peuvent évoluer rapidement entrent souvent en discordance avec les réponses opportunistes des écoles privées et politiquement mal encadrées par les politiques d’éducation et de formation professionnelle, le plus souvent peu flexibles. Et au bilan, l’on constate que le taux de placement des personnes formées - sorties de ces écoles privées - dans le monde professionnel dépasse d’une courte tête les performances des formations classiques dans les universités sur le marché de l’emploi. Des formations qui, elles, ont du mal à se réformer. En toile de fond, le constat global est que les solutions à l’épineuse problématique de l’emploi-jeune ne se focalisent ni sur les besoins strictement locaux en biens et services transformables en autant opportunités de formations dédiées, ni sur la réorientation des capacités du système de formation à répondre en priorité à ces besoins. Notamment en renforçant les capacités des acteurs du secteur informel, tous secteurs confondus, à améliorer leur capacité à faire face au quotidien à ces demandes de biens et services suivant les exigences des normes de qualité. L’amélioration de la qualité des offres de services et de biens dans le secteur informel qui représente 80% de l’économie réelle dans les pays africains peut en elle-même constituer un projet de formation aux compétences, de création de valeur ajoutée, de plus-value pour les opérateurs transformés et une opportunité de création de richesse nationale. A travers de telles politiques bien pensées, l’État lui-même se donne par la même occasion une justification sociale et distributive. En retour, il pourrait voir son investissement maximisé par l’amélioration de l’assiette fiscale qui en découlera. Sans se détourner de l’économie-monde, les économies africaines gagneraient à sortir de l’imposture néolibérale, à être plus souverainistes dans leurs choix de politique économique et moins soumises au catéchisme des institutions de Breton Wood dont la mission est bien de promouvoir l’orthodoxie économique dont la traduction dans les pays du sud est l’ajustement des économies aux normes néolibérales sur fond d’incitation au retrait de l’État. Pourtant, ce qu’il se passe depuis ces trente dernières années dans les pays d’Asie du sud-est, montre bien, contrairement à ce que défend la Banque mondiale, que les pays à faible revenu ne peuvent sortir de la trappe de la pauvreté sans intervention massive de l’État, sans protection de l’Etat. Mais les institutions de Bretton Woods savent qu’elles opèrent sur des terrains de manque c’est-à-dire qu’elles sont en asymétrie de pouvoir face à des États qui ont en permanence des besoins financiers pour, la plupart du temps, gérer des urgences. Elles savent que ce ne sont pas des mondes dans lesquels peuvent prospérer des idées alternatives. Je compare ici l’Afrique à l’Asie ou à l’Amérique latine qui a toute une autre histoire politique. La dynamique en Afrique n’est pas du tout la même. Quand la Banque mondiale et le FMI débarquent dans les pays africains, ils viennent avec une expertise et des conditionnalités qu’ils imposent avec une promesse de décaissement immédiat. Du coup, dans l’urgence, ces préconisations passent. A l’intérieur des pays africains, l’on ne réfléchit pas aux besoins internes et aux mécanismes de réponse aux besoins internes. Les institutions de Bretton Woods savent que dans les pays africains, il n’y a pas d’alternative en termes de réflexion. Il n’y a pas de modèle alternatif. Donc le capital international continue de dominer et surtout de cultiver la dépendance des économies nationales aux marchés financiers à travers la logique de l’endettement. Le phénomène se poursuit dans le temps. Raison pour laquelle vous avez, dans les pays africains, deux économies qui se côtoient sans beaucoup s’interpénétrer tout en ne s’ignorant pas : l’économie informelle qui répond, elle, aux préoccupations internes et puis l’économie dite formelle extravertie pour l’essentiel, mais qui subit la pression fiscale de l’État parce qu’elle est très limitée en taille. C’est sur elle que l’État compte pour améliorer son assiette fiscale. D’ailleurs, dans les pays africains, le secteur privé se plaint constamment de cette pression fiscale excessive des États qui n’ont pas encore intégré qu’ils gagneraient à renforcer la capacité du secteur informel. Or l’État africain ne lorgne du côté du secteur informel que pour envisager comment l’imposer. Comment soutenir ce secteur qui couvre pourtant tous les domaines de la vie réelle ? Le secteur informel en Afrique répond à tout, même aux besoins de santé. Dans les villes africaines, vous avez des étals de pharmacopées sur les places des marchés, des offres de médecine alternative et tout un tas de choses. C’est toujours vers le secteur informel de la santé que les populations courent lorsqu’elles se retrouvent face aux défis de cette médecine moderne très coûteuse qui finalement les exclut de l’accès au droit à la santé. C’est cette médecine alternative qui leur permet de continuer à se soigner. Pourquoi, au bénéfice des usagers, un État sérieux ne travaillerait-il pas à trouver un compromis entre ces offres alternatives et le coût exponentiel exclusif de l’accès à la médecine dite moderne, avec toutes les précautions éthiques qui s’imposent ? Pourquoi ne soutiendrons-nous pas plus sérieusement les programmes de recherche sur la pharmacopée, aider à résoudre les problèmes de dosage souvent opposés à la pharmacopée ? Les solutions proposées par la pharmacopée peuvent être efficaces. Mais lorsque l’on vous dit que les mêmes produits guérissent dix (10) maladies, il y a de quoi soumettre cette assertion au filtre de la raison scientifique pour espérer garantir aux populations une offre de pharmacopée plus rationnelle et bienveillante. Pourquoi ne pas le faire ? Parce que nous voulons protéger le marché des médicaments pour les grands laboratoires pharmaceutiques qui n’ont aucun intérêt par ailleurs à investir dans les recherches pour ce que l’on appelle aujourd’hui « les maladies négligées » ? Dans tous les secteurs de la vie, vous avez ce type de phénomène. J’ai pris le cas de la santé mais vous pouvez retrouver la même chose dans l’alimentation et dans les grands secteurs socio-économiques. Nous préférons laisser en rade la part de l’économie qui répond aux besoins de la grande majorité et nous focaliser sur celles qui insèrent les économies africaines dans une dynamique plutôt internationale mais qui finissent par garantir à l’État un minimum fiscal, lequel ne permet justement pas à l’État de fonctionner ; ce qui l’oblige de fait à s’endetter pour répondre aux demandes minimales en termes d’infrastructures économiques et sociales de base. C’est ce hiatus qui me paraît incompréhensible.

3 - Plusieurs analystes s’accordent pour dire que la pandémie offre une occasion aux pays africains de repenser les modèles de développement et d’accélérer l’intégration régionale, la diversification de l’économie, une croissance verte, …Pensez-vous également que nous sommes à un moment charnière pour la transformation économique du continent et quelles sont les pistes que vous avancez ?

Ce que je constatais, c’est que au plus fort de la pandémie, le monde semblait s’est arrêté. Et nous avions tous commencé par comprendre que, quel que soit l’endroit où nous nous trouvions dans le monde, il y a quelque chose qui ne tourne pas rond et que nous devons changer nos modes de vie. Aussi, quelques temps après, j’ai pu constater que nous étions tous pressés de recommencer comme par le passé dès que les premiers signes de reprise, dès que les premiers signes de recul de la pandémie ont été observés. Nous sommes repartis comme si la pandémie n’était juste qu’une parenthèse dans nos vies. Pourtant, on se promettait d’avoir un rapport plus sage à la nature, lorsque les avions étaient cloués au sol, pendant que les signes de la pollution se sont tassés et qu’on constatait nous-mêmes que nous polluons la nature, que nous sommes les destructeurs de cette nature. Dans les moments de confinement généralisé, on avait tous des idées généreuses vis-à-vis de la nature, vis-à-vis de l’environnement. C’était le temps de la repentance sur la manière dont nous vivions jusque-là. Il en était de même en Afrique comme en Europe ou en Amérique. Certes, la pandémie ne nous a pas touché comme elle a touché l’Amérique du Nord et l’Europe. Mais dans toutes les conversations, en Afrique également, nous nous faisions également les mêmes types de promesses : vivre plus sainement et simplement ; moins violenter la nature ; réapprendre à vivre de l’essentiel. L’on se rendait bien compte qu’il fallait sortir du style de vie trépidant qui était sans issue pour l’humanité. Mais dès que les activités économiques ont repris parce que on a observé un recul de la pandémie, nous avons recommencé à vivre comme par le passé. Nous avons oublié la promesse que nous nous sommes faites quelque mois avant, comme si cette réflexion n’a jamais eu lieu. Malgré la présence des variants delta et maintenant omicron, je ne vois pas de signe de mise en exécution de cette promesse, de cette réflexion qui appelait à vivre autrement au plus fort de la crise de la pandémie.

Je reviens chaque fois sur le mot ‘’alternative de réflexion’’ parce que la réflexion alternative a un coût et suppose un engagement. La réflexion alternative suppose qu’on la finance parce que la pensée pour l’action positive ne naît jamais ex nihilo. Je ne vois aucun signe qui marque la différence sur le terrain de la recherche en Afrique et même des politiques publiques. Supposons même que cette pensée se développe dans des cénacles fermés, je ne vois ni de signe ni d’engagement en faveur d’une autre façon de faire l’économie et de vivre. Nous avons du mal, ici et ailleurs, à nous fixer de nouveaux horizons parce que j’ai le sentiment qu’on est assez confortable dans le modèle actuel, qui a ses prédicateurs, ses chapelles. On ne voit pas émerger de nouveaux lieux de réflexion pour envisager un autre monde, une autre façon de réfléchir et de vivre. Tout se passe comme si l’on était en face du mur de l’impossible réinvention de soi parce que le modèle dominant est bien assis sur ses rocs. Il a ses supports de propagandes qui continuent de fonctionner et il laisse penser que l’on n’a rien à faire d’autre que de continuer à vivre sans sourciller. Maintenant pour qu’il y ait cette alternative dans la façon de penser et de vivre, il faut qu’il y ait une détermination, une volonté politique de nous réinventer dans les différentes parties du monde, ce que je ne sens absolument pas venir, de toutes les façons. Encore moins dans nos pays africains qui ne gèrent que des urgences, Dans ces pays dans lesquels quasiment toutes les décisions politiques se prennent dans l’urgence, il n’y a pas le temps de la réflexion encore perçue comme un luxe pour pays riche.

4 - La Côte d'Ivoire est dans un voisinage difficile avec plusieurs pays au nord – Burkina Faso, Mali, Niger – très gravement touchés par les insurrections djihadistes. Quelles mesures pratiques la Côte d'Ivoire et le Ghana, le Bénin et le Togo voisins peuvent-ils prendre pour éloigner le risque d'infection par ces groupes ?

Le risque de développement de l’extrémisme violent est grand dans les pays côtiers. Et d’ailleurs, certains pays côtiers comme le Bénin et la Côte d’Ivoire subissent déjà des attaques dans leurs zones septentrionales mais aussi dans la partie sud pour la Côte d’Ivoire. Cela veut dire que le phénomène sort du périmètre de l’hinterland et touche désormais les pays côtiers tout autant exposés. Ces pays qui sont sous la chape des mouvements extrémismes violents et ceux de la côte qui n’ont connu que quelques attaques ont quelque chose en commun. Ils connaissent plusieurs fragilités allant des questions identitaires aux tensions intercommunautaires liées, soit à l’accès aux ressources naturelles en situation de changement climatique, soit aux inégalités dans la répartition des ressources. L’oisiveté des jeunes, rongés par le chômage constitue pour eux une fabuleuse opportunité d’enrôlement. L’économie de la violence se présente dans de tels contextes comme une offre d’alternative aux vies sans projet et une réponse toute faite proposée par les mouvements djihadistes à la demande sociale de justice distributive. L’argument religieux islamiste n’est qu’une imposture que mobilisent les ingénieurs de l’extrémisme violent, profitant ainsi des récriminations contre les États et capitalisant ainsi les frustrations de diverses natures. Dans les pays de l’hinterland, l’on est confronté à des États affaiblis qui n’arrivent plus à répondre aux besoins de leurs populations, surtout celles qui vivent dans des zones de relégation géographique. Vivant avec un sentiment d’injustice sociale, et en situation d’absence de l’État, elles sont réceptives au discours et à l’idéologie politique de l’utilisation de la violence pour instaurer un État islamique ou rétablir un califat. Selon leur logique, il faut déloger les Occidentaux et fragiliser les États fantoches et corrompus qu’ils auraient, selon eux, contribué à installer à la tête des pays africains. Ils se payent sur les ressources glanées via les économies criminelles dans lesquels s’insèrent massivement ces jeunes qui accèdent par ce biais à un revenu parfois bien supérieur à ce qu’ils auraient gagné en travaillant honnêtement. On voit bien que l’extrémisme violent est avant tout un problème de développement. La réponse sécuritaire militaire qu’on tente d’y apporter montre tous les jours ses limites puisque le mouvement s’étend. L’on n’a pas encore assez intégré que c’est aussi le résultat de l’affaiblissement de l’État et de l’inadéquation des modèles de gouvernance qui le caractérise. En clair, le djihadisme trouve dans le besoin de revanche des oubliés de l’État un terreau fertile pour son expansion.

Book Review: Village Ties: Women, NGOs, and Informal Institutions in Rural Bangladesh by Nayma Qayum

Published by Anonymous (not verified) on Wed, 12/01/2022 - 11:14pm in

In Village Ties: Women, NGOs, and Informal Institutions in Rural BangladeshNayma Qayum explores the role of non-governmental organisations in involving women in the political and development process in rural Bangladesh. This book contributes to scholarship that attends to ordinary people’s lived experiences to understand how marginalised communities solve political and social problems, finds Ritwika Patgiri.

Village Ties: Women, NGOs, and Informal Institutions in Rural Bangladesh. Nayma Qayum. Rutgers University Press. 2021.

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At Independence, Bangladesh was one of the poorest countries of South Asia, poorer than both India and Pakistan, the two countries with which it shares its legacies and history. Bangladesh celebrated 50 years of its independence in 2021, becoming a curious case for all development economists. The country saw a massive famine in 1974, but its growth from then on is indeed miraculous. It is now one of the world’s fastest-growing countries with an average life expectancy higher than India and Pakistan.

But what this story often misses out is the role of women in this development. ‘When poor women from the global South make headlines, it is often as oppressed victims rather than inspiring readers’ (7). Nayma Qayum’s Village Ties starts with this very sentence, setting off her attempt to explore the role of non-governmental organisations (NGOs) in involving women in the political and development process.

Qayum focuses on Polli Shomaj (PS), which translates to rural society, a rural civil society organisation implemented by the Bangladesh Rural Advancement Committee (BRAC). Polli Shomaj has been described as a platform that enables the rural poor to raise their voice, gain better access to locally available NGO resources, address systematic inequities, take collective action against exploitation and social injustice and play a more active civic role. The PS women have defied stereotypes of rural poor women of the Global South, the image that looks at them as ‘backward’, ‘isolated’, ‘helpless’, ‘oppressed’ and needing to be ‘liberated’. The book narrates how these PS women can change politics, what development for women really means and how neoliberal notions of development do not always give the complete picture.

The book poses two important questions at the beginning – first, if development programmes can bring about institutional change in the rural Global South; and second, if these programmes can shift the relationships between women, the state and society. The book argues that while neoliberal development focuses on the individual, programmes focused on the collective (like PS) can lead to institutional change if they encourage decision-making, target anti-oppression as a goal and are embedded in the community (8). PS is explored as an alternative to the neoliberal development model in challenging the injustices prevailing in society.

Image Credit: Pixabay CCO

The book admits that NGOs have played a complicated role in the development of Bangladesh. While NGOs can work as agents of neoliberal development, they can also provide critical services in the absence of the state. There is also a third way they function, a position in between in a world faced with the challenges of globalisation, neoliberalism and patriarchy, which Qayum focuses on (9).

Starting with a gendered history of Bangladesh and the context that gave rise to the emergence of PS, the book notes how women’s movements in the country, which were once tied to nationalist movements, have now become NGO-ised over time. The Bangladesh government’s aid-based development strategy has largely seen women as welfare recipients, but the subsequent NGO-isation has shifted the focus from ‘collective mobilization’ to ‘service delivery’. This includes a shift from civic awareness and women’s mobilisation to service delivery like microfinance (34). Women’s need to break away from patriarchal norms has only recently become part of the development story.

Qayum further looks at the role of informal institutions around gender and how these institutions affect everyday lives. By looking at both formal and informal institutions, Qayum also focuses on the networks that women in rural Bangladesh embrace. The role of networks in development theory is a recent field of study. While Qayum mentions that her book adds to the literature on informal institutions and feminist institutionalism, it is worth noting that Qayum has also highlighted the role of the networks that PS members have built. Personal networks have helped PS members create an organisational infrastructure that members can navigate as they mobilise.

The book also highlights the role of PS members in battling social evils like dowry, child marriage and violence against women. In rural Bangladesh, legal issues regarding these often get resolved using a combination of formal and informal rules, sometimes so complex and overlapping that it is difficult to differentiate between formal and informal institutions. Informal institutions exist alongside formal institutions, which may not always be undesirable. For instance, in Chaper Five Qayum discusses how women can initiate divorce based on Muslim law, but rarely do so.

PS groups often negotiate with the state and society to enact institutional change. PS members further increase women’s access to the law in times of legal disputes, even though gender-related matters are quite complex (for instance, a woman seeking a divorce but not specifying anything about domestic violence). PS groups play a community leadership role in bringing justice to women and connecting poor people to the informal legal system. The access to shailish that PS groups seek to mobilise for the women provides them protection and an opportunity to access laws that align with formal rules.

The book’s last chapter looks at women’s representation in local governments in Bangladesh and how PS has changed this. PS groups play a major role in campaigning and, hence, in local governments. Qayum notes that South Asian countries have had histories of women leaders, but women’s participation in politics vanishes when looking beyond the elites. Women’s lack of representation in politics in these countries is tied to their role in the community (132). There are also added questions about honour and reputation, which women are often considered the defenders of. Few women can campaign at night or even visit public spaces, which are often male-dominated.

Qayum shows that PS groups choose a range of candidates to represent them. They are members of an NGO (mostly BRAC), are embedded in the community, have leadership qualities or are educated. The candidates may not necessarily be poor but are connected to both elites and village community groups. Thus, these candidates’ choices can be exclusionary to ‘ordinary’ women. While PS groups mobilise candidates to push past gendered institutions, they exclude women who do not possess these attributes.

Qayum’s book uses mixed methods with quasi-experimental research. The book explores the role of a platform that mobilises and empowers rural women by providing them agency and access. At the same time, this mobilisation and empowerment work in multiple ways. While PS groups can push a mother not to marry off her daughter at a young age, there is also a chance of the mother not having the agency within the family to push for this despite being convinced by PS members. The book contributes to the emerging literature that studies ordinary people’s lives through their lived experiences by discussing how marginalised people solve political and social problems. As the book makes clear, rural societies in the Global South are changing and transforming – the role of women and women’s groups in these societies are evolving too.

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 and Political Science. The LSE RB blog may receive a small commission if you choose to make a purchase through the above Amazon affiliate link. This is entirely independent of the coverage of the book on LSE Review of Books.

 

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