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Tuesday, July 07, 2009

The plight of development in Africa

Some people say Africa is destined to lag behind in the process of development. If we look back the farming history of human, we can see that farming in Africa appeared far later than that in Eurasia. As mentioned in Diamond’s famous book, “Gun, Germ and Steel”, unfavorable climate and absence of potentially domesticated plants and animals are the main reasons of backwardness in agricultural development. Transformation from hunter-gatherer to agrarian mode of living is the key to the advancement of civilization. Farming allowed more stable food supply and therefore supported the living of those who might not practice farming. They could take part in activities that were conducive to the advancement of civilization. But can we simply conclude that only“geodeterminism” is to blame for the poverty of most African countries.

“Geodeterminism” may be part of the story but it can’t be the only reason that explains the failure of economic development. Zambia, an African country endowed with copper mines, is a vivid illustration of “natural resource curse”. Just like other resource-rich countries, leaders of Zambia once believed that natural resources could bring enormous revenues to the country, lifting millions from poverty. There was a brief success in economy built upon mining industries. With economic success firmly hinged on the fate of mining sectors, the government channeled most resources to support mining industries at the expense of those that should normally be spent on public services such as education and health care. Policies in favor of the mining industry only fed a group of oligarch, which became a major impediment in the subsequent economic reform that would benefit society as a whole but hurt a minority of vested interests. The success of resource based economy would have sustained as long as the assumptions of upward price trend and low price fluctuation remained valid. The above assumptions were in fact far from reality. Plummeting copper price was a blow to the economy of Zambia. Raising tax rate was the only option left to keep the government functioning. Owing to the huge gap between people’s expectation and what the government could actually deliver, social unrest and even civil war were inevitable and this entailed a vicious cycle of war and poverty. When the ruling party planned to appropriate more money for improving infrastructure and public services of the country that would lay the foundation for the development of a more balanced economic structure, resistance from vested interests would stem any reform from its budding stage.

Natural resource endowments are not always a bless to a country. Poor governance makes the ‘natural resource curse’ a self-fulfilling prophecy. The government should use the money well especially in the areas of education and infrastructure because they are the foundation essential for a more balanced economic and social development.

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