Coming Soon: South Sudan, World's 193rd Country

98.83%--that's the percentage of South Sudanese voters who chose independence at the polls in December 2010. As someone not naturally disposed to fairy-tale endings, it is nonetheless heartening to note that the South Sudanese are firmly on the road to independence. On 9 July, it will become official--South Sudan will become the world's 193rd country. In a manner of speaking, it's the latest in a still-unfolding saga of Africans coping with borders most often arbitrarily drawn up by imperial powers. The white man's territorial demarcations have often been contested with huge losses of life.

While flipping through the LSE alumni magazine Connect, I found a very interesting article by Mareike Schomerus on this very topic. As you'd have guessed, severe challenges remain. While Khartoum was a distant and rather non-functional government, it is unfortunately the case that Juba isn't much of an improvement in governance at the present time. Even if replacing a remote Arab-Muslim regime with a local African-Christian/animist one is clearly desired, symbolism needs to be backed up by action. And so it is that the world's newest country will face classic state-building problems from inception--infrastructure, education, and other public services need to be provided for by a fledgling state:

Unsurprisingly, when the [election] results were announced a few weeks later, an
overwhelming 98.83 per cent of the southerners who went to the polls had voted
for independence. Although there were reports of rigging and forced voting, it
was clear that the Southern Sudanese wanted to leave Khartoum behind.

The decision on independence had been a long time coming. Southerners often refer to this moment as “a correction”: they think that Sudan should have been split in two at independence in 1956 to reflect what they see as the distinct characters of the two parts of the country. Instead, a bloody civil war ensued between north and south and lasted, with a brief respite in the 1970s, until the signing of the 2005 Comprehensive Peace Agreement. The referendum on independence was anchored in the peace agreement, an ambitious undertaking in a country with minimal to no infrastructure and a largely illiterate population that had suffered tremendously from decades of war violence.

There too is the problem of building identification with a new state whose past has not been very functional. Hence the resort to alternative providers of security (militias), settlement of land disputes, and the allocation of water:

Significantly, many citizens of the nation felt only a tenuous connection to a government that has delivered limited improvement since the peace deal was signed. People resorted to what they had known during the war: to rely on violence for survival. The fledgling state structures provide limited rule of law or justice procedures to stop violence. In the new independent country, providing reliable state structures and connecting to the citizens who have voted the new country into existence will be the government’s main challenge.

Yet it is not only the government that is important. People living close to the new north-south border, with minimal connection to the far-away government structures of Juba, tend to organise their lives not with the help of their government, but despite the government. Few people in the marginal areas of South Sudan – and the margin here is very large – expect change and governance to come from Juba. For many, the state has been so conspicuously absent as an accountable organising force that other governing mechanisms are more important. These might be local institutions to deal with crime, to mitigate disputes over land usage, to administer water sources.

It will take a long time to effectively devolve South Sudan from the central government, so it is necessary to better understand how in reality people tackle the challenges of their everyday lives. To make use of such local structures for development policies requires a deep understanding of how they work and whether they are fair and of equal benefit to all. It may be trite but true: South Sudanese are better of devising their own form of government which builds upon customs and tradition instead of importing Western institutions wholesale. Let's just say the latter path has not fared so well.

Before I conclude, also see a recent Christian Science Monitor article on the challenges of regularizing South Sudanese rebels, the Sudan People's Libertion Army SPLA. While the SPLA was one of the major parties during the peace talks which led to the 2005 agreement, let's say that its revolutionary ways have not yet been redirected towards keeping the peace instead of mounting regular skirmishes with the north.

It's going to be a long, difficult process, but nobody said that independence was an easy option--especially in a place which has virtually known little but hardship.

Mapping Chinese Investment in Africa

Like in practically every other continent, China has made itself a force to reckon with in Africa. I have thus had a very long string of posts [1, 2, 3, 4, 5, 6, 7, 8] examining its role and the views other have of China investing there. These range from the helpful and benign ("South-South cooperation") to the exploitative and malign ("the yellow man's burden"). While I still very much recommend Jian Ye-Wang's IMF research paper "What Drives China's Growing Role in Africa?" for those looking for a more comprehensive review, our friends at the World Policy Journal have a handy single-page geographic review depicting where and how much China is investing in various African nations.

Here's hoping you find it informative!

Why Remittances Matter So Much More Than Aid

This Thursday, Labour MP and Shadow Secretary of State for International Development Harriet Harman is going to give a talk at the LSE on the moral imperative for rich countries like the UK to devote 0.7% of their GDP to development aid. While the history of why we have this 0.7% aid target is an interesting one, let's also consider how aid figures into the larger scheme of capital flows to LDCs.

The graphic above (click for a larger image) from the UN International Organization for Migration's World Migration Report 2010 depicts workers' remittances alongside official development aid to developing regions. In every single region of the world expect for sub-Saharan Africa, remittances far outstrip official development aid as a source of capital flows. And, with innovations for sending international remittances to the region coming online, I believe it's only a matter of time before remittances to SSA edge past aid flows.

Think about it: the World Bank estimates that $440 billion in remittances went to developing countries in in 2010. If so, why do remittances receive far less attention than aid? The white man's guilt is evident in efforts of celebrity activists of this world to shame rich countries into pumping more aid--a message that obviously resonates with politicians like Harriet Harman. Perhaps they ought to change their message in light of this economic reality. Although "send remittances to the world" may not have the same punch and emotional resonance as "feed the world," there is precious little to suggest that aid butters the bread of more LDCs than remittances.

Lastly, it reinforces how a truly globalized world should look like where goods, services, capital and labour are mobile instead of today's world where so many restrictions exist for the latter. The image above only begins to hint at the possible increases in global welfare from dismantling borders--quite possibly a doubling of global GDP--but let's say not everyone is ready yet for such a world. Still, instead of fighting tooth and nail for small reductions in trade barriers or increasing comparatively trivial amounts of aid, perhaps rich country politicians should consider how their migration regimes prevent such desirable outcomes if they're really interested in promoting development. So if there's an IPE issue that matters for the future, it isn't aid or trade but most likely migration.

Harriet Harman, are you listening?

WikiLeaks: Shell 'Infiltrates' Nigeria, Hugo Bossed

I can hardly believe that this is my third post on WikiLeaks. After cataloguing typical American double-speak on "Internet freedom" (whatever that is) and suggesting that WikiLeaks move to Montenegro if survival is its goal, we now have two interesting entries.

First, I have in the past featured the highly controversial activities of Royal Dutch Shell in Nigeria. To say that its activities in the Niger Delta and relationship with the Ogoni tribe are controversial is to put things mildly. Now we have these cables in which American officials claim that a Shell executive boasted of infiltrating the Nigerian government. From WikiLeaks' media partner The Guardian:

The oil giant Shell claimed it had inserted staff into all the main ministries of the Nigerian government, giving it access to politicians' every move in the oil-rich Niger Delta, according to a leaked US diplomatic cable.

The company's top executive in Nigeria told US diplomats that Shell had seconded employees to every relevant department and so knew "everything that was being done in those ministries". She boasted that the Nigerian government had "forgotten" about the extent of Shell's infiltration and was unaware of how much the company knew about its deliberations.

The cache of secret dispatches from Washington's embassies in Africa also revealed that the Anglo-Dutch oil firm swapped intelligence with the US, in one case providing US diplomats with the names of Nigerian politicians it suspected of supporting militant activity, and requesting information from the US on whether the militants had acquired anti-aircraft missiles.

There's another story that caught my eye. I have never been much of a fan of Venezuela's so-called Bolivarian Revolution insofar as it has done rather worse by its people in the aftermath of expropriating several Western oil companies. If you kick the foreigners out, I'd be a heck of a lot more impressed if you could at least sustain output at pre-nationalization levels. Let's just say Hugo Chavez hasn't achieved this feat. Talk about ideology trumping reality. Worse, for lack of technical expertise, it's said that he's asking same Western companies he kicked out to come back on terms more favourable to them. Not very impressive; Simon Bolivar probably wouldn't approve:

Venezuela's tottering economy is forcing Hugo Chávez to make deals with foreign corporations to save his socialist revolution from going broke. The Venezuelan president has courted European, American and Asian companies in behind-the-scenes negotiations that highlight a severe financial crunch in his government. Venezuela's state-owned oil company, PDVSA, is the engine of the economy but buckled when given an ultimatum by its Italian counterpart and has scrambled to attract foreign partners, according to confidential US embassy cables released by WikiLeaks.

The memos depict an unfolding economic fiasco and suggest some of Chávez's key allies – Argentina, Brazil and Cuba – are gravely concerned at Venezuela's direction. "President Chávez, for his part, is acutely aware of the impact the country's general economic trajectory has had on his popularity," says one cable...

However, in separate private conversations with the [American] ambassador, Patrick Duddy, industry figures detailed the parlous state of the industry. A senior manager from Chevron estimated the state oil company's output at 2.1m to 2.3m barrels per day, well below official declarations of 3.3m.

And then there's the humiliation of Hugo as he calls back the conquistadores:

Italy's ambassador to Caracas, Luigi Maccotta, told his US counterpart that [national] Italian oil company ENI squeezed PDVSA over an Orinoco belt deal in January this year knowing it had no one else to turn to. The Italians delayed the signing by two days to reinforce the Venezuelan government's "need for ENI". Paolo Scaroni, the company's CEO, then faced down Venezuela's oil minister, Rafael Ramirez, over changes to terms and conditions.

"Thirty minutes before the ceremony was supposed to begin Scaroni told Ramirez: 'Take it or leave it, I can get on my plane and move on.' Ramirez apparently used that half an hour to convince President Chávez to accept all of ENI's proposed changes or risk losing the deal," according to the US cable. The Italians said they would not pay PDVSA a standard signing bonus because the company already owed them $1bn.

Colour me unimpressed, Hugo.

Cash-Strapped West = Declining Aid to Africa

Who's to provide aid to Africa when many developed countries themselves could use some inflows? It seems this article is obvious enough: as more and more Western countries come under pressure to rationalize their fiscal policies, among the items on the "to-cut" list is overseas development aid. The trigger-happy UK coalition has supposedly "ring-fenced" foreign aid and then some, but the situation may not be the same in other countries once the reality of more austere times sets in. What are the geopolitical implications of bean-counting Western countries? Answer: African countries coming under the greater influence of free-spending China.

From the Nigeria's Daily Trust (c/o All Africa) comes this feature in which the Chief Economist of the African Development Bank Mthuli Noube cautions African states to prepare for this seeming inevitability:

Foreign aids inflow from donor countries are drying up and in the next 15 years, many poor African countries may not be able to access the window, Chief Economist of the African Development Bank Group (AfDB) Professor Mthuli Ncube has alerted. He attributed the new trend to several economic factors that are redefining economic relations around the world, some of which include the economic recession in Europe and America, and Africa's new economic partner - China.

Economic recession has forced some European countries like Britain, France, Germany, Ireland, Greece and Portugal to consider austerity measures with rising concerns that immigration and development budgets may be stifled. From 1960 to 2008, foreign donors have pumped over $650 billion in aids into the continent with a population of about one billion people...

Professor Ncube said African countries must focus on building infrastructure and strengthening intra-continent economic ties. China, he said, has introduced a new model to aid through its policy of 'resources for infrastructure'. Chief Investment Officer, Private Sector Department of AfDB Godfrey Mwindare told this reporter in Tunis that the entrance of China into Africa would create competition and fair deal, and that the continent is not currently benefitting from its extractive resources.

Africa's trade with China has doubled every three years since 2000 and hit $107 billion in 2008, eclipsing the United States as the biggest trading partner. Trade with China fell to $90 billion in 2009 because of the global recession. But the US Commerce Department said trade ties with Africa fell from $141 billion in 2008 to $86 billion in 2009.

Some 800,000 Chinese workers are now in Africa, according to a website that focuses on China in Africa, www.saiia.org.za. Addressing a press conference last Friday top economist and former CEO of France's international development agency, the Agence Française de Dévelopement Jean-Michel Severino said Africa has come of age to decipher its needs, and that the era of compassionate aids was over.

So the rise of China in relation to the West has manifold implications on other parts of the world. As we've asked many times before [1, 2, 3, 4, 5, 6, 7, 8], has the yellow man's burden replaced the white man's burden or do the Chinese something more constructive than the colonizers of yore? In particular, do proceeds from China's hunger for natural resources benefit more folks and create jobs in Africa?

Also see a recent post looking at historical aid flows from 1960 to the present.

Africa's Security, Governance & Development Nexus

I was very intrigued by this contribution from Knox Chitiyo from the Royal United Servicemens' Institute (RUSI) to our IDEAS maiden publication commemorating the launch of our African International Affairs programme. However, it's only now that I've had the chance to mention it. The general gist is that security, governance and development are interlinked in Africa. Whereas most tend to come at it from one of the three perspectives, it is perhaps better to view them as a set of overlapping challenges.

While the likes of William Easterly think that traditional development scholars mucking about with security matters is beside the point--see his criticism of Paul Collier's advocacy of intervention [1, 2]--there may be a path that is less activist yet keeps security matters in sight as a precursor and not a side-issue to economic development:

The 2002 transition from the organisation of African Unity (OAU) to the African Union has been the catalyst for an African road map for Africa’s Security Architecture (ASA). The AU, and the regional and national organisations to which it is linked, have four main premises for Africa’s security.

First, although recognising the importance of partnership and assistance from external stakeholders, there is recognition that it is Africa which takes primary responsibility for its security.

Second, Africa’s security road-map requires a formal framework, agreed at continental level and implemented at various levels, if it is to have any real-world applicability. this has led to the consensus on an AU led African Security Architecture framework. The ASA articulated the challenges and opportunities for security in Africa, and offers a long-term road map for embedding security in the continent.

Third, in terms of its hard security parameters, the ASA recognises the need to build capacity for African forces to cope with peace and stabilisation efforts. this in turn requires the increased professionalisation of Africa’s militaries and improved coordination of continental, regional and sub-regional militaries for alliance operations. the establishment of the regional Africa Standby Force (ASF) brigades in each of Africa’s regions is intended to strengthen the work done by AU peacekeeping forces. AU forces have achieved a great deal in peace operations, but because they often operate as allied but national forces under an AU aegis, there have been long term problems of equipment interoperability, logistics (particularly lack of air power), command and control, standard operational Procedures (soP) and funding. the establishment of the AsF, with its permanent regional depots, is intended to build sustainable capacity and capability, as well as to shorten reaction times.

Fourth is the realisation that Africa’s security, governance and development are interlinked. In this regard, the AsA should be seen as part of what we might call a wider African Security, Governance and Development (ASGD) architecture. there are no rigid barriers between security, governance and development, Indeed, the conditions under which regional and continental forces can intervene include situations in which a governance and/or development crisis creates insecurity (for instance, military coups or extreme environmental crises). This securitisation of development, which recognises that security is a prerequisite for sustainable development, is important. Also important and often ignored is the ‘developmentalisation’ of security; i.e. the recognition that security forces can, and should on occasion, contribute directly or indirectly to development. this developmentalisation of security is already becoming the ‘new wave’ in the security-development nexus. It has been spurred by the global recession, by the growth of civil society in Africa, by the increasing professionalisation of Africa’s militaries and by questions regarding wealth distribution in Africa.

It relates to longstanding questions about the nature of the state in Africa, about the role of the military, and about whether militaries can engage in non-traditional projects such as state-building. This has been a major issue for allied forces in Afghanistan and Iraq – it is also a question which the ASF and Africa’s militaries will have to engage with. This is one of a number of challenges and opportunities for Africa as it creates an ASGD. the increasing interaction of Africa’s governance, security and development institutions is fundamental for the continent as it seeks to widen its footprint in the global system. This entails ending, or at least moderating, the traditional compartmentalisation and mutual distrust and antipathy which characterised relations between the security, justice, political and development sectors.

Time to Join the Fight Against Maritime Piracy

Later this morning I'll be off to the International Maritime Organization (IMO) headquarters here in London to participate in the launch of a new initiative called Seafarers' Rights International. In essence, it's a response by various stakeholder groups to the plight of seafarers travelling through the volatile Gulf of Aden where still-rampant piracy endangers not only crewmen but also world trade. While I'm not much of an activist, I'll make an exception here since my country sends somewhere between a fifth to a quarter of all seafarers worldwide. Not coincidentally, today (23 September) is also the UN-designated World Maritime Day. Here is a brief description of what we're up against from the press blurb:

Piracy and crime at sea have been problems throughout history. But, in recent years, there has been a dramatic upsurge in the threat to shipping and crews, particularly with attacks originating from the lawless coastal regions of Somalia. 2008 saw an increase in attacks on shipping in the Gulf of Aden from pirates operating out of certain coastal regions of Somalia. In that year 111 ships were attacked. By 2009, the number of ships attacked had increased to 217, with 47 vessels and 867 crew taken hostage.

Currently there are 354 people being held hostage (including Paul and Lynn Chandler). Their nationalities are Indian, Sri Lankan, Greek, Pakistani, Filipino, Sudanese, Ghanaian, Bangladeshi, Ukrainian, Yemeni, Burmese, Turkish, Vietnamese, Kenyan, Indonesian, Chinese, Korean and British. Sixteen vessels are also being held to ransom.

Twenty to twenty five thousand vessels pass through the affected area each year – that’s over 400 vessels and 6,000 seafarers at risk every week. In 2007, a piracy attack was reported approximately every 31 hours. There were 15 piracy related deaths in 2006, 11 in 2008 and nine in 2009. In 2008 the amount paid to pirates in ransoms was estimated at US$150 million. There are an estimated 600 to 1,000 pirates operating out of Somali waters.

And here are more details of the petition which you can of course sign on to online:

The petition (www.endpiracypetition.org) was launched just four months ago as the centrepiece of a campaign to persuade all governments to commit the resources necessary to end the increasing problem of Somalia-based piracy. Originally intended to achieve half a million signatures, it has far exceeded that figure and definitively proves that immediate action is needed.

At a time when 354 seafarers and 16 ships are being held hostage in Somalia, pirates are being released unprosecuted to kidnap, loot and maybe kill again, when it is impossible to use routes via the Suez Canal between Asia/the Middle East and Europe/North America without passing through a high risk area, the campaign calls on governments to:

• Dedicate significant resources and work to find real solutions to the growing piracy problem
• Take immediate steps to secure the release and safe return of kidnapped seafarers to their families
• Work within the international community to secure a stable and peaceful future for Somalia and its people

Since this is the IPE Zone, we must also consider the negative effects of piracy on world trade if ships choose to go around the Cape of Good Hope instead of passing through the Suez Canal or purchase increasingly costly insurance:

As well as the human cost in fear and trauma caused to victims, seafarers and their families, piracy creates additional economic costs which are ultimately passed on to taxpayers and consumers. Apart from military patrols, paid for by a handful of governments, ship operators have to pay to re-route ships, meet higher insurance premiums, hire security guards and install shipboard deterrent/protection equipment.

6.8 billion tons of goods are moved by sea each year, in a global trade cycle worth $7.4 trillion. European economies are those most affected in relation to trade through the Gulf of Aden. In August 2009 the Suez Canal reported a 20% drop in revenues, partly as a result of piracy.

Examples:

Re-routing a tanker from Saudi Arabia to the USA via the Cape of Good Hope means 2,700 extra miles on the voyage. Over a year this reduces the number of voyages the ship can do from six to five round trips (a 26% drop). Additional fuel costs over the year would be $3.5 million.

In 2002 maritime insurers tripled the premiums for tankers passing through Yemeni waters. The cost to insure the ship, not the cargo, for a typical supertanker that carries 2 million barrels of oil jumped from $150,000 to $450,000 for a single trip. That increase translated into an additional 15 cents a barrel on the delivered cost of the oil.

Re-routing on a liner trade would mean adding another ship to the service to maintain the schedule. On a Europe - Far East route, re-routing around the Cape of Good Hope would increase the costs by $89 million per year ($74.4 million in fuel and $14.6 million in charter expenses).

War risk binders for ships transiting the Gulf of Aden cost $20,000 per ship per voyage, excluding injury, liability and ransom coverage. Crew costs while the vessel is in the high risk area can double. The cost of hiring a security escort through the Suez Canal can be as much as $100,000. Yemen’s navy is charging commercial vessels up to $55,000 each for escorted transit through the Gulf of Aden.

Maersk Line is reportedly increasing the amount it charges for cargo in and out of East African ports by $50 to $100 per container. The company’s ‘war risk charges’ for containers transported through the Gulf of Aden are $25 for a 20 foot container and $50 for a 40 foot container.

The breakdown of what a typical ransom costs (Source: Miller Insurance Services Limited) is as follows:
Average ransom $2 to $5 million
Managing the pirates: approx $550,000
Managing the people: approx $600,000
Managing the business: approx $1 million
TOTAL = ransom + $2.15 million

Attacks on energy vessels account for a large proportion of piracy attacks (12% in 2006, 24% in 2007). Over 60% of all oil used worldwide is transported by sea.

It's not fun stuff, I hope you'll agree.

Battle Rejoined on Climate Causing African Wars

While the publication Nature usually features stuff that interests research scientists rather than social scientists, this news item may be of interest to IPE followers as well. Two years ago, there was a well-publicized book called Climate Wars: The Fight for Survival as the World Overheats that made exactly the case that climate change triggered conflicts. In line with this idea, the economist Marshall Burke and his colleagues at UC Berkeley empirically investigated the relationship between indicators of climate change and conflict. Here is the abstract of their downloadable paper from last year:

Armed conflict within nations has had disastrous humanitarian consequences throughout much of the world. Here we undertake the first comprehensive examination of whether global climate change will exacerbate armed conflict in sub-Saharan Africa. We find strong historical linkages between civil war and temperature on the continent, with warmer years leading to significant increases in the likelihood of war. When combined with climate model projections of future temperature trends, this historical response to temperature suggests a roughly 60% increase in armed conflict incidence by 2030, or an additional 390,000 battle deaths if future wars are as deadly as recent wars. Our results suggest an urgent need to reform African governments' and foreign aid donors' policies to deal with rising temperatures.

So far, the pop notion of climate change triggering conflict is given some empirical support. However, a newer paper by Norwegian political scientist Halvarg Buhaug of the Peace Research Institute finds otherwise. Here's the abstract from his likewise downloadable paper in which he says climate is not to blame for Africa's civil wars:

Vocal actors within policy and practice contend that environmental variability and shocks, such as drought and prolonged heat waves, drive civil wars in Africa. Recently, a widely publicized scientific article appears to substantiate this claim. This paper investigates the empirical foundation for the claimed relationship in detail. Using a host of different model specifications and alternative measures of drought, heat, and civil war, the paper concludes that climate variability is a poor predictor of armed conflict. Instead, African civil wars can be explained by generic structural and contextual conditions: prevalent ethno-political exclusion, poor national economy, and the collapse of the Cold War system.

Which is correct? Beats me, pal. I haven't had the time to look over the methods and whatnot to form an opinion like, say, the one which made dubious claims that IMF structural adjustment caused tuberculosis deaths in Eastern Europe. As with many of these econometric studies, there are definitional issues: On the independent variable side, what constitutes an incident of climate change? On the independent variable side, what constitutes and incident of civil war? In its writeup Nature starts off with the later study...

But is there real proof of a link between climate change and civil war — particularly in crisis-ridden parts of Africa — as many have claimed?

No, says Halvard Buhaug, a political scientist with the Peace Research Institute Oslo in Norway. In research published today in Proceedings of the National Academy of Sciences1, he finds virtually no correlation between climate-change indicators such as temperature and rainfall variability and the frequency of civil wars over the past 50 years in sub-Saharan Africa — arguably the part of the world that is socially and environmentally most vulnerable to climate change. "The primary causes of civil war are political, not environmental," says Buhaug.

The analysis challenges a study published last year that claimed to have found a causal connection between climate warming and civil violence in Africa. Marshall Burke, an economist at the University of California, Berkeley, and colleagues, reported a strong historical relationship between temperature and the incidence of civil war. They found that the likelihood of armed conflict across the continent rose by around 50% in unusually warm years during 1981-20022. Projected future warming threatens to offset the positive effects of democratization and eradicating poverty in Africa, they warned.

...before discussing quarrels on method mentioned above:

The two rival groups are now disputing the validity of each other's findings.

Buhaug says that Burke's study may have been skewed by the choice of climate data sets, and by their narrow definition of 'civil war' as any year that saw more than 1,000 fatalities from intra-national conflict. The definition is at odds with conventional measures of civil war in the academic literature, says Buhaug: "If a conflict lasts for 10 years, but in only 3 of them the death toll exceeds 1,000, [Burke et al] may code it as three different wars...You'd really like to apply as many complementary definitions as possible before proclaiming a robust correlation with climate change," Buhaug adds.

Burke maintains that his findings are robust, and counters that Buhaug has cherry-picked his data sets to support his hypothesis. "Although we have enjoyed discussing it with him, we definitely do not agree with Halvard on this," says Burke. "There are legitimate disagreements about which data to use, [but] basically we think he's made some serious econometric mistakes that undermine his results. He does not do a credible job of controlling for other things beyond climate that might be going on."

Buhaug disagrees vigorously. "If they accuse me of highlighting data sets in favour of my hypothesis, then this applies tenfold more to their own paper."

I think regression models are too blunt a tool for answering this question. Disaggregating political and social variables was already hard enough before they threw ecological ones into the picture. Interaction effects, anyone? Judgement will inevitably play a role as this issue will become an increasingly more important one in national, regional, and international policy circles. Stata may help, but it isn't a substitute for clear-headed thinking.

Nigeria Dreams of "The Dubai of West Africa"

Two related threads are in evidence with the following story care of All Africa: First, despite being Africa's largest oil exporter, Nigeria has made limited development progress overall. Some call it the natural resource curse or the oil curse that limits many generously endowed nations' motivation to create productive industries instead of relying almost solely on revenues from extractive ones.

Second, there's still an ongoing debate about China's role in Africa. Some see it as neo-colonization, with the white man's burden being replaced by the yellow man's burden. Others believe in China's professed third world solidarity in bringing its "Beijing Consensus"-style development elsewhere. I tend to think the reality lies between these two extremes. While there is certainly a lot of self-interest involved in, say, China building football stadiums all over the continent, the Chinese tend to pay more attention than their colonial predecessors to infrastructure. That is, the Chinese are keen on putting up ports, roads, and other things that can facilitate commerce.

Of course, there's another debate as to whether China's construction projects benefit the local population since a lot of labour is often imported from China instead of being sourced locally. OTOH, Chinese officials I ask about this always mention that there is often a limited pool of local workers able and willing to help in construction projects. At any rate, what is described below is the emergence of an export processing zone (EPZ) near the capital of Lagos broadly modelled on China's exceedingly successful experiment with EPZs. If the Lekki Free Zone provides Nigeria with some diversification away from energy, hey, why not?

Nigeria is building a multi-billion dollar free trade zone with Chinese investors on the edge of its commercial capital Lagos to try to develop a local manufacturing base and help reduce its import dependence. The $5 billion first phase of the Lekki Free zone, a 3,000 hectare site on the eastern fringe of the city, is 60 per cent held by Chinese investors and 40 per cent by the Lagos state government, the deputy head of the project told Reuters.

The consortium will provide basic infrastructure including roads, power plants and water plants before manufacturing firms are invited to set up business, Lekki Free Zone Development Co (LFZDC) deputy managing director, Adeyemo Thompson, said.

"We have a number of Chinese companies which are coming in the manufacturing area," Thompson said in an interview. "They are coming to produce furniture, electronics, pharmaceuticals and heavy machinery. We are having a fair in November, that is when we kick off operations."

The Chinese shareholders in the project include China Railway Construction Corp., the China-Africa Development Fund Ltd and the China Civil Engineering Construction Corporation Ltd. A total of 16,500 hectares of land bordered by the Atlantic Ocean and the Lagos and Lekki lagoons has been earmarked for the whole free zone, which will include a deepwater sea port and a new international airport in close proximity.

The aim of the free zone is to make it easier for foreign investors, particularly manufacturers, to build a foothold in sub-Saharan Africa's most populous nation and second-biggest economy while still owning 100 per cent of their firms. It is modelled on free zones around China which have helped the Asian giant to develop its manufacturing base and economy over the past three decades.

"We have a one-stop shop ... No investor has to deal with any government agency directly. We license the enterprises. You can register your enterprise within a week, get permits and everything you need to run your business," Thompson said. "The free zone allows you to attract foreign direct investment into the country and investors are given some incentives ... It helps boost production, manufacturing, create employment and is a basis for sustainable infrastructure."

The manufacturing and agricultural sectors have been neglected since the 1970s oil boom, when Nigeria began making easy money from crude oil sales. Oil accounts for more than 80 percent of revenues and more than 60 percent of exports.

There's a slick promotional video too if you're further interested. Like China, Nigeria should be so Lekki...Lekki, Lekki, Lekki.

UPDATE: Also see this earlier interview regarding the hopes placed on Lekki. Apparently, it's been on the drawing boards for some time now. The key part concerns the role the PRC played in inspiring this EPZ and in funding initial outlays. Note the emphasis on hiring 4 Nigerians per Chinese worker to address concerns noted earlier:

How did the Chinese get involved with the free zone?

As you know, when the Chinese opened up their economy in the late seventies and early eighties, they established a number of free zones or economic zones to improve economic activity in their country. These zones helped to encourage investments into the country and improve the level of employment. My predecessors went round and talked to various people, looked at what was available and they were happy with what they saw in China. Four Chinese firms then came together to form a consortium and here they are now.

Lagos State Government is providing the land and this forms our equity. The Chinese consortiums are bringing in funds for the basic infrastructure for the first phase which will cover power, water, sewage and some roads and then the land will be leased to prospective investors. Proceeds from the land will be used for further development of the zone. Also, some money will be raised from local investors in due course.

The agreement we have with the Chinese is that there has to be some form of skill transfer to local Nigerians. For every Chinese, there should be four Nigerians working with him to acquire the necessary skills. Whatever jobs can be given to the local community will be given to them. One of the benefits of this project is employment creation and we will start with the local communities to garner their support for the FTZ.

Thank Serbia for Its Best Export: Football Coaches

With apologies to ABBA:

I'm nothing special, in fact I'm a bit of a Bora
If I show a formation, you've probably seen it before
But I have a talent; a wonderful thing
Cause everyone listens when I start coaching
I'm so grateful and proud
All I want is to manage it now...

It is with great sadness that we must lament the ouster of the brave Ghanian team at the hands of Uruguay under dubious circumstances. In the closing minutes of the game, the latter's scoring machine Luis Suarez who tallied 35 goals in 33 matches [!] for Dutch powerhouse Ajax handballed a surefire goal by Ghana. While rightly red carded, the subsequent missed penalty by Asamoah Gyan that hit the crossbar eventually set the stage for Uruguay triumphing on penalties. Such gamesmanship is unbecoming despite the favourable result, no?

Somewhat overlooked, however, was the role played by Ghana's Serbian coach Milovan Rajevac. When it comes to coaches plying their trade internationally, few compare to the Serbians' drive for adventure. There is something innately curious at work here, so much so that I must say Serbia's best-known exports are football coaches. Some greats ply their trade mostly at home like Ljupko Petrovic who led then-Yugoslavian side Red Star Belgrade to victory in the European Cup--today's Champion's League--in 1991.

However, there is a peripatetic legend who stands above them all: Bora Milutinovic. Our man Bora is justly famous for his international exploits. Together with the Brazilian Carlos Alberto Parreira, he is one of only two persons to coach five different teams at the World Cup: Mexico (1986), Costa Rica (1990), the United States (1994), Nigeria (1998), and China (2002). While he can't boast of winning a title like Parreira did in 1994 with Brazil, nobody has equalled his record of taking four different national sides past the group stage until he was unable to do so with China in 2006.

Now, some African players have expressed caution over the continued influx of Serbian coaches as they have made their way to Africa alike other parts of the world. A few months ago, this story made waves in the sporting media:

Rwandan star striker Jimmy Gatete has challenged the Tanzania Football Federation (TFF) to be careful in appointing the national team Taifa Stars coach and he expressed his reservations against Serbian tacticians. He said the TFF must avoid Serbian coaches at all coast for what he said they are not good enough.

Paradoxically, Gatete who features for St. George of Ethiopia is under the Serbian coach Milutin Sredojevic Micho. "I'm telling you this from experience. Serbian coaches are not good, they talk a lot but they hardly deliver," he said. "Tanzania should not hire coaches from Serbia. They are noise makers. They are not good enough; they do not live to their billing," he said.

Yes, whatever. Speak for yourself, pal. It turns out that Ghana's coach Milovan Rajevac--who led Ghana to victory over Serbia in the World Cup if you remember--worked under Bora himself prior to striking out on his own. What's more, he's taken some time to win over Ghanians, and, indeed the whole of Africa. Although Ghana was the youngest side in the competition, (Germany is second youngest--there's a lesson here), they almost made their way to the semis but for some crafty foul play. Here is the key bit from his FIFA profile:

Qualifying two unheralded Serbian clubs, FC Vojvodina and FK Borak, to the UEFA Cup were the achievements that earned him the notoriety to seek a national team job and when Ghana were looking for a replacement for Claude le Roy before the start of the 2010 FIFA World Cup qualifying campaign, Rajevac proved their choice, even though the public had never heard of him before and were somewhat sceptical. Rajevac signed a two-year contract and immediately set about taking the Black Stars to their second successive FIFA World Cup finals appearance. Ghana had some tough games in their first round group [of qualifying] but were surprisingly ruthless against much tougher opposition in their final group phase, thereby enhancing the reputation of the 56-year-old coach.

It is only fair to infer two things. First, Serbian coaches are pretty damn good at cross-cultural communication to be able to work in so many international contexts. Second, they obviously know a thing or two about coaching the sport. Unsurprisingly, previously obscure Coach Rajevac is now hot property after taking Ghana so far in the competition when much more fancied African sides fell by the wayside and did not even make it past the group stage. Remember, too, that Ghana didn't even have the talent of Michael Essien to call upon this time around and was bested by mighty Germany by only a goal.

Remember too that Ghana's 2006 squad was coached by another Serbian, Ratomir Dujkovic. Yes he had stars playing in top European competition like Sammy Kuffour, Stephen Appiah, and Michael Essien, but it takes some talent to make them gel with their countrymen. Ask France or Italy, for instance. That 2006 squad made it past the group stage, too, but Rajevac did them one better. To me, it's these stories of previously obscure talent unbeknownst to most fans making the most of their opportunities on the biggest stage that make the World Cup something special.

Before ending, then, here's a salute to Serbia for its best export--football coaches. Teaching the game across the globe, their work exemplifies cross-cultural communication at its finest. To paraphrase ABBA...

So I say thank you for Milutinovic
The plays they're making
Thanks for all the goals they're bringing
Who can live without them?
I ask in all honesty
What'd football be?
Without a free kick or penalty?
So I say thank you for Milutinovic
For bringing football to TV!

(Failed) White Man's Burden, Madagascar Edition

There's an interesting article in the Atlantic about the hubris of yet another American would-be social engineer, economist Paul Romer of New Growth Theory fame. In a very politically incorrect manner, he set out to demonstrate the theory that establishing rules of the game or institutions along Western standards is a key foundation for economic growth. In this respect he cites the well-known example of Hong Kong as a British colony.

As you will read below, he tried to apply his ideas in Madagascar, but political realities your typical economists fail to deal with eventually overwhelmed this would-be whiteocracy. Not only was Madagascar's then-ruler deposed, but the whole project fell into disrepair and, needless to say, disrepute.

Given the chance, there are a number of things I'd like to ask Romer about this White Man's Burden-ish enterprise:

1. Yes Hong Kong was a British colony, but is that the main contributing factor to its success? Were the other Asian Tigers Singapore, South Korea, and Taiwan still benefiting from the fruits of colonization?
2. Several generations of developing country elites who have studied economics at the most prestigious Western institutions--Stanford, Oxford, and what else have you--have failed to promote meaningful development in their home countries. What reason is there to believe that bringing over rich, white people to run poor peoples' countries will succeed where trying to transplant technoratic ideas drawn from the selfsame experts to the Third World have failed?
3. Given their current state of economic malaise, why would the UK and US be shining examples of progress and enlightenment for the developing world?

Contrary to Romer and similar to William Easterly, my inclination is to believe that other nations work things out for themselves and should not wait for manna from heaven to trickle down, whether it be from ostensibly well-meaning economists, multilateral institutions, or aid agencies. Anyway, to the key snippets of the article:

In the 1990s, Paul Romer revolutionized economics. In the aughts, he became rich as a software entrepreneur. Now he’s trying to help the poorest countries grow rich—by convincing them to establish foreign-run “charter cities” within their borders. Romer’s idea is unconventional, even neo-colonial—the best analogy is Britain’s historic lease of Hong Kong. And against all odds, he just might make it happen...

Fast-forward several centuries, and Henry the Lion’s would-be heir is Paul Romer, a gentle economist at Stanford University. Elegant, bespectacled, geekishly curious in a boyish way, Romer is not the kind of person you might picture armed with a two-handed flanged mace, cutting down Slavic marauders. But he is bent on cutting down an adversary almost as resistant: the conventional approach to development in poor countries. Rather than betting that aid dollars can beat poverty, Romer is peddling a radical vision: that dysfunctional nations can kick-start their own development by creating new cities with new rules—Lübeck-style centers of progress that Romer calls “charter cities.”

By building urban oases of technocratic sanity, struggling nations could attract investment and jobs; private capital would flood in and foreign aid would not be needed. And since Henry the Lion is not on hand to establish these new cities, Romer looks to the chief source of legitimate coercion that exists today—the governments that preside over the world’s more successful countries. To launch new charter cities, he says, poor countries should lease chunks of territory to enlightened foreign powers, which would take charge as though presiding over some imperial protectorate. Romer’s prescription is not merely neo-medieval, in other words. It is also neo-colonial...Romer’s New Growth Theory opened the window onto a sunnier worldview: a larger number of affluent people means more ideas, so prosperity and population expansion might cause growth to speed up.

So that's the theory. How did it work out in practice?

In July 2008, Romer made his first trip to Madagascar’s bustling capital, Antananarivo. Madagascar’s government was anxious to attract foreign investment, and it understood that a credibility deficit held it back. In an earlier bout of openness, the island had lured in foreign garment firms, but then the political climate turned hostile and the firms fled; now the government was having trouble enticing them to come back. Faced with this obstacle, the Malagasy authorities were open to unconventional arrangements. To boost investment in agriculture, they were ready to lease a Connecticut-size tract of land to Daewoo, a South Korean corporation, for 99 years...

Even as Romer was meeting with Ravalomanana, the president’s main political opponent was sniping at the proposed lease of farmland to Daewoo, and the idea of giving up vast swaths of territory to foreigners was growing increasingly unpopular. The arrangement was denounced as treason, and public protests gathered momentum, eventually turning violent. In late January 2009, protesters tossed homemade grenades at radio and TV stations that Ravalomanana owned; looters ransacked his chain of supermarkets. In February, guards opened fire on marchers in front of the presidential palace, killing 28 civilians. At this, units of the army mutinied. Soon, Ravalomanana was forced out of office.

The first action of the new government was to cancel the Daewoo project, and Romer’s plans in Madagascar were put on hold indefinitely. But the larger question was what, if anything, this disappointment signified for Romer’s whole approach. The riots appeared to demonstrate the explosive sensitivities surrounding sovereignty and land—sensitivities that are not confined to Madagascar. Indeed, versions of the Daewoo story have played out elsewhere. In the late 1990s, for example, Fiji’s government decided to bring in a British nonprofit to manage its mahogany forests, and an indigenous leader launched a revolt under the slogan “Fiji for the Fijians.” The rebellion was hypocritical: as the Oxford economist Paul Collier recounts in his book The Bottom Billion, the indigenous leader had himself backed a rival foreign bid to manage the mahogany. But the venality of the rebels’ motivation didn’t change the fact that a demagogue could easily attract support by railing against territorial concessions to foreigners.

It would be funny if it weren't for the highly deleterious consequences. What did they say was paved with good intentions?

Largest World Cup Patrons are...the Americans

Most people--including the Americans--believe that the US is indifferent to football or what they call "soccer." Certainly, the big money in American professional leagues is in American football, baseball, basketball, and to a lesser extent, ice hockey. There's also the impression that the American soccer leagues are where washed-up players go to finish off their careers Sunset Boulevard-style. Think of David Beckham. The current England coach, Italian Fabio Capello told Beckham that to have any chance at playing for his country, he had to come back and play in ["real"] European competition. Becks' injury ended such hopes, but still.

This interesting contribution I came across by Scott Gulbransen, Senior Director of Global Public Relations for Sony Online Entertainment, begs to differ with this impression. He says that Americans not only have paid the most for TV rights, but their contingent of fans in South Africa is the largest one. Further, he suggests that increasing popularity of the sport in America is due to a continuing influx of Latin immigrants:

There is no doubting that soccer is popular and growing in the United States, with the influx of immigrants from Mexico, Central and South America. With that increase in popularity, the World Cup is becoming a bigger deal here in the U.S.. More and more Americans are joining their neighbors from all parts of the globe to live the spectacle that is the Cup.

This year’s Cup in South Africa has a very American feel to it. Not only does the United States have its best chance to advance in the tournament in 60 years, but Americans are flocking to the country buying up tickets and wielding our substantial financial influence.

In fact, U.S. fans have bought more tickets than any other nation outside of South Africa. U.S. television networks have also paid the highest media rights fees of any nation. The US is a finalist to host the World Cup (in either 2018 or 2022) for the second time ever. The last time (1994) was the first and only time every ticket to every game was completely sold out. American affluence and hunger for the sport fueled the greatest financial success FIFA had ever seen.

With that in mind, you’d think FIFA would be excited about the fact the US is driving such interest in the sport. You'd think the "sleeping giant" of U.S. soccer would excited the governing body. Not so says one of its leaders.

And here is an interesting quote that demonstrates that football's high priests understand IPE [!] UEFA President Michel Platini argues that unlike the World Bank or the IMF, football governing bodies are much more egalitarian to Third World interests. Even the IMF blog tells you the IMF is in need of reform. Hence, the commercial clout of US broadcasters, fans, and sponsors (it needs to be mentioned) should not sway matters too much in America's direction--especially as it bids to host another World Cup according to the powers-that-be:

With that in mind, you’d think FIFA would be excited about the fact the US is driving such interest in the sport. You'd think the "sleeping giant" of U.S. soccer would excited the governing body. Not so says one of its leaders.

"You may be confusing the world of football (soccer) with the IMF or the World Bank," says Michel Platini, a top executive of FIFA, the international governing body of international soccer. "When it comes to decision-making in international football, the U.S., like Germany or China, has as much power as San Marino, Vanuatu or Belize."

Whether Platini admits it or not, the World Cup needs the US more than ever. With a global recession, Americans and their wallets – including the large television networks – throw more money at the tournament than everyone else combined. FIFA and the World Cup increasingly need American interest and money to keep the expensive show afloat. Yes, it might be the world's most popular sport, but America is its richest and most important benefactor.

The Washington Post reports that FIFA figures do indeed show Americans have bought the most tickets to the events after the host nation.