TDUD

Turning Development Upside Down
A book about reforming relief and development

Sunday, January 16, 2005

Chapter 1150 Accountability Deficit

Accounting profession not up to the challenges

Spreading the word

In order to test the hypothesis of the action plan being proposed, I have put elements of the plan into a number of lists that specialize in different aspects of development work. Overwhelmingly, the feedback is positive. The question that most people seem to have relates to the information ssues, and the difficulties of making this work.

For example:
Re: Is there an accountability deficit?
mailto:11iacc@yahoogroups.com
4/22/2003 5:28:50 PM Eastern Daylight Time
Re: Is there an accountability deficit?

Dear Colleagues

I have been very quiet, not because of lack of interest, but lack of time.

Corporate ethics have never been particularly high ... from the early days of the industrial revolution until today. So there should not be too much surprise in the way in which corporate profits have a priority over good works.

And personal greed has also been a human trait from biblical times, so that should not be too much of a surprise either.

What is disappointing, however, is how ineffective the various checks and balances on these two issues have been over the past two decades. The SEC has proved to be a very weak component of the oversight framework, and the CPA world has also dropped the ball. I am particularly disappointed in the accountants. I am a UK trained Chartered Accountant who was training in the 1960s when the dialog about whether or not the Institute of Chartered Accountants should have a Royal Charter or not ... and as I recall the argument ... the CAs should have a Royal Charter because it is accounting professionals and NOT government that should be setting the professional standards for what is "true and fair" in the reporting of corporate results.

But in the USA .... it has been about rules since way before I became a Chartered Accountant ..... rules NOT principles .... so a bad rule giving a "good impression" of corporate performance was allowed by the rule if not by any principle of good accounting. This got out of hand many years ago, but nobody paid attention. In fact it was encouraged ...... more complexity ..... more confusion .... more fees.

And then the investment bank analysts got in on the game as well. Instead of the accounts and the audit being the protector of the investor, there was nobody. The only driver was quick gain, and the bigger and quicker the better. Fee based banking created fortunes for some, at the expense of somebody. These somebodies are the ordinary folk who have lost their retirement savings and their jobs .... and are now having tough times.

I proposed a new framework for accounting and audit some time ago that had some of the characteristics of the ISO system for manufacturing quality assurance .... that was not well received in the accounting world ..... surprise surprise.

And recently I saw another innovative suggestion that I liked particularly well. Simply stated the idea is that the Financial Reports would be "insured". The insurance company would hire and pay for the audit. The company would pay the insurance company a premium for the insurance. The premium would be based on the risk of the company having bad accounts and getting into trouble over them. The insurance company has no interest in the company's "results", just in the quality of the numbers. The company now has to make its accounting systems and numbers so that the insurance company will not raise the premium sky high.

And everywhere I look there are numbers .... development .... politics .... rebuilding Iraq .... but do any of the numbers make sense. Financially, the world is out of control.

But it need not be, and should not be. What is needed is some "independent" and universal accountability system ..... technically possible and well worth while.

Sincerely

Peter Burgess

Chapter 250 Root Causes

Root causes of development failure being ignored

When I first started working in the emergency and humanitarian assistance environment in the 1980s, I was impressed with the way people put themselves in harm's way in order to relieve human suffering. It was impressive. Some of the work that was done was not much short of being miraculous. But there was something missing. The job was to do relief work well. Nobody seemed to be working with the same energy and commitment on the question of why we had the crisis in the first place. Nobody seemed interested in "root causes".

But there have been over the years a lot of people who have given me insights into the many issues that are contributing to the problem. A lot of what I know comes from listening to local people in their communities. And a lot from wotking with local consultants and professionals.

For many assignments I worked with an Ethiopian female colleague who brought a very different insight into the workings of community than my own male Caucasian Euro-American NORTH perspective. And I also had the good fortune to work alongside a lot of people who have been top experts in their respective fields, that helped me to understand something about a lot of different development elements.

But there have been few of my colleagues that have had much interest in the management dimension and the idea that development performance could be improved enormously by optimizing the way development linkages were developed and initiatives coordinated. My work on development dynamics and the linkages in development convinced me a long time ago that development performance could be managed better, and that we could do better at eliminating root causes of development crisis.

I wrote the following in November 2000 in connection with the World Bank's dialog about “comprehensive development”. It summarizes some elements of this problem.

Root causes .... that create the need for humanitarian intervention

I am an Englishman who has lived in the United States for more than 30 years. I started a consulting firm specializing in international business and socio-economic development in 1978 and over the years have worked in more than 50 countries. Previously I had been a corporate financial manager with something of a reputation for problem solving and profit improvement.

I have done work with the World Bank, various units of the UN system and other institutions of the official development assistance (ODA) community. For reasons that need to be understood, in a lot of places development has been superseded by the need for humanitarian intervention. The sad reality is that the last fifty years has been one of the most killing periods in all of history.

My current focus is on Africa. Africa has been the location for many sorts of violence and the results has been death and injury to combatants and civilians and an enormous number of refugees and internally displaced people. The scale of the disruption in Africa in the last fifty years is difficult to comprehend.

The horror of the disaster is numbing. One needs to remember that everyone who dies is a son or daughter, a brother or a sister, a mother or a father. These are human beings who have died by the million and who have been turned into refugees and displaced people dependent on humanitarian assistance.

Humanitarian intervention in its civilian form through UNHCR and the various specialist international NGOs and WFP do important work to mitigate the impact of the crisis. Humanitarian military interventions to make peace and provide security serve to stop killing and the escalation of fighting and the abuse of power. But these interventions do very little to address the root causes that created and the insecurity and the chaos and killing in the first place.

The question then is what is the root cause? The quick answer is that nobody knows.
I have seen humanitarian operations in progress and I admire the dedication of the people involved. They have focused on doing these operations better. They have not focused much on what should have happened years before so that the situation would not have required humanitarian intervention. There is no organization of stature engaged in the analysis of this problem. In most cases the focus in on shopping the fighting and making a peace with rather little attention to the root causes.

The hypothesis that I want to describe is my own best attempt to understand the problem.
Africa has a long history. It is a different history from Europe. There has been an evolution over time of the characteristics of society. African Empires have come and gone. All the time a body of traditional law was evolving. During the last 200 years ... some places longer, some places shorter ... there has been a disruption and discontinuity in the application of traditional law .... and new laws were introduced from the outside ... enforced by outsiders .... often in collaboration with part of the local community. The first area of stress, as I see it, was the introduction of law from outside that was never a part of the evolving traditional law.
As outsiders become engaged in Africa, there was, of course the slave trade. This has great historic importance but slave trade was in decline by the early 1800's and ended in the first half of the 9th century. But other exploitation and trade has continued. The extraction of raw materials in Africa for export and consumption in the NORTH has been a continuing aspect of the African economy through the of the 20th century. The nature of this investment, the flows of investment funds and profits and dividends and the repatriation of liquid assets have created wealth, but very little of it in the communities where the natural resources originated. Diamonds and bauxite and gold and copper and oil are all extractive industries that have made wealth for many, but rarely for the people who have a traditional claim on these resources. The law hat is he law of the land in most places in Africa has little or no respect for the justice that indigenous rules would deliver, but is more a framework of law that makes the rules of contract and property to suit the perception of justice needed to satisfy investors and traders with no interest in community impact or human rights or environmental considerations.

The definition of country borders at the Treaty of Berlin in the 1880s aimed at making peace between competing nations in Europe and had nothing to do with how Africans should define border in Africa for the benefit of Africa. The OAU specifically took the border issue off the table immediately after it was established, and it has remained off the agenda until now. But the issue is deeper than mere borders. The issue goes to the heart of the relationship that should exist between the government of the nation and the peoples that comprise the nations.
Africa has a strong family structure. Around the family is the extended family and around that the clan or tribe. In spite generations of attempting to devalue the importance of this structure, it remains a critical element in the African society. There will never be peace and harmony unless the role of the family is given the respect it deserves and both political and economic institutions are reorganized so that the family is given the power and dignity it deserves.

I keep reminding myself that the United States was able to declare independence quickly, and fighting the was of independence was clear, but defining a way to govern the new country took years. It was 11 years before the Constitution was drafted and another two years before it was ratified and became the law of the land. No country in Africa has gone through that process. Defining hos countries are going to be governed has been done quickly and without anything like the research needed into the underlying ethnic issues within the country and in neighboring areas.

And virtually nothing has been done to address the issues of rights to natural resources – mineral, animal and vegetable – that ought to be contributing to the economic value of the people, communities and nations of Africa., but is not. Almost every adviser or consultant has the mindset of law in the NORTH and is predisposed to the idea that foreign direct investment (FDI) is good for Africa. Advisers usually have an agenda that is to strengthen contract law and property rights of owners in due course at the expense of local people and communities. They are often support5ed in this by the central national government and the political leadership that has a lot in common with the foreigners.

Africans fight over scarce resources. They fight over injustice. They fight because it is the only job available.

While Africans fight - the NORTH prospers. Guns and ammunition for the soldiers and fancy aeroplanes and other military hardware for the senior officers and country leaders. These items are expensive but can be paid for with gold or diamonds or oil concessions.

How can it be that Angola is going to get the biggest flow of foreign direct investment in a situation where the people of the country are at war and the socioeconomic status of the country is about as bad as it can be. The answer is the abuse of oil power.

How can the DCR wage a civil war and show no signs of quitting. The answer is the diamonds and the NORTH's preoccupation with making profit no matter what the collateral damage

And then there is the question of water. While oil and diamonds and gold are important to the NORTH, within Africa the issue of water and who is going to use it is a critical question

And then there is the question of religion

And then there is the question of food, and starvation, and population growth, and desertification, and HIV-AIDS, and life expectancy

Root causes are wrong laws, wrong government structures, wrong borders and a whole range of NORTH policy elements and development practices that have resulted in failed socio-economic progress

Solutions are not easy, quick fixes will not worked. Laws and structures and borders will take a long time to change.

hOWEVER, development policy and practice can be changed quickly. Sadly the existing major institutions in the NORTH will not change much, it at all in the short run, but new and small initiatives with a different business model for development can succeed and make an enormous difference very quickly.

Because Africa is a family based society, investment that supports family and community and clan will succeed unless the big government structure and international special interests intervene to make it fail.

Democracy that is simply giving people he opportunity to vote for people who are going to use government against the people does nobody a favor. But democracy that includes the concept that everyone should have an opportunity to live the dream of a better life .... and puts resources in play to make it happen is doing everyone a favor

Peter Burgess


Chapter 240 Health in a historic crisis

HIV-AIDS, Malaria and other killer diseases

The world was becoming in healthier place as a result of some amazing advances in medicine and some well organized international interventions to intervene to end some terrible diseases like smallpox and polio.

But something appears now to be going wrong. Instead of further progress in eradicating disease and reducing mortality and morbidity, there is tremendous backsliding.

There are financial constraints in public health that are constraining everything in the health sector. The amount of money for public health in almost every country in the SOUTH is so limited that health services are bound to be inadequate. International official relief and development assistance (ORDA) is not enough either. ORDA does not start to address the health funding deficit.

But beyond the financing issues, there appear to be medical and scientific issues as well. The HIV-AIDS pandemic has changed the population dynamics of the whole of Africa, and in the hardest hit countries the expectation of life has dropped by more than 10 years in less than 5 years. Instead of moving up into the 60s, and a continuation of thirty years of steady progress, expectation of life has started to drop dramatically. With more than 3 million dying prematurely of AIDS related disease in a single year, the people of Africa are having to face an incredible crisis.

But it is not the only health crisis. Malaria continues to be a tremendous killer, and where it does not kill it still has a debilitating impact on an individual. Children are badly impacted by malaria. And the easy curatives for malaria are becoming less effective as more and more malaria becomes resistant to medication.

And after years of progress with tuberculosis, TB infection is again growing and becoming more and more widespread. And again, the TB strain that is spreading is one that is resistant to easy and low cost medication.

While there are many views about why disease is growing so fast now after years of progress, it is highly likely that poor medical services and lack of higuene are part of the problem. The writer is convinced that unsafe medical practices are feeding into the growing health crisis, especially unsafe injections and other procedures that result in blood contamination. The use of dirty needles is widespread, especially in the informal settings where people expect a health intervention to include getting an injection.

The Secretary General of the United Nations, Kofi Annan, to his credit, has raised the issue of the growing health crisis at the UN, and has been instrumental in having a Global Fund for HIV-AIDS, Tubruculosis and Malara (GFATM) launched. In its inaugural year the GFATM was able to mobilize around $3 billion, a substantial achievement, even though the requirements were for something more like $10 billion.

But the health sector is a problem area. It is something of a symbol of failed development. Progress was made, but the progress has not been sustained, and now there is a high probability that poverty is going to be more and more accompanied by health crisis as well.



Chapter 230 Governance

Often a constraint rather than a facilitation

Governance is a high profile issue, with some terrible examples of tyrannical regimes running roughshod over society.

There are three levels of governance: local, national and global.

For the past two centuries national government has been at the forefront of governance. And to some extent during the colonial era international was a mere extension of national so that national had a far longer reach from the home country to all the colonial possessions.

In the post independence world governance has remained focused on the national level, but another level of international governance has emerged. This new global reach of governance is delivered through the UN and its specialized agencies.

The governance process is getting more and more complex, but the net impact is an institutionalized disadvantage for the SOUTH.

The widely held view is that SOUTH has poor governance, and is corrupt and difficult to do business with. This is only part of the story. The problems of SOUTH governance have been enormously aggravated by the behavior of most of the leading countries in the NORTH and a lot of international corporations and business people.

During the cold war being “against” the Soviet Union was enough to make a government a “friend” of the United States. And a lot of wasteful and damaging fund flows and trade transactions took place in these “friendly” relationships. The US relationship with Mobuto in Zaire is one high profile example of a string of convenient and corrupt relationships.

The magnitude of the global damage to long term development and financial stability is difficult to assess, but it is almost certainly far bigger than the ORDA fund flows that we know about.

The Soviet Union was in the same mode as the United States during the cold war.

I have worked in a number of countries where the Soviet Union (as it then was) had a lock on government initiatives. The Soviet Union had helped fund their wars of independence and they expected something in return. Nobody seemed to know what they “owed” the Soviet Union in tangible financial terms. There did not seem to be a bill, but just the threat of a bill. And a big one. So, not surprisingly, the Soviet Union was able to set the terms of a lot of their “investments” and “joint ventures” in ways that (in my view) were very favorable to the SOUTH client.

This tactic was being used to give the Soviet distant water fishing trawlers access to rich fishing grounds, with almost no benefit to the host country. Value destruction at its worse.

In the decades since independence there have been powerful forces in play. The role of big business collaborating with NORTH government to achieve local advantage in the SOUTH is a massive problem.

While there are many examples of high officials of SOUTH governments getting paid for to authorize some advantage, and that is considered corrupt. But the recipient of the advantage is a party to this corruption. And yes, there is the argument that “If this beneficiary had not paid up, then some other organization would have, and we would have lost competitive advantage.” is probably true, but no more right.

One day somebody will write a definitive story of corruption in Nigeria. The scale of this corruption is difficult to appreciate, but it is huge and it might even be legal, but it is not right. The big international oil companies are deeply implicated in Nigerian behavior but cannot easily be held accountable. The idea that late President Abacha was able to accumulate a fortune alleged to be $4 billion dollars in four years is remarkable. And while this is going on the peoples of the oil producing areas of Nigeria are as poor as almost anyone in the world. It makes no sense.

All business is not as corrupt as the oil business. In fact most business, and especially small sized and medium sized small enterprises are just plain honest and hard working. They do not have the deep pockets needed to get heavily involved in grand corruption, and to the extent that they get “favors” it is more because of friendship than it is base corruption.

But while national level governance has had its problems, there are other aspects of governance that should not be ignored. Local government and community organizations are very important in the regulation of society. In the eyes of the official development assistance (ODA) community local governance is downplayed. But it is the quality of local government that determines how good the quality of life people can have. It is said that “all politics is local” but it is even truer to say that ”all life is local”.

In broad terms it can be said that “value adding” from the perspective of the individual associated with government is the highest at the community level. The national level is more involved with projects that have a value destroying characteristic.



Chapter 220 Wrong Scale

Wrong scale causes huge economic distortion

Schumaker's classic book "Small is Beautiful" made the case that scale was important. But the issue is much bigger than the case that Schumaker made. Big projects also create economic distortion that ripple throughout the economy. Keynes talked a lot about the multiplier and the accelerator affects of spending and investment in an economy, and if these are taken into account, big projects cause huge distortion.

There was a realization during the 1980s that scale was an issue. But it seems that the ORDA institutions concluded that scale had to be big, because the problems were so huge. It was a classic miscalculation and reflects the weak base of relevant information being used by the ORDA community and the

When I started to write “privately” about performance of development early in the 1980s one of the issues that I addressed the question of scale. I had become convinced that “big” projects were failing because of size, and the distortion that this size was bringing to the economy, the society, the private and government institutions. I talked a lot about “distortion” but never had a UN or World Bank staffer working with me who was willing to advocate for the importance of this issue.

When one does economic analysis combining engineering, economics and accounting, it is common to find that the equations describing "economy of scale" are more complex than typically taught in introductory economics. In fact, dis-economies of scale become dominant quite early on, especially when the economic environment is weak.


Chapter 215 - Weakness in Accounting

Why on earth was accounting weak?

I have always been incensed by the weakness of accounting and management oversight in the official relief and development assistance (ORDA) organizations. It is difficult to understand how the World Bank and the other donor organizations allowed accounting and management information to become one of the weak links in development.

Maybe it had something to do a “racist” perspective. How can we (whites) in the NORTH possibly ask these ignorant (black) natives in the SOUTH to do good accounting?

Or it might be because the World Bank and the donor community never had any good accountants on their staff and in their leadership. They never understood the value of good accounting, and just ignored it.

The real reason may be the first or it may be the second. Or it could be a bit of both. But I am horrified that accounting is one of the failures in development, when it could so easily have been one of the great successes of development.

Governments, and the ORDA community usually operate with very weak accounting systems that reflect a era when government was small and the funds they managed quite limited. Few governments work with accrual accounting that is a requirement for generally accepted accounting in the corporate world. Government accounting is structurally much weaker in its ability to control resources.

But many governments and public sector organizations have strong financial regulations that make a basically weak accounting structure operate effectively. It can be done, and some countries are doing it. But the ORDA world is not. Attempts to make improvements in the way the UN organizations do their accounting have been delayed and little has been accomplished.

In the ORDA institutions there is a voucher based culture that ensures that there is paperwork to substantiate why funds were disbursed, but no similar culture about evaluating and recording the value derived from the expenditure. This is forced in a corporate system with a balance sheet, but not forced in govenment accounting and the typical ORDA systems.


Chapter 212 Colonial Overhang

Colonial overhang both bad and good

When “development” first started in its modern form, that is after independence of the former colonies in what I am referring to as the SOUTH, there were a lot of experienced former “colonial” civil servants who were able to do a career change and become “development” experts and advisers. To the extent that they knew something of the geography, and the culture and the problems and the potentials, these people were an enormously valuable resource. And they made a significant contribution, especially when they were appointed to appropriate positions in the UN and the World Bank and the bilateral development agencies.

But they did not succeed as well as they might have, and the reasons for this are many. And of course, much easier to see now with the benefit of hindsight than at the time. These former colonial officers had to contend not only with technical matters but also had to address the political dimension of the old “colonialism”. Many younger professionals accepted a simplistic view that the SOUTH's economic circumstances were simplay a result of “colonialism” and that with the colonial issue out of the way development would now be easy.

This view was also popular in government circles in the SOUTH, and development was going to be easy. Essentially a simple equation: money in results in development out. If only it had been that simple.

In the 1980s, there have been lots and lots of times when I have tried to address the issue of development performance with World Bank and UN staff, and the response has been couched in terms that it was a problem carrying over from the “colonial” era. This was used as an excuse for for everything. This happened in Nigeria. This happened in Madagascar, This happened in Ghana. This happened almost everywhere I worked.

It was not long before dialog between beneficiary government and donor organizations picked up on the "colonial overhand" as a universally acceptable excuse for failing projects. Meanwhile the real issues about relief and development performance went unaddressed.


Chapter 2 - Problems - Financial Sector

Maybe the Weakest Link in Development

The financial sector has a long history of being a facilitator of progress. If we look at the history of what the financial sector has done, it is remarkable. They have facilitated enormous progress over the past hundred and fifty years or so, and in the process have also become wealthy. And if that is all there is, the bankers are are winners.

But in the last fifty years, there has been a dark side to banking that has too much been ignored. In the process of creating enormous wealth, the financial sector has also facilitated others becoming terrible poor. Is it sufficient to service a wealthy client while the client's community is deathly poor. Is the ethical requirement something a little more. Is the financial sector merely about making money by “conning” the clients and basically making money for one group at the expense of another, or is it something much bigger than that.

I do not have an answer to this question. But I do know that if the global financial sector believed that it could make money out of development there would be no shortage of finances to do all the development that was proposed. The problem is that nobody has yet convinced the global financial community that there is money to be made in development, and they are right to avoid direct investment in development.

I remember doing work in Thailand in the early 1980s. Part of the work concerned an assessment of the investment potential of Thailand and the enabling environment of law and culture and institutions that would make Thailand a good place to invest. Of course the analysis of law and the banking sector and the regulatory environment and everything else made one draw the conclusion that Thailand was not going to be a good place to invest. Not to mention that very few people spoke English and the language and even the alphabet was incomprehensible. But before I concluded my work, I asked another simple question. Why was it that money was being invested in Thailand? And of course it turned out that a lot of money could be made in Thailand if it was invested in profitable enterprise. Money flow was not constrained by things that I had been studying. It was all about economic value adding and earning profit. Brothels, tourism were profitable. End of analysis.

Development will never be successful as long as the financing of development is limited to the initiatives of the official development assistance (ODA) community. Most of their decisions are driven by a social dimension that has little to do with economic value adding and profit. And after forty or more years of this, the flow of funding for ODA work is miniscule.

And something else has been going on. As the failure of development became a pandemic, which probably happened in the late 1970s, the financial community has sought to limit its losses, more often than not be tightening the terms and in fact making failure more certain. What was bad in 1980 had become horrendous by 2000. But almost all was due to bad lending into economic value losing propositions, and a bad problem was made even more serious by the financial community's strategy.

And as this was going on the major financial organizations created communities of interest to ensure that the borrowing nations were even more limited in their options. The UN Round Tables and the Paris Club negotiations ensure that fifty big institutions are able to gang up on a small developing country and get it to do whatever they call for. In any other field of trade or commerce this would be called a cartel, and would be the subject of great criticism, but I do not think I have seen anything in the NORTH press that sees this as an undesirable feature of the international financing scene.

Actually, this would not be too bad a way to move forward if the financial community was asking for economic value adding initiatives. But in fact the international financial community rarely has this on the agenda, and the outcomes are frequently very damaging to the SOUTH country.
Over the years I have had assignments where I have been collaborating with IMF and World Bank teams, and I have seen some of the work they do. And some of it is very bad. Not only is the work done too fast, it is done with too little understanding of the problems. The agenda is from the NORTH, and the SOUTH country has little of no say in the negotiation or the conclusions. It is a terrible process. It is worth commenting that the IMF and the World Bank have some great and experienced staff, but they are likely to be working on the big high profile problems, while the staff working on the boring problems of any of 100 or so poor SOUTH countries are not so likely to be of this caliber, and even if they are good, do not they have the seniority to get policy changes made when they are needed. This is a terrible process.

The basic financial flows do not serve development well. The World Bank and the other Regional Development Banks (RDBs) are able to borrow money from the capital markets. They then onlend to SOUTH governments who onlend to programs. The repayment flow is essentially SOUTH people fund SOUTH government to repay WB and RDBs. The missing link is that program should benefit people so that people are able to repay without it being a problem. But this missing link has been missing for decades. In theory the programs benefit people, but it is pretty apparent from the ODA publications that most programs have resulted in rather little benefit for the people and their is a growing debt arising year after year with little development progress.

There is a debt dilemma. The financial sector in most developing countries is in a difficult situation, and the debt crisis does not make it any better. Solving the debt crisis is not best handled by getting tough about repayment and debt service, it is much more about getting tough about economic value adding in the debtor countries. This may to some extent be addressed by improved governance and better policy options from government, but it also needs to be addressed by improved financing modalities and focus on economic value adding activities.

The problem goes far beyond just corruption in SOUTH governments. It is also about the whole framework of economic value destruction that arises with much of the existing flows of investment and assistance to developing countries. Economic value destruction in developing countries is being aggravated by a lot of Foreign Direct Investment (FDI), by a lot of the rule making going on in the Geneva based international organizations such as the WTO and the ICU.

It is not a pretty sight.

Chapter 201 The Problems - Overview

Not just one problem - a network of problems

Chapter 2 gives an overview of the problems that seem to be causing development failure. In some ways talking about the problems in relief and development is overwhelming. Everything seems to be a problem.

There are problems of too many people, not enough development resources, a dysfunctional development process, and not much useful information.

And one has to go further than just to see a problem that is merely a symptom, but to understand the root causes that are the underlying reasons for development failure. We have to identify systemic factors that go beyond the rather simplistic or journalistic NORTH version of the problems to one that reflects much more of the SOUTH's viewpoint.

A quick look through what has been written about development, or attending a conference on some aspect of relief and development will make it seem that development has a zillion problems. So it is not one problem, it is many. But because there seem to be a zillion problems, its is virtually impossible to figure which one of these problems is the most critical problem.

My education about relief and development has been long. I first saw the impact of failed development in the form of dead people in 1974 in Nigeria. Already the impact of oil wealth was distorting the social and economic framework of the country and super-wealth was growing while terrible poverty remained critical and getting worse. How can children starve when there is so much wealth?

Bad numbers
But I was exposed to some of the problem of development a decade earlier when as a young accountant with Coopers and Lybrand, I worked verifying the costing for a major infrastructure project being planned for World Bank financing. My analysis of the costing suggested that the World Bank numbers were off by a full 50%. My conclusion was that the project would cost twice as much as the World Bank was estimating, and that, of course put the whole economic justification for the project in jeopardy. The project was funded, and the infrastructure constructed and I understand at a cost not far off the estimate that I had made. But the question remains how the original estimate was so far wrong.

Corruption
It is easy to point a finger at a single problem and use that to explain away the terrible performance of development. It can make a good news story, but it is not going to be very helpful if the aim is to improve relief and development performance. The level of corruption in developing countries is one issue that constrains development success, and while I regard this as an unacceptable situation, I do not believe this should have been such a big problem. Why is this corruption so big, and so prevalent? Why has this issue not been successfully addressed over a period of perhaps as much as 40 years?

Value Destruction
I had plenty of opportunities to assess performance in development. It took me a long time, however, to realize that almost everything that I was being asked to assess was a complete waste of time and money and effort. Too many of the interventions were value destruction rather than value creation. Almost none of the donor support was going into things that would improve the socio-economic situation and be sustainable. That is not to say that it would be better to ignore the problem of “under-development”, but it does raise the question of how this can be done a lot more effectively.

Institutional constraints
In my assessments, big constraints to success in relief and development originated in the systems and procedures of the World Bank, the UN and its specialized agencies and all of the other ORDA organizations that were providing funding. Over the years, as development performance got worse and worse, these institutions added more and more to the basic framework of constraints. It was a feedback loop gone mad.

Colonial overhang
A lot of people have the view that the SOUTH's economic circumstances are a result of “colonialism”. In the 1980s, there were lots and lots of times when I have tried to address the issue of development performance with World Bank and UN staff, and the response has been couched in terms that it was a problem carrying over from the “colonial” era. This was used as an excuse for everything. This happened in Nigeria. This happened in Madagascar, This happened in Ghana. This happened almost everywhere I worked. And it was not long before the dialog between beneficiary government and the donor organizations picked up on this and created a universally acceptable excuse for failing projects

Weaknesses in accounting
The weakness of accounting and management oversight in relief and development is a glaring problem to anyone with experience in the corporate world. It is difficult to understand how the World Bank and the other donor organizations allowed accounting to become one of the weak links in development. Maybe it was a “racist” thing. How can we (whites) in the NORTH possibly ask these ignorant (black) natives in the SOUTH to do good accounting? Or it might be because the World Bank and the donor community never had any good accountants on their staff and in their leadership. They never understood the value of good accounting, and just ignored it. The real reason may be the first or it may be the second. Or it could be a bit of both. But I am horrified that accounting is one of the failures in development, when it could so easily have been one of the great successes of development.

Wrong scale and Economic Distortion
There was a realization during the 1980s that scale was an issue. But it seemed that the scale had to be big, because the problems were so huge. When I started to write “privately” about performance of development early in the 1980s one of the issues that I wanted to see addressed was the question of scale. Around this time Schumaker wrote his classic “Small is Beautiful” making the case for “appropriate scale”. Big projects in a small economy create huge distortions and disruption far out of proportion to the benefits that could possible be achieved.

Government implementation
When was government ever the the most efficient way to do things. Good projects have gone wrong because the implementing structure did could neot do it. This is about government and how it is organized more than a question of South innefficiency.

Science and technology
Science and technology is a problem, because it is not a solution. The problem is that science and technology has made it possible for the North to advance in ways that leave the South even further behind. Knowledge is not being used to achieve stability and sustainability in relief and development.

Corporate Behavior
The whole issue of public responsibility for private (corporate) behavior is an area of great importance. And while there have been a growing number of suits brought in the United States to get damages from corporate organizations, it is a clumsy mechanism that does little to solve the problem when it needs to be solved. The big tobacco companies (Big tobacco) are being sued because of the cancer causing elements in their products, and are now after years and years of litigation are now starting to lose cases. And the asbestos manufacturers and industrial users are also starting to lose suits regarding the safety of their products and work practices going back decades. But this is not a solution, all it does is moves money from one group to another, but the problem remains.

Weaponry
The whole arena of weapons of mass destruction, whether nuclear, chemical or biological needs addressing. The science needed to do good and the science for catastrophic weapons of destruction is not very different.

Genetics
The whole area of genetics. The issues are all over. There are issues in genetic modification of plants, and animals and humans. These are not only academic issues but are also tremendously important in development performance The whole area of sustainability in the long term. The idea that we will destroy things that have been around for a million years, but in our lifetimes, we will be destroying these things getting something for ourselves, but leaving nothing for the future. Why are we stopping some progress in science and technology so that some groups can continue to prosper, while other groups cannot participate.


Saturday, January 15, 2005

Chapter 1- 1 Development has failed

The first challenge is to get readers to understand the scale of the failure of development. First, absolutely in terms of the total population that are affected by development failure. Second, relatively in terms of how some have progressed and other have not.

Failure of development is reflected in the big facts that have to be faced: famine and hunger, war and refugees, poverty and concentration of wealth.

A sad state of affairs

It is a sad reality that development has failed. The quality of life for most of the people in the world is rotten. Half the world is poor and hungry.

The following message from Claudio Schuftan, an observer of the African development scene sums up the situation in Africa. Somewhat similar numbers apply to the poor countries in other areas of the SOUTH. As I see it this is clearly development failure

Africa, some sobering numbers

With 10% of the world's population, 1% of the global GDP and less than 10% of primary exports of all developing counties, in 2002, Africa produced the same type of commodities and exported them to the same markets as it did in the 1970s and 80s.

In no other continent is poverty more pervasive than in Africa. In 2000, out of a population of 765 million people, about 350 million lived on less than $1 per day. This places Africa as the continent with the highest share of poor people and that figure is on the rise. [In E. Asia and the Pacific the proportion of poor people fell from 27 to 15 % between 1990 and 1998; in Latin America / Caribbean it also fell from 17 to 12%; in South Asia it fell from 44 to 40%; in Sub Sahara Africa it rose from 47 to 48%.

In terms of the Human Development Index, in 1998, only S. Africa, Botswana, Gabon, Zimbabwe, Cameroon, Kenya and the R of Congo had HDIs between 0.5 and 0.7; all others were below 0.5. More than half of low HDI countries are in the continent.

The continent's debt stood at 334 billion dollars in 2000. That same year, the debt to GDP ratio was 58% and the debt to export ratio 182% while debt servicing, as a % of exports was less than 6%. Tanzania spends 9 times more on debt repayment than on health and 4 times more than on education. In all of Africa, some 8 billion dollars are being paid every year while 5-6 billion is due but rescheduled. In Zaire and Zambia, the arrears alone account for 30% of outstanding debt.

Africa's terms of trade have continued to be weak and plunged by 0.5% per year on average between 1980 and 1990 and 0.3% per year between 1991 and 1999.

Posted by Claudio Schuftan to the AFRO-NETS e-list in April 2003 (with permission)

This message highlights the result of failed development. The same information can be found in hundreds of publications. We do not lack for information about the failure of development.

But rarely are the numbers presented with the acknowledgment that development has failed. It is more usual to see the information included in some fund raising package that suggests that the only thing wrong with development is the shortage of financial resources. Mobilize more money, and development will then succeed.

But this is clearly not true. More money used badly will merely aggravate an already terrible situation.

The critical things for a community are related to economic value adding, whether in the form of more productivity from their local labors, or more jobs created by outside investors, or better water, or health services or education opportunities, or water or electricity or telephone or Internet. In some communities the priorities may have to be related to security and safety and staying alive.

At the start of the 3rd millennium, socio-economic conditions in SOUTH are horrendous. From a purely financial perspective most of the governments are essentially bankrupt. Something has gone dramatically wrong. There are enough people. There are enough resources. There is enough technology. Why is it that it does not come together to deliver success.

For Africa its even worse. There is a population of around 800 million people who are amongst the world’s poorest. Yet the resources of Africa are enormous. The wealth of Africa is drawn down every year as financial and material resources are shipped out of Africa to pay debt or to satisfy foreign investors’ claims. The process of development used for most of the period since independence has failed.

I responded with some additional observations. I thought that Claudio's set of data showed results, and there is general agreement that results are awful. But the data I want to see is the transaction data that will show why we have these very unsatisfactory results. It will show not just that the results are terrible, but that the process does not function.

AFRO-NETS> Africa, some sobering numbers (2)
4/29/2003 4:17:16 PM Eastern Daylight Time
From: mailto:Profitinafrica@aol.com
Africa, some sobering numbers (2)

Dear Colleagues,

The sobering numbers about Africa are food for serious thought. The numbers highlighted by Claudio Schuftan show the RESULTS of a failed paradigm for development that has been used for several decades.

Solutions are possible, but not until people who have control of policy and control of resources allow changes to be made.

When I first started working on development issues in Africa in the early 1970s, guns were far less widespread....... where do all the guns come from? Who pays for them? What development value do they have?

What about refugees and internally displaced people? ICARA I and II in the early 1980s highlighted the problem. Why so many? What are the root causes?

What about hunger? Is the problem food production or food trade or food aid? Or is it poverty?

What about oil and minerals? Is foreign direct investment (FDI) a blessing or a curse?

Are the oil companies creating economic value adding in Africa, or is it just for corporate stockholder added value? What about foreign mining companies?

What about diamonds and gems and gold......... and civil war...... and timber..... and guns and landmines? Where is the economic value adding for the people of Africa?

What about the health and HIV-AIDS crisis? Is this just another excuse for investors to avoid business and development investment in Africa..... it certainly is having a devastating impact on economic value adding in Africa.

The prevailing development process flows almost all the available resources into activities that do very little economic value adding in Africa. Worse, this has been going on for decades. Under the prevailing development paradigm economic value is being systematically removed from Africa....... with benefit accruing to others.... but not Africa.

There is a terrible shortage in information that can help pinpoint what is good and bad about development, and get resources allocated to expanding the good activities. What is clear is that most of the available resources do NOT produce significant economic value adding in Africa. (If I am wrong... give me the facts... and I will be as outspoken about success as I am trying to be with respect to failure.)

These main characteristics of failed development in Africa are rarely talked about by the leading spokespeople on Africa's economic crisis, especially this associated with the official development assistance (ODA) community (World Bank, IMF, UN, USAID, DFID et al.). And ways forward to address these issues do not seem to be forthcoming from our ODA leadership.

On the other hand, I sense that my African professional friends understand the issues very clearly, and would be delighted to see new ways for development resources to be mobilized for use in activities that will address priority development and investment needs in their communities. This is NOT about more welfare handouts, but making it possible to create new opportunities and create economic value in Africa's back yard using new resource flows outside the prevailing FDI and development cartel.

Sincerely,
Peter Burgess

In this chapter some of the symptoms of failure will be looked at, recognizing that treating symptoms does not cure the underlying disease.

But what we will see is a generalized pattern that seems to suggest a way forward that can be extremely successful.

As a starting point, then, the following:

  • Hunger and famine (food, water and basic necessities)
  • Violence, war and insecurity (also refugees, IDPs and victims of trauma)
  • Poverty, economic value destruction and the distribution of wealth


Chapter 1- 2 Hunger and famine

Hunger and famine (food, water and basic necessities) is a crisis that should never be. Yet the lack of food, safe water and basic necessities is having an impact on about half the population of the world, some 3 billion people. The experts of the official relief and development assistance (ORDA) community know about this, and the leaders of nations in the NORTH and the SOUTH know about this, yet it is a problem that not only persists, but gets worse.

“Global Banquet” is a video produced in 1998 that shows some of the issues of poverty and food shortage in a world where plenty is possible. Its thesis is that large scale corporate monoculture supported by subsidy has defeated value adding labor intensive sustainable multiculture.

Corporate win, people defeated.

The video's thesis is well intentioned. But the problem is both broader and deeper. Without understanding a lot more about the global economy and local cultures and area issues, it is very difficult to sort out what are the symptoms and what are the fundamental underlying problems.

After forty years of development effort, it is sad that there is no apparent consensus about a way forward for development that looks like being successful.

My first experience of death from failed economics was in Nigeria. Nigeria was in the process of becoming one of the richest places in the world as a result of the oil shocks of the 1970s. At the time it was the largest market in the world for Mercedes cars, ahead of the United States. But one morning when I was going to our lawyers office in Western House on Broad Street in the middle of Lagos, there were two dead undernourished children on the steps of the building.

Clearly, money alone did not ensure development success.

What became clear very early on in my development consultancy career was that success in development required progress on many fronts at the same time. My experience in Nigeria showed me very clearly that money flows on their own would not result in development success. It was also clear to me that good people and good intentions were not going to make a difference as long as control of the process was subject to corruption and fraud.

The failure of world development was already becoming apparent in the 1970s, and in the 1980s famine became headline news, especially the famine in Ethiopia. As a result a lot of money was raised for famine relief in Ethiopia, and also for other famine affected areas. I did some planning work during that period in futile attempts to integrate emergency and development initiatives. I tried to get “Band Aid” funds to be used effectively, but could not get heard. It was heartbreaking. The decisions were tough. Feed the dying or build a future for the living.
The commitment of good people working in the emergency organizations is amazing. They do incredible work in impossible circumstances. But the fact that they are needed is a problem.
There are multiple systemic and process problems that make needed changes very difficult if not impossible. People being hungry is partly cause by shortage. People cannot have food and water and the other basic necessities when there are none to be had. But it is not the only problem.

Another critical problem is that while food and water and basic necessities are available, poor people just do not have the economic means to buy them.

The two problems are quite distinct, and different strategies are needed to have a lasting impact on these problems. There are linkages, and there are ways for the strategies to be effective.
On a global basis there is no shortage. But at a local level there may well be a physical shortage.

If the community has no buying power, there is no market mechanism that will solve the shortage problem. With no demand the market suppliers will not make any offers of supply, and the shortage will continue.

If it is impossible to have value adding economic activities of any sort in an area, then the people are well advised to move. Economic migration has been a part of history, and is with us as much today as it has ever been. If people cannot survive in terms of food and water and basics, and the local environment does not allow for any productive economic activity, then migration is what should happen.

But migration to where?

The rural economy in the modern world with the present development paradigm is not able to support people as it might have done in the past. There are market pressures and there are population pressures. But migration from a failing rural area to a typical urban area is essentially “out of the frying pan, into the fire”. The people who are having difficulty succeeding in the rural setting are also likely to be in trouble in the urban setting, and maybe worse.

Development initiatives have got to get to the root cause of rural economic failure. There are many elements to be addressed.

The first responsibility of rural communities in developing countries should be related to food security. Rural communities should be able to produce a good surplus of food over what they need for their own consumption and for seed requirements. Food is first. If they can also produce other crops to earn cash, then that is a bonus. But the first job is to produce food.

And rural communities should be able to get easy access to safe potable water. This is perhaps the top job for community leadership. If there is no water, there cannot be much community.
The next issue is probably fuel, and this is likely to be fuelwood. There is a global energy crisis, and it is fuelwood. Rural populations have grown and the fuelwood supplies have been depleted and the problem of deforestation is accelerating all the time.

And rural productivity degradation continues in a vicious cycle. Because of deforestation there is more soil erosion and less productive agriculture, and then less food and more hunger.
This is a big problem. We will come back to it again.

Chapter 1- 2 Example: Ethiopia in 2003

The following story was written by Nicholas Kristof and published in the New York Times in May 2003. It paints a vivid picture of the scene. There is obviously a problem. Something is not working, but the article does not address this question at all.

The sad case of Abernash Andreos
By NICHOLAS D. KRISTOF

Meet Aberash Andreos. She's a 6-year-old girl from a remote village in southern Ethiopia. I met her at a Catholic-run clinic near the town of Awassa, where she was among the throngs of children awaiting lifesaving milk to rescue them from the famine that threatens millions of people in the Horn of Africa.

Aberash is not one of the worst off. The really desperate children are inside the clinic, lying comatose on beds (two children to a bed) as nurses fight to keep them alive, or they are dying in their villages.

The better-off children, like Aberash, can stand on their own on the clinic grounds.

"I've nothing to eat at home," said Andreos Lutta, the girl's father (standing behind her in this photograph). He is a farmer whose crops have failed because of the drought that has struck the region, so he tries to find day labor and earn money to buy food. When he finds work, he earns about 40 cents a day.

I didn't visit Aberash's home, but the others I entered were similar: a windowless grass-roofed hut, called a tukul, with a couple of cows (if they haven't died) on one side, and the family on the other. Keeping the cows inside at night protects them from hyenas and rustlers. Poor families typically have a single cooking pot, a water jug, a homemade bed made of sticks that serves everyone, and no other possessions: no bicycle, no watch, no change of clothes, no food.

That's not to say there is no food in the village itself. Some families are better off and have grain, and there are merchants with supplies to sell to anyone with money. In one village, a grain merchant was insouciantly putting his grain in sacks on the main street as children were staggering by, ready to drop from hunger.

Like most parents, Mr. Lutta himself didn't seem malnourished (the father almost always eats first in these villages, and then the mother and children eat together, using bread to scoop a stew from a common pot). He has six other children, and they are better off. It's typically the smallest ones, like Aberash, who are in trouble: they no longer depend on breast milk, but they aren't strong enough to compete with their siblings in grabbing food from the pot.

"It's the first time we've seen it like this," Mr. Lutta said, referring to the severity of the famine. In this area, conditions were never this bad, even in the terrible 1984-85 famine, which killed some one million people.

Children like Aberash will be saved only if the West mounts a major effort to help them. The U.S. has responded relatively well to the calls for assistance from Ethiopia, but I'm afraid that much more will be needed. For individuals who want to contribute, some options are listed below.

Aberash is just one child, but I saw countless more just like her. In village after village, you meet these kids, hold their hands, touch their bones. But they are in a remote corner of the world, dying quietly, as we go about our business.

In the best of circumstances, about 100,000 boys and girls like Aberash will die of malnutrition-related ailments this year in Ethiopia. If the drought continues and the West doesn't provide more assistance, the number of deaths will rise to several hundred thousand or more.

****************
Many readers have asked how they can donate money to help fight famine in the Horn of Africa. I don't think it's appropriate for me to recommend any one organization, and there are many groups doing good work in the region. Here are some options (in each case, write "Ethiopia" or "Eritrea" for the money to go to one specific place):

1. The U.N. World Food Program, http://www.wfp.org, whose feeding programs I visited, is very active in the area.
Donations are tax-deductible in the U.S. if checks are made out to "Friends of the World Food Program."
Send the donation to:
WFP2 UN Plaza DC2 - 2500
New York, New York 10017
Phone 917-367-43412.

Doctors without Borders,
http://www.doctorswithoutborders.org,
is also active in the area where Aberash lives:
6 East 39th Street, 8th floor
New York, NY 10016
Phone 1-888-392-03923.

Childreach,
http://www.childreach.org:
155 Plan Way
Warwick, Rhode Island 02886
1-800-556-7918
4. Mercy Corps,
http://www.mercycorps.org,
which works in Eritrea but not Ethiopia:

Mercy Corps
Dept. FM
PO Box 2669
Portland, OR 97208-2669
1-800-292-3355 extension 250

This article in a the New York Times in May 2003 is so very typical of the “stories” that get run by major newspapers. The story is a good story. It is written well. It grabs attention. But it is a story that could be written about maybe 2 billion people on the planet. So I argue that this is a good story, but not news, and really not anything. It really is not “fit to print”.

To their credit, the writer, or the editors, or someone has responded to readers who want to “donate money” by including a set of organizations that would be glad to receive donations, but this is easy, and there is a question as to whether this is a good idea or not with the present state of development and the lack of effective accounting and accountability.

I felt the need to respond to the article and the following is what I sent. I did not address all the issues but wanted to open a dialog if that was possible.

The sad case of Abernash Andreos
5/24/2003 12:31:56 AM Eastern Daylight Time
From: Profitinafrica
To: nicholas@nytimes.com

Dear Nicholas Kristof

I have had your recent article about Abernash Andreos forwarded to me by a friend. And it is, of course, a very moving and tragic story.

But the really sad thing is that this crisis should never have happened.

There is a chronic failure of development. The system of global economics that allows maybe 50% of the world's population to be poor and hungry, and in the present situation in the Horn of Africa, starving and dieing is a crime.

Your article tells us something about today. But what was it that happened yesterday that caused today? And what are we doing today that will replicate this crisis again tomorrow?

There is a crisis in international affairs and development that is causing the crisis you have described. The process of development just does not work. And it has not worked effectively for the past two or three or four decades. The world works for the rich NORTH but the poor SOUTH is in trouble and getting worse. This need not be. It can be changed. But do not look to the existing official development assistance organization to do it.

There needs to be a new way forward that gets resources to people who are going to use the resources to solve problems practically and according to the real priorities of the community. The solution is not food for the starving today. It should have been resources for the communities yesterday so that they could be ready for today.

Just food now is not enough. There must be resources for community to get ready for tomorrow's crisis.

And it should not be given to the community. It should be loaned ..... and used only for economic value adding activities of priority for the community.

Giving to support failed plans must stop .... and be replaced with loans to support things that are going to be successful.

And governments that fail to allow loans to support success should be held accountable for their actions.

I am not happy to see your story. Why is this happening? Why are people tolerating this global failure of development ..... this terrible injustice .... and the incompetence it represents.

Sincerely
Peter Burgess

I copied the person who had sent me the NYT article in the first place. She seemed to like what I had said.
Re: The sad case of Abernash Andreos
5/24/2003 9:45:27 AM Eastern Daylight Time
From Claudiamcg
To Profitinafrica

Yea!! Peter.
xx,claudia

And I got a reply from the writer of the article, but it was only an automated reply and really did not say very much.

Thanks for your message
5/24/2003 12:35:36 AM Eastern Daylight Time
From: nicholas@nytimes.com
To: profitinafrica@aol.com
Thanks for your message. This is an automatic response, because I can't respond individually to the emails -- then there'd be no time to write the column. But I read them all and appreciate both the compliments and the complaints, as well as the information and ideas for future columns. I do reply to some points made by multiple writers (and quote some incoming messages anonymously) at a site in the NYT forums section. You can get to it via the forum for discussing my columns, or the direct link is:http://forums.nytimes.com/webin/WebX?50@@.f3beae7
If you would like your message considered for publication as a letter to the editor, then please send it to another email address: letters@nytimes.com
You will increase the prospect of having a letter published if you send it as soon as possible after publication and keep it as short as possible.
Thanks very much.
Nicholas Kristof

Chapter 1- 3 War, Insecurity, Violence, Arms Trade

War and insecurity have resulted in a massive loss of economic value in developing countries over the past decades. Getting a more peaceful world and a more secure world will have enormous value in developing countries.

What war and military expenditure does in the SOUTH is disastrous. Spending on military hardware and supplies wrecks the budget. Use of military hardware and supplies kills and maims people, and uproots people from their homes and their normal occupations and creates refugees and internally displaced people (IDPs). Both do serious economic damage and destroy economic wealth,

Refugees and IDPs are a quiet crisis of our time. In the last twenty years in Africa there has been a continuing crisis of refugees and IDPs, but the crisis is not on the media agenda. UNHCR talks about their own crisis. Not having enough money to look after the refugees. But that is not the issue. The real issue is why do we have refugees and IDPs in the first place.

There is something wrong with a world where poor people have guns and do not have potable water. There is something terribly wrong when governments can buy F16 fighter jet aircraft and cannot buy basic medical supplies. What is wrong is not only the focus on destruction but the totally immoral allocation of scarce resources.

The video “Arms for the Poor” produced in 1998 shows some of the issues of military arms sales to poor governments. The jobs and profits of arms manufacturers are a key driver of the problem, and difficult to get stopped.

Governments cannot stop the escalation of military equipment sales. The politics will not allow it. But if it is not stopped the world's future is going to be increasingly dangerous and increasingly poor.

The killing and maiming of both combatants and civilians is a global disgrace. But for some reason the preconditions for war and insecurity are off the international development agenda until there is hot conflict and there is a resultant humanitarian crisis.

The anti-social behavior of soldiers is another disgrace with rape and pillage in our time as bad as it was in our history books. Rape in particular with high prevalence of HIV-AIDS in the population is tantamount to murder.

President Carter, to his credit, has made the challenge of conflict resolution one of his missions in life as a past-President of the United States. But the issue of peace not war should be high on the agenda of every human being. It is a basic requirement of civilization. It is the foundation of natural law.

The sad fact about war is that there are enormous profits to be made when war is being waged. The economic history of the United States shows how immensely profitable war can be ..... as long as the nation is a supplier of the materials of war, and is not being destroyed by the process of war. In the period 1914-1918, when the First World War was being waged in Europe, the United States was able to consolidate its position as the richest nation on earth. In the period 1939 to 1946 when the Second World War was being waged around the world, the United States again advanced its position as the richest nation on earth and an emerging superpower. The great foreign wars helped make the United States wealthy. But the little foreign wars do the same thing. Guns and ammunition and land-mines and aircraft and other military supplies all add up to big and profitable business.

But the problem of peace is that there is a reduced demand for weapons of war, and weapons of war are jobs and profits in the NORTH, and it is the NORTH that is in a position to set the global agenda.

The mindset that the Second World War helped to get the US economy out of the depression of the 1930s is still a factor in the way in which people think about military spending and jobs. In the USA, cutting spending on local bases is politically very difficult, and exporting guns and military hardware is seen as good for the US economy. What these exports do for the buying nations is not part of the decision matrix.

Everything associated with war generates jobs and profits in the NORTH as long as the war is in some remote part of the SOUTH.

But this is not just the United States. This is all the European nations, it is Japan and the Asian nations, it is Russia and the newly independent republics of the former soviet union. Every nation seems happy to sell armaments to other nations. Profit for the supplier, but potential mayhem for someone else.

But another sad fact of war is that enormous profits can be made. Manufacturing organizations that produce military equipment and supplies can make huge profits. And, sadly, there is no accounting and accountability for the terrible economic value loss and human trauma that arises as a direct consequence of these materials. Not to mention the economic disruption and chronic shortages of a war economy and the rationing of essentials and the anti-social role of “black market” business

The essential immorality of profiting from war has been with me since my first memories as a toddler in London during the Second World War. There is always money to be made when there are shortages and rationing and the market system is taken over by a regulated system. The black market was profitable and corrupt

A land mine can be made for a few dollars, of which a substantial part is profit. But a land mine can blow off the legs of an unsuspecting civilian farmer thousands of miles away and years later. If the civilian does not die immediately, the persons farming performance is going to be terribly diminished, and he and his family are going to suffer horribly. Replicate this thousands of times, and it is real damage to the society.

While litigation in the United States on behalf of victims of dangerous materials like tobacco and asbestos has generated billions of dollars of claim settlement on behalf of the “victims”, there is no similar movement to make claims against the manufacturers of weapons of war, though arguably, weapons of war are inflicting far more damage and devastation on the world's people than tobacco and asbestos.

Economic value flows are all from SOUTH to NORTH. By participating in the NORTH to SOUTH arms trade, developing countries are exchanging their tangible resources for the best that is produced for economic value destruction. And by choosing value destruction the SOUTH has landed in a situation where it has an impoverished economy and a disenchanted people who are largely hopeless.

The arms trade has been and continues to be one of the aspects of the global economy that makes development fail.

Chapter 1- 4 Poverty and Distribution of Wealth

Probably half the world's population is poor and hungry. Even while the world's aggregate wealth has been growing enormously over the past fifty years, faster than at any time in history, the number of poor people has grown as well. Debilitating poverty still affects about half the whole of the world's population or around 3 billion people.

Very few countries are rich, most are poor. Some people are rich, many are middle income but most are poor. The problem is the way resources are used and the way there has been economic value destruction in poor countries and economic value creation in rich countries. The problem is the process of economic value creation and the way it is managed for the benefit of the managers.

The same economic drivers serve to help rich people get richer and poor people stay poor. The fact that so many are poor is a worry to the rich, but it tends to be a reason for defending wealth and the wealth creating processes rather than being a catalyst to understand how more wealth can be created by the poor and indeed to benefit the poor.

The possibilities and promise looked for when the old European empires gave up their colonial possessions has not be realized to anything like the extent anticipated. But something is wrong when the world has half its population excluded from the possibilities.

The basic institutions that are being used to “govern” are not working very well, or at any rate are not working for the benefit of everyone. In fact the basic institutions seem to function in a way that ensures that the rich get richer and the poor get poorer. This is not by accident. It is because the basic economic model and the corporate business model that has emerged and proliferated during the past fifty years has a very limited planning horizon and short term focus.

Even though economic wealth has been created in the last fifty years at a pace never ever anticipated, it has concentrated to an extent that is dangerous. And the pace of concentration has continued to accelerate even as the boom times of the 1990s evaporate.

The role of “market economics” and the role of “globalization” have been discussed at length in a lot of places. But there is little in either of these themes that serve to explain how development has performed, how it is managed and how it can be reformed.

Just as the great fortunes of the industrial revolution and the early days of the oil industry and the automobile industry live on as major philanthropic foundations, the Carnegie Foundation, the Rockefeller Foundation, the Ford Foundation, etc. the new fortunes of the more recent past are spawning a new era philanthropic organizations. The Templeton Foundation in finance and the Melinda and Bill Gates Foundation from technology are examples.

But the underlying fact is that the same economic mechanics that made concentration of wealth happen in the “robber baron” days of 19th century capitalism still work the same in the much more highly sophisticated capitalism of modern times. And it also possible to say that the same foolishness that dominated the market in every boom time in history are still in play today.

And some of the same economic mechanics that worked in the mercantile empire era for the European empires still works for the economically powerful NORTH in its economic relations with the SOUTH. Just as colonial possessions provided raw materials for Europe's factories, now the SOUTH provides raw materials for the NORTH, and especially the United States.

And while much raw material production in colonial times had a big local labor content, modern raw material production is highly capital intensive with very little local labor and economic value adding.

In political terms the SOUTH has independence, but in economic terms the SOUTH is ruined and is facing disaster.

The world's wealth is now more concentrated in the financial centers of the NORTH than it was at the peak of empire. The difference is that New York is now bigger than Europe and Tokyo (and Beijing and Hong Kong) have important financial centers and function as part of the NORTH.

But the SOUTH is poverty stricken. Its financial base is almost non-existent. Even the oil rich exporting countries have failed to move solidly into the NORTH and remain outside the exclusive club of global leadership.

The idea that a single individual can get paid $1 million for a year's work raises lots of questions.
The idea that more and more at the top people of the NORTH are getting paid $10 million, $100 million or more is even more questionable. While a family in the SOUTH may not even get paid $500 a year. And a poor family in the USA may only be getting $10,000 a year, a lot more “money” than they would get in the SOUTH, but still true poverty because of the high cost of a lot of essentials in the NORTH.

The global economic system as it has been operating for the last few decades is doing some things very well, but it is a long way from perfect, and the way that rich and those in control positions are able to augment their riches while the poor are on an everlasting cycle of working to survive. In the NORTH the survival is “economic”. In the SOUTH survival is “staying alive”.


About the author

Peter Burgess

Peter Burgess has worked for more than 30 years in more than 50 countries. He is currently a co-founder of an international consortium of community based organizations that are advising on comprehensive integrated community centric sustainable development and a co-founder of the international transparency and accountability network (Tr-Ac-Net)

He has worked internationally as a corporate CFO and as an independent development consultant. He has a Cambridge University education in engineering. He also studied economics with a Cambridge Keynesian slant, as did his professional training as a Chartered Accountant with Coopers and Lybrand in the UK. During the first phase of his career he worked on heavy engineering construction in the steel industry, pulp and paper and civil construction, in the process moving from the UK to Canada and then to the United States. Later it was corporate expansion and profit performance improvement in consumer products and high tech products and the implementation of best practice management systems for planning and control all in the United States. In the mid 1970s his career went international again as the Chief Financial Officer for a US based international fishing company operating in 26 jurisdictions around the world.

In 1978 he started a consulting firm to specialize in international business and development. He has traveled to more than 50 countries on consulting assignments for the World Bank, for the UN and many of its specialized agencies for sector planning, national planning, refugee planning, famine and drought emergency planning, national reconstruction planning, aid coordination, information technology planning and implementation, privatization, management training, etc. Peter Burgess has had the opportunity to do planning and analysis work at the national level, the sector level and for regions and communities. His work has been done largely in collaboration with local local staff, consultants and professional firms. This has made it possible for him to see development in ways not normally seen by most international experts.

Peter Burgess's consulting experience also includes work with private sector companies based in or doing business in developing countries. These assignments included work on management, marketing, international trade, management and accounting systems, strategic planning, training, computerization, privatization and arrangement of financing.

Peter Burgess has been associated with many planning assignments in post war and post famine situations. He did work on Afghanistan rebuilding after the Soviet withdrawal in 1990 and worked on Namibia's (formerly South West Africa) first development plan after its independence in 1991. He worked in Kazakhstan as part of the post cold war reform effort and in Africa and the Caribbean on government financial reform. He has done planning work in connection with refugee emergencies in Sudan, Ethiopia, Somalia. Malawi and Zambia. He has done AID coordination work in several African countries as well as in South Asia.

Peter Burgess has a unique approach to development that combines a deep respect for human and cultural factors that are so important in a family's quality of life with an appreciation of the great possibilities and limits of technology. He is concerned that there cannot be sustainable development and progress without a new and significantly different development paradigm.


Book outline

Introduction
About this book. Why is it being written. Why the writer can write the book. What the writer hopes to achieve. What sort of impact a changed paradigm shift will produce.

SECTION 1 THE STATE OF DEVELOPMENT
Chapter 1 Development has failed
The first challenge is to get the reader to understand the scale of the failure of development. First, absolutely in terms of the total population that are affected by development failure. Second, relatively in terms of how some have progressed and other have not. Discussion of some of the big facts that have to be faced: famine and hunger, war and refugees, poverty and concentration of wealth.

SECTION 2 WHERE WE ARE
Chapter 2 The problems
This chapter gives an overview of the problems that seem to be causing development failure. The problem of too many people. The problem of not enough development resources. The problems of the development process. The problem of information in development. This chapter starts to move beyond the symptoms of the problems to understand the root causes that are the underlying reasons for development failure. This chapter starts to identify systemic factors. A start is made to go beyond the NORTH's perceptions of development problems as commonly portrayed in the media to a view that reflects more of the SOUTH's view.

Chapter 3 People – too many
Many of the problems of development are blamed on increase in population, and population pressures. But that begs the question of people as having value and their role as a resource. This treats people as liabilities and users or consumers rather than as assets and producers. The chapter challenges some of the issues about people that are used to explain development failure but which are more about the way organizations and societies fail people. It raises the question about people's wasted potential, lack of opportunity and disorganized organizations. It takes up the issue of how organizations with ineffective systems and processes destroy the potential of good people to do great work.

Chapter 4 Resources – not enough
Many of the problems of development are blamed on lack of resources, especially financial resources. There is a lot of dialog in development about lack of resources, and the inability to achieve sustainable development because of resource constraints. Every needed resource is a constraining factor. Human resources are not good enough. Organizational arrangements are not good enough. Infrastructure is not good enough. Natural resources are huge, maybe, but that is not important for local development progress. Machinery and equipment is inadequate. Working capital in business is very limited. Financial resources are short. Knowledge is irrelevant. In short, this chapter starts to challenge the prevailing view that development is impossible because of resource constraints.

Chapter 5 Process – value destruction
This chapter starts to show how nearly everything that has been done in the name of development for the past forty years has ended up with development progress in reverse. It shows how economic value destruction has become the prevailing development process, whether or not it is loan financing of development or grant financing. It shows that most interventions in the past forty years have removed wealth from developing countries rather than creating wealth in these countries. This chapter challenges the conventional ways in which development is implemented, in particular the “project” form of organization that dominates official development assistance (ODA). This chapter shows that development resources are used ineffectively throughout the ODA community. This chapter shows that the process does not result in minimum cost and maximum outcome, simply because the procedures and systems will not allow that to happen. Good people are beaten by bad systems and bad processes and ineffective organizations.

Chapter 6 Information – lots of it, but not much use
The chapter describes some of the information that is available about development and explains why this information has an enormously high cost, but dramatically smaller value. It explains why this information does not help much in making decisions about development. It shows how the data are good for economic analysis and are good material for journalists, but have little use in the effective management of development resources

SECTION 3 CREATING A WAY FORWARD
Chapter 7 There is a way forward
This chapter shows there is a way forward. The proposition is that there is a new way to think of development in terms of the four components: people, resources, process and information. The theme of the chapter is to think of people as being both the beneficiary and the driver of development, to think of resources as being abundant but needing mobilization, to think of process as a way to achieve economic value adding and information as a way to improve development performance, to measure performance and provide a new level of accountability in development.

Chapter 8 People – people centric development
This chapter puts people at the center of development, as the beneficiaries, as the definers of priorities, as the funders of development, as the implementers, as the managers, as the decision makers. It puts people in every corner of the development process. It expands on the ideas that when people have opportunity they can make better use of their abilities for good benefit. But it also recognizes that people are only as good as the team they are part of. So it takes up the question of how people can be organized to get things done. And how people need to be motivated for success. It addresses how to organize for success at every level, while keeping the priorities of people, and the enthusiasm of people so often lost in the humdrum of a typical large organization. It takes up the importance of having people well informed so that they are able to participate in priority setting and decision making and making accountability a factor in development performance.

Chapter 9 Resources – use what is available
This chapter addresses the issue of resources both from the perspective of resource availability as well as how resources are mobilized and allocated to priority works. The chapter explores ways in which available resources can be used to achieve maximum economic value adding and progress towards the goal of success in development. This chapter highlights the importance of all resources. Resources are not just money and financial resources. Resources are:

  • People. What is the human potential? What is needed so that people can do the maximum that they are capable of?
  • Organization. What are the capabilities of existing organizations? What is needed so that they can do the maximum that they can do? What professional organizations are there and what can they do?
  • Infrastructure. What is there? What is the best way to improve the infrastructure so that it can support the highest level of activity? What is the status of the roads, the communications, the clinics and hospitals, the transport systems, etc, etc?
  • Natural resources. What natural resources are there? How can local resources be used as an economic driver for the area? What is the natural economic potential of the area? What can agriculture do? Are their other local resources that have economic potential?
  • Machinery and equipment. What production capacity is there? Does business have what is needed?
  • Working capital. Does business have access to the working capital and liquidity it needs. What needs to be done to satisfy working capital needs?
  • Money. What money and financial services are available? How can salaries and suppliers be paid? What is the business model to generate positive cash flow? What are revenues? Is it market driven? Is it government budget? Is it grant based? Is it fee based? Is it mixed?
  • Knowledge. What knowledge is there? Is everything known that needs to be known. How to stay up to date. How to train new people. How to update knowledge and be in the global knowledge community.

Chapter 10 Process – economic value adding
This chapter describes how the development process can be made to work for people and be done by people and deliver on sustainable development and improved quality of life. It describes how the process must make best use of available resources. It shows how economic value adding can help to create development success out of everything that is done. The chapter describes the essentials of the process:

  • Plan: Use available information and knowledge to determine priority needs and figure out the best way to satisfy these needs based on available people and resources.
  • Organize: Get the resources lined up to do the work. Organize is not just in terms of human resources, but in terms of all resources including the mobilization of financial and other material resources.
  • Implement: Do the work. Generate the benefits. Pay the bills. Do the accounting.
  • Measure: Measure what was used and what was done and what was accomplished. Measure so that excellence can be seen and used to attract more resources.
  • Feedback: Use the measurements. Figure out how to do better. What went wrong? What went right? Get the information to decision makers that can change performance.

This chapter describes a dynamic process with multiple parallel tracks all progressing to success in the best possible way. It is not one single dumbing down of a process to one average for the whole world that makes no sense for anyone. It is process that respects individuals and family and community, and tries to make community better, one community at a time, but bringing to bear everything that might be helpful.

Chapter 11 Information – useful, independent, reliable, universal
This chapter explains the difference between data, information, knowledge and wisdom. It explains the role of private data and the role of public data. For public data, what are the needs, what resources, what uses and what results? This chapter describes how information can be useful, independent, reliable and universal and how enormously valuable data are in achieving development excellence and economic value adding. It describes how data should be organized, the metadata, the information architecture and the amazing ways that modern technology can be used in the management and distribution of information. The chapter addresses the issues of independence and reliability. The chapter addresses the potential problems of errors, insecurity, hackers, fraud or incompetence, and how to get information to be universally accessible through Internet and other appropriate technology. This chapter focuses on the information that is needed to make good plans, to get well organized, to implement well.

SECTION 4 ACTION NOW
Chapter 12 Let's get going
In this chapter there will be some ideas about what readers can do in practical terms and within their means to help. Relatively little help in the right places will make an enormous difference.

The Way Forward

The way forward must avoid the problems that constrained success in the past. There needs to be new approaches and ways of doing things rather differently. There needs to be a respect that development is a process, with a lot of linkages with the elements interrelated in very complex ways.

I have chosen to think of the elements of development grouped as follows. This works for me, but may not be the best way for other people.

  • People
  • Resources
  • Process
  • Information

And I think of process as having the following steps:

  • Planning
  • Organizing
  • Implementing
  • Measuring
  • Feedback

This way of looking at development sets the stage for practical solutions to the global development crisis. This way forward is a coherent whole, and can be the foundation for successful economic and social progress in the SOUTH. The way forward explicitly addresses some issues about the enabling environment for success that people in the NORTH now take for granted.

Nothing in the way forward requires difficult reform. Everything in this way forward can be done, and in a modest way is already being done.

But there has to be a deep appreciation of the problems, and an understanding and respect for people of different backgrounds and experience and capabilities.

Goals of development

Development in the context of this book is about socio-economic progress, and a process that improves people's quality of life and standard of living.

The goal of development is very clear. It is not just getting the maximum economic activity to benefit a relative few. It is much more than that. It is to give a lot more people an opportunity to live a life that has a lot more dignity and be a lot more secure and further away from death than is the present situation for almost half of the world's population. There are a lot of fancy ways to describe the goals of development, but the simple one is that poor people should have a better chance at life, liberty and the pursuit of happiness. But this is a great shorthand for what should be being done.

At the individual person level, and at the family level, development is easy to understand. I wrote the following almost 20 years ago. I had been working in an area affected by civil war and with refugees. A situation that has been all too common in the past few decades all over the world.

  • Families do not want to be killed because there is war and insecurity all around them.
  • Families do not want to die because there is no food and water for the family members.
  • Families do not want to suffer and possibly die because there is not enough clothing and inadequate shelter from the elements
  • And when the issue of todays survival is taken care of, the next priority is the survival of the family and procreation into the next generation. The survival of the children. The feeding and the nutrition and health of the children.
  • And then the education of the children
  • A taking care of the elderly and sick in the family
  • And jobs for the family members
  • And social responsibility for the community
  • And a role in the spiritual life of the community

Why has development failed?

We really need to know why development has failed. If we do not know why development has failed, then we do not know what to fix. So there is an enormous need to get an answer to this question.

Few in the official relief and development assistance (ORDA) community understand or accept that development has failed. In the broadest sense the development paradigm that has prevailed for the past three or four decades just does not work. Bits of it are functional, but most of it consumes resources and destroys economic value.

Though development has failed, nobody in the ORDA community is willing to answer the question as to why it has failed. The culture of relief and development has evolved in a way that makes it impossible to get a straight answer from ORDA organizations themselves. This is not a failure of people as much as it is a failure of organizations. The system is just not structured to allow this question to get answered because maybe it puts into focus too many issues that people need to leave undisturbed. There are people who know the answers, but they would be at risk of job loss or worse as soon as the question of failed development is answered.

Development performance cannot get answered within the ORDA organizations. The phrase “conspiracy of silence” is a good way to sound bite the issue. There is a culture that avoids transparency, and a culture that has no accountability.

Over and over again in my experience with development there were cases of complete ineptness. There were cases of outright fraud. But the system protects its own. And the system does not force these incidents of failure to be addressed. The system makes it difficult to be efficient while allowing incompetence and fraud to survive, and indeed, flourish.

Until the question of why relief and development has failed is answered, there is going to be a continuation of relief and development practices that produce “failed” results. The upsurge of criticism of development is not coming from the experts and the leadership of ORDA organizations but is coming from outsiders who see what is going on, and do not like what they see.

Getting to the root of the problem

The following was written to the "End Terrorism" list serve about two months after the terrorist attacks of 9/11 in 2001. Most of the ideas that I tried to express at that time still apply. My hope is that by trying to organize the thoughts in a “book”, my arguments will be better prepared and my hopes for implementing effective change will be more practical.

Subj: Getting to the root of the problem
From: Peter Burgess Date: 11/13/01
Dear Participants

I have not been able to follow recent discussion as much as I would like, and I might be repeating some of what has already been said.

Might does not have the power to end terrorism. History seems to show that terrorism happens when there is a high degree of hopelessness and it is quite clear that the power structure has no intention whatsoever of a meaningful change in the status quo.

These were arguments expressed over a century ago. Dickens did not like what he saw in the "justice" of the capitalist society of the day. Nor did Karl Marx who argued that the capitalist system could only be reformed by revolution. Most of the terrorist situations we are looking at today have this element.

The good news is that Karl Marx was wrong. The modern United States has demonstrated that it is possible to have an economic revolution without a physical revolution, and from the US perspective (and the NORTH as a whole) modern capitalism is a pretty efficient system and one that has made opportunity and work deliver great results for a very large community of people.

But NOT all people. The present wealth of the global NORTH and the present poverty of the global SOUTH is essentially an unstable situation. The challenge is to make it possible in this century for the economic success that has resulted from opportunity and innovation and hard work in the NORTH to be facilitated also in the SOUTH.

Clearly a lot of people like the American version of capitalism. The backlog of people who would like to come to the United States is vivid testament to that. But people are not so pleased that the NORTH has backed away over and over again from giving value adding development support to the SOUTH. The NORTH has not invested in the SOUTH in the post independence years with anything like the same commitment as the US invested in post World War II reconstruction in Europe and Japan. There has not been the private development investment flows to the SOUTH in the 20th century as there were to the United States and its Wild West in the 19th century when Britain and Holland made enormous financial investments in developing America .... and more than a century later still have major investment holdings.

Terrorism has root causes. Economics and a lack of economic equity and fairness and justness is one key root cause. Religion is not as much a root cause as an excuse and a rallying cry to mobilize the masses ..... and in the present context to motivate the terror operatives to commit their atrocities.

Yes we should attack the perpetrators of terror and eliminate them to the extent that it can be done.

But more important, we need to help remove the economic disparities that are ongoing, and mostly getting worse.

There are a number of major institutions that could make an enormous difference. These include the World Bank, USAID and the US Government, the other major donor governments, the UN and its specialized agencies ...... but most importantly the leaders of the global capital markets and the corporate community.

For the past 30 or 40 years the official relief and development assistance (ORDA) community has engaged in support for development that has resulted in "value destruction" rather than "value or wealth creation". This is mainly because most of the investment has flowed into the public sector where it has been "consumed" by the government rather than being a resource to facilitate wealth growth by the private sector and people. The private sector has not been able to flourish in most developing countries (nor in the Soviet Union) the way it has flourished in the United States (and the NORTH).

The private sector in developing countries as the engine of economic wealth creation has never had much fuel, yet the entrepreneurial spirit is alive and well, and with some nourishment can be again the driver of wealth creation and economic success.

The prevailing foreign direct investment (FDI) paradigm is, however, not a good solution. Yes, wealth is created but it mostly flows out of the host country, and the economic distortion caused by these projects are value destroying in the host community. And FDI often brings other social consequences that are undesirable. But investment in financing the entrepreneurial sector in the host country is a key, and must be done and done right.

The leaders of the global capital markets have the intellectual capacity to address the relief and development problem and the imbalance between the rich and the poor and do it well. These are the leaders that should become engaged because this thinking should not be done with an entrepreneurial mindset rather than in a socialist or communistic mode.

The use of global capital to fund socially responsible and highly profitable investment in developing countries is absolutely critical. The use of global capital resources to refinance the public sector in developing countries is critical. If a bankrupt New York City in the early 1980s can be saved, then a bankrupt developing world can be saved. The ability exists. Is there the will?

The need is more than debt reduction. The need is for refinancing and figuring out how socioeconomic progress can succeed ...... using the world's best knowledge ..... using the world's best technology ...... using human resources ...... using natural resources ...... and organizing and managing to make them create world wealth.

This is setting the stage for win-win, and global value creation or wealth creation. It goes a stage beyond just pipeline politics. It is about people and their quality of life. Make the pie get bigger, then ALL the slices can be bigger.

Our organization has much of the understanding needed to start making these things happen. We have been listening for many years to the needs of remote communities around the world ...... and we now know what they think would improve their quality of life. We know a lot about modern technology. We know a lot about organization and management and performance in development. We understand the concept of accountability.

Nobody needs terrorism. But sadly, we have got it and it will not go away until there is some positive and creative new thinking along the lines described

Peter Burgess


As a result of academic economic training I used to think that development performance could be best expressed in macro-economic terms. But as soon as I started to work practically with people in very poor communities in developing countries and even more so with refugees who had been uprooted from their homes it became apparent that this approach was ridiculous. It would be much better to start looking at development goals from the family perspective and perhaps the local community and working up, rather than looking at the macroeconomic elements and working down.

In a poor developing country the macroeconomic information badly reflects the socio-economic situation for almost all the population, but family focus information is extremely useful. There is a case for expressing development goals in terms of community matters. Communities usually know what it is that they need and want most, and it is not necessarily what people from the NORTH, or even another region in their country would think is the most important.

If we focus on people, and giving people opportunity, then we should find out what people need and want and what they can do best. Opportunity should not be constrained to what we in the NORTH think is the priority.

There is a case for thinking about development at the national level. But already the specific activities that are going to get the most added value is starting to be averaged out. By thinking at the national level, development success is already going to be less than it can be with thinking at the family level and the community level.

In my work experience from Myanmar to Mozambique, from Kazakhstan to Costa Rica, there are some community elements that seem to be common, and some that always seem to be different. The only way forward that will get the best economic value adding is one that has skilled listening at every step of the process.

Time to make changes

Changes should have been made long ago. Development was already in a failure mode two decades ago, but the changes made and the solutions chosen aggravated the failure.

It is time to try again. This book aims to help make changes. This book is about people and resources and process and information. This book is about planning and organization and implementation and measurement and feedback. These are all very basic concepts of organization and management, and all have value in the development context.

It is time that the ODA community and the financial and economic and political leaders of the NORTH are challenged about the failure of development in the SOUTH. Every year millions of people are dieing prematurely because of failed development. It is time to do an accounting and start to reengineer development.

I am at a great advantage. At my age I do not have to reflect my employer's views and I do not have to safeguard a pension, or be careful about my next career step. I have the unusual freedom to write what I believe.

In the first section of this book the problems of development are set out briefly and broadly as well as an outline the main elements of a logical solution. In later sections, the main issues of development performance and a framework of possible solutions are explored in more detail.