TDUD

Turning Development Upside Down
A book about reforming relief and development

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


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