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Why the Africa lion stayed poor and the Asian tiger became rich

Posted by Administrator on December 25, 2011

Why did Asian tigers and not African lions become economically successful? The answer is simple: agriculture. In the sixties, newly independent African countries had more potential than their South East Asian counterparts. The reason why Africa is still poor is that it failed to invest in rural areas, a comparative study by the Tracking Development project shows.

The study, that took five years to complete, researched the development of four pairs of countries: Nigeria/Indonesia, Kenya/ Malaysia, Tanzania/ Vietnam and Uganda/Cambodia. The pattern that emerges is clear, says David Henley, Indonesia expert and one of the leaders of the project, which was funded by the Dutch Foreign Ministry: agriculture is the only effective tool for development.

He says that African countries can learn lessons from South East Asia’s effective development track record. This is what is required: 1. pro-poor, pro-rural public spending; 2. economic freedom and market access for peasants and small entrepreneurs; and 3. low inflation and stable currencies.

Political threat South East Asian governments had good reasons to invest in rural areas, because that’s where their most serious political threats came from. The rural masses were poor, vocal and well organized. Rural insurrections were looming. “In Africa, rural masses hardly have a voice. An African leader doesn’t need to be afraid of them,“ explains Dutch africanist Kees van Donge, Henley’s fellow project leader.

After independence, African governments were hoping that the benefits of their industrial investments would trickle down to rural populations. That never happened. In South East Asia, by contrast, measures to boost agriculture eventually benefited urban populations as well.

Van Donge says the rationale is simple: “You should focus on agriculture because most poor people live in rural areas; it’s easier to reduce poverty there. This, once it is achieved, gives rural populations the possibility to engage in productive work. The returns from agriculture are much higher and provide a foundation for industrialisation, not the other way around.”

Corruption At the project’s inception, it was believed that corruption did not have a major impact on development, as two notoriously corrupt countries, Indonesia and Nigeria, had achieved different levels of development. But in Indonesia, corrupt money was reinvested in the local economy, says David Uchenna Enweremadu, who did research in both countries. “And in Nigeria the money is taken outside to Switzerland and Britain, so you end up with a very negative type of corruption that is more harmful to development.”

The researchers also examined governance in both regions. Akinyinka Akinyoade, for example, found that with longer tenures in office, ministers in Indonesia had sufficient time to implement their policies, compared to Nigeria where the political turnover was high. When Nigeria had six finance ministers in 15 years, Indonesia had only one. “In Indonesia, ministers are appointed not because of their political or ethnic background, but because they are ready to deliver, and they get government support to get the job done,” says Akinyoade.

Public relations Bethuel Kinuthia compared development in his home country Kenya with that of Malaysia. One key issue, he found out, was finding foreign investment. He says Malaysia was able to attract foreign investors by improving the country’s infrastructure, and by setting up offices worldwide to promote itself as a place to invest. “What Kenya has done can barely be called PR,” he says.

David Henley says there is no reason why the Asian model could not be replicated elsewhere, decades later. “In any kind of developing country, I see agriculture as the only area in which interventions by governments or development agencies can do the job.”

All say they have gained new insights into the motors of development. For Kees van Donge it’s the realisation that African leaders and policymakers tend to focus on what they do not have. “They want to have factories like in Europe, while the Asian policymakers ask themselves what resources they do have and what they can do with them. I think Africa could benefit from that approach.”

Source: http://dailytimes.com.ng/article/why-africa-lion-stayed-poor-and-asian-tiger-became-rich

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