Bucking the Global Trend: Africa’s Economic Growth

Europe’s economic funk continues. Japan’s aging society is struggling under a huge pile of public debt and slow GDP growth. Recovery in the United States is about what can be expected from a post-financial crisis expansionary cycle. And in China, Communist Party leaders are adjusting to much slower growth. In much of Africa, though, growth prospects are strong, if we can believe aid agencies such as the World Bank and USAID.

On April 15th, the Washington-based World Bank issued a periodic check-up on Africa’s near-term growth prospects. Partly fueled by high commodity prices – especially for energy resources and minerals – continental growth is forecasted to be more than five percent per year over the period 2013-2015. The optimistic forecast also highlights the impact of increased consumer spending in many countries south of the Sahara, including places like Ethiopia, Angola, Ghana, and Mozambique. Indeed, many sub-Saharan states have seen above-average growth rates for more than a decade, leading to some reduction in still-high poverty rates. The diffusion of mobile phones and more predictable macro-economic conditions are key factors leading to better growth prospects.

USAID and the World Bank are probably right about continued high commodity prices. Even if some of this new African wealth is squandered through corruption, better terms of trade will lift many ordinary people out of poverty. A cautionary word is in order, though. Enclave-based development – especially if it involves oil or high-value minerals – can facilitate political instability and armed conflicts. Think diamonds in Sierra Leone and Angola, numerous precious resources in eastern Democratic Republic of Congo, and oil in Nigeria. In short, over-reliance on mineral and energy exports can lead to so-called “rentier states” (and failed states) that do not necessarily promote broad-based human development. Careful observers of the DRC and Nigeria know about the “resource curse” all too well.

So, boosting international trade between Africa and other continents is set to grow significantly in coming years. With luck and better governance, many states will avoid the worst excesses of the resource curse.

The perennial problem of limited inter-state trade in Africa also requires urgent attention. Vast distances, colonial legacies, poor governance, and under-investment in transportation infrastructure have all contributed to high costs of trade throughout much of the continent. As USAID indicates,

Trade among African countries makes up only 10 percent of the region’s total trade volume. In East Africa, it costs 50 percent more to move freight one kilometer than it does in the United States or Europe, and in landlocked countries transport costs can be as high as 75 percent of the value of the goods they are trying to export.

Like South Asia (India and its neighbors), Africa possesses huge potential for growth in intra-regional trade and investment. This potential will only increase if Africa’s middle classes continue to swell.

The economic news out of Africa is relatively good, particularly compared to the world as a whole. Still, it is worth remembering the continent’s patchwork pattern of progress on governance, peace, and economic reforms. The overall trend is clearly positive, but recent news out of the Central African Republic (CAR), Mali, and the DRC reminds us that progress is geographically uneven.

Obama’s Geopolitical Pivot to the Pacific

 

Submarine near Newport News Shipyard

The Newport News Shipyard (Huntington Ingalls Industries) in Virginia is the sole manufacturer of aircraft carriers in the United States. Pictured is a Virginia-class submarine. Photo credit: U.S. Navy (via Flickr, Creative Commons license).

On April 3rd, the new United States Secretary of Defense, Chuck Hagel, delivered his first major policy speech. Though broad in its outlines, the address provided further confirmation of America’s shifting geopolitical strategy. The relative shift from the Atlantic world to the Pacific world pre-dates the Obama administration, but that shift is taking on a new dynamic in this age of fiscal austerity.

In the early post-Cold War period, the United States was still primarily focused on engaging with and securing Europe and neighboring regions, including the post-Soviet states. An overwhelming concentration of America’s overseas military assets were located in the world’s most important peninsula of peninsulas (and to a lesser extent in Northeast Asia). Over twenty years after the close of the Cold War, America has gradually been realigning its military and diplomatic resources toward the western Pacific Ocean. As U.S. defense and foreign affairs budgets stagnate or decline in the coming decade, the world’s lone superpower will face stark choices about how to utilize shrinking resources.

In his policy speech at the National Defense University, Secretary Hagel indicated that naval and air power would play more important roles as the United States continues to pivot to the Pacific. Some see this shifting of assets as an expedient decision in an era of war-weariness, following the Iraq and Afghanistan wars. Others see this as the logical outgrowth of shifting to a region (East and Southeast Asia) that is ambivalent about the large-scale presence of Army and Marine units. A reliance on naval and air power will allow the United States to leave a lighter footprint in the region.

Hagel’s speech also highlighted the soaring costs associated with America’s military personnel, particularly health care costs. Downsizing the Army and the Marine Corps would ease some of this pressure related to health spending, though the military is partly suffering the same burden that the entire nation is facing with regard to out-sized spending on health care.

From a personal perspective the continued pivot to the Pacific is meaningful for my local community, Hampton Roads, Virginia. My region is home to the world’s largest naval base (Naval Station Norfolk), Langley Air Force Base (officially part of Joint Base Langley-Eustis), and other naval facilities. As well, tens of thousands of workers in my home area build and maintain aircraft carriers, submarines, and other naval vessels. Even as the “sequester” cuts are already having some impact in my home area, the longer term prospect for the local defense economy seems less dire than some American regions with ties mainly to land forces, even though some Virginia assets will likely be re-deployed toward the West coast in the coming years. The pivot to the Pacific will significantly impact both global geopolitics and local economies in the United States.

Mali as Mirage: State Failure and Regional Turmoil

Just two years ago, many outsiders were still praising Mali for its democratic credentials and relative stability.  The democracy monitoring group Freedom House categorized Mali as one of the few liberal democracies in West Africa. We can now see more clearly that the Sahelian state’s status in early 2012 was something of a mirage.

The Atlantic Council, a Washington D.C.-based think tank, recently held a lively panel discussion, entitled “Managing the Crisis in Mali and the Sahel.” The discussion was re-broadcast on CSPAN.

For those of you unfamiliar with CSPAN – especially non-American readers of this blog – this is the television network that shows sessions of the U.S. Congress, government press conferences, and other public affairs programs. Most Americans could truthfully tell you that they have never watched more than five minutes of CSPAN programming at one time. Even for me, a politics junkie, many CSPAN programs are quite dry and uninteresting.

In contrast, this Atlantic Council panel on Mali and its neighbors was lively and compelling. The full video is worth a look. If you don’t make it through the full video, here are a few high points, with some of my own commentary.

  1. Cote d’Ivoire’s instability in the 2000s is an underappreciated factor in Mali’s current crisis. Cote d’Ivoire’s turmoil disrupted and rechanneled Mali’s ties with the coast. This sequence of events is another reminder of the vulnerabilities of landlocked states. The panel also discussed the unintended and harmful effects of Libya’s upheaval for Mali.
  2. Mali’s economic foundation is now extraordinarily weak. Reconstructing the Malian state will require the emergence of legitimate economic activities that can supplant illicit trading and smuggling. In the years ahead, climate change will be an intensifying economic constraint for Mali and other Sahelian states.
  3. Mali’s civilian leaders did not adequately fund the military’s fight against northern rebels. As panelist Ricardo René Larémont bluntly stated, Mali’s military leaders had good reasons for launching their coup in 2012. Lack of weapons, equipment, and pay will lead many soldiers to leave the barracks and topple governments.
  4. International military training programs are worth doing, even if they don’t always have the desired results (e.g. Mali’s coup). On this point, particularly see the contributions of panelist Rudolph Atallah, who was formerly a top Pentagon official dealing with African affairs.
  5. Europe should be very concerned about intensifying flows of migrants and refugees out of this region.
  6. There is a debate about how threatening the region’s Islamist militants are to the West and the wider international community, contrary to the views of David Cameron. The Obama administration’s back-seat approach on Mali seems to reflect an ambivalence about how dangerous these militant groups actually are to the wider world.

Geopolitical Issues for Obama’s Second Term (2013-2017)

When Time magazine selected Barack Obama as their 2012 person of the year, they noted that the re-elected president is seeking to emphasize domestic issues in his second term. While this emphasis may come about, it is highly likely that foreign affairs will occupy much of Obama’s time after his second inauguration.

Following is a quick preview of seven key geopolitical issues that will likely occupy much of Obama’s agenda. What is remarkable is how few of these issues were intensively debated in the long 2012 election campaign.

  1. America’s fiscal health
    The early January deal on tax rates is only the beginning of efforts to restore balance to America’s public finances. If the president is successful in brokering a grand bargain with Republicans, defense and foreign affairs spending will inevitably decline in a significant way. Contrary to the perceptions of many Americans, the U.S. does not spend a great deal of money on international aid and non-military foreign affairs. It is particularly the Department of Defense that would have to adjust to an earlier era of austerity.
  2. Climate change
    In 2012, candidate Obama was stunningly quiet about the ongoing climate crisis. After the big letdown at the 2009 climate change conference in Copenhagen, world leaders committed to keep working on a comprehensive plan in South Africa in late 2011. Because of the Great Recession, and a market-driven shift to cleaner fuel sources, American greenhouse emissions are now lower than when Obama took office. Much hard work remains, and major battles loom over EPA regulations and U.S. participation in an international climate change framework.
  3. Iran
    It is quite possible that Iran will develop deployable nuclear weapons during the second Obama term. The real threat may be a chaotic nuclear arms race in the Middle East. As Ray Takeyh and others have argued, a nuclear Iran could be contained. Other consequences of a nuclear Iran may be harder to address.
  4. Political reform in China
    China is on track to become the world’s largest economy by 2020, if not several years before. That progress, and China’s growing influence around the world is directly dependent upon the country’s political stability. China’s new leaders will be severely tested over the next four years to manage political dissent and information flows.
  5. Transition in Afghanistan
    Though Obama did not start the war in Afghanistan, he took direct ownership with the surge of 30,000 additional soldiers into this failed state. The key issue is whether political reconciliation can occur with a sufficient number of the Taliban.
  6. Europe’s future
    Europe starts 2013 with some signs of hope. Notably, borrowing rates are sharply lower for most of the region’s governments. Yet, centrifugal forces in the European Union remain strong, and it is quite plausible that President Obama will have to help manage the disintegration of the EU.
  7. Illegal drugs and the Americas
    For now, immigration has receded as a defining issue in relations between the United States and its southern neighbors. It is not clear how interested Obama will be in proposing new solutions for the drug-related violence and instability confronting Latin America.

Helping Failed States in an Age of Austerity

Anti-austerity Protestors in Ireland

Protestors of austerity budgets in Dublin, Ireland, November 2012. Photo credit: informatique (via Flickr, Creative Commons license).

According to traditional wisdom, helping failed states is expensive. Right now, Europe, Japan, and the United States are loaded down by a massive debt burden. Emerging powers – including China, India, Brazil, Russia, and South Africa – don’t seem too interested in bankrolling expensive new state-building missions. So, it looks as though we are at an impasse. Except, that we’re not.

The first premise – on the financial costs of helping failed states – is not necessarily true. Successful state-building / reconstruction can involve long deployments of foreign militaries and billions of dollars in international aid. Foreign engagement in Afghanistan, for example, has been anything but cheap. Yet, this costly “big footprint” approach is not the only available option in assisting fragile states. And that is a good thing, given the unavoidable reality of this age of austerity.

Europe, Japan, and America are clearly in the midst of an age of austerity. “Austerity” simply refers to a massive and sustained program of public spending cuts (and tax increases). Even without the massive deficit spending associated with the Great Recession (2007-), these established industrial states were facing structural imbalances. In all of these areas – but especially in Japan and most of Europe – rapidly aging populations are severely straining prior social welfare commitments. In the U.S., a pervasive anti-tax culture has also starved the state, and therefore led to more dramatic tradeoffs between domestic spending and foreign assistance. On current trends, the present decade is likely to remembered by much of the world as a “lost decade” economically, due to the circumstances of austerity.

No matter. The onset of austerity could actually be a helpful stimulus to creative thinking about responses to state failure. Because we must come up with low-cost solutions to state decay, it is more likely that we will do so. Two key options are the following: 1) provide diplomatic flexibility to redraw the territories of existing states and 2) in rare cases, allow “stateless zones,” rather than push the development of modern states where they are not wanted. You can read more about these and other low-cost solutions to state failure in my new book, State Failure: Realities, Risks, and Responses ($4.99, available from Amazon, Barnes and Noble, and Kobo).

Persecuted Christians

I am a Christian. And I identify and sympathize with the tens of millions of Christ followers who face intense hostility and persecution in their daily lives. During this Christmas season, I think it is appropriate to call attention to the plight of persecuted Christians, even as we recognize that those from other faiths also face indignity and repression because of their spiritual beliefs.

Lest I quickly lose all of my non-Christian readers, let us begin with some other notable examples of religious persecution in today’s world. And, given their global influence, let us focus on Muslims.

In India, the Muslim minority (approximately 15 percent of the total population) has long faced discrimination with respect to employment, housing, and construction of mosques. At times, Indian Muslims (and Christians) have endured extreme episodes of communal violence, sometimes abetted by local public officials.

In Europe, the growing Muslim community faces more subtle, but still meaningful discrimination. In particular, Europeans have a long record of placing constraints and bans on mosque construction. In many Europeans countries – past and present – Muslims are forced to worship in “garage mosques” and other concealed worship spaces due to limitations of religious freedom. And, of course, some of these same restrictions are appearing in many localities in the United States, as the Muslim population in America grows.

That said, Christians are uniquely vulnerable to global persecution. And that persecution is particularly common and forceful in parts of Africa and Asia, including in some of the weak and failed states that are frequently covered by this blog.

An excellent source of information about persecuted Christians is The Voice of the Martyrs (VOM). VOM particularly focuses on a few dozen countries that are “restricted” or “hostile” to Christianity. Restricted countries are those that have formal laws or government practices that actively repress Christians (and usually other religious groups). Hostile countries are those such as Nigeria and India, in which Christians are routinely subjected to attacks or severe discrimination despite government attempts to prevent such persecution.

Jos, Nigeria Christians

The city of Jos is part of Nigeria’s religiously volatile “Middle Belt” zone. Pictured are members of the Evangelical Church of West Africa at a groundbreaking ceremony in Jos. Photo credit: Mike Blyth (via Flickr, Creative Commons license).

The politically difficult reality is that majority Muslim states compose the overwhelming majority of restricted and hostile states. And the vast majority of all majority Muslim states are “restricted.” Of the more significant majority Muslim states, Turkey, Jordan, Mali, and Indonesia are merely “hostile” environments, according to VOM. (The other key restricted states are China, North Korea, Burma, Vietnam, and Cuba.)

I am a Christian. But it is my divinely-given responsibility to seek peace with all people, including Muslims. It is also a fact that Muslim majority countries are some of the most difficult places for Christians in today’s world. During this Christmas season, Christians in safe environments would do well to not forget those in persistently difficult places.

Greece as a Failing State

Are some of Europe’s Mediterranean countries failing states? Spanish Prime Minister Rajoy’s recent comment that “Spain is not Uganda,” suggests that many southern Europeans don’t grasp the depth of their challenges. Nowhere is this truer than Greece. That ancient home of democracy is, in fact, a failing state.

One need not be an expert on Greek politics to support this claim. Once again, we only need to follow the money. Or, in this case, we need to ask what happened to the money (i.e. taxes).

Tax evasion is a universal game, but it has long been a massive problem in Greece. Non-payment of taxes – mostly orchestrated by under-reporting income – is a deeply ingrained culture that cuts across Greek social classes and regions. And this problem with tax collection is a key reason why Greece continues to teeter on the brink of fiscal collapse. Brad Plumer sums up the recent damage:

But why did Greece have such a massive budget deficit in the first place? One factor … was rampant tax evasion, which had starved the Greek government of funds. As it turns out, this was a very big deal indeed. The Wall Street Journal’s Justin Lahart points to a new paper (pdf) by three economists who estimate that the size of Greek tax evasion accounted for roughly half the country’s budget shortfall in 2008 and one-third in 2009.

The problem of Greek tax evasion, though, is about more than public finance and accounting. When journalists and researchers probe deeper into the country’s fiscal mess, they find systemic corruption, an incompetent tax collecting bureaucracy, and a breakdown in civic virtue.

When citizens routinely disregard the tax code, they undermine public finances, the rule of law, and a shared sense of civic purpose. And, though it is premature to call Greece a failed state, the country is now reeling from institutional and cultural decay (and its disadvantageous position in the Eurozone). It can recover, but the road to recovery will require more than adherence to an externally-imposed structural adjustment plan. Greeks must reconsider what citizenship means. In particular, they must re-instill a respect for the responsibilities of the governed.

*** Did you like what you read here? You might be interested in the new book by this blog’s author, Failed States: Realities, Risks, and Responses.