Thursday, May 13, 2010

WIDER Panel: Paul Collier, the one man panel

Agriculture in Africa has been bound by European romanticizing, such as anti-GMO lobbies (anti-science, "health nuts")
Europe shot itself in the foot. Africa in the heart. Why? Africa needs agriculture and GMOs. Not a magic bullet, but important.
Second romantic affair is with European organic peasants. That wants to preserve Africa is the past. They want Africa to develop, but not by changing.
Commercialization of African agriculture will happen. Some by natural conglomeration, some by foreign companies coming in.
Fiscal policy needs to be more honest about counting the returns to deficit and debt - remember there are positives - make sure they're large enough to justify the deficit.
Microfinance is important, but not a transformation. We err. We need rules to protect ourselves from our own folly.
Western financial markets got deeper bcs local bankers had close relationships with firms in their area & got involved in management.
The risk is high in Africa - so is the need for information. Use the venture capital formula, not low & order model.
Role of government is not to manage retail, but to regulate. NGO model is Governments minus accountability. NGOs have to learn accountability to governments where they are working. "We're not giving OUR money to the gov" said NGO funded by the gov
Experiment and Evaluation needs to be built in to African governance approaches. Try different things at the same time.
Freetown was planned as a town, infrastructure of a town, population flooded in - no investment in years. Potential for growth lost.
Diversification is difficult bcs Africa the last to manufacturing. Scale economies no longer in product, but in the task. That helps Africa - don't need ALL the skills and capital. Choose the task & clusters. It doesn't need protection in Kenya. It needs protection in markets.
Voters are not presented with policies, so there isn't even a debate or informed society. Africa has had elections without checks and balances. A disaster because incumbents learn how to win by all allowed means.
If governments don't have capacity to tax, they don't benefit from economic growth. Few countries have built that capacity.
Sovereignty retained by Burundi vs. sovereignty retained by Germany in the EU. No comparison. Germany given up so much.

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