31 August, 2008
Development Dialoguing With the Big Guns
The rich and famous continue to march through my fair city. Friday evening, I attended an on-campus panel featuring Justin Lin, the World Bank’s newly installed Chief Economist. Dr. Lin is the first native of a developing country (China) to occupy this post. He has pledged to make African development the priority of his tenure, and Ghana, “the gateway to Africa,” was his first stop on the continent since being appointed Chief Economist. Dr. Lin was joined on the panel by, among others, J.H. Mensah, the Chairperson of Ghana’s National Development Planning Commission.
Dr. Lin’s address was titled, “Inclusive Growth and the Role of Knowledge: Lessons from China and East Asia.” Dr. Lin began by reviewing the four elements of competitive advantage identified by Harvard professor Michael Porter. They are (1) abundant, low cost factors of production (i.e. comparative advantage), (2) a large domestic market, (3) an industrial cluster (He didn’t define this. I’m assuming it means locating the various facilities needed for a good’s production close to each other, but that could be wrong), and (4) competitive markets.
A nation’s development depends on its willingness to pursue its competitive advantage. And so the historical argument: In the wake of World War II, East Asian nations pursued labor and resource intensive industries which played to their competitive advantages. The rest of the developing world did not. South Korea may be producing robots and cloning puppies today, but it only moved into those high-technology industries after it built up a comparative advantage in those fields. Similarly, the whimsical example of Chinese production women’s underwear for sale in Europe was held up as paradigmatic. China identified a labor-intensive industry, imported the machinery, acquired expertise, and then began to produce and export both panties and the panty making machines. Dr. Lin’s example, not mine.
According to Dr. Lin, Latin America, Africa, and South Asian adopted competitive advantage defying (CAD) policies by attempting to engage in capital intensive industries like auto manufacturing. They could not compete with more developed nations. Their problems were compounded by interventionist national governments whose economic policies such as subsidies and price setting, led to crony capitalism, rent seeking, and low efficiency. Dr. Lin advocated for the emergence of “facilitating states,” or those governments which collect and disseminate information, provide education and infrastructure, and institute reasonable bankruptcy laws so that entrepreneurs are not unduly punished if their ventures fail. He ended by asserting that if Ghana followed its comparative advantage, perhaps in cocoa or shea butter, then it could join the ranks of medium-income countries within a generation.
Dr. Lin has his PhD in Economics from the University of Chicago. He is one of the most influential minds in development economics. My economic credentials include the successful completion of Introduction to Economics at Furman. Nevertheless, how can we identify youth unless it goes arm and arm with brashness? So I’ll say it: I was underwhelmed by the Chief Economist’s argument. Telling a developing nation to grow by following its competitive advantage is roughly equivalent to telling an unemployed person to get a job by going to work. I’m not the only one who noticed that not-so-subtle nuance. One of the other speakers and an audience member made reference to it.
I was vaguely aware that the evidence for complicating Dr. Lin’s presentation was readily available, so, for the benefit of myself and my reader(s), I did some research. When considering the theme of Dr. Lin’s speech, lessons for the developing world from the rise of China and East Asia, I think it’s also important to consider (1) the IMF’s and World Bank’s prior activities in Ghana, and (2) the actual policies that China and East Asia followed.
Point number one is that starting in 1983 when it received its first IMF structural adjustment loan, Ghana was considered a darling of the Bretton Woods institutions. From 1983-2000, it received 26 such loans. Over that period Ghana did register moderate growth (1.2%), but the country bordered on economic collapse due to high inflation (averaging 32% over that same period) [William Easterly, White Man’s Burden, 67]. I’m not asserting causation between the structural adjustment program and Ghana’s economic woes. Maybe the case could be made that Ghana did not properly curtail government spending or corruption over that same period. I’ll do more digging, but I’m pretty sure I’ll be hard pressed to find anyone who considered structural adjustment a success anywhere in the developing world.
Two of the speakers referred to the fact that at independence in 1957, Ghana and Korea had the same GDP per capita. South Korea’s GDP per capita is now 10 times higher than Ghana’s. Dr. Lin pointed to Ghana’s failure to follow its competitive advantage to account for the economic divergence between the two nations. He might also have acknowledged the formidable health challenges facing Ghana’s work force. The World Health Organization estimates that it would cost about US$40 per person per year to meet the essential health needs of a Ghanaian worker [Michael Weinstein, “The Economic Paradox of Ghana’s Poverty,” Financial Times 10 Nov. 2003]. Structural adjustment programs required developing nations to cut their social welfare spending.
Finally, China’s rise was not driven by marching in lock-step with neoliberal economic prescriptions. In Easterly’s words, “[China’s economy] combines lack of property rights with free markets, Communist Party dictatorship with feedback on local public services, and municipal state enterprises with private ones. ” [Easterly 354] Korean growth is also partly attributable to state owned enterprises. The story is more complicated than the discovery and pursuit of competitive advantage.
And you thought I was just going to be talking about what I had for lunch. This is just the first round on this set of fascinating and important issues. Especially since I’m taking Theories of Development this semester, I’ll be thinking and writing a lot on this over the next few months.
Dr. Lin’s address was titled, “Inclusive Growth and the Role of Knowledge: Lessons from China and East Asia.” Dr. Lin began by reviewing the four elements of competitive advantage identified by Harvard professor Michael Porter. They are (1) abundant, low cost factors of production (i.e. comparative advantage), (2) a large domestic market, (3) an industrial cluster (He didn’t define this. I’m assuming it means locating the various facilities needed for a good’s production close to each other, but that could be wrong), and (4) competitive markets.
A nation’s development depends on its willingness to pursue its competitive advantage. And so the historical argument: In the wake of World War II, East Asian nations pursued labor and resource intensive industries which played to their competitive advantages. The rest of the developing world did not. South Korea may be producing robots and cloning puppies today, but it only moved into those high-technology industries after it built up a comparative advantage in those fields. Similarly, the whimsical example of Chinese production women’s underwear for sale in Europe was held up as paradigmatic. China identified a labor-intensive industry, imported the machinery, acquired expertise, and then began to produce and export both panties and the panty making machines. Dr. Lin’s example, not mine.
According to Dr. Lin, Latin America, Africa, and South Asian adopted competitive advantage defying (CAD) policies by attempting to engage in capital intensive industries like auto manufacturing. They could not compete with more developed nations. Their problems were compounded by interventionist national governments whose economic policies such as subsidies and price setting, led to crony capitalism, rent seeking, and low efficiency. Dr. Lin advocated for the emergence of “facilitating states,” or those governments which collect and disseminate information, provide education and infrastructure, and institute reasonable bankruptcy laws so that entrepreneurs are not unduly punished if their ventures fail. He ended by asserting that if Ghana followed its comparative advantage, perhaps in cocoa or shea butter, then it could join the ranks of medium-income countries within a generation.
Dr. Lin has his PhD in Economics from the University of Chicago. He is one of the most influential minds in development economics. My economic credentials include the successful completion of Introduction to Economics at Furman. Nevertheless, how can we identify youth unless it goes arm and arm with brashness? So I’ll say it: I was underwhelmed by the Chief Economist’s argument. Telling a developing nation to grow by following its competitive advantage is roughly equivalent to telling an unemployed person to get a job by going to work. I’m not the only one who noticed that not-so-subtle nuance. One of the other speakers and an audience member made reference to it.
I was vaguely aware that the evidence for complicating Dr. Lin’s presentation was readily available, so, for the benefit of myself and my reader(s), I did some research. When considering the theme of Dr. Lin’s speech, lessons for the developing world from the rise of China and East Asia, I think it’s also important to consider (1) the IMF’s and World Bank’s prior activities in Ghana, and (2) the actual policies that China and East Asia followed.
Point number one is that starting in 1983 when it received its first IMF structural adjustment loan, Ghana was considered a darling of the Bretton Woods institutions. From 1983-2000, it received 26 such loans. Over that period Ghana did register moderate growth (1.2%), but the country bordered on economic collapse due to high inflation (averaging 32% over that same period) [William Easterly, White Man’s Burden, 67]. I’m not asserting causation between the structural adjustment program and Ghana’s economic woes. Maybe the case could be made that Ghana did not properly curtail government spending or corruption over that same period. I’ll do more digging, but I’m pretty sure I’ll be hard pressed to find anyone who considered structural adjustment a success anywhere in the developing world.
Two of the speakers referred to the fact that at independence in 1957, Ghana and Korea had the same GDP per capita. South Korea’s GDP per capita is now 10 times higher than Ghana’s. Dr. Lin pointed to Ghana’s failure to follow its competitive advantage to account for the economic divergence between the two nations. He might also have acknowledged the formidable health challenges facing Ghana’s work force. The World Health Organization estimates that it would cost about US$40 per person per year to meet the essential health needs of a Ghanaian worker [Michael Weinstein, “The Economic Paradox of Ghana’s Poverty,” Financial Times 10 Nov. 2003]. Structural adjustment programs required developing nations to cut their social welfare spending.
Finally, China’s rise was not driven by marching in lock-step with neoliberal economic prescriptions. In Easterly’s words, “[China’s economy] combines lack of property rights with free markets, Communist Party dictatorship with feedback on local public services, and municipal state enterprises with private ones. ” [Easterly 354] Korean growth is also partly attributable to state owned enterprises. The story is more complicated than the discovery and pursuit of competitive advantage.
And you thought I was just going to be talking about what I had for lunch. This is just the first round on this set of fascinating and important issues. Especially since I’m taking Theories of Development this semester, I’ll be thinking and writing a lot on this over the next few months.
27 August, 2008
My First Rotary Meeting in Ghana
Two events in the past week have given me an introduction to the Rotary in Ghana. On Saturday, I received a call from my host counselor, Dr. Gyabaa, inviting me to his home near Accra. An hour later, I was drinking a Guiness Malta and being plied with heaps of jollof rice in the Gyabaa home. I met Dr. Gyabaa’s wife and two of his five children. By rather unbelievable coincidence, one of Dr. Gyabaa’s sons had applied to Furman, though he ultimately decided to attend college in Ghana. Dr. Gyabaa’s hospitality was very much appreciated.
On Monday, I joined Dr. Gyabaa at the Labaadi Beach Hotel for my first Rotary club meeting in Ghana. Unfortunately, due to the aforementioned traffic, I only arrived for the last twenty minutes of the meeting, so a more comprehensive account of the praxis and practice of the Ghanaian Rotary will have to wait until next time. Dr. Gyabaa has shared with me a few details about his club, however. It is the first and largest club in Ghana. Chartered in 1958 just a year after independence, the club still boasts an active and involved membership fifty years later. I was deeply disappointed to have missed the speaker at this Monday’s meeting. The gentleman was associated with an organization involved in supervising the upcoming presidential elections. I suppose they’ll just have to bring me back to Labaadi Beach for another lunch and another speaker. I never said that being a Rotary scholar was challenging all of the time.
On Monday, I joined Dr. Gyabaa at the Labaadi Beach Hotel for my first Rotary club meeting in Ghana. Unfortunately, due to the aforementioned traffic, I only arrived for the last twenty minutes of the meeting, so a more comprehensive account of the praxis and practice of the Ghanaian Rotary will have to wait until next time. Dr. Gyabaa has shared with me a few details about his club, however. It is the first and largest club in Ghana. Chartered in 1958 just a year after independence, the club still boasts an active and involved membership fifty years later. I was deeply disappointed to have missed the speaker at this Monday’s meeting. The gentleman was associated with an organization involved in supervising the upcoming presidential elections. I suppose they’ll just have to bring me back to Labaadi Beach for another lunch and another speaker. I never said that being a Rotary scholar was challenging all of the time.
18 August, 2008
The Swing of Things
The adjustment process continues. My movements have been confined mostly to the campus. I have visited three suburbs of Accra (Medina, Osu, and Achimota) for shopping but am yet to make it into Accra proper. I have logged one successful run on a tro-tro. Tro-tros are the nearly ubiquitous vans that offer cozy (or cramped depending on your mood) and cost effective (though taxis are not terribly expensive either) transportation to pretty much anywhere you want to go. A twenty minute ride the other day cost me 35 pesawas, or about 35 US cents.Regardless of how you travel, the traffic is pretty slow around Accra. There’s a great deal of construction. I think at least some of it consists of projects funded in part by the U.S. Millennium Challenge Corporation, which is supporting infrastructure upgrades, particularly between Accra and the port of Tema.
Personally, I feel that I’m adjusting well. I’ve already had several engrossing conversations, many started spontaneously by strangers eating at the same food stand or sitting on the same bench. I was told that Ghanaians would be extremely friendly, and my experiences on the campus have certainly born that out. The most recent Pew Global Attitudes Survey notes that about 70% of Ghanaians have favorable views of Americans. For the most part, it seems that any anger with US foreign policy is directed at the government and not confused obrunis (Twi for white people).
I’ve been eating well. For breakfast, I usually have fruit (bananas or a mango) or a bread and egg sandwich. Lunch and dinner are usually organized around a starch, either jollof rice or pounded cassava or maize. The pounded cassava or maize comes in doughy balls called fufu and banku. You use your right hand to break off a piece (the left hand is considered unclean and therefore not appropriate for eating, shaking hands, etc.) and dip it in a soup which may be based on groundnuts (peanuts) or palm oil. I’ve also had beans with plantains and gari, which is a powder made from dried cassava. I’m sure I’ll become more food savvy in the coming weeks, but for now I’m happy that I’ve found good tasting meals that agree with my stomach.
Projects for the week include straightening out my academic program, searching out internship/volunteer opportunities, and continuing to explore the library.
Personally, I feel that I’m adjusting well. I’ve already had several engrossing conversations, many started spontaneously by strangers eating at the same food stand or sitting on the same bench. I was told that Ghanaians would be extremely friendly, and my experiences on the campus have certainly born that out. The most recent Pew Global Attitudes Survey notes that about 70% of Ghanaians have favorable views of Americans. For the most part, it seems that any anger with US foreign policy is directed at the government and not confused obrunis (Twi for white people).
I’ve been eating well. For breakfast, I usually have fruit (bananas or a mango) or a bread and egg sandwich. Lunch and dinner are usually organized around a starch, either jollof rice or pounded cassava or maize. The pounded cassava or maize comes in doughy balls called fufu and banku. You use your right hand to break off a piece (the left hand is considered unclean and therefore not appropriate for eating, shaking hands, etc.) and dip it in a soup which may be based on groundnuts (peanuts) or palm oil. I’ve also had beans with plantains and gari, which is a powder made from dried cassava. I’m sure I’ll become more food savvy in the coming weeks, but for now I’m happy that I’ve found good tasting meals that agree with my stomach.
Projects for the week include straightening out my academic program, searching out internship/volunteer opportunities, and continuing to explore the library.
13 August, 2008
Kofi Annan Was Here
Ghana's hopes for an Olympic medal were dashed the other day as its last Cuban-trained boxer was defeated. The nation and this very university had another shot at the international news cycle this week as none other than former UN Secretary General Kofi Annan, was installed as the University Chancellor. The ceremony was attended by the President of Ghana, John Kuofor. Although I did not get the chance to give Chancellor Annan my new cell phone number or invite him back to my room for some water and reading, another Ambassadorial Scholar and I did make our way up to the Great Hall where the ceremony was taking place (picture included). There we saw the new chancellor and assembled dignitaries from a tv screen outside the building.
Secretary Annan adds to the University of Ghana's already growing profile. I don't have enough information to comment authoritatively on the state of tertiary education in West Africa, but I think I'm safe in saying that the options and access of residents are limited. Nevertheless, I said Legon (another name for the university after the wealthy suburb of Accra in which it's located) is on the rise. I received some insight into this fact when I was unexpectedly roped into an orientation session for freshmen. The University of Ghana's enrollment as of the 92/93 school year was about 2,000 students. By 97/98 enrollment had jumped to about 9,000. Incredibly, over the next decade, that figure tripled to the current student population of over 27,000. This at least in part accounts for the flurry of construction taking place all over the campus.
12 August, 2008
I have arrived safely and am (almost) completely settled in, thanks in large part to the very generous help of all sorts of people at the University. Assurances that people here would be extremely friendly have been more than born out by my few days worth of experience.
For those of you not familiar, let me quickly explain what I am doing at the University of Ghana at Legon. I was awarded a Rotary Ambassadorial Scholarship by District 7750 of Upstate South Carolina. Rotary, an international service-oriented organization for professionals, offers scholarships to students around the world. The Ambassadorial Scholarship empowers young people to be ambassadors of goodwill, sharing and absorbing a foreign culture. I selected the University of Ghana for its reputation as one of the finest colleges in West Africa. I am drawn to West Africa intellectually becaus of its connection to a range of important issues including global poverty, socio-economic development, democratization, the politics of oil, and the historic and current impact of U.S. foreign policy. I will be writing about all of these issues in this blog.
At the University, I will pursue an MA in African Studies, which will take approximately 12 months to complete. My Rotary Scholarship is covering my tuition, room, board, and travel expenses. It is only thanks to Rotary's generous financial support that this amazing opportunity is possible. My sponsor counselor, Dr. Gyabaa, even came to meet me at the airport.
I'll post again later this week with pictures, more details about the University, and my initial impressions of my new home. In the mean time, if you have comments or questions, please feel free to contact me at petedemarco@gmail.com. Thanks for checking in.
For those of you not familiar, let me quickly explain what I am doing at the University of Ghana at Legon. I was awarded a Rotary Ambassadorial Scholarship by District 7750 of Upstate South Carolina. Rotary, an international service-oriented organization for professionals, offers scholarships to students around the world. The Ambassadorial Scholarship empowers young people to be ambassadors of goodwill, sharing and absorbing a foreign culture. I selected the University of Ghana for its reputation as one of the finest colleges in West Africa. I am drawn to West Africa intellectually becaus of its connection to a range of important issues including global poverty, socio-economic development, democratization, the politics of oil, and the historic and current impact of U.S. foreign policy. I will be writing about all of these issues in this blog.
At the University, I will pursue an MA in African Studies, which will take approximately 12 months to complete. My Rotary Scholarship is covering my tuition, room, board, and travel expenses. It is only thanks to Rotary's generous financial support that this amazing opportunity is possible. My sponsor counselor, Dr. Gyabaa, even came to meet me at the airport.
I'll post again later this week with pictures, more details about the University, and my initial impressions of my new home. In the mean time, if you have comments or questions, please feel free to contact me at petedemarco@gmail.com. Thanks for checking in.
06 August, 2008
Almost gone
Thank you for checking out my blog. I plan on using this as a platform to record some thoughts while I study at the University of Ghana on a Rotary Ambassadorial Scholarship.
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