On February 6 my IB year 2 Economics classes welcomed Dr. Irene Forichi, former Research Officer for Zimbabwe’s Ministry of Agriculture, and former Regional Emergency Agronomist for the Food and Agriculture Organization for Southern Africa. Dr. Forichi spoke with our classes about the role of agricultural productivity in contributing to human development and economic growth in Southern Africa.
For students or teachers who are interested, she delivered an excellent presentation about the agriculture-related obstacles to and strategies for economic development in the Southern Africa Development Community (SADC). Her presentation can be viewed here, or the PowerPoint she presented can be viewed below.
Teaching at an international school affords me the privilege of encountering and learning from truly unique and diverse individuals. Last week, my Economics classes were lucky to have as a guest speaker one very interesting and inspirational young man named Andrew Cunningham. Andrew, originally from Vermont, graduated from Duke University in 2008 and has helped co-found a non-governmental organization (NGO) focused on promoting grassroots strategies for economic development. WISER (Women’s Institute for Secondary Education and Research) serves a community of 35,000 in Kenya’s Muhuru Bay, an area where the per capita income is around $1 a day and 38% of the population is HIV positive.
Traditionally, less than 5% of young girls complete primary school in Muhuru Bay. In the town’s history, only ONE girl has ever gone to university (she would become the only Muhuru Bay native to complete her PhD and would eventually co-found WISER with Andrew). A combination of tradition, culture, and most importantly poverty had prevented improvements in the plight of woman in this poor corner of Africa. What was needed, decided Andrew and his founding partners, was an all-girls boarding school where opportunities for young women were promoted and academic achievement encouraged and fostered. WISER opened the community’s first all-girls secondary school in 2010 to 130 local girls who had made it through primary school.
Beyond female education, WISER have embarked on several other development projects in the last year and a half. In his visit to our IB Economics class, Andrew told the story of human development in Muhuru Bay as occurring primarily in three realms.
I will briefly summarize the three main development strategies WISER has employed in Muhuru Bay, starting with education.
Education as a development strategy:
Education is a primary and fundamental strategy for eradicating poverty. A nation’s human capital is its most vital resource, and the road to prosperity requires an effective education system that does not discriminate based on race, gender, or socioeconomic status. In Muhuru Bay, which is 14 hours by car across un-paved roads from Kenya’s capitol, the education system had failed to achieve meaningful results, both for boys and girls. Student performance on national examinations across the primary grade levels had historically averaged around 11% passing rates. Boys out-performed girls, but as a whole only about one in ten Muhuru Bay children passed the examination required for admittance to secondary school in Kenya.
WISER wished to improve this dismal statistic. If they were going to build a secondary school for girls, they would need to first get girls to pass the national exam for entrance to secondary school, or else their new building would be full of empty desks.
Andrew first talked to my class about the traditionaldevelopment community (think World Bank, UNICEF, USAID) approach to promoting education in Africa. You are probably thinking the way to help these kids is to give them resources to improve their education. Build better schools, give them textbooks and school supplies, maybe uniforms, build a library, electricity in the classroom, chalk boards, heck, how about we give them laptop computers! All of these ideas represent the traditional development community’s approach to improving education in poor countries. The problem is that these strategies focus only on the inputs into education, and completely fail to look at the output.
Inputs and outputs are common topics of discussion in any Economics class. To produce anything, three resources are required: land, labor, and capital. The traditional approach to improving education in Africa focused primarily on the land and capital. Things such as pens, notebooks, laptops, and new libraries are great, but they have little actual impact on what gets learned in a school. The neglected factor was the labor (i.e. the teachers!) In Muhuru Bay, teachers were paid so miserably and worked in such dismal conditions that the incentive to actually improve their students’ results was just too weak! With passing rates at 11% on national exams, WISER set about figuring out how to use incentives to improve the outputs of education in Muhuru Bay.
A simple and relatively low-cost plan was put into action. Teachers were told that if their students’ scores increased by only 15% on the exams, they would receive a 100% increase in their salary. Andrew and WISER worked with the national education ministry to develop interim exams that could be given quarterly to help the teachers measure their students’ improvement before the annual national examination.
With only minimal investments on the land and capital resources (i.e. textbooks and classroom materials) in Muhuru Bay schools, and by spending less than $10,000 on teacher raises, the passing rate among Muhuru Bay schools increased in one year from 11% to 36%. Hundreds of students, boys and girls, who would not have been able to enter secondary school the previous year, instead passed the exam and were eligible for a secondary education, a crucial step towards a better future!
The teachers’ incentive pay program was such a success in Muhuru Bay last year that the state government has taken notice and intends to implement it in other rural communities throughout Kenya. By focusing on the outputs (student learning), rather than the inputs (classroom resources) WISER has assured that when their all-girls school opens in January, its seats will be filled with qualified students who successfully completed their primary education.
Health as a development strategy:
The second topic of Andrew’s discussion with my IB Economics classes focused on health and sanitation, specifically solving the problem of open defecation (“OD” is a technical term used in the development community referring to the fact that in many poor communities basic latrines are non-existent, and therefore people shit in the open). OD in Muhuru Bay contributed to the poor health and low life expectancy of locals; According to Andrew an estimated 60 people were dying each year of cholera, a disease spread via human waste.
In the health realm of traditional economic development programs, the same basic dilemma between focusing on the inputs or the outputs had stymied previous attempts to reduce OD in Muhuru Bay. Recently, an outside aid organization had made loans to the community to build 30 public latrines. Within a year, however, the latrines had fallen into disrepair and were essentially useless. When Andrew and his team asked the community members why they had let the latrines fall into such a poor state, their answer was predictable. These were not their latrines, they belonged to the aid organization that had built the latrines. If they were broken, the aid organization could fix them! Such logic reflects a common problem in economics, that of the tragedy of the commons. Because the latrines were public, no one owned them. Because no one owned them, no one cared for them. When the latrines fell out of repair, people quickly reverted back to OD, and instances of cholera and other diseases increased once more.
WISER decided to tackle this problem using a similar approach as the one used to fix primary education in Muhuru Bay, by focusing on the output, rather than the inputs. In this case, the goal was simple: create incentives for people to build their OWN latrines, which they would then have an incentive to take care of and use. The strategy for promoting personal latrines they decided to employ is one that has been successfully implemented throughout the developing world, and is now funded by UNICEF, which trains facilitators to go into a community and in a very short time, and at a very low cost, incentivize the locals to take sanitation into their own hands and build their own latrines.
Community Led Total Sanitation (CLTS) is a mind-blowing and shockingly blunt way to promote sanitation. Rather than spending thousands of dollars to build public latrines, the CLTS approach brings community members together for an afternoon of discussion and education about sanitation issues. Locals are asked to take an index card and go to “where they shit” and collect a sample of their own waste. A large pile of human waste is placed on a table in front of a room full of locals right next to a large selection of delicious foods. The facilitator then goes about discussing basic facts related to OD in the community, such as “If you added up all the shit your community produces in a year, how many donkeys would it weigh as much as?” or, “How many bags of rice would you have to eat to create this much shit?” In the mean time, of course, hundreds of flies have descended on the pile of waste in the front of the room, and the community members look on in utter disgust as the flies jump from the feces to the food and back again.
At the end of the lecture, the facilitator turns to the food and says, “Well, it’s time for lunch, who’s hungry?” In utter disgust, the locals ask the facilitator if he has gone mad. The lesson, of course, is that the food and water the community consumes is most likely being contaminated by the waste they produce and deposit in the open around their village. Within a few weeks of the CLTS project in Muhuru Bay, 256 new latrines were built by the community members themselves. Whereas previously, only around 15% of the locals used latrines regularly, after the CLTS project around 75% had access to the “facilities”.
The total cost of the CLTS sanitation project? Around $55, a tiny fraction of the cost of building the public latrines that had previously been neglected by the community. By focusing on the outputs rather than the inputs, real development in the health of the community was achieved at a very low financial cost.
Entrepreneurship and micro-lending as a development strategy:
The final approach to human development in Muhuru Bay Andrew discussed with my classes focused on the economic empowerment of community entrepreneurs. Micro-lending is a much talked about and widely used development strategy that provides financial credit or technology loans to entrepreneurs in poor communities to create small businesses, ideally ones with a socially beneficial purpose. Watch the first 12 minutes of the video below to get a better idea of the history and purpose of micro-finance as a strategy for achieving economic development.
In Muhuru Bay, the micro-lending scheme Andrew has pioneered involved not financial capital, but physical capital (i.e. technology).
WISER was able to secure several technology donations, including a copy machine, several laptop computers with cellular internet connections, a foot pump for water, and a digital LCD projector. WISER then solicited loan requests from several “young entrepreneurs”. Young men and women wrote business plans outlining how they would use the technology loans to generate income for themselves and the community, and provide services that would benefit others in the Muhuru Bay community. The technology would not be donated to the recipients; rather they would be required to pay back the value of the capital through their business revenues.
It is simply amazing how a few pieces of second-hand technology, items that we in the rich North would take for granted as relatively common and thus of very little social or economic value, can completely change a poor community in Africa for the better. Here’s how some of the capital Andrew and WISER loaned to young entrepreneurs were put to use to achieve meaningful development in Muhuru Bay:
The copy machine was installed and powered by a generator. It was the first such machine ever installed in Muhuru Bay. Local businesses, students, job seekers and other could now, for a few cents, photo-copy their documents locally, avoiding the two hour drive previously required for such a service.
The laptops were installed in an internet café and made available to local students and businesses. Farmers and fisherman could check product prices in the cities hours away, increasing efficiency and bargaining positions when middle-men came to town to buy their produce. Job openings in the city newspapers’ classifieds could be printed and posted for the local community to see, improving information symmetry between the poor countryside and the cities where job opportunities existed. The cost of access to these services was cheap, yet the entrepreneurs who were granted the laptop loan were able to pay back the cost of the technology in no time at all, and the community as a whole benefited from their existence.
My favorite entrepreneurial venture involved the LCD projector. This piece of technology, which now hangs from the ceiling of thousands of classrooms around the rich world, had never before been seen in Muhuru Bay. You may think it ended up in a classroom or in an office building, but no; the entrepreneurs who received the projector hooked it up to a satellite dish which captured and projected English Premier League football matches onto the wall of a large room in a local building. The business was to sell tickets to local football fans who were more than happy to pay to watch English football matches in full color on a wall-sized screen. Before the projector, dozens would have huddled around a tiny television with poor reception to watch football matches. The “football theater” business was the most successful of all, and paid back its loan fastest.
All three of these entrepreneurial endeavors were very low cost, using donated technologies. The reason for their successes, however, must be attributed to the model for implementation. They were not simply “given” to the community. Such a strategy would certainly have led to the same “tragedy of the commons” experienced when the outside aid organization funded the construction of public latrines. The capital would have been neglected and fallen into disrepair. By lending the technology to businesses, however, the incentive for innovative and socially beneficial ventures was created, and a business model was developed to best utilize the resources in a profit-earning, sustainable manner. With very little inputs, fantastic outputs were achieved, enriching not only the entrepreneurs, but the entire Muhuru Bay community.
Economic Development the WISER Way:
Andrew’s visit to Zurich International School was eye-opening in many ways. He brought to light both the successes of WISER and other community projects in rural Kenya, but also shined a light on the failures of the traditional development community’s agenda. When I think about the hundreds of billions of dollars that have been committed to economic development in Africa over the past decades, and on into future decades, I wonder whether the diplomats and the politicians in the “aid community” have any idea how much has been accomplished on the ground in places like Muhuru Bay thanks to community-based organization like WISER.
With so little, so much can be accomplished. The poor of Africa and the world need resources, but more importantly they need education, health and sanitation, and business opportunities so that they can enjoy the benefits of development from the bottom up. Development aid, as it has traditionally been distributed, comes from the top down, funneled through national governments. Waste and corruption are rampant, and typically only a fraction of what has been given ends up on the ground in places like Muhuru Bay. Even when it does, the tragedy of the commons often results in inefficiency and waste, as the “inputs” are managed and distributed from the top down, leading to uncertainty of ownership and misaligned incentives once the resources are on the ground.
Perhaps aid from the outside is still needed, but Andy’s visit showed me and my students that something much more basic lies at the core of successful economic development. Education focusing on outputs rather than inputs, sanitation focusing on outputs rather than inputs, and entrepreneurship that empowers business leadership, have improved the lives of thousands in one Kenyan community. What could such a re-thinking of development strategies do for the rest of Africa and the developing world?
Fair trade schemes aim to get more of the money we spend on our stuff into the hands of the workers in less developed countries where they originate. Some examples of goods produces in fair trade cooperatives in poor countries include fruits, tea, coffee and cocoa. Some handicrafts and textiles are also available from Fair trade programs as well.
It is estimated that approximately 7.5 million producers in the developing world participate in fair trade programs, producing $5 billion worth of output.
a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in the South.
Fair Trade organisations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade”.
Fair trade as a strategy for economic development is controversial, as many argue that either fails at raising the incomes of the farmers it is supposed to serave or that it incentivizes farmers to remain in the low-productivity agricultural sector rather than seeking higher productivity jobs in manufacturing, thereby contributing to poverty in poor countries.
Below are two videos that proclaim the benefits of free trade. After watching the videos, discuss the benefits of fair trade with your class.
Discuss the strengths and weaknesses of Fair Trade programs at promoting economic development.
Outline the possible advantages of a country specializing in manufactured goods instead of primary products.
What factors explain the growth in importance of multinational corporations over recent decades? Illustrate your answer where possible by making reference to your own or other countries. Do multinational corporations work in favor of or against the interests of Less Developed Countries?
To what extent has the international trading system contributed to economic growth and development in less developed countries?
Discuss the view that increased trade is more important than increased aid for less developed economies.
Hans Rosling, a Swedish professor of international health, is well known for his animated presentations on Human Health and Development. Some would describe Rosling’s presentations as doing for Economic Development what Al Gore’s “The Inconvenient Truth” did for global warming, in that they have spread awareness of the obstacles to and sources of economic development to a wide audience using powerful visual metaphors and data presentations.
Using software he developed to analyze data on human development called “Gapminder”, Rosling gives a mind-blowing presentation on the trends in economic and human welfare over the last thirty years, debunking several myths believed true by many in the first world about development and poverty.
Watch three of Rosling’s presentations below before beginning the assignment.
2006 TED Conference:
2007 TED Conference:
Hans Rosling’s Magical Washing Machine
Learning outcomes:
Distinguish between economic growth and economic development.
Explain the nature of economic development in terms of reducing widespread poverty, raising living standards, reducing income inequalities and increasing employment opportunities.
Explain that the most important sources of economic development include increases in quantities of physical capital and human capital, the development and use of new technologies that are appropriate to the conditions of the economically less developed countries, and institutional changes.
Explain the relationship between growth and development, noting that some limited economic development is possible in the absence of growth, but that over the long term, economic growth is usually necessary for development to occur.
What is the HDI? The Human Development Index (HDI)is a summary measure of human development. It measures the average achievements in a country in three basic dimensions of human development:
health as measured by life expectancy at birth,
access to education as measured by literacy rates and school life expectancy,
Data availability determines HDI country coverage. To enable cross-country comparisons, the HDI is, to the extent possible, calculated based on data from leading international data agencies and other credible data sources available at the time of writing.
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The assignment: Follow the steps below and make notes to help you complete the follow up questions at the end of this post.
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Step 1: Go to the UNDP website, and watch the video entitled 2010 Human Development Report. Take note of the indicators that have contributed most to the development of the countries profiled as well as the obstacles that have and are still standing in the way. After watching the video, answer the four questions below.
Of the four countries profiled, which have been most successful in achieving economic development in recent years? Justify your answer.
What indicators are pointed to as evidence of successful economic development?
Of the countries profiled, which have struggled most to achieve development? What obstacles exist that prevent development from occuring?
Besides rising incomes, identify four of the variables that contribute to a country’s economic development as profiled in the video?
Step 2: Go back to the UNDP website and click on the tab for “Indices and Data”and look up the current statistics for three countries:
A country listed under “Very High Human Development”,
A country listed under “Medium Human Development”, and
A country listed under “Low Human Development”.
Record the following data for the countries you selected:
Click on the tab labeled “Indicators” and briefly describe each of the indicators used to measure the above variables.
Education index:
GNI per capita in PPP terms:
Inequality-adjusted HDI:
Multidimensional Poverty Index:
Gender Inequality Index:
Adjusted net savings:
Step 3: Go to Hans Rosling’s site, GapMinder World. Spend some time exploring the indicators available on the horizontal and vertical axes in the graphing software. Be sure to select the three countries you’ve chosen to investigate from the menu on the right so that you can compare a very high, medium and low developed country. Attempt to identify relationships between various social, environmental, health, economic and environmental variable.
- Attempt to form THREE HYPOTHESES regarding the relationships between two or more variables and economic development. Does your very high human development country demonstrate any obvious characteristics compared to your medium and low human development countries? When you discover a relationship between various data that you think you can build a hypothesis on, take a screenshot of the graph you have created and upload it to this page. Explain our three hypotheses below:
Hypothesis #1:
Screenshot of graph:
Hypothesis #2:Screenshot of graph:
Hypothesis #3:
Screenshot of graph:
Step 4: Focus now on your low human development country.
Using data and trends from GapMinder, identify three obstacles to human development that you believe the country faces.
Brainstorm and describe strategies the country could follow to overcome one of its major obstacles to development.
Step 5: Follow Up Questions – Answer these questions once you have completed the above activity.
What are the weaknesses and strengths of the Human Development Index (HDI) as an indicator of progress in comparison to GDP per capita?
Explain why increased investments in the following areas are essential for improving human welfare in less economically developed economies.
We are currently studying and analysing some of the trade blocs that exist around the world. Three East African countries; Uganda, Tanzania and Kenya formed a Customs Union in 1967 with the lofty aims of developing free trade. An article in a past edition of the Economist, explains the evolution of trade in this part of Africa and also explains how the group of nations is attempting to revitalise and strengthen the agreement.
Each of the nations who are members of this trade bloc are at different stages of development, thus have different things to gain or lose through the expansion of the trade bloc. Uganda is rich with natural resources such as oil, Tanzania lacks the same educated workforce of Kenya, which inturn has high levels of endemic corruption. The risk for all three nations in a free trade agreement is the exploitation of resources across national borders.
This is a good video which introduces the new Common Market.
Have a read of the article at the link above and complete the following discussion questions.
Discussion Questions:
What kind of trade bloc exists between the existing members of the East African Community?
Who are the original members of the EAC?
Describe how the East African Communtiy (EAC) has changed overtime?
What are the advantages of altering the EAC to become a customs union and common currency union, with a bigger population base, and to include nations such as Somalia, South Sudan and Congo
As a culminating activity for the two year IB Economics course here at Zurich International School, senior econ students research, prepared and presented proposals to the World Bank. The purpose was to choose a developing country, identify its current development status, pinpoint the major obstacles to development, brainstorm the country’s major assets and areas of potential, then request funds for a specific development project aimed at improving human welfare in the country.
Proposals ranged from transportation infrastructure to language schools to fair trade schemes to improvements in police protection. In the table below all 22 of my students’ projects can be viewed by clicking on the country’s name and following the link to the student’s presentation. Also below I have embedded some of the presentations for you to browse and evaluate here.
World Bank Development Project Proposals: Click on the name of the countries below to view the student’s presentation to the World Bank.
Goal: To win a concessionary loan from the World Bank to put towards a specific development project in the developing country you represent. Funds are extremely limited, and whether or not you will receive aid and how much aid you receive will be determined by a panel of judges consisting of your classmates.
Background:You will assume the role of Finance Minister for a country that you chose to research earlier in this unit. In that role, you will write a detailed report of your country’s development status, obstacles to economic development, existing resources and potential within the country, concluding with a proposal for a specific development project that will improve human welfare in your country. You will then make an appeal to lenders at the World Bank, requesting funding for your project. A committee made up of your classmates will decide whether to approve requests and bring them to the chief economist of the bank, your teacher. The best proposals (accurate, appropriate, achievable) will get the limited money available…and those students will earn the best marks.
Assignment:You will create a report for the country you selected in our earlier lesson, “Sources of Economic Growth and Development”. You will have class time over the next three weeks to research and prepare your report. The report may take any form you wish: It can be a written report to be delivered orally, it may be in the form of a Google Presentation, or it could be a video, such as a PhotoStory. You may also create a website containing the details of your report, or even an audio recording that could be podcasted in your appeal for financial support. Any other reasonable media may be used to prepare and present the report.
Content Requirements: Reports will contain the following four sections.
1. Current Development Status: Describe your country’s status along the spectrum of economic development. Focus on factors such as the following: Natural factors (land resources, geography, location), human factors (health, education), economic factors (GDP per capita, unemployment, inflation, economic makeup of country) physical capital and technological factors, political and institutional factors, externalities, income distribution and sustainability.
2. Obstacles to Development::From the data presented in part 1, what would you consider to be the key internal factors preventing the further development of your country? What would you consider to be the key external factors preventing the further development of your country? Some obstacles to economic development you may focus on are:
Institutional and political obstacles: ineffective taxation structure, lack of property rights, political instability, corruption, unequal distribution of income, formal and informal markets, lack of infrastructure
International trade obstacles: overdependence on primary products, consequences of adverse terms of trade, consequences of a narrow range of exports, protectionism in international trade
Social and cultural obstacles: religion, culture, tradition, gender issues
3. Resources and Potential: Describe the internal and external advantages your country possesses that will enhance its chances for development. What geographical, social, institutional/political, economic, technological, or other advantages does your country already possess that make it a viable candidate for external aid. Convince your audience that your country is a worthy aid recipient and will put resources to use responsibly towards socially and economically beneficial ends. Why should YOU receive scarce foreign aid?
4. Formal Proposal: Propose a specific plan to speed development and improve the welfare of the people in your country . This part is to be more extensive and should include:
Project type (infrastructure investment, fair trade organization, micro-credit scheme, health or education initiative, environmental or social project)
Project goals, specific details about who, what, when, where and how the project will promote human development in your country.
Examples of similar projects that have been successful in other developing countries
Financial analysis of project: Detailed cost estimates, expected rates of return, a repayment schedule detailing how and when the development loan will be repaid.
Week 1: Choose the medium you will use for your report and the country you will represent. Research part 1: “Current Development Status”
Week 2: Continued research on parts 2 and 3: “Obstacles to Development” and “Resources and potential”. Progress update due to teacher for by end of week.
Week 3: Research complete, create formal proposal with required detail. One day dedicated for peer editing: each student must peer edit two other student’s reports and have theirs reviewed by two classmates.
Week 4: Completed reports due first day of the week. Report presentations and proposal review process. Funds rewarded and grades given by end of week.
Week 5: Review development economics, unit 5 test.
Distribution of Funds: During week 4, students will present their development reports and proposals to the loan committee. Following each presentation, the committee members (students) will complete a brief evaluation of which will be submitted to the World Bank’s chief economist (the teacher) for review. Final distribution of fund (and grades) will be determined by the chief economist. The countries whose reports best fulfill the above criteria will receive the most funds and the highest grades. Reports failing to adequately fulfill the above criteria will receive fewer of the requested funds (and a lower grade).
This assignment will be one of only four grades you will receive during the final semester of IB Economics. Below are the other assignments that will make up your grade.
This is my experiment with a new web 2.0 presentation tool called “Prezi”. It is a web-based tool that is freely available and allows you to create something that fits between the genres of a presentation, mindmap and poster. Very cool for teachers who are stuck in a powerpoint mindset. www.prezi.com (free education licenses are available)
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This is an introduction to the concept of economic development which I am teaching to my class at the moment. You can click through the prezi by pressing the play button and choosing fullscreen under “more”. The up and down arrow keys, zoom in and out.
In IB Economics unit 5, Development Economics, several strategies for achieving improvements in the welfare of the world’s poorest people are investigated. Foreign aid has been one of the main focuses of economic development strategies over the last several decades. But is aid in the form of development loans and grants from international organizations and foreign governments always beneficial to those who receive it in the poorest countries (the bottom billion as described by development economist Paul Collier)?
In the discussion that follows, Paul Collier of Oxford and Zambian economist Dambisa Moyo argue that the developed world’s focus on aid to Africa, resulting in a trillion dollars in loans and grants over the last 50 years, has missed the mark and completely failed to achieve meaningful economic development. The focus must therefore shift to opening markets, improving governance, achieving security and creating jobs for the poorest people on the African continent. Watch the two videos below, and respond to the discussion questions that follow. [the time in the video where the question is discussed is in brackets]
Part 1:
Part 2:
Discussion Questions:
Part 1:
What factors does Paul Collier point to that contribute to the “poverty traps” many African nations find themselves in? [3:07]
What have the two main goals of foreign aid policy been over the last 50 years, according to Dambisa Moyo? [4:45]
What are the “four horsemen of the African apocalypse?” How does Moyo think these four obstacles to development can best be overcome? [5:14]
What is Paul Collier’s opinion of the role of free trade in promoting human and economic development in Africa? What does he think about Africa’s traditional dependence on primary products and commodities? [7:45]
Before economic growth and development can occur, security must be achieved. Why is security, according to Collier, the number one obstacle to achieving meaningful development in Africa? [8:30]
In a dissenting view, Dr. Jeffery Sachs argues for more aid to Africa. What types of aid does Sachs believe is absolutely crucial for Africa to continue to receive? [10:39]
Part 2:
Collier makes the claim that aid may create “moral hazard” in Africa. What is moral hazard and how could reducing aid to African governments actually “force good governance”? [5:30]
Is there any historic record of aid working? What strategies accompanied foreign aid that contributed to its greatest historical success? [8:10]
What’s the main difference between Europe’s economic successful development during the second half of the 20th century and Africa’s unsuccessful experience during the same period? [9:00]
A week after the earthquake, the Haitian people now speak of day zero plus seven. Day zero was the day when an earthquake rumbled and shook the shallow bay near Port-au-Prince and crumpled the many fragile houses, hospitals, churches and hotels. The quake did not discriminate against the rich and the poor, but in the months and years to come the world needs to ensure that the country gets a fair chance to rebuild.
Some consider the day of the quake, as the day a new nation began. As Economists we can offer insights about the path to improved living standards, through our understanding of what has worked, and not worked, in other countries.
Haiti has a history which is more turbulent than most. In 1697 when Spain ceded control of Haiti to the French, much of the land was deforested and the ecology wrecked as sugar fields were planted. In 1804 the republic was founded, and later the dominant political figure was Dr. François Duvalier, and his son who reined as Presidents of the country from 1957 – 1972 (François) and his son till 1987. In 1990 the ruling military junta gave up power and President Clinton sent in 20,000 troops to a country ravaged by HIV and entrenched poverty. Hurricanes in 2004 and 2008 displace hundreds of thousands of Haitian’s and ruined existing infrastructure. But the recent earthquake might be the biggest challenge yet for most fragile and poorest nation in the Caribbean. On the Human Development Index, Haiti is classified as one of the least developed nations in the world at 149th of 182 countries (HDI Report, UN 2009).
After the mourning and eventual stabilisation, the government will need explain what the future holds for Haiti. This is a window of unfortunate opportunity that the government will never see again and mustn’t squander. The developed world has made promises of aid to support the reconstruction, but health care and education, skills and employment must be offered to the people to help the nation grow from the depths of this disaster in a sustainable way. From our learning about Development Economics we can explain strategies appropriate to Haiti.
Former President Bill Clinton who is the UN’s Special Envoy to Haiti, offered a good insight on the nations challenge in his excellent essay in last weeks Time Magazine.
We’ve got to all work together toward a common goal (for Haiti). We have to relentlessly focus on trying to build a model that will be sustainable, so we don’t plant a bunch of trees and then revert to deforestation, or adopt a program to bring power to the country that can’t be sustained, or adopt an economic strategy that is going to wither away in two years.
What the economic strategy will be for Haiti will likely be influenced by the trade agreement with USA called the Caribbean Initiative. This has recently provided an impetus for the clothing industry in Haiti. Hanes, which sells T-shirts throughout North America, produces part of their stock in Haiti in the factories, which are now being protected from looting. These labour intensive industries are important in a nation with approximately two-thirds of labour force unable to find work. The quake and eventual rebuild also offer opportunities to build on existing plans as Clinton explains,
Haiti isn’t doomed. Let’s not forget, the damage from the earthquake is largely concentrated in the Port-au-Prince area. That has meant a tragic loss of life, but it also means there are opportunities to rebuild in other parts of the island. So all the development projects, the agriculture, the reforestation, the tourism, the airport that needs to be built in the northern part of Haiti — everything else should stay on schedule. Then we should simply redouble our efforts once the emergency passes to do the right sort of construction in Port-au-Prince and use it to continue to build back better.
It is evident that Haiti can use this opportunity to develop the country as Clinton explains. In addition, there are many other ways that the country could improve the living standards of the Haitian people. These development and growth strategies could include;
The development of Fair Trade schemes to improve Haiti producer’s access to world markets.
Facilitating the provision of small loans through Micro Finance schemes
Developing the export sector by investing in the transportation infrastructure to transport products.
Exploring new trade agreements with nations.
Promoting foreign direct investment in Haiti by multinational companies.
Nevertheless the task is daunting for Haiti. As a UN staff member recently explained to a New York Times reporter, the immediate recovery is complex. The future reconstruction and redevelopment will be difficult, and the road long.
“You’re talking about a country that pre-earthquake had limited resources and capability, and what resources it did have were concentrated in the capital,” said Kim Bolduc, who is coordinating the relief effort for the United Nations. “This context helps explain why this emergency is probably the most complex in history, more than the tsunami, more than the Pakistan earthquake” of 2005. Link
Here are some interesting facts about Haiti
40% of the population is under 14 years of age.
The nations main exports are coffee, mango and other agricultural products.
66% of all Haitian’s work in the agricultural sector on small subsistence farms.
Before the quake foreign aid made up a large proportion of national income. In 2004 over $1 billion was pledged by USA, World Bank and Canada and France. Partly in loans but also in direct assistance.
In 2006 Haiti was ranked as the most corrupt nation in the world by Transparency International, followed by Burma and Iraq.
Objective: Whereas most assignments deal in information and analysis, this one deals in imagination. Here we ask you to portray what you believe more economically developed countries look like. And considering that development is a relative term, we also want to see how a country could end up if it only achieves economic growth, without any progress on development.
Goal: To visualize and depict the distinction between economic development and economic growth.
Process:
Class is divided into pairs, each pair is either an “A” or a “B” pair. A groups will focus on Economic Growth and group B groups on Economic Development
Read chapter 30 of the Course Companion with special attention to your assigned section.
A groups will focus on pages 321-325 on “Economic Growth” and “Consequences of Economic Growth”
B groups will focus on pages 325-328 “Sources of Economic Development”
Using PhotoStory, create a slideshow depicting the situation you were assigned (either “growth” or “development”). For an example of a PhotoStory, quickly watch this one on the Dust Bowl. Here is a tutorial from Microsoft on how to quickly start making your slideshow in PhotoStory.
Save images to a folder on your computer, then import them into a PhotoStory when you are ready to start creating your slideshow.
Add subtitles and/0r your own narration to your PhotoStory. If you wish, you can add music to your PhotoStory as well.
Be sure to include at least ten images in your slideshow.
As you and your partner gather images online, keep in mind the definitions of growth and development. Images should portray these definitions in a creative way.
When your PhotoStory is complete, save the file “for playback on your computer”, then submit the finished file into your class’s folder on Classworks. Each pair will have the chance to show their slideshow to the class. The two best slideshows from the class (one on growth and one on development) will be posted to this blog for the world to see!
This lesson was originally created by Sean Maley, IB Economics teacher at the International School of Bucharest, Romania.
