A Butterfly without Excuses: Progress Stalled

shutterstock_331912505The ways of the world are quite often more straightforward than they at first glance appear to be. Whatever happens has a cause that carries an effect – which, of course, is a cause as well, reigniting the cycle and keeping it in perpetual motion. This is a bit like Edward Lorenz’ metaphorical butterfly that flutters its wings in the forests of Madagascar, causing almost imperceptible vibrations in the air which travel – in perpetual motion – halfway across the globe to become a hurricane in the North Atlantic.

While it perhaps is too much of an exercise to debate the relative merits of both linear and nonlinear views on history; attributing past, current, and future migratory trends that see Africans pushing into Europe to climate change stretches the butterfly effect to beyond the point of reason. The great northbound trek of Africans is quite simply caused by dreadful conditions in the refugees’ home countries – civil strife, enduring poverty, lack of opportunity, pestilence, etc. Africa has made great progress over the past two decades, lifting millions out of poverty. However, some pockets of misery have yet to be eliminated.

If it is not climate change driving people out of their homes to undertake a perilous journey towards an uncertain future, it must surely be the evil machinations of western powers and their multilateral henchmen that cause mass migration. The thousands – millions? – of public and private initiatives to provide aid, credit, and safety – and deliver development – to nations in need was but an exercise in smoke and mirrors, essentially an elaborate hoax, deployed to draw attention away from greedy corporations as they pillaged their way to vast riches.

If anything, conspiracy theories are exceedingly tiresome. If western powers indeed do not allow countries to emerge from underdevelopment, how may we explain Chile, Uruguay, South Korea, Malaysia, China, and a host of others that escaped the clutches of poverty and did so over the course of a single generation? Looking for excuses to justify a lack of progress – colonialism, imperialism, climate change, or whatnot – is doing the countries suffering underdevelopment no favour.

Wherever poverty prevails, management fails. To blame the plight of newly-poor Venezuela on anything other than the monumental incompetence of its government borders the insane. Food and medical supplies ran out not because of odious debts or the pillaging of resources, but because the authorities proved singularly unable to run the economy. Venezuela is far from the only country to remain subjected to the yoke of poor governance.

Yet some development gurus believe that the way forward is to support still more incompetence. The Brussels-based European Network on Debt and Development (Eurodad) – leeching on monies provided by the governments and development agencies of Great Britain, Sweden, and The Netherlands – is one such collective that derives its existence from peddling the obvious and juxtaposing solutions. Its stated goal is to push for development policies that support the poor (!) and are democratically-designed. Simultaneously, the rather unfortunately named network seeks the empowerment of “southern people” as they chart their way to prosperity: Daddy gives you power, now please go vote for what daddy knows is best for you. Carlos Rangel (see this issue’s Architects of Development) would have loved it.

Eurodad also deplores the illicit outflow of monies from developing countries where companies dodge taxes and engage in other financially unsound practices. It has not yet occurred to the network’s members that such behaviour, whilst perhaps reprehensible, is but part of a natural tendency to maximise profits. It happens everywhere – see, for example, the tax structures pioneered by Starbucks, Amazon, and other corporate giants with little to no presence in, or exposure to, the developing world.

Countries with governments that actually care for the national interest adopt all sorts of reasonable measures to counter this propensity of people and businesses to, well, take care of business.

Though there may be a kernel of truth in the allegation that the International Monetary Fund’s standard economic prescription may not always cure the patient; the fund did belatedly mend its ways and cannot really be said to act on behalf of corporate interests. Rather, the IMF urges troubled countries to let go of the economic heterodoxy and other discredited policy mongrels that caused them to appeal for help, and adopt a more pragmatic set of policies instead.

To those who insist on arguing that telling the IMF to go take a hike is good for both growth and development, the obvious reply would be to have a closer look at Argentina. After reneging on its debt yet again in 2001, Argentina indeed managed to grow its economy at China-like rates for a few years. Fast forward a decade and the picture changes into one of utter destitution with faltering public services, corruption across the board, and an economy weighed down by inefficiencies on an epic scale. Notwithstanding all the protectionist barriers put in place, Argentina has moved back to the preindustrial age, becoming a mere exporter of commodities. It did so without any outside help too. Life behind a tariff wall is usually not all it is trumped up to be.

Good governance remains the only key to enduring success. The exodus of refugees from Africa can only be interrupted by the embrace of sound development policies. Solutions that are more politically correct – or fashionable such as apportioning all blame to global warming – than sensible must not be hawked. Destitute people are not fleeing from a changing climate or corporate evil-doers; they are running away from uncaring governments that insist on keeping them repressed either politically or economically.

If there is any hope – and luckily there is plenty – it is that venerable institutions such as the IMF and the World Bank continue to condition their aid to good governance – as they have already been doing for the past ten or so years. Late December, Uganda discovered what that policy actually means when the World Bank cancelled a $265m road project already well underway after the country’s government was found to mismanage the funds. No governance, no money.