Last Thursday, I went to the second P4T (Preparing for Tomorrow) symposium, which focused on aid to Africa. One of the moderators, Blaise Buma, from Cameroon, mentioned how little the U.S. trades with African nations and how China has taken the route of trying to develop African countries through trade as opposed to aid. Reading Stiglitz's chapter on "Lifting the Resource Curse" after attending this P4T event, I found it interesting that Stiglitz mentioned using trade as a vehicle to help countries develop only at the end of the chapter in saying that trade practices can be used to enforce "good behavior," i.e. political openness, economic transparency, and fair-trading.
I know I am probably forgetting my economics 101, but when there is a "resource curse," the economy becomes focused on developing natural resources, preventing workers from developing secondary, tertiary, or other industries. Given this understanding, could the problem of the "resource curse" be sidestepped by liberalizing trade?
Earlier in the course, we discussed how trade liberalization can be a vehicle for national growth, but for the United States and Africa, from what I understand, there is a lack of bilateral economic and trade relations. The U.S. sends aid to Africa, hoping that this will help improve social or health conditions, but the U.S. does not focus on building up trade with Africa. Perhaps the reason is that the U.S. imposes social and political benchmarks for African countries applying for aid or trade agreements. This runs counter to what Stiglitz says. The demands for more liberal social and political policies are often forced onto countries that do not have a demand for such policies, which can hinder the development of liberal policies such as transparency or eliminating corruption (Stiglitz 152). Considering the U.S.'s development practices might do more harm than good, is it any wonder that China, which is focusing on trading with Africa rather than promoting democracy and anti-corruption policies, is quickly gaining influence in Africa?
Already China is helping Africa develop their agriculture, which has to compete with U.S. subsidized agribusinesses on the global market. By helping Africa become self-sustaining agriculturally, they will not have to import food from the U.S. as they do now. Perhaps, this will help Africa to "stand on its own two feet" economically. If the real trouble in Africa is that they are under-developed because of social and political structural problems, i.e. corruption, lack of the rule of law, etc., could it be possible to sidestep these problems by focusing on their economic development rather than political and social development?
Using China as a case study, they have corruption on a massive scale, an undemocratic political system, and poor people on the scale of the hundreds of thousands. Because they are not exactly resource rich per capita, they do not have a "resource curse." However, they have developed at incredible rates, despite these perceived political and social shortcomings. It is interesting therefore that Blaise mentioned that many African countries are beginning to look to China as their bedrock for development.
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