Institute Notes: A Dialogue on Overcoming Hunger and Poverty

Progress in Africa

There are a couple of stories this week that serve as a reminder that progress can be made under challenging circumstances--Time and CNN report that many African countries are experiencing strong economic growth and steady improvements in governance. Good news is indeed a rare commodity these days but I'll take it! The financial crisis is taking up much of the oxygen and understandably so. But as my colleagues Eric Munoz and Charles Uphaus have noted in recent blog posts that developing countries are especially at risk in this crisis, both in terms of access to the financial resources needed for development and because of the impact of slower growth in rich countries on exports from developing countries. An unintended consequence of this financial crisis, coming on the heels of a surge in food and fuel prices, may be a growing setback in the progress against poverty that we have seen in recent years. It is absolutely clear that if the global community doesn't step in, the gains we have made will be lost.

Is natural resource "curse" real in Africa?

The poorest countries in Africa are rich in oil and other natural resources. Often this resource has been a source of conflict and war instead of development and prosperity. This has led many to conclude that natural resources are a “curse” for Africa. The concept of a natural resource curse is not new. It refers to countries which, despite being endowed with abundant natural resources, have lower economic growth rates than those countries with few if any natural resources. A number of reasons have been proffered for the natural resource curse including a decline in competitiveness of other economic sectors, volatility of revenues from the natural resource sector, corruption, and resource led conflicts that reverse development efforts.

In Africa, conflicts instigated by resources are many. The delta region in Nigeria provides a good example. The region has a significant reserve of oil, and conflict among local residents and the military have been consistent. This has resulted in loss of lives and resources. Similarly, mineral resources (oil and diamond) have financed and instigated war in Angola. The same can be said for Sierra Leone, the republic of Congo and Cameroon where millions of dollars from oil and valuable minerals are unaccounted for.

More recently, conflict in Niger has received a good deal of attention, and people are looking again at how resources are fueling instability in this country. More than 45 government soldiers have died since February as a result of an ongoing conflict between the government and locals over uranium extraction. The story is even more complicated since the uranium is being mined for export. As one recent account puts it, the problem in Niger is aggravated by “… a lot of powerful countries [including China, France and Libya] meddling in a weak state and a lot of strategic interests involved."

The Mo Ibrahim’s Index- Rewarding Good Governance

Good governance is the base for development. Political institutions define all the relationships of development policies. Investing in good governance will allow for a radical change to reduce poverty and hunger in sub-Saharan Africa. Most of the regions misery can be explained by lack of good governance. For instance, in 1960s Africa was ahead of Asia and poor governance explains most of the failure to this progress.

It is with this notion that a bright and forward looking millionaire from Sudan, Mohamed Ibrahim, started a foundation that rewards sub-Saharan African leaders who exit office peacefully. He launched a $5 million annual prize in October 2006 and this week the foundation announced that former Mozambique president Joaquim Chissano won the innaugural Mo Ibrahim Prize for Achievement in African Leadership. He was selected from among 13 African former heads of states that left power in the past three years. Kofi Annan led the foundation’s prize committee and the award is based on a complex index devised by Robert Rotberg from Harvard University’s John of Kennedy School of Government. The main criterion for selection is based on the leaders’ commitment to democracy and improving governance. The award, the first of its kind and world’s most comprehensive ranking of African governance, is supported by key world personalities including Nelson Mandela, Alpha Konaré, Bill Clinton, and Tony Blair.

Too Poor for Peace?

Up to 30% of the world’s population is in poverty because of war or conflict. This is the finding from Too Poor for Peace, a new volume edited by Leal Brainard and Derek Chollet. The book highlights the fact that the poor have little to lose in going to conflict or war. It is widely believed that poverty leads to weak institutions, breeds corruption, increases poor managements of resources and lowers the quality of leadership.  However, the opposite is also true, lack of peace leads to poverty. Conventional wisdom on the causes of conflict focuses on issues like ethnic diversity, but this book argues otherwise. They conclude that “poverty, environmental degradation and natural resource abundance, big demographic imbalances are drivers of conflict.” The authors note that “the fight against global poverty has become a fight of necessity, not just of morality”.

Yesterday’s Oxfam press release supports this argument. The release states that the cost of conflict for Africa is $284 bn from1990 to 2005. This is a lot of money to be spent in conflict where the money is needed desperately for other development projects. Africa received similar amount of money as foreign aid. During the same period 23 African countries have been involved in some kind of conflict. The press release, based on a study titled “Africa’s Missing Billions”, shows that “human tragedy, armed conflict costs Africa around $18bn per year, seriously derailing development”.

Both conflicts and poverty have become challenges of sustainable development in developing countries. To tackle poverty we should build peace. The number of poor people in conflict ridden countries is high. The question is which comes first; I think poverty is both the cause and the result of conflict. If reducing poverty is needed, effort should be made to reduce the number and scope of conflicts, particularly in less developed countries.