Thursday, July 07, 2005
Africa: A continent or a crisis?
In the wake of the Live8 concerts and the G8 debate over Africa, Ethan Zuckerman has been doing some prolific writing. But first, some context. Ethan first wrote a post called Bono and Brad Pitt need your help, expressing his frustration with the Live8 concerts and the misplaced idealism behind it. Black Star Journal responded by saying that all publicity is good publicity and that raising awareness about Africa's development problems was critical. In response, Ethan wrote an entry he called Africa’s a continent. Not a crisis.
Read the whole thing. Though I am very conflicted about this awareness issue, I think Ethan raises some excellent points. If people stopped seeing Africa as a hopeless problem and instead of thought of it in terms of potential investment opportunities and markets, I think we'd come up with a better solution than Live8. After all, we can look at a village of 2000 people who don't wear any footwear as an impossible market for a footwear company to crack or we can look at it as a virgin market with 2000 potential customers, assuming the right price point and selling strategy can be found. We must keep in mind that the single greatest poverty alleviation measure in the history of humankind has been the rapid economic development of India and China. Why should Africa be any different?
The good news is that large developing country firms have begun to see the potential lying untapped in these markets with burgeoning middle classes. So, Tata is bidding for a license to become the second network operator in South Africa, South Africa's MTN is fast becoming the largest telecom player on the continent, China is improving its foot print all across Africa, Videocon is setting up a greenfield project in South Africa and so on. Hopefully, this is only the beginning and there will be plenty more investment into Africa. You may also want to read an archived story in the Economist from April, which outlined how developing countries were attracting FDI from each other.
I’m having trouble sharing Brian’s view that the attention generated by Live 8 is neccesarily a good thing. Yes, millions of people are paying attention to “Africa” today… but I’m having some trouble recognizing the “Africa” they’re talking about. In several of the interviews I watched on CNN and MTV, concert performers and fans referenced “the issue of Africa”, “the African cause”, or “the problem of Africa”. Africa’s not an issue. It’s not a cause or a problem. It’s a continent - a complicated, confusing, beautiful continent, with wealth and poverty, peace and strife, success and tragedy. When Africa becomes a cause, we tend to see only one side of the continent - a helpless, dependent, starving side that “needs our help”.
To actually accomplish the goal of Live 8 - the elimination of poverty in Africa - Americans and Europeans have to get a great deal smarter about this other Africa. This Africa needs investment and trade, rather than just aid and debt forgiveness This Africa is open for business. This Africa is as important and as real as the Africa that needs help. Aid dollars don’t eliminate poverty - integration into a global economy does. (South Korea and Ghana had approximately the same per capita income when Ghana gained independence in 1957. South Korea’s income per capita has increased roughly fifteen times in constant dollar terms, while Ghana’s has fallen slightly. You may notice that we buy a great deal more from South Korea than we do from Ghana.) If the goal of Live 8 were to help people see the African continent as a place they want to visit, a place they want to open businesses in, a place they want to engage with, as opposed to a place they want to save, I’d be more likely to share Brian’s hopes.
But that would be a very different concert. It would be one that celebrated the cultural richness of the continent by putting African artists on stage, rather than inviting them - after Geldof was shamed by Peter Gabriel - to perform at a parallel event a hundred miles away from the main action. It would be one that put African leaders, entrepreneurs and innovators on stage, rather than using a silent young Ethiopian woman as a stage prop for Madonna and Geldof. It would be one that was more focused on changing the global image of Africa than on somehow changing the minds of the eight guys sitting around a table in Scotland.
Read the whole thing. Though I am very conflicted about this awareness issue, I think Ethan raises some excellent points. If people stopped seeing Africa as a hopeless problem and instead of thought of it in terms of potential investment opportunities and markets, I think we'd come up with a better solution than Live8. After all, we can look at a village of 2000 people who don't wear any footwear as an impossible market for a footwear company to crack or we can look at it as a virgin market with 2000 potential customers, assuming the right price point and selling strategy can be found. We must keep in mind that the single greatest poverty alleviation measure in the history of humankind has been the rapid economic development of India and China. Why should Africa be any different?
The good news is that large developing country firms have begun to see the potential lying untapped in these markets with burgeoning middle classes. So, Tata is bidding for a license to become the second network operator in South Africa, South Africa's MTN is fast becoming the largest telecom player on the continent, China is improving its foot print all across Africa, Videocon is setting up a greenfield project in South Africa and so on. Hopefully, this is only the beginning and there will be plenty more investment into Africa. You may also want to read an archived story in the Economist from April, which outlined how developing countries were attracting FDI from each other.
