Chrystia Freeland

Africa: the next economic tiger?

Chrystia Freeland
Oct 19, 2012 14:36 UTC

If you are looking for some good cheer in a pretty gloomy world, consider the growing consensus among some of the world’s smartest money that the next big emerging market may be Africa.

Above all, that is great news for Africans: As we have seen across so much of Asia, economic growth has accomplished what decades of well-meaning development efforts failed to do, lifting hundreds of millions out of poverty. If that happens in Africa, the world will be transformed.

This case for Africa as the world’s new economic tiger is made forcefully in “The Fastest Billion: The Story Behind Africa’s Economic Revolution,” a data-packed collection of essays to be published at the end of this month and brought together under the aegis of Renaissance Capital, an investment firm with Russian roots and global ambitions.

The consensus view among many students of the global economy is that investment decisions are about choosing, in the words of Mohamed A. El-Erian, chief executive of the fund manager Pimco, “the cleanest dirty shirt”: The United States faces a fiscal cliff and political gridlock, Europe is tenuously poised between years of painfully slow growth and outright collapse, and even go-go China is slowing.

By contrast, in the view of Stephen Jennings, the Renaissance chief executive, Africa is on a tear. “It is the only region in the world where growth is accelerating,” he said by phone from Moscow. “If you strip out South Africa, the rest of the region is actually growing very, very quickly.”

America’s middle class goes global

Chrystia Freeland
Oct 15, 2012 20:17 UTC

President Barack Obama did a miserable job of making his own case last week. But speak to his supporters and the pitch is clear: The American middle class is being hollowed out; Obama’s self-appointed mission is to try to save it.

That is what I heard from Jeffrey Liebman, one of the president’s economic advisers, at a debate about the election I moderated at Columbia University on Monday. Liebman said the central difference between his candidate and Mitt Romney was the president’s view that trickle-down economics doesn’t work. Instead, he believes policy needs to focus on the middle class. Economic growth, he said, should come from the middle and radiate out.

In a separate interview, Mark Gallogly, co-founder of the private equity and credit investment firm Centerbridge Partners and one of Obama’s earliest supporters on Wall Street, likewise emphasized the middle class. The president’s overriding concern, Gallogly told me, was with the workers who make $24,000 a year. Their lot is a pressing issue, Gallogly argued, because even before the recession there had been persistent downward pressure on middle-class wages. Yesterday’s middle-class job can land you among the working poor today.

For government, it is not just size that matters

Chrystia Freeland
Oct 4, 2012 21:38 UTC

Photo: Joshua Lott/Reuters

One of today’s major debates is how big government should be. Maybe we are asking the wrong question. Our battle over the size of the state overlooks a problem that is just as important and that may be easier to muster the collective will to resolve: how effective government is, regardless of its scale.

After all, even in this age of polarized politics, there is one thing right and left agree on: Government needs to get better. Diana Farrell, an economist who recently returned to the consulting firm McKinsey after a two-year stint in the White House, thinks smart pragmatists should seize this common ground.

“We see a massive opportunity in what is a meaningful part of GDP to make it work better,” Farrell, who leads the new McKinsey Center for Government, told me. “Whether you believe government should be 20 percent or 80 percent of GDP is a political choice. But once that has been decided, then assuring that that part which is government works – that can be apolitical, that can be managerial. That is what we are trying to do.”