Far from being all bad news for Africa, the global financial crisis is a chance to break a dependence on development aid that has kept it in poverty, argues Zambian economist Dambisa Moyo, who has just published a new book “Dead Aid”.

Moyo’s book, her first, comes out at a time when Western campaigners, financial institutions and some African governments have been warning of the danger posed to Africa by the crisis and calling for more money from developed countries as a result. The former World Bank and Goldman Sachs economist spoke to Reuters in London.

“I’m not saying its going to be easy, I’m just saying that there is a real opportunity for policymakers to focus on coming up with more innovative ways of financing economic development. In a way the crisis actually provides the African governments with the situation where they cannot rely on aid budgets coming through from the West.”

Moyo believes more than $1 trillion in development aid over the past 50 years has only entrenched Africa’s poverty, distorted economies and fuelled bureaucracy and corruption. She sees alternatives such as encouraging trade - particularly with emerging markets - encouraging foreign direct investment, microfinancing for enterprise and seeking funds from capital markets.

Moyo is not discouraged by the fact that all those options appear more difficult in the current environment.

“It just means the onus is on African governments to come up with a more compelling story as to why African governments are overseeing real asset investment not derivative products we don’t really understand.”

“If you focus on traditional markets like Europe and the United States, you come to the conclusion that markets are really damaged and it’s very hard to raise money in those markets, but if you start to look towards China for example which has $4 trillion of reserves, all of a sudden you could see there might be another opportunity to do a bond issue in the Chinese market for example.”

“The model that’s coming up, that I’m proposing, is essentially one where Africa and Africans become equal partners with the rest of the world, not one where there is kind of a donor and a recipient, where Africans are kind of viewed as secondary citizens,” she said.

“There is no other system, whether a political system or a business system, that has stayed as the status quo for 60 years when we all know it’s not doing what it’s supposed to do, it’s not generating growth and it’s not alleviating poverty.”

Moyo is not worried about the impact of aid being taken away:

“It actually tends to pool at the top so it’s not like the average African is going to suffer. They don’t see the aid anyway. Essentially it‘s going to really affect the bureaucratic processes at the top and would really impact on corruption.”

“You could take me to country X in Africa and say ‘look at this girl here and she’s going to school because of aid’. Yes, that’s true but on a macro aggregate perspective these economies are not growing. They’re not growing fast enough to ensure that when that girl is done with her schooling she can find a job.”

Moyo is unimpressed by Western campaigners such as rock stars Bob Geldof and Bono calling for lots more aid for Africa.

“I fundamentally object to the notion that Africa needs more aid and I do think it’s time to have many more Africans speak out, especially the policymakers, because many of the policymakers actually don’t support aid  and yet they stay in the background and they allow this money to come into the economy.”

“You very rarely see Africans on the global stage saying ‘actually we would like to have much more aid please’.”

“I do think a gap has opened up to allow other people to formulate a view on coming to the global debate and offering opinions as to what they think Africans want. But maybe we should start a website called ‘Ask the African’ because I think you might be quite surprised to find that people say ‘we want jobs’, I wouldn’t mind a flat screen television, I wouldn’t mind having my kids go on holiday sometimes ...’”

Picture: Helen Jones photography

Who remembers the Google Wars website that was doing the viral rounds a few years back – a mildly amusing, non-scientific snapshot of the search-driven, internet world we live in?

It lives on at www.googlebattle.com where you can enter two search terms, say ‘Lennon vs. McCartney’ or ‘Left vs. Right’, and let the internet pick a winner by the number of search hits each word gets.

As we reported here – the virtual world has become a real battleground in the ongoing Gaza conflict – with all sides deploying significant resources.

For Israel – where hasbara or PR has often been frowned upon as unnecessary pandering to international opinion that never turns in Israel’s favour anyway – the second Lebanon war underlined the need for a coherent media and PR strategy coordinated at the centre of government.

The post-mortem of the month-long war with Hezbollah in 2006 - known as the Winograd Commission - recommended a centralised approach to hasbara to avoid spokesmen from different ministries, the army or the police telling different or conflicting stories to a voracious local and international media.

Notwithstanding the fact that the head of the new National Information Directorate did not make it to a scheduled interview with our reporter on the story above  – as my colleague Dan Williams reported here the strategy certainly seems to be working for domestic consumption.

Sources inside the Israeli government have said they are generally happy with the way the strategy has worked internationally as well despite growing international calls for a ceasefire and increasingly angry protests around the world.

The media strategy has been backed up by zero tolerance within the military and security establishment for anyone going “off message” - field commanders or political insiders who seemed to relish leaking tid-bits to their favoured reporters in 2006 are now keeping mum.

And while the virtual media war has raged – with pro-Palestinian websites like electronicintifada.net or Hamas’ own website http://www.palestine-info.co.uk/en/ ratcheting up the rhetoric alongside their Israeli foes – many in the traditional media (or dare I say MSM) complain that they have been totally defeated by Israel’s media strategy which has prevented them from entering Gaza or a ‘closed military zone’ neighbouring Gaza.

The world’s press has been herded on to a hill-top 2 kilometres from the Gaza Strip - where Israeli political and military spokespeople wander among the satellite trucks and live positions ‘briefing’ journalists with the official view of what’s going on inside Gaza.

As much as the protagonists have been duking it out in the virtual world - online media now has the clout to shape the way war stories are told and delivered.

The most surreal example of this is probably Joe the Plumber - yes, that Joe the Plumber of US election campaign fame - who has been engaged by pro-Israeli US website Pajamas Media to file reports from Israeli towns under Hamas rocket fire.

Joe’s basic premise seems to be that the media is inherently biased against Israel and journalists have no business being in the war zone anyway.

While you might not agree with his point-of-view - Joe is an example of the sort of do-it-yourself journalism with a strong voice that has been empowered by the Internet.

Read these two accounts - one from my colleague Nidal al-Mughrabi in Gaza and this one from another Gaza journalist - and I think you’ll agree that reporting from inside a warzone is important, journalists should be there and the combatants should facilitate rather than threaten this effort.

And by the way - in case you were wondering - a GoogleBattle between Israel and Palestine gives Israel a decisive victory. IDF vs. Hamas, though, has Hamas edging it.

PHOTO CREDITS

Photgraphers take pictures of Israeli tanks. REUTERS/Ronen Zvulun

Massive explosion in southern Gaza town of Rafah. REUTERS/Ibrahim abu-Mustafa

I once paid a cop 30 ringgit (about $10 then) for making an apparently illegal left-hand turn in Kuala Lumpur. Scores of drivers in front of me were also handing over their “instant fines”, discreetly enclosed within the policeman’s ticketing folder. It was days ahead of a major holiday and the cops were collecting their holiday bonus from the public.

Malaysia opposition leader Anwar Ibrahim holds a disc he says contains evidence of judge-fixing in Malaysia 

I felt bad about this, of course. What I was doing was illegal, immoral and perpetuating an insidious culture that goes by many names in the East — “baksheesh” in India, “Ali Baba” (and his 40 thieves) in Malaysia, “swap” in Indonesia (means “to feed”).  But the policeman pointed out I would have to take off the good part of a day to go to court and pay 10 times as much to the judge. So I rationalised: “When in Rome…”

Alas it was not the first time, nor would it be the last that I have (ahem) paid an “informal levy” to officialdom. I’ve given baksheesh to the phone company in India to get a telephone installed, and to get a driver’s license without a test (no wonder there are so many accidents in India.)  I’ve paid the immigration officer at Jakarta airport to let me in with a nearly expired passport.

Many of my friends in Asia have similar tales to tell about bribing customs agents, power companies, hospitals, schools — anybody with the power to give a license or provide a service. A couple of bucks here, a couple there. Pretty soon you’re talking about real money. Daniel Kaufmann, who spearheaded the World Bank’s efforts to improve the study of governance and the rule of law estimates that $1 trillion of bribes are paid every year. A Reuters series on corruption in Asia found that perceptions of corruption in the emerging markets of Asia have not improved much over the years and have even declined in some cases. This is despite a growing revulsion among people in those countries for business as usual on the “demand” or government side, and a growing realisation from companies on the “supply side” of the bribery equation that payola is simply bad for business.

  Protester holds a  wanted poster for ousted Thai premier Thaksin Shinawatra at a mass anti-government rally in Bangkok.

Part of the problem is mindset and a major attitude adjustment might be needed. People may be fed up with “money politics” and crony capitalism in their countries, but they still pay off people in their neighbourhoods. A U.S. National Bureau of Economic Research study on unpaid parking fines issued to diplomats in New York, home to the U.N., showed Southeast Asian nations again among the league leaders and a remarkable correlation with more conventional measures of corruption. You can take the man out of his corrupt country, but you can’t take the culture of corruption out of the man. 

Anti-graft fighters model uniforms that those convicted of corruption offenses inIndonesia willbe required to wear in court and jail.

    For years, Indonesia ranked among the most corrupt countries in the world.  It permeates almost every level of society, reducing the country’s appeal to foreign investors, and curbing Indonesia’s potential for growth.  Today, Indonesia’s anti-corruption agency, known by its acronym KPK, has won plenty of media attention with its Jame Bond-like undercover exploits against corrupt officials.  The government is also trying to get at the root of the problem by sending officials and judges to “anti-corruption school.

    Passers-by in Jakarta walk past a poster that reads “fight corruption.” 

Some OECD countries will even let you take a tax deduction for providing “facilitation payments” to get routine services such as a phone installed. Facilitation payment? Hello, it’s called a bribe, payola, grease, ice, a backhander. It’s corruption, the dictionary definitions of which include moral perversion, depravity, debasement, not to mention rottenness. Okay, that’s a little harsh. We’re not talking about the moral equivalent of, say, paedophilia. But it’s surely a slippery slope from giving the cop some lunch money, to bribing the customs guy to look the other way on a smuggled shipment, to paying off politicians.

Ramon Navaratnam, 73, the Transparency International Malaysia President told me the battle for him started when he was a young man in the finance ministry and he came home one night from work to find a case of whisky on his doorstep from a company bidding on a government contract. “It took a lot of doing, but the company finally took the whisky away. “If I had taken that box of whisky, I can never say no later on.”

Returning to Nigeria for the first time in five years, nothing is more striking than the mobile phones ringing wherever you go.

The phone signal barely drops on a drive some five hours out of Abuja, through countryside where the only people visible are hoeing the red earth and balancing unwieldy stems of sugar cane on bicycles. A growing number of village households now have phones.

It marks a big change in a country where not long ago it was often easier to visit someone than to try to call.

As elsewhere in Africa, free access to mobile phones has created a new industry and made business easier for everyone – helping to propel the continent’s fastest growth in years.

But finding somewhere to charge a mobile phone’s battery can be problematic.

Nigeria, like some of its neighbours, has had far less success in bringing the reliable power supplies that business also needs to take off.

Nigerians blame that failure as much as anything else for holding back Africa’s giant. They increasingly question the ability of President Umaru Yar’Adua to make a difference, despite campaign promises ahead of last year’s election and a pledge to declare a “national emergency” to improve power supplies.

For many Nigerians, the lights rarely – if ever – come on. It is not only frustrating, it forces businesses to run their own generators, pushing up costs and eating into profits.

The growing economy and population have only made the shortfall more dramatic.

To put Nigeria’s failure to meet its power needs in context, South Africa suffered crippling outages early this year despite having 10 times Nigeria’s generating capacity for only one third of the population.

The success of mobile phones in Nigeria was not so much because of anything the previous government did as the fact that it was able to remove longstanding official obstacles to private firms eager to invest in a country of over 140 million.

The power sector is a bigger task, given the huge investments needed, but there is little sign of government action to address the problem despite an investigation into billions of dollars that the previous administration is accused of misusing in its failed efforts to improve electricity supplies.

In fact, there is concern among Nigerians and foreign investors alike at the slow pace of government under President Yar’Adua, now widely dubbed “Baba Go-Slow”.

A new cabinet has yet to be announced despite the sacking of 20 ministers and there are doubts over progress on the 2009 draft budget. Worries over Yar’Adua’s health have added to the mood of uncertainty.

Meanwhile, the economic environment is getting harsher with prices for the crude oil on which Nigeria relies now closer to $60 a barrel than the $140 they topped earlier this year. Turmoil in the Niger Delta continues to restrain oil production. Nigeria’s main stock market index has lost nearly half its value since March.

Is Yar’Adua going to be up to the task of turning on the lights? Is anyone? What do you think?

It was not hard to see which of Zimbabwe’s rivals felt he had come out on top from the regional summit at the weekend.

President Robert Mugabe described the leaders as “persuasive”. Opposition leader Morgan Tsvangirai said he was “shocked and saddened”.

Leaders of the Southern African Development Community demanded immediate implementation of Zimbabwe’s power-sharing deal and said the rivals should share the powerful Home Affairs ministry to end weeks of deadlock – a proposal quickly rejected by Tsvangirai.

Anyone hoping the summit might be able to bring Zimbabwe’s increasingly desperate crisis closer to a resolution would have been disappointed.

Instead of highlighting a strong position, it showed up more than anything why the region’s leaders are unlikely to ever be able to force Zimbabwe’s rivals to implement a power-sharing deal that now looks in growing doubt.

What chance is there now for the power-sharing deal? Should Tsvangirai accept the verdict of the regional leaders and share the Home Affairs post? Should Mugabe form a government alone if Tsvangirai does not go along?

What do you think?

As Germany’s foreign minister, Frank-Walter Steinmeier has delivered many speeches,  but none that anyone can particularly remember. Germany’s top diplomat has impeccable credentials yet has rarely come close to stirring anyone with his balanced, cautious, usually dry and sometimes rather dull addresses. No one would ever think of ticking the box “rousing speaker” next to his name.

That all changed on Saturday — when Steinmeier gave the speech of his life to a congress of his centre-left Social Democrats (SPD). The 500 delegates interrupted the white-haired lawyer’s riveting 88-minute address with applause 114 times. They then elected Steinmeier, who had never won election for any public office, as their candidate for the 2009 election with 95 percent of the vote.

By brilliantly latching on to the dominant issue of the moment — the global financial crisis – Steinmeier told the SPD delegates who have suffered post-war record lows in opinion polls this year and are worrying about their own job security in next year’s elections that it is the SPD more than any other party that is ideally positioned to benefit from the banking crisis. The SPD has long pushed for more state controls, he reminded them, and always stood up to protect the proverbial “little guy”.

“Let’s close our flanks, let’s not settle for second place but rather let’s fight for the victory next year,” Steinmeier told the delegates, who gave him a five-minute standing ovation for the fiery address.

It was also more than the usual vague piddle-paddle that German leaders often offer up. Steinmeier, until now seen more aligned to the conservative wing of the SPD, gave the party’s left plenty to cheer about. He spoke out clearly against extending nuclear power, unambiguously endorsed Gesine Schwan as the party’s candidate for the office of president even though SPD conservatives would prefer her withdrawal, and promised new government spending to boost the economy.

“People are looking to us to lead them through the crisis and we can do it. We’ve buried our differences. We believe in ourselves again and that’s making us strong. At critical moments we’ve been the ones that provided the answers.” Before Saturday the SPD had been a party in disarray. They had struggled to make their mark with voters. Trailing Chancellor Angela Merkel’s Christian Democrats by about 10 points in opinion polls, the party has been deeply frustrated, fed up with Merkel getting much of the credit for the achievements of their grand coalition.

“I was extremely impressed with his speech,” said former Chancellor Gerhard Schroeder, who sat cheering Steinemeier in the front row with another ex SPD chancellor, Helmut Schmidt. An accolyte of Schroeder’s, Steinmeier served as his chief of staff. Before Saturday, he was seen as a steady pair of hands, holding an office (foreign minister) that almost automatically makes him one of the country’s most popular leaders. Before Saturday he was respected, admired perhaps.

He has now added a new attribute to his résumé: “rousing speaker”.

Nigeria is unhappy at Robert Mugabe’s continuing presidency in Zimbabwe.

The opinion of Africa’s most populous nation and its second biggest economy is hard to ignore, although some may observe Nigeria’s own presidential elections last year were not above reproach. “We express our strong displeasure at the process leading to the election and its outcome,” Foreign Minister Ojo Maduekwe told reporters, saying any negotiations over the future shape of Zimbabwe’s government should set the flawed election process to one side.

A few hours earlier, Botswana had called on southern African nations to refuse to recognise Mugabe.

Was it coincidence or the start of a concerted push by African states dismayed at the failure of South African President Thabo Mbeki to broker a deal that would end the Zimbabwe crisis? Mbeki’s role as mediator looks ever more untenable. Today’s endorsement of his role by Robert Mugabe will hardly have helped.

Are the public statements by Nigeria and Botswana the beginning of something bigger? Will more African governments speak out? And how long can Mbeki continue as mediator?

Kenya’s parliament and critics are calling loudly for Finance Minister Amos Kimunya to be fired for his role in the secretive government sale of a luxury hotel under murky circumstances. Pressure is mounting for Kimunya to resign or for his political patron, President Mwai Kibaki, to fire him over the sale of the Grand Regency hotel to a company that includes Libyan investors and at least one senior Kenya Central Bank employee.

The matter has tested the government set up in a power-sharing deal to end a bloody post election crisis

Kimunya denies wrongdoing and says the price offered was too good to resist. Political opponents and others have said that the value was drastically low, but straight answers about who bought it, how the deal came about and who is benefiting have not been forthcoming or given when asked for by the public or the press.

It hasn’t helped Kimunya’s situation that the Grand Regency first came to public scorn in the early 1990s when the man at the heart of the country’s longest running corruption scandal bought it with what the government says was stolen Central Bank money. That scandal, the Goldenberg affair, nearly brought the country’s economy to its knees and became the symbol for most in the east African nation of the impunity with which politicians and a small politically connected elite can steal public assets.

Adding to Kenyan frustration is the fact that many of the players from that era are still active in politics or remain in the small club of the connected. For example, the lawyer who handled the sale of the Grand Regency in 1994 to accused Goldenberg architect Kamlesh Pattni is now a government minister and is on the commission investigating the new case. Also on that commission is Justice Aaron Ringera, who earns 2.5 million Kenya shillings ($37,820) per month in his job as the head of the Kenya Anti-Corruption Commission – and Kimunya was on the panel that awarded Ringera that job.

So with so many close connections among the relatively small political elite, so much official obfuscation and a poisonous political atmosphere, will Kenya’s taxpayers ever get a straight answer on how the deal came about or how they will benefit? Will — or should — anyone be punished for what is shaping up to be the latest Kenyan corruption scandal?

And what could it mean for the coalition?

Five years after the U.S.-led invasion to topple Saddam Hussein, Iraq is throwing open its oil sector to foreign oil firms  in a way Saudi Arabia, Kuwait and others in the region are reluctant to. Oil Minister Hussain al-Shahristani says no company will have any special privilege.

Some  analysts take a different view. They reckon U.S. and British oil majors are in a strong position to help develop the world’s third-largest oil reserves. Exxon Mobil, Chevron, Royal Dutch Shell and BP head the queue. They have already built up a relationship with Iraq’s oil officials by negotiating short-term technical deals.

Now Iraq is inviting bids for long-term development contracts at its biggest fields, the “backbone of its industry” in the words of Shahristani. He believes Iraq could become the world’s second- or third-biggest oil producing country, rivalling Saudi Arabia and Russia.

Are U.S. and British firms obvious choices as partners because of their expertise? After all, before the U.S.-led invasion Iraq often preferred Russian firms. Or are U.S. and British firms reaping the benefit of their governments’ policies?

Each side accuses the other of trying to scare voters ahead of Ireland’s referendum on the EU treaty on Thursday.
“No” groups have campaigned on issues ranging from abortion and euthanasia to taxation and Ireland’s military neutrality. They also say new decision-making mechanisms mean small states will lose influence and get trampled by the EU’s heavyweights.

The government’s response is to accuse treaty opponents of scaremongering by campaigning on emotive and extraneous issues that will not be affected by the treaty.
In some cases neutral voices are inclined to agree, with the Catholic archbishop of Dublin and referendum commission weighing in to say there is nothing in the treaty that threatens Ireland’s strict abortion and euthanasia laws.
The government warns of “dire consequences” for Ireland’s economy and diplomatic clout if a nation that has gained so much from EU support and subsidies is ungrateful enough to reject the treaty.
The “No” camp accuses the government of bullying, blackmail and exaggeration. Indeed a number of economists say that while a “Yes” vote would be best for future prosperity, rejection of the treaty is unlikely to have any severe repercussions.
So who is the biggest bully in the playground? Or is it just an inevitable flaw in referendums that they become a lightning rod for irrelevant issues and for politicians who don’t trust us to be able to debate the question we’re being asked?