from Africa News blog:

Overdose of trouble in West Africa

That political stability is vital for investment and development goes without saying, but it seems as though too much instability can be bad for criminal enterprises too.

The cocaine cartels that used West Africa, and Guinea-Bissau in particular, as a conduit to Europe were long accused of worsening the chaos in one of the region’s poorest and most troubled states by buying off some factions of the security forces and political leaders.

But if so, things may have gone too far.

In less than a year, Guinea-Bissau has lost President Joao Bernardo “Nino” Vieira (dead), the head of the army (dead), the head of the navy (fled), a former defence minister (dead) and a candidate to replace the slain president in the June 28 election (dead). And those are just some of the figures at the top.

from Africa News blog:

Should West back Zimbabwe’s government?

The United Nations has joined Zimbabwe’s power-sharing government in appealing for more than $700 million in humanitarian aid for the ruined country.

But while Western countries may show willing when it comes to emergency aid, they are still reluctant to give money to the government between President Robert Mugabe and Prime Minister Morgan Tsvangirai, his old rival.

First, they say, there must be broader political reforms and a clearer demonstration of respect for human rights.

The Western countries have long been at odds with Mugabe, accusing him of ruining Zimbabwe after the seizure of white-owned farms, of widespread human rights abuses and of making a mockery of elections last year that were widely condemned outside Zimbabwe.

from Africa News blog:

Africa back to the old ways?

The overthrow of Madagascar’s leader may have had nothing to do with events elsewhere in Africa, but after four violent changes of power within eight months the question is bound to arise as to whether the continent is returning to old ways.

Three years without coups between 2005 and last year had appeared to some, including foreign investors, to have indicated a fundamental change from the first turbulent decades after independence. This spate of violent overthrows could now be another reason for investors to tread more warily again, particularly as Africa feels the impact of the global financial crisis.

"Although I don't think these instances of instability in Africa are related to each other or part of a pattern, I think there's no doubt external constituents and businesspeople around the world will assume there is a pattern," said Tom Cargill, Africa Programme Coordinator at London thinktank Chatham House.

The fact that coup makers have succeeded without being forced to step down or even face major censure could also embolden those who might be tempted to take power in bigger countries, where falling growth is encouraging disaffection.

from Africa News blog:

Time to stop aid for Africa? An argument against

Earlier this month, Zambian economist Dambisa Moyo argued that Africa needs Western countries to cut long term aid that has brought dependency, distorted economies and fuelled bureaucracy and corruption. The comments on the blog posting suggested that many readers agreed. In a response, Savio Carvalho, Uganda country director for aid agency Oxfam GB, says that aid can help the continent escape poverty - if done in the right way:

In early January, I travelled to war-ravaged northern Uganda to a dusty village in Pobura and Kal parish in Kitgum District. We were there to see the completion of a 16km dirt road constructed by the community with support from Oxfam under an EU-funded programme.

The road is bringing benefits in the form of access to markets, education and health care. Some parents say their daughters feel safer walking to school on the road instead of through the bushes. Many families have used the wages earned from construction work to pay for school fees and medical treatment. This is the impact of aid.

Having lived and worked in east Africa, I have witnessed the positive effects of aid. But done badly, it can be very limiting and even has the potential to create more harm. To avoid this, it must be provided within an enabling environment in which it is used as a catalyst for change and not as an end in itself. Governments must show leadership through an accountable system.

Red tape tripping up Iraq

By Mohammed Abbas                 � �                    

Many developing countries are mired in dated bureaucratic practice and tangled in red tape, but of all of them, Iraq can perhaps least afford to see its crucial post-war development suffocated under mounds of paperwork. What hangs in the balance is nothing less than whether oil-rich Iraq can emerge from years of war as a prosperous, democratic and secure state — or whether it sinks back into the bloodshed that almost tore it apart. A love of official stamps, seals and documents in triplicate is by no means only an Iraqi phenomenon. Receiving shipments at Cairo airport, for example, involves one queue to buy a ticket, another to receive it and a third to get it laminated.

But if Iraq is to rebuild its crumbling infrastructure, develop its oil fields and find jobs for legions of restless unemployed — who have easy access to guns — it must make doing business and governing as smooth as possible. Would-be foreign investors are likely to steer clear if Iraqis themselves find the country’s bureaucracy a nightmare. Born in Iraq, I was technically eligible to vote in recent provincial elections, but a trip to a government office to apply for a required residency card was a shocking reminder of the mountain of bureaucracy Iraqis must climb. Hundreds of people shuffled from room to room down long, dim corridors with unmarked doors, clutching sheaves of faded paperwork. A crowd would clamour at a door whenever an official turned up, but otherwise many sat on the floor despondent. Some looked like they had been there for days.

In one office, two officials let people in one at a time. Noise and paper-waving from the crowd outside erupted each time the door opened. “Fake. Fake. This one’s okay, take that to the district office and apply there,” said one official, lazily flicking forged identification cards back at a woman before advising her to go and queue at yet another government building. Far from instilling order, the bureaucracy has fostered an industry in forged documents and fixers versed in byzantine official process, who can apply on your behalf for a hefty fee. Some of that money probably goes to officials. Iraq came second to last out of 180 countries in corruption watchdog Transparency International’s 2008 Corruption Perceptions Index. Meanwhile, roads remain unpaved, sewage disposal is abysmal and millions have no access to decent housing and healthcare, partly because bureaucracy has made it hard to execute Iraq’s budget. For journalists, the insistence on long-winded procedure is maddening. Recent Reuters requests to meet senior Iraqi officials were rejected because the envelope had not been stamped correctly, or because it did not have a randomly generated reference number. Many officials insist on lengthy honorifics and encourage obsequious preambles to questions, which eats away at press conference time and takes up newspaper space. The leads of many Gulf newspaper articles, for example, consist of little but long-winded honorifics. “Noble Leader, Master of the Seven Sand Dunes, who Blesses us with his Beneficience, Sheikh xxxx of xxxx bin xxxx abdul xxx met …” That’s only a mild exaggeration. Democracy has been touted as a way for Iraqis to reconcile after years of war, and last month they voted in local polls. Incumbents fared badly, and the result was seen as a vote against years of perceived corruption and incompetence. The pressure is now on Iraq’s new crop of officials to cut the red tape and show democracy works.

from Africa News blog:

Hu reassures Africa?

If anyone in Africa was worried that the global financial crisis might dim China’s interest in the continent, President Hu Jintao will be visiting this week to give some reassurances - as well as possibly to temper any unrealistic hopes for the amount of assistance to be expected.

As Chris Buckley reported from Beijing, this visit is also about China showing the wider world that it is a responsible power.

The fact that none of the countries Hu will visit is among Africa’s economic or resource heavyweights - Mali, Senegal, Tanzania and Mauritius - is seen as a sign that China wants to send a message that its engagement with Africa is about much more than resources.

Trade between China and Africa rose to $107 billion last year and more deals are expected on this visit. Nearly all of Africa's exports to China still come from a handful of countries rich in oil or minerals, though, and now the global downturn has put those in more doubt.

from Africa News blog:

Time to stop aid for Africa?

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.

from Global Investing:

What a web we’ve woven

Thanks are due to the World Economic Forum for clearly  explaining the interlinked web of misery currently facing the world.  Make what you will of the details in the graphic below -- and if you can, please do let us know! -- but the overall impact really does spell it all out.

This Vonnegutesque cat's cradle, incidently, comes from the forum's new report, Global Risks 2009, released ahead of its annual meeting in Davos between January 28 and February 1. It shows an interlinked world facing a monumental series of interlinked risk, some of which  investors are having to confront for the first time.  Sheana Tambourgi, head of WEF's global risk network, explains the report in this video:

from Africa News blog:

Selling Africa by the pound

The announcement by a U.S. investor that he has a deal to lease a swathe of South Sudan for farmland has again focused attention on foreigners trying to snap up African agricultural land.

A few months ago, South Korea’s Daweoo Logistics said it had secured rights to plant corn and palm oil in an even bigger patch of Madagascar - although local authorities said the deal was not done yet. Investors from Asia and the Gulf are looking elsewhere in Africa too.

Investor interest in farmland – not only in Africa – grew sharply after food prices shot to record highs last year. Although commodity prices have fallen since, there is still anticipation of long term demand growth once the world emerges from its current economic troubles.

Philippe Heilberg, chairman and CEO of New York-based investment firm Jarch Capital, told Reuters he saw ripe opportunity for decades in south Sudan’s Mayom county. The deal covers land nearly twice the size of the Indian Ocean island of Mauritius.

from Africa News blog:

Forgiveness in paradise?

If you lived on an archipelago that defined paradise with palm-fringed white sand beaches and emerald green waters, you would expect a relaxed, lazy pace of life.

Lazy would be a generous description of the Seychellois soldier’s wave at the entrance to State House as I arrived with my local colleague George Thande - who is admittedly a regular visitor here.

The Seychelles were ruled by the French before the British and State House in the capital Victoria is every bit the luxurious colonial mansion: a lush garden exploding with tropical colours; an oil painting of Britain's Queen Victoria hangs in the wood-panelled reception room close to a portrait of Castor, a runaway slave from the 19th century with a fearsome reputation; a Daimler and Rolls Royce are parked on the forecourt.

But President James Alix Michel, cannot afford to be relaxed. This is an exotic destination at the sharp end of the global financial crisis.