Showing posts with label World Bank. Show all posts
Showing posts with label World Bank. Show all posts

Friday, November 20, 2009

Britain’s aid donation won’t tackle root cause of Ethiopian famines

Britain announced the release yesterday of a food package of $316 million (US) to support the provision of basic services, social protection and humanitarian assistance in Ethiopia. The UK Minister of State for International Development, Gareth Thomas made the announcement on a visit to Addis Ababa saying there was a “robust mechanism” to make sure that the money is used as intended. This means paying close attention to political developments and the regime of Meles Zenawi who has been Prime Minister since 1995 and de facto leader since 1991. (photo credit: Turkairo)

The British bequest came two months after the World Bank signed two financing agreements amounting to $65 million for tourism development and enhance agricultural productivity. The first agreement for $35 million will finance sustainable tourism development projects and the remaining $30 million is set aside for agricultural projects. The World Bank Country Director said they would assist Ethiopia to tap its rich resources in the agriculture sector and encourage it to become self-sufficient in food production.

The need has become urgent as Ethiopia teeters on the verge of another debilitating famine. This is Ethiopia’s fourth successive year of lack of rain and when the rains do come it is often in the form of torrential showers causing floods and landslides. While the country has recovered from the disastrous 1984 famine (during the reign of Dictator Mengistu), some of the country remains particularly exposed, especially the far eastern region bordering war-torn Somalia. The conflict has created a refugee crisis and disrupted food production making already poor people even more vulnerable. The Zenawi government said the number in need of urgent assistance during the period October to December 2009 has increased from 4.9 million people to 6.2 million.

The British envoy made no mention of the famine in the Horn of Africa in his visit or Zenawi’s role in it but others have not been so coy. Writing in The Times last month, Sam Kiley noted the drought is the region’s worst in 47 years but foreign aid was not helping. On the contrary, said Kiley, it was “the principal reason for Africa’s accumulated agony.” Kiley quotes the Oxfam paper Band Aids and Beyond, which says that between 70 and 90 per cent of all US aid to Ethiopia has been food. But while the US was feeding the country, Ethiopia spent billions on a debilitating war with neighbour Eritrea. Riley says that only education can stop the vicious cycle of dependence.

African researchers Julian Morris and Karol Boudreaux agree with Riley that Ethiopia has not dealt adequately with the risk of famine. Writing in Business Daily they say the lack of rains are common to other parts of the world where they “routinely face droughts yet avoid famine.” Global deaths from drought-related famines have fallen by 99.9 per cent since the 1920s. The reason for this is specialisation and trade which increased food production and enabled vulnerable people in drought-prone regions to diversify. But the planned central economies of countries such as Ethiopia have provided no incentives to improve the land.

Under the 1995 Constitution, Ethiopian farmers cannot own their land. This means they cannot use mortgages for capital investment in machinery, seeds, fertilisers or irrigation. The net result is that farmers sub-divide their properties leading to environmental degradation and lower crop yield. This is exacerbated by government policies restricting movement to cities. The end result is a crippling cycle of forcing people to remain smallholder farmers, denying them opportunities in cities, compelling them to migrate and making them ruin the land through subdivision. Not everyone agrees that Africa should be judged by western lights. Nevertheless The Times and Morris & Boudreaux, present persuasive cases that Ethiopia’s famines are caused by bad government policies, not bad weather.

Wednesday, July 11, 2007

Mixed results in World Bank corruption report

A new World Bank report has praised African nations for their fight against corruption. The report measured the quality of governance in 212 countries from 1996 to 2006 and found Africa had shown the greatest improvement. The report did, however, find that the gains and losses balanced out such that the average quality of governance worldwide over the past decade has not improved much. Finland, Iceland, Denmark Norway and New Zealand were judged the least corrupt countries in the world while Somalia, Myanmar (Burma), Equatorial Guinea, Haiti and Zimbabwe ranked most corrupt.

The World Bank’s Daniel Kaufmann, co-author of the report and director of the banks knowledge-sharing and training arm, said that bribery is costing world $1 trillion a year with the billion people living in extreme poverty worst affected. “The burden of corruption falls disproportionately on the bottom billion people living in extreme poverty,” he said. Kaufman said improvements in governance are critical for aid effectiveness and for sustained long-run growth.

The report entitled Governance Matters, 2007: Worldwide Governance Indicators 1996-2006 highlighted the number of African countries that had made great strides in improving various aspects of government. Using criteria such as accountability, free media, political stability,government effectiveness, regulatory quality, the rule of law and control of corruption, the report covered 212 countries and territories and drew on 33 different data sources. It captured the views of tens of thousands of survey respondents worldwide, as well as thousands of experts in the private, NGO and public sectors.

Some countries such as Venezuela, Zimbabwe, Eritrea, Ivory Coast and Belarus had regressed in the timeframe of the survey. But others are doing well: Kenya, Niger, Sierra Leone, on leadership accountability, Algeria and Liberia on the rule of law, Algeria, Angola, Libya, Rwanda and Sierra Leone on political stability and Tanzania on corruption. Outside Africa, those making significant gains included Indonesia, Ukraine, Columbia, Turkey and Afghanistan. Meanwhile corruption is on the rise in Bangladesh, Poland, Kyrgyzstan, Moldova and Pakistan.

Management of corruption is now a key World Bank benchmark. Many of the debts of the world's poorest countries have been written off under the Bank's Heavily Indebted Poor Countries (HIPC) initiative and increased aid flows to them on condition that they stamp out corruption. HIPC started in 1996 and was enhanced in 1999 as an outcome of a comprehensive review by the International Development Association (IDA) and the International Monetary Fund (IMF). HIPC’s debt-burden thresholds were adjusted downward, which enabled more countries to qualify for larger volumes of debt relief.

The report showed that corruption in the US has significantly worsened in the last decade. The World Bank scored the US on the same measure as Chile. Similar surprises showed emerging economies such as Botswana, Costa Rica and Lithuania, scored higher on the rule of law and corruption than two industrialized countries Italy and Greece. Daniel Kaufman the report showed the power of data “It begins to challenge these long-held popular notions that the rich world has reached nirvana in governance,” he said.

However Kaufman also admitted that the Bank’s own recent scandal involving former President Paul Wolfowitz has impacted the credibility of both the report and the bank itself. Wolfowitz was forced to resign in May after he violated a World Bank ethics rule forbidding personal relationships between bank employees and their supervisors. Kaufmann said countries rightly asked the Bank, "What right do you have of rating the world when you first have to rate yourselves? It has to start at home."