In a couple of postings from my trips to Africa in 2007 (link1; link2), I wrote about how the Dark Continent’s slow connection speed to the worldwide Internet was making it unlikely that businesses would invest in Africa. The owner of the fiber optic cable linking London to South Africa, for example, is a crony of the rulers and is able to charge 100X the price per bit per mile compared to any other undersea cable anywhere in the world. Now it seems that Africa’s Internet woes are not limited to connectivity with Europe, the U.S., and Asia. Even internal data transfers are slower than via carrier pigeon, according to this ABC News article.
With communications speeds so slow and costs literally 100 times what people in other countries pay, coupled with air transportation costs that are at least 4 times higher (due to government-imposed restrictions on competition), the question is not “How come Africa is in such bad economic shape?” but rather “Why is there even a single free market business in Africa?”
They must have used an incompatible extension to the RFC 1149, I guess involving USB flash memory…
Hey Phil – I would suggest that there effectively aren’t any free markets in Africa (with the possible exception of South Africa). Where there is stability, the playing field is configured to benefit the Man In Charge.
I heard an interview recently with Dambisa Moyo (formerly of the World Bank and Goldman Sachs) who wrote a book about the economic issues in Africa and how development aid from the West has exacerbated the problems. I found her very articulate and intelligent in the interview.
She asked the basic question – after over $1 Trillion of development aid in the past 50 years, why is Africa still an economic wasteland?
Her answer is that the aid spigot never stops flowing. Across Africa, 70% of government funding comes from foreign aid. There is no incentive for creating long-term growth or take on the very hard task of building an economy when all you have to do is sit back and cash the checks.
Corruption, nepotism, and strong man governments are the norm – and barriers to entrepreneur-ship are created – for example, getting a business license can take almost 2 years. After all, a functioning economy would probably reduce the aid payout for the man in charge and could allow rivals to develop. Better to keep them all poor and live large off money from others.
You might find it interesting:
http://www.amazon.com/Dead-Aid-Working-Better-Africa/dp/0374139563
Looking back 50 years from now, people of the undeveloped regions of the world will probably be very pleased their land is still land and vegetation and wildlife, and real communities where people actually inhabit the same relative geographic space when they speak with each other. The alternative being living in the stone and iron wastelands popular in developed countries and this time’s major Chinese cities.
The land in Africa is undeveloped because its residents don’t have the wherewithal to provide a supportive infrastructure but they have many treasures and pleasures a New York suburbanite like me can only dream of. Ultimately, this is their greatest asset and it can become a monetizable one as ecology salvation programs come into being which compensate land stewards for maintaining the integrity of the natural worlds in which they live.
Ultimately, the people themselves need to come forward and take charge for learning the value of what they have and educating themselves about the tools they need to steward and protect those assets moving forward with them into the future. These includes health, environmental, entrepreneurial and technology education and a communication infrastructure. It’s a big job but people whose hearts are strong can take on big jobs and succeed with them.
Kimi: I don’t think that the lack of Internet connectivity is helping to preserve the land in Africa. In fact, because it is impossible to operate an information-based business, the only viable businesses become ones that depend on exploiting the land, either for mining, agriculture, or tourism. Africa has nothing like the extensive protected wilderness areas of North America and what they do have is rapidly being deforested. The protected areas of Africa are biogeographically best compared to islands. The animals haven’t gone extinct yet but they don’t have enough range to live indefinitely (unless they too can move to farms and cities).
Your description of the noble savage living in a primitive connectivity-free paradise would fit Africa nicely if they had not enjoyed a population boom during the colonial and post-colonial period. Africa supposedly had around 90 million people in 1800. Today it has 1 billion. Having 11X the population is tough on a piece of land, even if no concrete or steel is applied.
Hey Kimi, nothing stopping you from giving up the stone and iron wasteland of New York to sample the treasures and pleasures of scraping a living on a subsistence farm with no electricity and no running water!
Yeah, I didn’t think so.
There is nothing wrong with the hearts of African people, but as long as they are ruled by kleptocrats who have free access to aid, they, like the citizens of Arab countries, have no levers to overthrow these despots, who don’t need the support of the citizens and certainly don’t need industry to thrive. Turning off the aid would be the biggest favour the West could do for ordinary Africans.