Way Down Below

By Parag Khanna

The noted economist Paul Collier has always had a way with words, making him part of the vanguard of development experts—Jeffrey Sachs and William Easterly among them—who have achieved a wide audience outside academic circles. With coinages such as “greed versus grievance” and “diamonds are a guerilla’s best friend,” Collier has made the complex challenges of civil conflict, war economies, and poverty traps, accessible to the layman and piqued interest in re-framing and re-engaging with major questions of the international political economy.

The Bottom Billion is Collier’s book-length treatment of these vexing issues to which he has devoted his rich a career. Unlike unapologetic aid advocates, Collier, who has sat at the nexus of development assistance debates during his years at the World Bank, points out that aid alone has failed in the many states where poverty and conflict intersect. These countries live in what he describes as a 14th century reality of civil war, plague, and ignorance. So while geography is largely to blame for the endemic poverty of mostly African micro-states, the development biz of aid agencies with cushy offices in Brazil and China but not a single resident representative in the Central African Republic, and the development buzz of rock stars and celebrities who capture attention but have no comprehensive agenda are not helping much. The former have fallen into complacency and the latter are something of a “headless heart.” But Collier is no geographic determinist. Rather he argues for a central economic truth that if the economy develops, culture and institutions follow. Channeling resources away from their role as fuel for conflict and political patronage and towards sustainable development is the way to escape the resource curse which so widely makes democracy in Africa malfunction. Collier treads into two areas not often enough addressed by pure development economists: regional integration and military intervention. He points out that the maintenance of post-conflict peace is a sine qua non for breaking out of cycles of resource/rent capture and violence, but that the interventions made possible by the end of the Cold War have led to the suspended animation of quasi-occupation without deeper stability. One senses that he would not be opposed to more muscular, decisive interventions to make post-conflict growth more promising. He further points to the need for proactive regional integration as the most concrete measure to alter the damning confines of African political geography, citing the East African Community as a vehicle for improving coastal access, building business and export hubs, and attracting regional aid. All these latter steps require private capital, yet Africa still suffers from more capital outflow than inflow. As Collier writes, “What it [Africa] and other economies of the bottom billion really lack is foreign investment.” Governance experts today should find Colliers discussion of regional integration most promising—as do entrepreneurs and progressive leaders in Africa itself. They are keenly aware that even though Africa’s labor costs are now lower than China’s, the continent has nonetheless been locked out of global manufacturing by Asia, a missed opportunity compounded by internal protectionism. Here the story gets interesting, for Collier believes that under these circumstances, Africa still needs protectionism—but from Asia, to buy itself time to build manufacturing agglomerations that can give it some hope of one day competing with Asia. The West can help through measures such as the U.S. Africa Growth and Opportunity Act, which has boosted exports from Africa across the Atlantic tenfold, and altering rules of origin codes to allow for the more efficient production of African goods. With growing investment coming into Africa from both EU countries and especially China in recent years, the possibility of competition among aid models is a topic readers may wish Collier would have addressed. African leaders such as Senegal’s president have launched invectives against OECD countries for their rigid agricultural subsidies and expensive white elephant projects which don’t deliver infrastructure at the scale, cost, or speed of Chinese projects. Rather than expressing dismay and criticism at China’s sudden appearance on the scene, perhaps the West can learn from China’s rapid acceptance as a development partner for Africa. Africa may be responsible for a high share of the planet’s bottom billion, but with the right constellation of external competition and internal competitiveness, the fortune at the bottom of the human pyramid could yet be unleashed.