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Skills-based remittances April 23, 2010

Posted by Dan Herman in Economics, Government, Immigration.
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Stay, go and come back.

Economic development is often thought of in two simple terms: trade and aid. If one doesn’t work, the other will. Yet increasingly, with prolonged poverty and weak-GDP growth performance in many developing countries, we find that perhaps neither works as well as it should.

(I’ve previously reviewed Dambisa Moyo’s work on half of this topic, and my Masters thesis might explain the rest.)

So why then do some countries seem to be emerging from sub-Saharan Africa’s economic slumber? In particular, the West African countries of Senegal, Ghana and Nigeria. Is it the consequences of decades of aid? Free trade? Or it because they have the right policy and institutional framework?

While it’s hard to disconnect any of the above metrics from eachother, I’d like to propose that growth in these, and other, countries is actually in large part linked to a concept of skill- and capital-repatriation that could be the “remittances” of the future.

(more…)

Book review – Dead Aid by Dambisa Moyo February 8, 2010

Posted by Dan Herman in Africa, Books, Economics.
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Having spent over 2 years in Sub-Saharan Africa, in some of the richest and poorest countries on the Continent, and having worked in the aid & development industry, I was excited to learn of the release of Dambiso Moyo’s polemic against the aid industry in her book Dead Aid (released in early 2009). However with scant access to libraries and bookstores over the past year of our travels, I had to wait until I was back on Canadian soil to pick up a copy.

Unfortunately, I don’t think I’m any better off having read it.

First, a caveat emptor: I’m in full agreement with the basic premise of Dambisa Moyo’s book, that being that development aid harms more than it helps recipient countries. From my experiences, the aid industry, albeit altruistic, suffers from one enormous fault of logic. That fault sees international dollars and expertise replace the basic functioning of the basic state. Aid replaces domestic statecraft, taxation and good governance. Thus the citizens (more…)

A different view on development assistance and trade April 7, 2008

Posted by Dan Herman in Economics, Politics.
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The following was published in the Awareness Times, one of Sierra Leone’s daily newspapers, back in November 2006. I wrote it in response to an editorial entitled Thank God the Chinese have come to transform economies of disadvantaged Third World Economies.”

I read with great interest in one of your recent publications a commentary regarding improving Sino-African relations, written by Alhaji Morikeh Fofanah. Indeed, while not new, over the past decade Chinese interests on the continent have increased tremendously. His article points out several key issues that are of benefit to African countries, notably the development of infrastructure that will be key if the continent is to industrialize on a large scale, let alone provide sufficient services to its constituents.

That said I believe there are several points in his article that need further analysis. While I will not question the unfair trade subsidies that hinder the entry of African products, notably agricultural products, into the world market, nor the appropriation of natural resources in the colonial period, I do have to question several of his assumptions about both the past and present.

Chinese economic development must be looked at very carefully – the pre-1978 period was by no means a panacea of growth, one must simply look at the failed Great Leap Forward or the mass starvations under Mao. Growth has been a marked phenomenon since 1979 and the introduction of agricultural reforms. Also, China’s giant leap in terms of GDP has been tied in large part to its export-oriented growth strategy, one that today risks undermining long-term industrialization or manufacturing efforts in Africa.

While aid from China comes with no political strings attached, it is often tied to a policy of open markets whereby cheap Chinese consumer products flood African markets. If China, or any other country no matter their political or geographic circumstance, wanted to help Africa, they would (more…)

Shout loudly but carry a small stick April 5, 2008

Posted by Dan Herman in Current Events, Politics.
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While the world waits to see how the outcome of the Zimbabwean presidential election unfolds, one can’t help but wonder what the world’s action (as opposed to what will evidently be a vociferous reaction) will be if Robert Mugabe disregards the actual results and attempts to continue his now 28 year reign of Zimbabwe.

My thoughts begin with reference to the first-of-its kind intervention of African Union troops in the Comoros less than two weeks ago. While there are very large differences between this situation and what may unfold in Zim, I think the situation bears analysing.

The Comoros is a small three-island (Grande Comore, Anjouan, and Moheli) archipelago off the coast of East Africa. Home to just over 700,000, the three islands have suffered through 20 coups or coup attempts since independence from France in 1975. In 2001 a new constitution was agreed upon that, in theory, saw central military power give way to a dispersed-democratic system that endowed each of the islands a significant amount of autonomy and control over local affairs. Oversight of the union of the three islands would rotate between the Presidents of each of the three islands. But things haven’t quite gone as planned.

Mohamed Bacar, who became President of the island of Anjouan in 2001, saw his re-election in June 2007 rejected by the Comorian central government, as well as the African Union, on the grounds that the elections weren’t held with the approval of the Central government and were fraught with voting irregularaties and initimidation. And so despite his supposed 90% approval rating, Bacar was told to exit forthwith.

Months of failed negotiations, threats and bravado led the Central Comorian government to forego sanctions on the Island in favour of a “military solution.” (more…)

Beyond the Safari April 5, 2008

Posted by Dan Herman in Africa, Tourism.
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Award winning columnist cum author Stephanie Nolan has an interesting article at the Globe and Mail about  travel in Africa, and among other things, the impact of civil strife on the Kenyan tourist industry. Beyond Kenya, however, she notes that “there’s a wealth of other vacation options on this vast continent. You can take both wildly opulent and budget safaris in South Africa. You can trek in the ancient cliff villages of Mali. Or sail a dhow in Zanzibar. There is much more to Africa than Kenya, despite what Papa Hemingway may have led you to believe.”

No freaking kidding. Nolan does a great job at painting the popular tourist haunts on the Cape to Cairo trail through South Africa, Zambia, and into Tanzania, and deserves credit for highlighting the legendary music of Mali. But in highlighting the most frequented places on the Continent she misses an opportunity to spread the wealth around, and draw attention to equally tourist-dollar starved locations ever so slightly off the beaten path. Now I’ll admit that any mention of travel to Africa is usually met with blank stares and offers of life insurance but having travelled through 17 countries on the Continent, and having crossed 17 borders by land, I’d like to offer an alternative to Nolan’s list.

But before I get to the list, a few important points that may help convince would-be travellers believe that I’m not alone in pushing these far-off destinations. In December 2007, Delta Airlines officially opened three new routes from the U.S. to the Continent, with flights linking New York and Atlanta to Accra, Dakar and Lagos. Even more exotic was British Midland’s decision in February to take over operations of a London to Freetown, Sierra Leone route.

And so I’ll start with this last destination, a former outpost of mine, Sierra Leone. (more…)

From micro to meso finance March 31, 2008

Posted by Dan Herman in Economics.
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Microfinance is justly seen as a savior for millions around the world. As of 2007 it’s estimated that over 16 million of the world’s poorest benefit from the small extensions of credit that the over 7000 global microcredit organizations channel. The volume of loans now approaches some $25 billion, including an increasing share of direct peer-to-peer loans through sites such as Kiva, Microplace and MyC4. It’s primacy role in economic development and poverty alleviation was perhaps best showcased by the awarding of the 2006 Nobel Peace Prize to the father of microfinance, Muhammad Yunus, the founder of the now-famous Grameen Bank.

At the time of the award, the Norwegian Nobel Committee noted that, “Micro-credit has proved to be an important liberating force in societies where women in particular have to struggle against repressive social and economic conditions…Yunus’s long-term vision is to eliminate poverty in the world. That vision can not be realised by means of micro-credit alone. But Muhammad Yunus and Grameen Bank have shown that, in the continuing efforts to achieve it, micro-credit must play a major part.”

But building at the bottom of the economic pyramid has it’s limits. Indeed, microfinance can enable millions to survive where and when they could not previously. But as James Surowiecki, author of The Wisdom of Crowds, points out in his recent editorial in the New Yorker, there are definite limits to how far microfinance can go in enabling economic development.

He writes,

“What poor countries need most, then, is not more microbusinesses. They need more small-to-medium-sized enterprises, the kind that are bigger than a fruit stand but smaller than a Fortune 1000 corporation. In high-income countries, these companies create more than sixty per cent of all jobs, but in the developing world they’re relatively rare, thanks to a lack of institutions able to provide them with the capital they need. It’s easy for really big companies in poor countries to tap the markets for funding, and now, because of microfinance, it’s possible for really small enterprises to get money, too. But the companies in between find it hard. It’s a phenomenon that has been dubbed the “missing middle.”

Filling this missing middle, usually neglected by both domestic and international lending sources, has come to be termed “meso-finance” and aims at enabling SME’s to grow and subsequently expand their employment bases. One of the means of doing so is taking a Prosper/Zopa like approach to peer-lending, and aggregating small loans into $10,000 + amounts for entrepreneurs in the developing world. Evidently there are some significant risk issues that accompany the extension of such credit but with the right local structures in place, Web 2.0 lending might just offer meso-finance the channel it needs to extend the credit that small business owners the world over desperately want.

Curious December 14, 2007

Posted by Dan Herman in Africa, My Writing.
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“You can come across, but promise me you won’t stay the night, ok?” Not quite the terror inducing remarks I expected from a border guard as I tried to cross into the DRC in August 2004. The country was still in the midst of an interminable ethnic conflict and I’d heard nothing but terrifying stories from the few that I met who had ventured in. It’s a ghost town they said, the police will strip you naked claimed others. But after having decided to forego a visit to Bukavu due to encroaching rebels I knew this was my last shot. Curiosity had pushed aside my voice of reason and as I stared at Mt. Nyiragongo from across the border in Gisenyi I knew I wanted to go.

My fascination with Africa stemmed in large part from my grandmothers stories about the Congo – some in our family had worked there during Belgian’s atrocious colonial period – and I longed to see whether myth was indeed reality. Before leaving home that spring, my mother had made me promise not to go to either of the Congo’s or Burundi. Too dangerous she said – I wouldn’t survive past customs. But kids being kids I decided I couldn’t miss out on this opportunity to see what had become Africa’s biggest question mark; the continent’s biggest country, its richest in terms of resources, yet the most ravaged by conflict and poverty.

And as if decades of war and foreign interference weren’t bad enough, Mt. Nyiragongo had, in 2002, spewed rivers of deadly lava onto Goma – destroying much of the city and forcing hundreds of thousands, many of whom were refugees from the Rwandan genocide, out of their homes. I still remember the eruption in 2002. I was a student back in Canada and vividly recall a feeling of incredulousness as I watched the streams of people, and rivers of fire, pour through Goma on the news. How could one place have it so bad?

So two years later, hesitations pushed aside, I was on the cusp of finally getting where I wanted so badly to go. And yet this man, a government official no less, was telling me that I couldn’t stay the night. Rebels, he said, you never know when they’ll come back.

I’m always quick to believe I’m semi-invincible; he’s just trying to protect the foreigner I thought. But at the same time I couldn’t help but remember Pasteur Kiza’s warnings in Burundi. “Things are getting worse – you foreigners don’t see it – but things are getting worse.” His fears rang true in Bujumbura as the day after we pulled into port over a hundred refugees were massacred on the border between the DRC and Burundi. From that moment forward I decided to put a bit more stock into these warnings.

And so after a surprisingly enjoyable conversation with my French-speaking border guard I promised him that I would indeed just stay the day, though only after exacting a promise that he’d let me come back tomorrow on the same visa. Africa gets a bad rap for many things, several justifiable, but after having crossed 17 borders by land I’m still amazed at the hospitality and friendliness of the military and police who patrol their borders. While a few have asked for this or that (my favourite remains the Mozambican officer who really admired my quick-dry socks), the majority are just curious about the young man in front of them. Curiosity defies race, its defies wealth; it’s simply who we are.

Perspective April 24, 2007

Posted by Dan Herman in Africa.
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’ve just returned from Sierra Leone, a country that went to hell and back. 11 years of civil war, brutal, at times demonic. Walking the streets of Freetown or Makeni you see the scars. Burnt out buildings, rusted tanks and, in particular, -amputees – it leaves a lasting impression.

When I first arrived in Freetown I was somewhat immune to the pain and suffering I saw around me. Having spent time in Rwanda, Burundi and the DRC I came here thinking that it couldn’t possibly be any different, any worse.

Heck, soaring above the swampy Atlantic on the approach to Freetown you’d be forgiven for thinking you had found paradise. Everything looks so pristine from onboard my brightly painted, though visibly decrepit, Russian military helicopter. Beautiful green mountains weave their way through the city, meeting miles of sandy white beaches along the crystal clear waters of the Atlantic. The beach is busy, local boys playing football outside one of the many bars and restaurants that have opened to cater to the since-departed population of UN soldiers and aid workers that at one time numbered nearly 20,000.

But ten years of brutal civil war have left an indelible imprint on the country’s infrastructure and its people. Freetown, the capital, was left relatively untouched until “Operation No Living Thing” entered the city in January 1999. I could get into the details but, truthfully, much of it is too harsh to recount. Put it this way, a lot of people died.

The rebel attack left bullet riddled facades and the blackened outer shells of charred government offices in its wake, not to mention the traumatic memories of atrocities that are now hidden deep in the minds of thousands of Freetown’s residents.

Upwards of seventy-five thousand rebel soldiers once roamed the hills and valleys of Sierra Leone, the bulk of them, young men, often children, were often drugged and forced to commit the most heinous of atrocities. Rehabilitation is inevitably slow.

It took me ages to get used to Freetown. African capitals are chaotic. Freetown, however, takes it one step further. It’s chaotic yet at the same time frightening. For at every corner groups of young men congregate, jobless, without education, and without much hope of anything more fruitful coming their way.

They ply the streets all hours of the day, selling anything they can get their hands on. No need to go far to shop as with a little patience the shop will come to you. The smell of fried cassava, plantains, chicken and fish permeate what is otherwise a mix of dust, rotting garbage and petrol fumes. Children weave between parked cars and the ubiquitous piles of steel and garbage, selling candies, fruit and bags of cold water to passerby’s. The governments’ policy of universal education has allowed most children to attend school but many more are too poor to afford the required uniforms, books and supplies. Most of the children who do attend school do so in shifts, spending their mornings in class and their afternoons on the dusty streets of Freetown trying to make enough money to fund their educations and more often their survival. Young men and women are largely in a similar situation. With few private sector jobs and few chances to attend post-secondary education, they take to the streets hoping to make a few dollars by joining a thriving informal economy. Life in Freetown is not easy. A large proportion survive on less than a dollar a day, enough to eat but nowhere near enough to escape from the cycle of poverty that grips this beautiful West African nation.

And so amidst the dirt and dust that was my home, I, a 25 year old just a few years out of university tried to make a difference. How exactly? Some days I wonder myself. I can’t build bridges, cannot cure the ill, nor feed the poor. My role within a small NGO and the UN seemed unlikely to save the world, let alone save lives. It’s hard to value your role when death and disease are commonplace and the life expectancy is 34.7 years. To put it all in perspective I would often give one of the neighborhood boys who lived near me the equivalent of $0.75 for doing a small job, perhaps laundry, shining my shoes – I just doubled his daily salary.

Months later I still struggle to see what the biggest contribution I can make really is. On one hand I don’t want to be just another rich white man in Africa, satisfying my own desire to help while being seen as a savior by those in need. But at the same time I can’t escape the fact that the modest monthly stipend I received while in Freetown, let alone my salary today, is worth three annual salaries. A rookie police offer takes home less than $30 a month, staff at one of the luxury hotels maybe $40 or $50, a teacher – just $25.

And so months after the peacekeepers left, months after people started talking about change, and months after the optimism and patience that come with peace started to fade, I left, leaving many friends behind.

Now, a few months later, I’m back in the relatively quiet confines of a friends condo in Toronto. Back at work, with my friends, in a city that offers me what ever I could ever imagine. Yet the experience of living in Freetown is still fresh, almost too fresh, as today, equipped with a perspective on life that few will ever have, I struggle to find peace. As every morning I buy a coffee for the equivalent of feeding a family of four in relative luxury over there. I have a gym membership that would pay for their rent for the year. I have, the vast majority there don’t. It’s pretty simple.

And so it comes every couple of weeks or so. It might be while I’m walking down the street, or perhaps while I’m grabbing my morning coffee. It stalks me. The guilt of having left, of having been able to escape, of having. Or, as I put it not so politely to my friends, the guilt of perspective and the fact that “perspective’s a bitch.”

No matter the signs of progress I saw while I was there, and there were some, I’d even like to think I helped create a few, I can’t help but think that so much more should be already be in place. Money is theoretically pouring in. DFID, CIDA, USAID…. they’re all there. They’re all pouring money into projects. And yet people are still dying from diseases they shouldn’t die from, from water they shouldn’t be forced to drink, from problems they shouldn’t have to face. And yes, I know, measures of wealth and income are all relative. The basic necessities of life, however, are not.

But so goes the reality of life. Some have, some don’t.

I, for one, got lucky, very lucky. And while I may not know the meaning of life, my travels have given me perspective. I’ve seen young men in Rwanda with scars that have left them looking more alien than human, met women so often raped that they’ve lost the ability to care. And so tonight, as I sit in the confines of what is once again home, I can’t help but think of my friends in Sierra Leone, in Rwanda, and in Burundi. And while I know that one man can only do so much, I’m determined to go back and to try to help them build something better. Some might say it’s just another case of a rich westerner wanting to satisfy his own somewhat selfish desire to help. Perhaps, but in the end, does it really matter?

My last night in Sierra Leone was spent outside Mohamed’s roadside shop, engulfed by shadows and watching cars stream by in the darkness. I sat there knowing I was leaving, leaving them behind. Knowing that I could do nothing more than hope against all hope that things would get better, that perhaps I had done something to make things better, and that perhaps they would find a way to build a better future. For without hope, we are but shadows of what we could be.

Where the streets have no names October 20, 2005

Posted by Dan Herman in Africa.
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I’ve been in Freetown for three weeks now and while the city is still an utterly chaotic place, I’ve really taken to it. Men and women ply the streets all hours of the day, selling anything they get their hands on. The smell of fried cassava, plaintains, chicken and fish permeates what is otherwise a mix of dust, rotting garbage and petrol fumes. Children weave between parked cars and the ubiquitous piles of steel and garbage, selling candies, fruit and bags of cold water to passerbyes. The governments policy of universal education has allowed most children to attend school but many more are too poor to afford the required uniforms, books and supplies. Most of the children who do attend school do so in shifts, spending their mornings in class and their afternoons on the dusty streets of Freetown trying to make enough money to purchase their next meal. Young men and women are largely in a similar situation. With few private sector jobs and few chances to attend post-secondary education, they take to the streets hoping to make a few dollars by selling second hand clothing, towels, etc. Life in Freetown is not easy. A large proportion survive on less than a dollar a day, enough to eat but nowhere near enough to escape from the cycle of poverty that grips this beautiful West African nation.

Woken by the hand of God August 14, 2005

Posted by Dan Herman in Africa, My Writing.
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The Sani Pass, Lesotho
June 17, 2004

Gus and Betty were retired missionaries touring through Lesotho as they paid a visit to their eldest son who was volunteering in the Peace Corps. They’d spent twenty years working in parishes throughout the Senegal, and their children had each chosen similar paths. While a pair of God fearing retirees isn’t my usual idea of good company, my choices in the mountainous kingdom of Lesotho were undeniably slim.
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I’d been having trouble sleeping that night, must have been dinner or perhaps the altitude I thought. Regardless, it was 2am and I was wide awake in the pitch dark confines of our room. As I stared blankly at the ceiling all I could think of was the searing pain that made its way through my chest and throat every time I took a breath. The cold weather had got to me.
___________________________________________________________

“Everybody wake up – we have to get out of here.” I’ll never forget Gus’s choppy voice, resonating off the rooms barren walls. Instantly I was alert, trying in vain to focus on something, anything. All I could find, though, was smoke, hot, choking smoke. Gus shone the flashlight from his top bunk and the rays of light barely made their way to me. Between us lay a chasm of smoke, billowing out from the fireplace, turning our cozy chambers into a race against time.

We quickly gathered ourselves and crawled our way towards the door. My throat seared with pain as I tried to catch my breath. As Gus pushed open the door we felt the fierce winter winds whip across our faces as clouds of smoke forced their way out of the building. The cold air snapped me out the haze that had nearly paralyzed me but I still couldn’t muster a word. Looking over at Gus and Betty, our eyes met, each of us knowing that another ten minutes in there would have meant we might never have woken up….

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