Oct 1 2014

Life behind Liberia’s Ebola-imposed curtain

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LSE’s Mitchell Aghatise asks whether the undoing of Ebola can be that on which the disease also thrives: human kindness.

A few months ago, the job of Liberia’s Minister of Commerce and Industry Axel Addy revolved around ensuring a stable business climate within Liberia. In a recent press conference at IGC’s Growth Week 2014 at LSE, he relates that in Lofa district, a few months back, he was talking to cotton farmers about value added to the mere business of farming – this was at a time when his most pressing problems were fluctuations in the prices of cotton and rubber, two of Liberia’s prime exports. There is little doubt that given the destruction Ebola has inflicted on the country, concerns about fluctuating international prices seem luxurious in the current climate.

Monrovia, the capital of Liberia, is struggling under the weight of Ebola epidemic

Monrovia, the capital of Liberia, is struggling under the weight of Ebola epidemic

Ebola has crippled Liberia. Watching the devastating effects on various news outlets often paints it as otherworldly – oftentimes by no fault of theirs – reducing real families and stories to mere statistics. Mr Addy’s presentation showed that there is life behind the Ebola-imposed curtains, and a government fighting against the odds to battle this unfamiliar beast. He spoke of supermarkets with expiring stocks as the expatriate market for those goods have all but disappeared. Continue reading

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Sep 29 2014

Assessing the economic effects of Ebola

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The outbreak of Ebola has highlighted the need for economists to assess the impact of the crisis. Very tentative findings by researchers at the International Growth Centre have flagged up warning signs on jobs, sales and the state of food markets. Post by IGC’s Phil Thornton.

In the midst of a severe health emergency such as the outbreak of Ebola that has struck the West African nations of Guinea, Liberia and Sierra Leone, it is clear the first priority must be to help the sick and contain the spread of the disease.

But it is equally clear that the economies of these countries will be devastated. The numbers of people affected by the second-round impacts of Ebola are likely to be much higher than the current estimate of the 5,000 infected.

The headline economic effects are already beginning to emerge. The economy of Liberia could shrink by as much as 5% next year (based on World Bank estimates) unless the outbreak is contained, Commerce and Industry Minister Axel Addy said at a briefing at the IGC’s Growth Week.

Clearly all aspects of the economy will be affected: hotels and restaurants will be hit as tourists stay away and families shelter at home; retailers will suffer a drop in sales; and agricultural production will be hit. Governments will have to react to rises in inflation as food shortages arise. Liberia imports 80% of what it consumes so any currency depreciation will only add to any price rises.

The challenge for policymakers at a time when all energies are rightly focused on treatment and containment is how to find out what is happening on the ground.

Trade restrictions

Economists can put forward some forecasts based on theory. At a time when governments are sensibly restricting people’s movements to contain the disease this is bound to have a major impact on the economy. If the government decides to shut all bars, then the brewing industry is likely to collapse, for example.

Uncertainty and fear will discourage people from going out to shop and buy non-essential items. If lending conditions tighten and interest rates rise, then increased costs of borrowing will discourage investment and spending.

“My first worry with the agricultural sector was that you are stopping internal trade at a time when people don’t have enough to eat,” says Rachel Glennerster, the IGC’s lead academic for Sierra Leone.

Tentative research from the IGC has started to fill in some of those knowledge gaps. Glennerster and colleagues used an existing survey of 150 markets in the country to see the impact on prices and trader activity.

Price spikes

Although the results are fresh off the press and highly tentative in terms of drawing conclusions, they tell a dramatic story. While there is little visible impact on prices, there were worrying signs that traders were pulling out.

The number of domestic rice traders has fallen substantially. In the areas that were cordoned off there was a 42% reduction in traders in staple foods. “If this translates into farmers not being able to sell their products – or even if they are seeing no traders come by and not even pick their products – then we have a serious problem,” Dr Glennerster said.

While there is no sign from the survey of general price rises, there is evidence of markets suffering price spikes. “What the government should be doing is finding out where those price spikes are and getting the food to them. This is why this monitoring is so important.”

However there were even more worrying signs in terms of the business sector. Data for Liberia that were only collated during Growth Week and therefore had not been subjected to any control tests showed major impacts on employment, business sales and even on business failures.

IGC researchers led by Jonas Hjort, lead academic for Liberia, used pre-existing surveys carried out by Building Markets, an NGO. They focused on affected regions of the country such as Monrovia and compared opinions now with historic results.

Of the 406 firms selected almost one in 10 had gone out of business. While that could be the normal trend and explained by other factors it still raised a concern over the impact on the private sector. “We have to figure how many businesses go out of business in normal times but it is our hunch that this number is very high.”

They can be a little more confident on the results for employment and revenues. Sales for businesses in affected areas appear to have collapsed. Compared with normal times when firms would report sales of 39,000 Liberian dollars (LRD), they were now reporting revenues down by around two thirds in these preliminary results. “These are huge amounts,” says Hjort. “If you are in construction and renovation in Monrovia, it looks like Ebola has wiped out your entire business.”

Targeted assistance

It is understandable that the government will not devote energy to collecting data at the peak of a crisis. However this is where reliable data becomes important. “A lot of the systems are breaking down and we have even less information than normal,” Dr Glennerster says.

“You see all this speculation and there is a lot of work that has to be done to provide targeted assistance to the people who are directly affected. But in terms of the economic impact, what we are worried about most is people who are not directly affected but are being indirectly affected by all the trade restrictions and the economic uncertainty. More people are going to lose their jobs than are going to die of Ebola.”

According to Minister Addy this crisis has offered an opportunity to put together a regional strategy for dealing with something of similar magnitude in the future. He said that even getting a full understanding of the current situation was a major challenge.

“All three countries are going through the same process of trying to map out a response that you can then hopefully move towards coming up with a regional approach should this happen again,” he says.

“None of us was prepared for this sort of crisis. There is no regional structure in place to respond to emergencies of this magnitude. But you think that there is an urgent need to look at this and it will be interesting to see the lessons learned from the responses in these three countries.”

For economists the crisis has raised a host of questions to be answered, according to Professor Eric Werker, IGC Country Director for Liberia. “Economics can bring different things to the table,” he says.

“We are six weeks into a crisis and we have an opportunity to think about what we can add to a conversation that will be heavily populated by institutions and organisations inside the countries and outside. We can try to bring expertise and economics as a non-interested party.”

This post originally appeared on the International Growth Centre blog.

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Sep 26 2014

The New Neo-Colonialism in Africa

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Truman member and sustainable development professional Adam Tiffen argues against China’s aid model of money without preconditions for social reform.

The first US Africa Leaders Summit has come and gone, with nearly 50 African heads of state travelling to Washington, DC in August. Questions of governance, security, and most importantly business are purportedly on the agenda; stagnating trade between the US and China in recent years has many leaders in industry interested in the talks. However, to think strategically about the long term economic wellbeing of Africa’s nations and people, US leaders should look further eastward. It is critical that the US step up investment to not only counter China’s influence on the continent but, perhaps more importantly, to understand the distinctions—and inherent dangers—of these Chinese model of engagement.

US has a lot more work to do if it is to match China's influence on the African continent

US has a lot more work to do if it is to match China’s influence on the African continent

In 1978, China was one of the poorest countries in the world and had a real per capita GDP that was one-fortieth of the United States. Today, China’s real capital GDP is almost one-fifth that of the US, and it is poised to overtake the United States as the largest economy in the world. To support this booming economic growth, China’s demand for natural resources has become insatiable. In exchange for locking up access to natural resources, China has authorized billions of dollars in loans to African governments. With an increasing number of these governments beholden to China, a new imperial empire is taking shape in Africa. Continue reading

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Sep 25 2014

Book Review: The Horn of Africa by Kidane Mengisteab

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The Horn of Africa is a deeply troubled region engulfed in multiple, interlocking crises. In this book Kidane Mengisteab aims to explore the key drivers of instability in the region, suggesting structural and institutional changes that – if implemented – could help lift the region out of crisis. Jonathan R. Beloff writes that the author successfully  introduces topics that are often forgotten when examining the region.

Since the infamous images of two United States military Black Hawk helicopters being shot down during the failed Battle of Mogadishu in October of 1993, Somalia has continued to fascinate Western scholars, as has the entire Horn of Africa’s seemingly endless conflict and economic underdevelopment. Kidane Mengisteab, an academic scholar on the Horn of Africa, attempts to inform readers of the current situation across the entire Horn of Africa. He does this via categories dealing with the legacy of past empires, colonization, the Cold War and the War on Terrorism; failures of nation building and their implications for current conflicts; regional and international influences; environmental disaster; and the prospects for better governance. Regional scholars and students might be perplexed by the author’s addition of Sudan, Southern Sudan, Kenya, and Uganda to the list of Horn of Africa states. Traditionally, the region is composed of Eritrea, Djibouti, Ethiopia, and the various entities within Somalia (Somaliland, Puntland, and the Federal Government of Somalia TFG).The underlying theme of the book is to see the context of regional failure through different levels of conflict: from inter-state wars, intra-state conflicts, civil wars, conflicts among rebel groups, inter-communal conflicts, cross-border community conflicts, and one-sided violence against civilians There are, however, simplifications of the root causes of the last fifty years of regional conflict.

horn of africaIn order to expand the rather vague terms that are commonly used to describe the region’s conflicts and crises, Mengisteab successfully introduces topics that are often forgotten when examining the Horn of Africa. One in particular, and reflective of his holistic approach, is how external actors have historically created and preserved a culture of inept and often violent political figures as well as of continuous violence in the name of ‘peace’ and ‘state sovereignty’. Continue reading

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Sep 24 2014

Book Review: The End of Plagues: The Global Battle against Infectious Disease by John Rhodes

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The End of Plagues is a fascinating book and well worth a read for anyone interested in the history of medicine, finds Sally Brown. Spanning three centuries, John Rhodes’s work weaves together the discovery of vaccination, the birth and growth of immunology, and the fight to eradicate the world’s most feared diseases.

An internationally renowned expert in immunology and vaccine discovery, John Rhodes is a fellow of the Royal College of Pathologists, has held research fellowships at the US National Institutes of Health and the University of Cambridge, as well as being director of strategy in immunology at GlaxoSmithKline for 6 years to 2007. Thus he writes this detailed and engaging account of a number of battles against various infectious diseases from a position of considerable knowledge and expertise.

The end-of_plagues

The End of Plagues charts the development of immunology from the earliest days, with Edward Jenner’s discovery of vaccination for smallpox in 1796, to current times, when smallpox has officially been eradicated, polio has almost gone from the world apart from a few small resilient pockets, and vaccination for a range of diseases is widespread, well known, and broadly accepted. Yet this is not a simple linear story of scientific discoveries and series of triumphs, and Rhodes captures the many complexities and contradictions in a well told tale with many heroes as well as a few villains. Continue reading

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Sep 22 2014

Annual Hargeysa International Book Fair and Cultural Centre: Diaspora imports that are pushing the arts to the fore in Somaliland

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As the Hargeysa Cultural Centre opens during the annual International Book Fair in Somaliland, LSE alumnus Giulia Liberatore highlights how diaspora is transforming a region with no access to IMF or World Bank loans.

“This country is the product of our imagination,” Edna Adan stated boldly, addressing a cheering crowd at the opening of the 7th Hargeysa International Book Fair. Adan, former Foreign Minister and founder of the maternity hospital in Hargeysa, had been assigned to speak about the “imagination”, the theme of this year’s festival. Initially concerned that the topic was “too abstract”, she had soon come to realise that this creative energy had in fact fuelled many of the country’s achievements of the last two decades, including the Book Fair.

Over the past seven years, the Hargeysa International Book Fair has played a special role in the Somali-speaking regions, facilitating discussion and sharing of work and ideas among writers, artists, poets and thinkers from all over the Horn and beyond. Jama Musse Jama, a publisher in Somaliland and an academic in Italy, and Ayan Mahamoud, director of a UK-based Somali arts organisation, are responsible for organising what has become the largest book fair in the Horn of Africa.

At this year’s Book Fair which took place in August 2014, Jama and Mahamoud launched a new initiative, the Hargeysa Cultural Centre. With a theatre, art gallery space and library, the centre has been set up in partnership with the Rift Valley Institute and support from the European Union. Intended as a cultural hub for artists in the Somali regions, it will host the annual Book Fair as well as run a wide range of activities for locals to engage with Somali arts and culture, stimulating the revival of the arts in the region and providing one of the first cultural institutions of its kind since the civil war.

Jama Musse Jama and Ayan Mahamoud have worked tirelessly to raise funds for a new Cultural Centre in Hargeysa

Jama Musse Jama, on stage with Edna Adan, has worked tirelessly to raise funds for a new Cultural Centre in Hargeysa

Having followed the Book Fair at a distance since its inception, I was thrilled to attend the 2014 version in the capital city of Somaliland – the former British protectorate that declared independence over two decades ago. Despite years of peace, stability and democratic rule, Somaliland is yet to be recognised internationally and its very existence is more often overshadowed by media reports of Al-Shabaab militants, piracy and conflict in the southern Somali regions. Continue reading

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Sep 19 2014

Book Review: Africa’s Urban Revolution edited by Susan Parnell and Edgar Pieterse

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Africa’s Urban Revolution draws on a diverse array of case studies to provide a comprehensive insight into the key issues surrounding African urbanisation. Reviewed by LSE’s Chris Suckling.

Africa’s Urban Revolution is a fourteen-chapter volume edited by Susan Parnell and Edgar Pieterse. They argue that practitioners and scholars must sharpen their tools to deal with the startling facts of Africa’s rapid urbanisation. The volume incorporates insightful case studies on climate change, food security, planning law and violent conflict, to position cities – medium and large – as the loci of effective development policies.

Three decades ago Elliot Bates, alongside the World Bank, applied Michael Lipton’s urban bias thesis to Africa. Coalitions of business and political elites were said to prevent economic development by favouring urban-based interests to the detriment of rural populations. But then, as now, care must be taken when claiming that one locality should receive greater attention. It is worth asking: whom does the urban revolution benefit? Parnell reminds us that recent thinking is informed by private sector think tanks. In line with the narrative that “Africa is rising”, economic growth is assumed to flow from a burgeoning new middle class that increases consumer demand and promotes sectoral diversification. While it is of course important to address ways that “residents are structurally trapped” (p. 15), many of the chapters overplay the Africa rising narrative of cities as spaces for entrepreneurship and opportunity.

Africas_Urban_Rev

In Chapter 11 Pieterse suggests slum dwellers incur the “highest transaction costs” – for they “come from [] messy, unsightly, stinking, foul neighbourhoods” – and urban planning must instead harness the creativity of these “agents of slum urbanism”. The state’s lack of attention to urban problems is not seen as resulting from “external forces” but rather a bad attitude to urbanisation marked by political self-interest. Or, more pejoratively, responsibility lies with a youth bulge that plays into elite interests and consumption-driven lifestyles. While Simone (chapter 12) indicates that governments are unlikely to leverage the finance on infrastructure investments necessary to meet existing needs, none of the contributors provide robust political solutions to deal with constrained and politically mismanaged public expenditure. The solutions proposed remain largely technocratic – institutional decentralisation and localism (chapter 11) – that arguably play into neoliberal policies of state roll back. Continue reading

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