I always look forward to New York University’s Development Research Institute’s (DRI) Annual Conference, which was held this year on Thursday, March 22, titled “Debates in Development.” While completing my masters degree at NYU, I enjoyed volunteering with the university’s Africa House as well as with DRI, where I had access to Professor William Easterly, Professor Yaw Nyarko, and top development thinkers that did scholarly research on the economic development and growth of poor (mostly African) countries. Having access to Professor Easterly was one reason that I decided to go to NYU for graduate school. I appreciated his critiques of the Millennium Development Goals and views on economic development that valued the assets and capacity of the indigenous poor in developing countries. Featuring authors of books such as Dambia Moyo of Dead Aid and Abhijit Banerjee of Poor Economics, it is clear that Professor Easterly has a mission to shift the paradigm of relationships on developed countries (and donor institutions) with developing countries. These works challenge the notion that money is a cure-all for global poverty.
Andrew Rugasira, founder and CEO of Good African Coffee, was the keynote speaker at the conference, speaking on “Finding Answers in the Global Market.” He spoke of one of the major problems for African entrepreneurs—access to capital. While there are banks, micro-lending organizations, and venture capital organizations, Mr. Rugasira noted that these funding institutions are for mature enterprises. These institutions have their own agendas, high interest rates, and stringent narrow funding requirements, which oftentimes stretch the mission of the enterprise. So how does the average entrepreneur gain access to capital and avoid mission drift in Africa? Mr. Rugasira argues that the mantra “Trade, Not Aid” can direct further economic development thinking and practice. Until trade agreements and trade partners benefit Africa’s natural resources, the one go-to answer is that entrepreneurs must borrow from friends, family, and fools.
But who are the friends, family, and fools? In a day and age where so-called “frenemies” are rampant, it is hard to trust who has Africa’s best interest at heart. While protests rage against post-independence dictators and coup d’etat in countries such as Mali, families are fighting amongst themselves. Questions of loyalty have estranged family members, and issues of politics, subsistence living, or religion have troubled once-strong family ties. In the case of Mali, the African Union has been quick to denounce the friction in the country, but has yet to yield adequate force to tame its distant cousins. The Economic Community of West African States (ECOWAS) issuance of sanctions against Mali on this past Monday, closing all borders between Mali and member states and cutting off currency flow to the country, is using a foreign form of discipline to punish a family member. Apologies to the entrepreneurs of Mali: ECOWAS is one big uncle from whom you unfortunately cannot borrow money. I wonder how this situation would be handled without the punishments and special interests of the United Nations? A house divided is certain to fall, so Africa must claim its family members and rules of engagement wisely.
When one can longer depend on family, one turns to friends for support, encouragement, and, even at times, money. The word “friend” is one commonly overused and misused, so I decided to consult the dictionary: “a person who is attached to another by feelings of affection or personal regards; a person who gives assistance (a patron); a person who is on good terms with another, a person who is not hostile.” Africa must choose its friends wisely. While I don’t agree with the definition of a patron as a friend, Africa must reevaluate its relationships with its foreign donor institutions if they are to remain on friendly terms. While friends often know our most intimate secrets and quirks, friends have a mutual respect for one another and strive to maintain good terms. Hostility, a fracture of loyalty, or a misrepresentation of an agenda, all stress a friendship and puts the relationship on “frenemy” terms. It is no surprise the world’s five largest emerging economies BRICS countries (Brazil, Russia, India, China, and South Africa) called on Thursday, March 29th in New Delhi, India for a more representative international financial structure—the BRICS Development Bank. The five countries account for almost half of the world’s population and approximately a quarter of world trade. A BRICS coalition—dare I say, friendship?—is forming that seeks to change the paradigm on what a Development Bank is, does and looks like. Let’s hope that this friendship remains one of mutual respect, not one of hidden agendas and hostility.
And who are the fools? Only history will tell, as it is said that victors write the history. I agree with C.K. Prahalad: there is a fortune at the bottom of the pyramid. People and institutions that fail to recognize the rising influence of the poor (bourgeoisies, have-nots) and fail to adequately meet its needs are fools. People who do not respect the poor are fools. People who blatantly disrespect friendships are fools. People and institutions that throw money at poverty only fuel the ever-burning fire of discontent. People who will not yield to the changing world tide in relationships with emerging economies are fools. The funny thing about poverty is that it doesn’t stagnate and stay confined in one area. It spreads, until it is at the very gates of the fools who ultimately help spread it. It seems like BRICS are following the mantra, “fool me once, shame on you; fool me twice, shame on me.” I agree with Mr. T of the A-Team when he says, “I pity the fool.” As Africa cannot trust its family and must reevaluate its friends, I trust that the developing world will have much to learn from the errors of fools.