Last night I watched the latest 007 film, Skyfall. It reminded me how so many past Bond films have featured SPECTRE, the global criminal organisation plotting to wreck havoc for its own often commercial ends. In my PhD interviews with UN officials, those who had considered the role of business in their mandate at all often tended to think that the private sector was comprised mainly of SPECTRE-like entities. I found that the consequent distrust and suspicion by officials inhibited the scope for them to co-opt business in pursuit of public goals.
2013 is just around the corner, and beyond that lies 2015, such that policymaking is turning to what priority development goals should replace the 2000-2015 Millenium Development Goals (MDGs). How should these be selected and framed? Who should / will likely decide these issues? What role should / will private firms and foundations play in the process?
This past week saw the announcement of a strategic partnership between the firm I work for and the UN Global Compact. This extends our earlier collaboration with them in identifying and explaining what macro-trends will shape the corporate sustainability agenda in the short, medium and longer terms (see here).
The corporate agenda is one thing. But one theme of this blog is the influence of private firms and foundations on public policymaking, including their input into framing global development priorities and discourse. That is, the envisaged and de facto role for the private sector extends (as it does for civil society*) beyond collaborating or cooperating on the achievement of development goals; it includes contributing to decisions on what those goals should be -- even if decisions about the formal agenda are political ones for duly constituted public authorities.
One strategic factor for public policy, especially in an era of fiscal austerity, is to frame a development agenda that aligns as far as possible with commercial realities and interests (so as to ensure corporates are incentivised and on-board) while also manifesting sustainable development imperatives (so as to engender or require transformed ways of doing business more responsibly).
One strategic factor for (big) businesses with global footprints is to try and influence a development agenda that maximises the commercial opportunities inherent in concepts such as 'green growth' while mitigating the social and environmental risks to long-term profitability. Since, in theory, most firms have an interest in seeing more peaceful and prosperous societies, they have incentives to support a formal development agenda calculated to help with this larger goal.
As we did with the 2012 Rio+20 summit, I think we'll see a much larger role played by private business and foundations in the lead-up to the post-2015 development agenda. Indeed that process of policy-shaping has already begun. Many of these actors have far more resources (and in-house long-term planning capacity) than UN member state governments.
As I've written before, there are many good reasons for care when it comes to business input into policy, even if this is already far more pervasive than most policymakers admit. The corporate world is not filled with SPECTRE-like conglomerates, but nor were we all born yesterday. A healthy objectivity is needed, even if governments do not have a monopoly on virtue.
Yet if a global internet or social media firm, for example, were to start pushing for greater recognition of the role of access to information in achieving development goals, is this necessarily something to resist simply because of who happens to be driving it? If business is showing an interest in the highest level of development policymaking, this is probably a good thing. The evil genius of SPECTRE lives on in many ways in the contemporary world -- but in striving to seek and find new paths to sustainable development we should be confident and not yield too readily to unproductive superstitions about corporate influence on public policy.
Jo
* The question of whether business or business federations (eg chambers of commerce) are members of 'civil society' or a distinct other category -- for purposes of formal inputs into policymaking -- is something on which policymakers, including the UN system, have been ambivalent. I'll return to this important question in another post. Intuitively, one tends to distinguish between a non-profit foundation or federation and a corporation, even if the latter supports the former.
Sunday, 18 November 2012
Sunday, 11 November 2012
Social licence: the neglected dimension
In response to a recent email I've mulled over a blogpost that ponders 5-6 topics, at the interface of business and society, that might be good research topics for students.
But it is Sunday night -- so I mention only one: is there anything that large project corporates (mining and energy) operating in less-developed settings might learn, by analogy, from the experience of UN and coalition-type forces in drawing-down or exiting fragile and / or post-conflict states and situations?
Richard Caplan launched his latest edited collection Exit Strategies and Statebuilding (OUP, 2012) recently, here in Oxford. Such literature deals with statebuilding projects by foreign powers typically following armed interventions such as those in Iraq and Afghanistan. The analogy? Well I think there is scope for more research on what is involved in large extractive industry operators scaling-back or exiting certain settings, and wonder if the 'exiting statebuilding' literature holds some possible insights.
Of course the analogy has many holes, in particular because international statebuilders (at least UN-mandated multidimensional peace operations involved, at some level, in building and supporting the institutions of conflict-affected states) are exercising public authority and responsibility; firms are not doing so even though they may cooperate closely with local government officials or become de facto local public service-providers. Nevertheless, mega-projects in often remote parts of under-developed regions in Africa often become important sites for wider social and economic activity. That is, a major project does not have to reach the scale of a 'state-within-a-state (like Firestone's Harbel plantation in Liberia) to nevertheless be, or promise to be, a major developmental node in its area. This makes the winding-down of such a site a significant and challenging event for such settings.
Caplan's recent book is not the only relevant 'hook' for blogging on this now; the other is how mineral-rich, politically-fragile Guinea is still absorbing the implications of the (also recent) decision by mining giant Vale to suspend its Zogota iron ore mega-project given difficult global conditions in the sector. This project was seen as a major pillar in supporting the country's continuing post-2010 recovery from five decades of corrupt, authoritarian and arbitrary rule.
I've blogged about what might be called 'the Zogota syndrome' before -- see the tail end of this post here:
* 'No mining!' Some mining-related community protests, such as in Peru and elsewhere, can be crudely characterised as largely opposed to a mine's operation at all, where locals see or expect no net benefit.
* 'No mining?' By contrast the Zogota syndrome involves another form of problem, whereby far from opposing mining operations, communities protest because the mine is not in fact going ahead as planned, and employment and other prospects will not be met.
I see so much of the literature on corporate responsibility, mining-as-development, social license to operate, etc as focussing on two areas of social invesment: entry / exploration / start-up, and normal operations. But while there is a solid literature on regeneration and restoration activities at the end of a mine's life, a third area is relatively neglected: the considerations of strategy (and principle) involved where social and political expectations of mining-related benefits will not be met because the operation is mothballed or stalled significantly. If we're approaching the end of a commodities super-cycle, the Zogota-style ('do not go!') protest above may prove more common than the anti-mining form of social protest, raising potential reputational and other risks for firms.
What might the experiences of military and civilian contingents in exiting statebuilding operations suggest for firms exiting major projects? I look forward to reading someone's research on this!
One theme of the statebuilding literature (see Charles Call's work, for example) will be applicable: the debate on what counts as 'success' in such endeavours, thus enabling exit. Who defines success or completion -- the statebuilding authority or the 'recipient' population / government? In the mining or energy firm analogy, what a firm sees as adequate provisions for its drawdown in operations may fall far below local expectations, provoking resistance to the exit. Such 'exit-resistance' might be just as heated as the resistance often encountered to the entry or operation of such projects.
The corporate responsibility / social investment literature arguably focusses too much on the up-front questions and places too little emphasis on the back-end of projects, the exit phase; in such situations familiar questions such as the division of roles between company and host government will become particularly acute -- especially where the latter was looking to the former to provide the sort of services and opportunities that will now not be forthcoming.
Jo
But it is Sunday night -- so I mention only one: is there anything that large project corporates (mining and energy) operating in less-developed settings might learn, by analogy, from the experience of UN and coalition-type forces in drawing-down or exiting fragile and / or post-conflict states and situations?
Richard Caplan launched his latest edited collection Exit Strategies and Statebuilding (OUP, 2012) recently, here in Oxford. Such literature deals with statebuilding projects by foreign powers typically following armed interventions such as those in Iraq and Afghanistan. The analogy? Well I think there is scope for more research on what is involved in large extractive industry operators scaling-back or exiting certain settings, and wonder if the 'exiting statebuilding' literature holds some possible insights.
Of course the analogy has many holes, in particular because international statebuilders (at least UN-mandated multidimensional peace operations involved, at some level, in building and supporting the institutions of conflict-affected states) are exercising public authority and responsibility; firms are not doing so even though they may cooperate closely with local government officials or become de facto local public service-providers. Nevertheless, mega-projects in often remote parts of under-developed regions in Africa often become important sites for wider social and economic activity. That is, a major project does not have to reach the scale of a 'state-within-a-state (like Firestone's Harbel plantation in Liberia) to nevertheless be, or promise to be, a major developmental node in its area. This makes the winding-down of such a site a significant and challenging event for such settings.
Caplan's recent book is not the only relevant 'hook' for blogging on this now; the other is how mineral-rich, politically-fragile Guinea is still absorbing the implications of the (also recent) decision by mining giant Vale to suspend its Zogota iron ore mega-project given difficult global conditions in the sector. This project was seen as a major pillar in supporting the country's continuing post-2010 recovery from five decades of corrupt, authoritarian and arbitrary rule.
I've blogged about what might be called 'the Zogota syndrome' before -- see the tail end of this post here:
* 'No mining!' Some mining-related community protests, such as in Peru and elsewhere, can be crudely characterised as largely opposed to a mine's operation at all, where locals see or expect no net benefit.
* 'No mining?' By contrast the Zogota syndrome involves another form of problem, whereby far from opposing mining operations, communities protest because the mine is not in fact going ahead as planned, and employment and other prospects will not be met.
I see so much of the literature on corporate responsibility, mining-as-development, social license to operate, etc as focussing on two areas of social invesment: entry / exploration / start-up, and normal operations. But while there is a solid literature on regeneration and restoration activities at the end of a mine's life, a third area is relatively neglected: the considerations of strategy (and principle) involved where social and political expectations of mining-related benefits will not be met because the operation is mothballed or stalled significantly. If we're approaching the end of a commodities super-cycle, the Zogota-style ('do not go!') protest above may prove more common than the anti-mining form of social protest, raising potential reputational and other risks for firms.
What might the experiences of military and civilian contingents in exiting statebuilding operations suggest for firms exiting major projects? I look forward to reading someone's research on this!
One theme of the statebuilding literature (see Charles Call's work, for example) will be applicable: the debate on what counts as 'success' in such endeavours, thus enabling exit. Who defines success or completion -- the statebuilding authority or the 'recipient' population / government? In the mining or energy firm analogy, what a firm sees as adequate provisions for its drawdown in operations may fall far below local expectations, provoking resistance to the exit. Such 'exit-resistance' might be just as heated as the resistance often encountered to the entry or operation of such projects.
The corporate responsibility / social investment literature arguably focusses too much on the up-front questions and places too little emphasis on the back-end of projects, the exit phase; in such situations familiar questions such as the division of roles between company and host government will become particularly acute -- especially where the latter was looking to the former to provide the sort of services and opportunities that will now not be forthcoming.
Jo
Sunday, 28 October 2012
Business and government: building trust
Many things need to change if we are to see more meaningful public-private cooperation on meeting development goals. An important yet simple one may be public service mindsets.
Here I mean those working in the foreign aid departments of major Western donor governments. The recent mantra about engaging the private sector in development (especially as austerity constrains the aid budget) has not necessarily resulted in a greater enthusiasm or pragmatism in talking with companies whose conduct in developing countries may enhance or complement the aid agenda.
Last week I had a conversation about corporate lobbying and private sector access to government policymakers. Typically, the concern one encounters is of undue and unseen influence by some business interests while other struggle to get a decent audience with government. (It is of course a question of balance -- see previous post here.)
Here I am talking of the reverse situation: where public policymakers seek to influence corporate policy. Of course that is what regulation involves, but I mean more generally a practice of seeking out conversations with business, exploring avenues to create 'shared value' by coordinating, for example, corporate social investment spending with official aid projects -- where and to the extent appropriate.
Even where they accept or embrace the notion of securing their 'social license' to operate, many business actors might have a range of reasons to be cautious of being approached by officials for discussions about making more explicit or substantive contributions to development outcomes. For instance, the well-known 'slippery slope' fear that firms might be left to carry the bulk of the responsibility for providing public infrastructure and social services in developing country settings.
This caution about talking to business exists on the part of officials, too. But much of it may be unjustified and a missed opportunity.
A number of recent experiences reinforce a finding I made in my PhD research about the reluctance that many in the UN system display for engaging with business in post-conflict peacebuilding. That is, I think public servants working in the development field largely have a blindspot for how business can positively affect their goals. Ignorance of the commercial world, suspicion of its agendas and people, fear of being 'tainted' by association -- these are some of the reasons why policymakers' recent rhetoric on engaging more with business on issues of mutual interest is not matched by action.
Take a recent London event exploring how Japanese and UK firms and government departments can cooperate towards responsible business opportunities in Africa (see here). There Sir Malcolm Bruce MP, chair of the parliamentary committee on international development, argued that the biggest obstacle to scaling-up these sorts of relationships was that most of those working within the Department for International Development (DfID) did not perceive business as a relevant development actor that should be understood, met, partnered.
There are (and this blog has explored) myriad reasons to be sceptical or cautious about the ways that business and government interact; DfID's role is not to enhance the interests of one or other firm, but to serve UK national interests and the global development agenda. It is also important not to perpetuate myths about private sector efficiency or altruism. Nevertheless, much of the existing appropriate scope for getting more out of the developmental potential of business-government cooperation is wasted. I think this mindset problem in officialdom is a large part of that.
Jo
Here I mean those working in the foreign aid departments of major Western donor governments. The recent mantra about engaging the private sector in development (especially as austerity constrains the aid budget) has not necessarily resulted in a greater enthusiasm or pragmatism in talking with companies whose conduct in developing countries may enhance or complement the aid agenda.
Last week I had a conversation about corporate lobbying and private sector access to government policymakers. Typically, the concern one encounters is of undue and unseen influence by some business interests while other struggle to get a decent audience with government. (It is of course a question of balance -- see previous post here.)
Here I am talking of the reverse situation: where public policymakers seek to influence corporate policy. Of course that is what regulation involves, but I mean more generally a practice of seeking out conversations with business, exploring avenues to create 'shared value' by coordinating, for example, corporate social investment spending with official aid projects -- where and to the extent appropriate.
Even where they accept or embrace the notion of securing their 'social license' to operate, many business actors might have a range of reasons to be cautious of being approached by officials for discussions about making more explicit or substantive contributions to development outcomes. For instance, the well-known 'slippery slope' fear that firms might be left to carry the bulk of the responsibility for providing public infrastructure and social services in developing country settings.
This caution about talking to business exists on the part of officials, too. But much of it may be unjustified and a missed opportunity.
A number of recent experiences reinforce a finding I made in my PhD research about the reluctance that many in the UN system display for engaging with business in post-conflict peacebuilding. That is, I think public servants working in the development field largely have a blindspot for how business can positively affect their goals. Ignorance of the commercial world, suspicion of its agendas and people, fear of being 'tainted' by association -- these are some of the reasons why policymakers' recent rhetoric on engaging more with business on issues of mutual interest is not matched by action.
Take a recent London event exploring how Japanese and UK firms and government departments can cooperate towards responsible business opportunities in Africa (see here). There Sir Malcolm Bruce MP, chair of the parliamentary committee on international development, argued that the biggest obstacle to scaling-up these sorts of relationships was that most of those working within the Department for International Development (DfID) did not perceive business as a relevant development actor that should be understood, met, partnered.
There are (and this blog has explored) myriad reasons to be sceptical or cautious about the ways that business and government interact; DfID's role is not to enhance the interests of one or other firm, but to serve UK national interests and the global development agenda. It is also important not to perpetuate myths about private sector efficiency or altruism. Nevertheless, much of the existing appropriate scope for getting more out of the developmental potential of business-government cooperation is wasted. I think this mindset problem in officialdom is a large part of that.
Jo
Tuesday, 16 October 2012
The new pragmatism: imperatives and ideals
I do find it remarkable how so many people find it remarkable that there is so much that business and governments can find to agree upon in terms of developing Africa and sustainable development generally.
In the sources I read, hardly a week goes by without someone -- policymaker or politician or practitioner -- speaking in sincere-but-excited terms about the scope for harnessing private initiative in the pursuit of public objectives.
Austerity, acknowledgment of shared interests and a twist of Asian-led competition in African investment (and development) modes has turned an ideal about finding avenues for greater public-private cooperation into an imperative for doing so.
At the same time that the public sector needs private capital and commitment, at least some parts of business and finance are feeling or finding a need to reach out for public sector endorsement, reassurance, legitimation and facilitation, especially when operating in more controversial settings or sectors.
I was fortunate to be in Oslo last week (congratulations to the fledgling Norway-Africa Business Association!). I was among hosts who think it only normal that their government take an interest in how Norwegian firms conduct themselves abroad. Yet they also seem to think it only normal that Nordic businesses operating in African settings be encouraged to help local governments build their regulatory and other capacities. Now there are many reasons to be very cautious about unduly close relations between business and government in weaker governance zones. But since many projects will go ahead anyway, and business will influence government officials anyway, it seems to make sense to attempt to structure this, keep it visible, find ways good business can help government build the environment that good business finds amenable to operating in...
Attracting good firms to risky places is hard enough as it is. Since others will fill the space, it seems sensible to be more flexible about firms (not just donors) helping to build government capacity. We must find policy frameworks that help us with what is acceptable and desirable, and what is inappropriate, in firms helping host governments with things like boosting the capacity of local regulators to regulate in a predictable, purposeful way. In such relationships lie many points to leverage for more responsible business conduct, and higher governance standards by public officials.
This Thursday I'll be attending the Asia House workshop on private investment and development in Africa. The participants here are unremarkable in the sense that they see it as entirely appropriate to explore business-to-business cooperation in taking up the supporting tools that governments provide to facilitate 'larger and responsible' investment in Africa (see here).
For those interested in tangible progress on sustainable development goals there is much to celebrate in the new pragmatism from governments (whether of the developing or donor variety) and the private sector (both corporates and financiers) about working together.
The imperative is to transform the rhetoric about public-private partnerships for African development into models and modes that are not removed from (or preferably that are designed to run with) commercial realities.
The ideal is that such partnerships maximise the space that exists for building-in incentives for more socially responsible and inclusive investment.
For my part, I don't tire of the term 'principled pragmatism', nor do I see why one should sigh at the oft-used term / concept 'win-win'. Where ideals and imperatives find common cause there is considerable scope for creating new norms of practice at the intersection of human development and economic growth and the business dimensions of building better societies.
It is probably most unfashionable to quote Cecil John Rhodes, but since there is so much to do, and so little done, it only makes sense to try and do much more together. Unremarkable, one would have thought.
Jo
In the sources I read, hardly a week goes by without someone -- policymaker or politician or practitioner -- speaking in sincere-but-excited terms about the scope for harnessing private initiative in the pursuit of public objectives.
Austerity, acknowledgment of shared interests and a twist of Asian-led competition in African investment (and development) modes has turned an ideal about finding avenues for greater public-private cooperation into an imperative for doing so.
At the same time that the public sector needs private capital and commitment, at least some parts of business and finance are feeling or finding a need to reach out for public sector endorsement, reassurance, legitimation and facilitation, especially when operating in more controversial settings or sectors.
I was fortunate to be in Oslo last week (congratulations to the fledgling Norway-Africa Business Association!). I was among hosts who think it only normal that their government take an interest in how Norwegian firms conduct themselves abroad. Yet they also seem to think it only normal that Nordic businesses operating in African settings be encouraged to help local governments build their regulatory and other capacities. Now there are many reasons to be very cautious about unduly close relations between business and government in weaker governance zones. But since many projects will go ahead anyway, and business will influence government officials anyway, it seems to make sense to attempt to structure this, keep it visible, find ways good business can help government build the environment that good business finds amenable to operating in...
Attracting good firms to risky places is hard enough as it is. Since others will fill the space, it seems sensible to be more flexible about firms (not just donors) helping to build government capacity. We must find policy frameworks that help us with what is acceptable and desirable, and what is inappropriate, in firms helping host governments with things like boosting the capacity of local regulators to regulate in a predictable, purposeful way. In such relationships lie many points to leverage for more responsible business conduct, and higher governance standards by public officials.
This Thursday I'll be attending the Asia House workshop on private investment and development in Africa. The participants here are unremarkable in the sense that they see it as entirely appropriate to explore business-to-business cooperation in taking up the supporting tools that governments provide to facilitate 'larger and responsible' investment in Africa (see here).
For those interested in tangible progress on sustainable development goals there is much to celebrate in the new pragmatism from governments (whether of the developing or donor variety) and the private sector (both corporates and financiers) about working together.
The imperative is to transform the rhetoric about public-private partnerships for African development into models and modes that are not removed from (or preferably that are designed to run with) commercial realities.
The ideal is that such partnerships maximise the space that exists for building-in incentives for more socially responsible and inclusive investment.
For my part, I don't tire of the term 'principled pragmatism', nor do I see why one should sigh at the oft-used term / concept 'win-win'. Where ideals and imperatives find common cause there is considerable scope for creating new norms of practice at the intersection of human development and economic growth and the business dimensions of building better societies.
It is probably most unfashionable to quote Cecil John Rhodes, but since there is so much to do, and so little done, it only makes sense to try and do much more together. Unremarkable, one would have thought.
Jo
Monday, 8 October 2012
Branson's 'Plan B': Better business in Africa
Does capitalism in Africa have a 'Plan B?' -- a version more promising yet socially-environmentally palatable and politically possible?
Sir Richard Branson last week launched his 'Plan B' initiative -- as The Economist describes it, a small group of business leaders who will campaign for reforms to make capitalism more socially responsible and more inclined towards addressing long-term issues such as climate change.
Much of what is happening in contemporary sub-Saharan Africa appears to involve a search for suitable models: an overarching idea about what development should look like and the relative roles of the public and private sector -- along with all sorts of hybrid initiatives -- in delivering both individual prosperity and public goods.
This search for a 'meta-narrative' to guide economic growth may be nothing new, but nor is there yet a post-'Washington consensus' consensus. African policymakers' perceptions of China's rise and developed economies' woes are the obvious backdrop for these debates, which are largely dumb to all the lessons and literature on the limits of transmitting or transplanting one model of governance or development to another setting.
This search -- and the appeal across Africa of the 'Beijing consensus' / state capitalism -- makes especially relevant, in this decade, the question of what model of capitalism (or aspects of it) will prove most persuasive or pervasive in various African settings, and what indicators will matter in judging performance -- the quality of growth, including its capacity to address inequality.
Will African policymakers find ways to enable the private sector to do well while doing some good, or is such an enquiry naive in the context of heirarchical market economies that may be neither liberal nor communitarian, and where politics so often matters far more than policy, and public/private distinctions are less easily discerned? What was the Plan A in Africa -- has it demonstrably failed, requiring a Plan B, or was there no African setting that exhibited type-A capitalism anyway? Can African economies avoid the angst and analysis and just leapfrog straight to Plan B ('nice' capitalism) or are current patterns structurally entrenched and impervious to reform?
One reaction to the Branson idea labelled it 'fascist' for suggesting that modifications to unrestrained free enterprise were appropriate. Yet the (anti-fascist) democratic impulse is what drives many of the voices calling for Africa's development to be greener, friendlier, more inclusive. It involves a constituency that mainly looks to the state to ensure that this happens, even while most African entrepreneurs (from street hawker to super-tycoon) find the state, when not being an irritant, largely absent or irrelevant. African capitals have not experienced direct equivalents to the 'Occupy Wall Street' phenomenon -- but governments are in little doubt of the mass expectations to deliver electricity, jobs, services. How private enterprise behaves or belongs in such scenarios -- scapegoat or strong deliverer -- is something governments are working through. This is hardly the end of history.
I see this search for models in many areas I work on: east African governments with new-found offshore gas wealth wondering how to develop these, and manage the resulting revenues, more like Norway has than Nigeria -- more East Timor (Timor Leste) than Equatorial Guinea. More responsible policymakers in these settings are asking what an appropriate, viable model for natural resource wealth management will look like. To the west, Nigeria's current presidency is trying to sustain momentum on ambitious policy reforms that go to the heart of broader notions of the state's role in major sectors of the economy. South Africa's ANC, channeling (as it sees it) Brazil and others, is rather painfully exploring what role private finance and business plays in its vision of the 'developmental state'.
During a rail journey to London on Friday I chatted with a schoolgirl whose Economics essay assignment asked her to write on whether the government had a role in addressing poverty or whether this ought to be left to market forces. Simplistic stuff, you might say -- except that its the gist of this year's US presidential debate, and not long after the train journey I sat in a meeting with a major development finance outfit. There we discussed fairly 'back to basics' things: if we are to devise a compelling (accurate-yet-aspirational) agenda for Africa-focussed developmental funding with a commercial bottom line, what does all the current fashion for promoting 'public-private partnerships' as the engines of growth and poverty-reduction actually mean? Where exactly should the state's role end and that of commercial actors begin, even if they share the same broad social development agenda?
The more one looks, it seems to me, the more Tony Blair's remark earlier this year -- that Africa is in a 'post-ideological era' where Cold War-style debates are long dead -- makes no sense. It is not just that 'the state is back' (in many settings is never went away, even if it never matured). It is that deep political imperatives -- especially the need to create jobs for the continent's youthful, restless populations -- are challenging African leaderships to devise models that appease both those holding scarce capital, and local forces imbued with a new assertiveness about the local value-addition that investment must bring to be seen as legitimate.
Perhaps above all -- and even if one's only interest is essentially a conservative one, continuity not sudden change -- a Plan B for Africa would need to focus on social inequality. That is, increasing inequality gaps in many African settings from Lagos to Luanda mean that any Plan B must, to be sustainable, include ways to ensure new-look capitalism's benefits are not limited (wait for the mixed metaphor) to A-listers.
Jo
- The article from The Economist is here.
- I've discussed these themes in other posts, see those labelled 'private sector', in particular the one critical of Blair's 'end of history' comment, here.
Sir Richard Branson last week launched his 'Plan B' initiative -- as The Economist describes it, a small group of business leaders who will campaign for reforms to make capitalism more socially responsible and more inclined towards addressing long-term issues such as climate change.
Much of what is happening in contemporary sub-Saharan Africa appears to involve a search for suitable models: an overarching idea about what development should look like and the relative roles of the public and private sector -- along with all sorts of hybrid initiatives -- in delivering both individual prosperity and public goods.
This search for a 'meta-narrative' to guide economic growth may be nothing new, but nor is there yet a post-'Washington consensus' consensus. African policymakers' perceptions of China's rise and developed economies' woes are the obvious backdrop for these debates, which are largely dumb to all the lessons and literature on the limits of transmitting or transplanting one model of governance or development to another setting.
This search -- and the appeal across Africa of the 'Beijing consensus' / state capitalism -- makes especially relevant, in this decade, the question of what model of capitalism (or aspects of it) will prove most persuasive or pervasive in various African settings, and what indicators will matter in judging performance -- the quality of growth, including its capacity to address inequality.
Will African policymakers find ways to enable the private sector to do well while doing some good, or is such an enquiry naive in the context of heirarchical market economies that may be neither liberal nor communitarian, and where politics so often matters far more than policy, and public/private distinctions are less easily discerned? What was the Plan A in Africa -- has it demonstrably failed, requiring a Plan B, or was there no African setting that exhibited type-A capitalism anyway? Can African economies avoid the angst and analysis and just leapfrog straight to Plan B ('nice' capitalism) or are current patterns structurally entrenched and impervious to reform?
One reaction to the Branson idea labelled it 'fascist' for suggesting that modifications to unrestrained free enterprise were appropriate. Yet the (anti-fascist) democratic impulse is what drives many of the voices calling for Africa's development to be greener, friendlier, more inclusive. It involves a constituency that mainly looks to the state to ensure that this happens, even while most African entrepreneurs (from street hawker to super-tycoon) find the state, when not being an irritant, largely absent or irrelevant. African capitals have not experienced direct equivalents to the 'Occupy Wall Street' phenomenon -- but governments are in little doubt of the mass expectations to deliver electricity, jobs, services. How private enterprise behaves or belongs in such scenarios -- scapegoat or strong deliverer -- is something governments are working through. This is hardly the end of history.
I see this search for models in many areas I work on: east African governments with new-found offshore gas wealth wondering how to develop these, and manage the resulting revenues, more like Norway has than Nigeria -- more East Timor (Timor Leste) than Equatorial Guinea. More responsible policymakers in these settings are asking what an appropriate, viable model for natural resource wealth management will look like. To the west, Nigeria's current presidency is trying to sustain momentum on ambitious policy reforms that go to the heart of broader notions of the state's role in major sectors of the economy. South Africa's ANC, channeling (as it sees it) Brazil and others, is rather painfully exploring what role private finance and business plays in its vision of the 'developmental state'.
During a rail journey to London on Friday I chatted with a schoolgirl whose Economics essay assignment asked her to write on whether the government had a role in addressing poverty or whether this ought to be left to market forces. Simplistic stuff, you might say -- except that its the gist of this year's US presidential debate, and not long after the train journey I sat in a meeting with a major development finance outfit. There we discussed fairly 'back to basics' things: if we are to devise a compelling (accurate-yet-aspirational) agenda for Africa-focussed developmental funding with a commercial bottom line, what does all the current fashion for promoting 'public-private partnerships' as the engines of growth and poverty-reduction actually mean? Where exactly should the state's role end and that of commercial actors begin, even if they share the same broad social development agenda?
The more one looks, it seems to me, the more Tony Blair's remark earlier this year -- that Africa is in a 'post-ideological era' where Cold War-style debates are long dead -- makes no sense. It is not just that 'the state is back' (in many settings is never went away, even if it never matured). It is that deep political imperatives -- especially the need to create jobs for the continent's youthful, restless populations -- are challenging African leaderships to devise models that appease both those holding scarce capital, and local forces imbued with a new assertiveness about the local value-addition that investment must bring to be seen as legitimate.
Perhaps above all -- and even if one's only interest is essentially a conservative one, continuity not sudden change -- a Plan B for Africa would need to focus on social inequality. That is, increasing inequality gaps in many African settings from Lagos to Luanda mean that any Plan B must, to be sustainable, include ways to ensure new-look capitalism's benefits are not limited (wait for the mixed metaphor) to A-listers.
Jo
- The article from The Economist is here.
- I've discussed these themes in other posts, see those labelled 'private sector', in particular the one critical of Blair's 'end of history' comment, here.
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