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Old 01-13-2008   #21
Surferbeetle
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Exclamation Iraqi Business Benchmarks

Newsweek’s 2006 analysis of Iraq’s Economy

“ Even so, there's a vibrancy at the grass roots that is invisible in most international coverage of Iraq. Partly it's the trickle-down effect. However it's spent, whether on security or something else, money circulates. Nor are ordinary Iraqis themselves short on cash. After so many years of living under sanctions, with little to consume, many built up considerable nest eggs--which they are now spending. That's boosted economic activity, particularly in retail. Imported goods have grown increasingly affordable, thanks to the elimination of tariffs and trade barriers. Salaries have gone up more than 100 percent since the fall of Saddam, and income-tax cuts (from 45 percent to just 15 percent) have put more cash in Iraqi pockets. "The U.S. wanted to create the conditions in which small-scale private enterprise could blossom," says Jan Randolph, head of sovereign risk at Global Insight. "In a sense, they've succeeded." “

http://www.newsweek.com/id/44302

IMF’s July 2007 Iraq Analysis

The Central Bank of Iraq’s Interest Policy Rate has gone from 6% in 2004 to 20% in 2007 while the Dinar Exchange Rate has dropped from 1949 to the Dollar in October of 2003 to 1256 to the Dollar in June 0f 2007. Exports of Oil, Dates, and ‘Other Commodities’ continue to increase with the bulk of exports going to North & South America, followed by the EU, and then Asia.

http://www.imf.org/external/pubs/ft/...07/cr07294.pdf

The Economist’s 2008-09 Iraq GDP Forecast

“Our higher oil production forecasts, and the recent improvement in security, have led us to revise up our real GDP growth projections for Iraq, with economic expansion now expected to rise to 4% in 2008 and 5.6% in 2009.”

http://www.economist.com/countries/I...ofile-Forecast

Iraq’s Stock Exchange

“ Iraq Stock Exchange (ISX) introduced a special index in October 2004 which closed in December 2004 at (64.996) points, December 2006 at (25.288) points. January 2007 at (25.903) points and December 2007 at (34.590) points.”

http://www.isx-iq.com/

Central Bank of Iraq

http://www.cbiraq.org
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Old 01-14-2008   #22
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Default Re: Iraqi Business Benchmarks

"Neo-Liberal" economics seems to be a leftist attempt to rebrand classical economics with a "Neo-Con" taint. Ms. Klein will probably be using this as an example of U.S. "Neo-Colonialism:" Forcing the Iraqi's to adopt economic policies that lead to growing prosperity and economic stability. Assuming, of coarse, that she even acknowledges the positive news.
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Old 01-15-2008   #23
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Ken,

With regard to your issue with the term "hearts and minds," LTC Kilcullen makes the point that "hearts and minds" does not mean getting them to like you but getting them to see that it is in their best interest to work with rather than against us. Viewed from that context, do you see value in the concept or am I playing with semantics. My experience with the ME has shown me that most there have a clearly defined sense of self-interest. Certainly, we must tap into that to have any sort success there. That is how I have always thought of that term and it has definitely affected how I dealt with the Iraqis I met on a daily basis. I never had any illusions about getting them to like me (but then I am a cynic anyway).

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Old 01-15-2008   #24
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Default I think the term sends a bad message to those

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Ken,

With regard to your issue with the term "hearts and minds," LTC Kilcullen makes the point that "hearts and minds" does not mean getting them to like you but getting them to see that it is in their best interest to work with rather than against us. Viewed from that context, do you see value in the concept or am I playing with semantics. My experience with the ME has shown me that most there have a clearly defined sense of self-interest. Certainly, we must tap into that to have any sort success there. That is how I have always thought of that term and it has definitely affected how I dealt with the Iraqis I met on a daily basis. I never had any illusions about getting them to like me (but then I am a cynic anyway).

SFC W
who see or hear it -- unless they have some experience as you do and realize that you can get host nation folks to act in their own interests but they aren't ever going to like you in the fullest sense of the word.

Most civilians who see the term promoted by those are responsible for COIN or involved in the effort in some way assume the intent is to "win them over to our side and love us." Intuitively they know somethings not quite right about that. Those opposed to the effort will use every violent act to say "You aren't going to win hearts and minds that way..."

I can go with 'win their minds' -- it's the "heart" bit that muddies the water. I think "...active or tacit support..." is a better if sorta stuffy term. Regardless, H&M is a part of the vocabulary now; we're stuck with it.

Agree with you on the ME; when all is said and done, they are very pragmatic and perhaps more so than the nominally less emotional westerner. They will always dislike the ferenghi as a group but may take to individual westerners and will almost always support the apparent winner and someone who treats them fairly and respectfully particularly if they see an advantage to the tribe, family or themselves.

As a fellow cynic, maybe the "hearts" bit is annoying because it's unlikely to happen most everywhere when lives are being severely disrupted. I sure wouldn't be a happy camper if it was me but I'd tolerate 'visitors' if the potential future was better than the past...
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Old 06-12-2009   #25
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Default Updated Iraqi Business Metrics

The IMF, in the 2009 World Economic Outlook, provides the following record of % changes in Iraq's GDP (page 195 of the pdf report):

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2005 (-0.7%), 2006 (+6.2%), 2007 (+1.5%), 2008 (+9.8%)
The Economist/Economic Intelligence Unit provides the following Country Briefing forecast for 2009:

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# We have lowered our forecasts for Iraq's fiscal deficit, after raising our oil price projections. Nevertheless, we still expect the budget to return an average deficit of US$15.6bn in 2009-10.
# Real GDP growth in 2009-10 is forecast to slow, from an estimated rate of 7.8% in 2008 to an average of 5.7%, as a tighter fiscal stance has a knock-on impact across the economy.
# Iraq's current-account deficit forecast has narrowed slightly, owing to the revision to our oil price projections. We now expect that the current account will return a deficit of US$9bn in 2009, narrowing to US$6.4bn in 2010.
The Iraqi Stock Exchange Website provides some March 2009 data:

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ISX at 183.9 points on 31 March 2009
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Old 07-04-2009   #26
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Ken, I see you're point on the balance between government and intervention. The thing is, though, that capitalism needs to do more than continue to meet the needs of the middle classes in the advanced industrial world. we have all the crap we need! instead manufacturing needs and pursuing a cynical model of globalization, which all to often is a race to the bottom, business needs to take a risk, invest some money and try to meet the very real needs the developing world.
I think this misses the point entirely. If you look around the world you will see very quickly that the incidence and severity of poverty is harshest in countries and regions within countries that are isolated from the capitalist global economy. The fastest improvements in economic and social conditions (observe east Asia for examples) have been in areas that have embraced economic integration. Maybe "we have all the crap we need", but if we stop buying that "crap" then the people who make that "crap" lose their jobs. The argument that living simply allows others to simply live is based on a false assumption: that whatever one has must be taken from another. In reality, consumption leads production, and production generates employment. The best way to help poor countries is to allow and encourage them to produce and sell goods and services.

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people need to incorporate a critique of authoritarian forms. You can't have true democracy when the economy is run by authoritarian structures like TNCs.
Who says "the economy" is run by TNCs? Which economy?

TNCs actually play an important and largely beneficial role in many developing economies, one which the Naomi Kleins of the world don't generally acknowledge. Many developing economies are totally dominated by rapacious local elites that are more far more authoritarian and more exploitive than TNCs could ever dream of being. These elites generally have the political and legal clout to suppress local competition. TNCs provide a balance to their power and an alternative source of supply and employment.

In the Philippines, where I live, jobs with TNCs are highly sought after because they offer better pay, better working conditions, and better opportunity for advancement than local employment. Widespread hiring of English-speaking graduates by foreign investors has pushed wage scales up and forced other employers to pay more (competition for employees raises wages far faster than strikes). These employees spend a large percentage of their incomes locally, unlike the previously dominant elites, and generate follow-on jobs.
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I still think, instead of dumping endless money into a needless invasion in Iraq, we should have put diplomatic pressure on regimes like Pakistan and Saudi Arabia and done "civic action" or peace corp type programs to make life less desperate for the people in the margins, whom, i feel, are legitimately attracted to extremist ideologies becuase they have few other options. For a fraction of the cost of the invading Iraq we could have provided clean drinking water, medical treatment and other humanitarian efforts which, beyond the shadow of a doubt, would have done more to win "the war on terror" than unilaterally invading a secular, quasi-socialist authoritarian state, which had no love for Islamic radicalism nor any connection to 9-11.
I'm a former Peace Corps Volunteer, and I can tell you that the Corps is about 99% show and 1% go, and the volunteers receive far more benefit (in experience and training) than the host communities. It's not a bad thing, but if your solution to poverty is the Peace Corps, God help the poor.

Humanitarian aid is important and necessary. It can alleviate the worst effects of poverty, but it does not eliminate or even reduce poverty. If you give a poor community a water system, they will have water and be healthier, but they will still be poor, and they will probably depend on you to come back and maintain that water system.

If you want a poor community to stop being poor, you have to create sustainable employment. That means somebody has to invest money in producing and/or distributing goods and services that can be profitably sold in a free market - if the production is not profitable or requires external subsidy, it's not sustainable. Once a community has jobs and income, they can build their own water system, buy their own mosquito nets, etc, etc...

I guess that's a rant, and maybe it makes me a "neo-liberal". I've never encountered that term outside the academic cloister, and I'm not convinced that anyone who uses it really knows what it means, except that it covers all the stuff they don't like. But what the hell, if this be neo-liberalism, let us make the most of it. It still works. It doesn't work perfectly (not much in this world does), but there's a good deal to be said for it.

Last edited by Dayuhan; 07-04-2009 at 10:55 AM. Reason: Obsessing over typos...
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Old 07-04-2009   #27
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I guess that's a rant, and maybe it makes me a "neo-liberal". I've never encountered that term outside the academic cloister, and I'm not convinced that anyone who uses it really knows what it means, except that it covers all the stuff they don't like. But what the hell, if this be neo-liberalism, let us make the most of it. It still works. It doesn't work perfectly (not much in this world does), but there's a good deal to be said for it.
I think there has been a powerful neoliberal impulse in the aid and development community—notably in the international financial institutions, stretching as far back as the Reagan Administration, and often attacked by critics such as Klein. However, I would argue that its all become a bit of a strawperson.

Developmental approaches have become much more nuanced. Almost everyone these days accepts that most employment and growth is generated by private sector activity and investment, and that you can't create large numbers of sustainable jobs with aid money. There's broad acceptance that TNCs can have positive effects (although, in some contexts, negative ones too.)

On the other hand, almost no one--not even in the World Bank or IMF—believes that unrestricted free markets are a good thing, or that you can get equitable and sustainable growth without effective state institutions to provide an enabling environment (rule of law, anti-corruption measures, security, critical infrastructure, education, health, social safety nets, environmental regulation, enforcement of labour standards, etc). It is also important that stakeholder consultation be done properly, ideally through a political system that is responsive to the needs of all affected groups, not just those with money.

The World Bank in particular has made major adjustments in the way it works, partly because of external and internal criticism, and partly out of learning from experience. The IMF remains more of a bastion of narrow classical economics, but critics miss the point that it should be—it is an institution that is all about promoting fiscal solvency. In doing so it provides a useful reminder of the dangers of unsustainable state expenditure. Think of the IMF as your parents: No, they weren't always right, and certainly not very cool, but in retrospect aren't you glad they lectured/reminded/nagged you at times?

Sadly, it was the case that some of the initial US development personnel in Iraq—political appointees or recent hires in most cases, not career USAID folks— were ideologically blinkered neoliberal/neocons, who treated it as a bit of a sandbox for ideas about radical privatization. Almost none of this worked out very well, and much of it was later abandoned or revised.
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Old 07-04-2009   #28
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Humanitarian aid is important and necessary. It can alleviate the worst effects of poverty, but it does not eliminate or even reduce poverty. If you give a poor community a water system, they will have water and be healthier, but they will still be poor, and they will probably depend on you to come back and maintain that water system.

If you want a poor community to stop being poor, you have to create sustainable employment. That means somebody has to invest money in producing and/or distributing goods and services that can be profitably sold in a free market - if the production is not profitable or requires external subsidy, it's not sustainable. Once a community has jobs and income, they can build their own water system, buy their own mosquito nets, etc, etc...
As a person who has worked in Central America and Iraq these are topics that I wrestle with. What's appropriate, acceptable, sustainable, and will be perceived as a hand up as opposed to hand out given the time and resource limitations that I am working under? How do I apply my language/cultural, biology, civil engineering, and business administration skills to produce sustainable quantifiable change?

Loss of the Cold-War construct has allowed for rapid observable changes in international affairs. Although they are only analogies, and many caveats of course apply, I find it helpful to use the concepts of ecological succession and geomorphology when considering the why's of what is occurring.

I find China's approach to international development and other things pretty fascinating. It's an interesting study to compare their methodologies with ours. When I do this I keep in mind that the 2009 Economist's Pocket World in Figures reports China's GDP at $2,645 bn and the US at $13,164bn.

Lebanon, Palestine, Iraq, Central Europe, and Central Asia are on my radar screen as places of rapid change where the application of various international development strategies are particularly visible. Tom Odum used the phrase Gunpowder or Gold the other day, and it's one that captures neatly the approaches on display.

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On the other hand, almost no one--not even in the World Bank or IMF—believes that unrestricted free markets are a good thing, or that you can get equitable and sustainable growth without effective state institutions to provide an enabling environment (rule of law, anti-corruption measures, security, critical infrastructure, education, health, social safety nets, environmental regulation, enforcement of labour standards, etc). It is also important that stakeholder consultation be done properly, ideally through a political system that is responsive to the needs of all affected groups, not just those with money.

The World Bank in particular has made major adjustments in the way it works, partly because of external and internal criticism, and partly out of learning from experience. The IMF remains more of a bastion of narrow classical economics, but critics miss the point that it should be—it is an institution that is all about promoting fiscal solvency. In doing so it provides a useful reminder of the dangers of unsustainable state expenditure. Think of the IMF as your parents: No, they weren't always right, and certainly not very cool, but in retrospect aren't you glad they lectured/reminded/nagged you at times?

Sadly, it was the case that some of the initial US development personnel in Iraq—political appointees or recent hires in most cases, not career USAID folks— were ideologically blinkered neoliberal/neocons, who treated it as a bit of a sandbox for ideas about radical privatization. Almost none of this worked out very well, and much of it was later abandoned or revised.
The IMF provides interesting datapoints and can be commended for many things but its relevance/authority/direction is being challenged. This is not necessarily a knock, but if you are up for sharing references, as always, they would be greatly appreciated.
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Old 07-04-2009   #29
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The IMF provides interesting datapoints and can be commended for many things but its relevance/authority/direction is being challenged. This is not necessarily a knock, but if you are up for sharing references, as always, they would be greatly appreciated.
I've worked fairly extensively with IMF folks and data in the past in Palestine, and in general they did excellent work in promoting greater fiscal transparency and accountability, tracing irregular financial flows, measuring key benchmarks, and providing technical assistance to the Palestinian MoF. (For many years the current Palestinian PM, Salam Fayyad, was the IMF rep to the WB/Gaza). There is considerable information and analysis on their website.

My broader point is that even when we may choose to ignore them—either because we think they're wrong, or because we think their failing to see the broader picture—its useful to have the IMF focused on issues of fiscal solvency, since no one else in the development community has quite that mandate.
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Old 07-06-2009   #30
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I think there has been a powerful neoliberal impulse in the aid and development community—notably in the international financial institutions, stretching as far back as the Reagan Administration, and often attacked by critics such as Klein. However, I would argue that its all become a bit of a strawperson.
I'd honestly prefer to drop the term "neoliberal". It has no traction outside the left and academe, and its definition is so vague that it makes discussion almost impossible. At some level almost any program that includes mainstream economic analysis can be said to demonstrate a "neoliberal impulse". It has also, as you say, become a complete strawperson. We've seen a long string of studies emerging from the academic side, looking at the failures and shortcomings of projects and programs deemed "neoliberal", and concluding that "neoliberalism" is a failure. These studies generally neglect to mention that the prescriptions of what might be called the "anti-neoliberals" haven't fared much better. A more reasonable conclusion might be that external attempts to promote economic development - whether "neoliberal" or otherwise - are extremely difficult and prone to unintended consequences and manipulation by local powers with vested interests. This is particularly true when those seeking to promote development are expected to remain strictly apolitical in environments where the principal constraints on development are political.

There's a great deal that could be said about development efforts during the Reagan era. My own greatest criticism is not that there was an excess of "neoliberalism", but that these principles were applied unevenly and often disregarded, especially when dealing with governments regarded as cold war allies. To take the example I'm most familiar with: in the Philippines, the flow of public and government-guaranteed private borrowing was sustained long beyond the point where it was clear to any observer that the money was not being productively invested and the borrowing far exceeded capacity to pay. According to "neoliberal" criteria Marcos should have been abandoned, but the conviction that he was an essential bulwark against communism kept the spigot open - even though anyone paying attention could see that Marcos was the best thing that ever happened to the Philippine communist movement. This was a common theme during the Reagan period: we talked the "neoliberal" talk, but didn't walk the walk.

Another sore point often misinterpreted is the undoubted failure of what were generically called "structural adjustment" programs. Unfortunately, these failures cast doubt on many reforms that were desirable and necessary, but were implemented by force at an impossible pace. It is of course true that subsidies, price controls, state owned enterprises do more harm than good, but forcing a country that has grown accustomed to these bad policies to abandon them instantly is simply too great a shock, especially during the early stages of democratic transition. A more rational approach would have been to aim for an extended transition period. What was done was analogous to forcing a severely unfit and overweight individual into a high intensity exercise program overnight. The diagnosis and the prescription are correct, but implementing the solution too harshly can kill the patient.

Consider a hypothetical nation where an authoritarian ruler has for several decades placated the urban populace by imposing price controls on food. Of course the result is that as production costs increase and selling prices remain fixed, production becomes economically unviable and output begins to drop, creating a supply/demand imbalance that tries to force prices up beyond the government-imposed ceiling. That is an untenable situation, and in the world of economics the solution is to scrap the price controls completely, allowing prices to rise to a level that stimulates additional production.

In the world of reality, trying to achieve immediate supply/demand/price equilibrium in an environment distorted by years or decades of bad policy will produce abrupt and dramatic price increases, and you get the populace storming the palace and stringing the unfortunate President up from the nearest lamp-post. Right prescription, wrong implementation. Unfortunately, the bad result discredits the prescription.

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On the other hand, almost no one--not even in the World Bank or IMF—believes that unrestricted free markets are a good thing, or that you can get equitable and sustainable growth without effective state institutions to provide an enabling environment (rule of law, anti-corruption measures, security, critical infrastructure, education, health, social safety nets, environmental regulation, enforcement of labour standards, etc). It is also important that stakeholder consultation be done properly, ideally through a political system that is responsive to the needs of all affected groups, not just those with money.
I'm not sure that anyone ever seriously contested these ideas. I've heard many left leaning academics proclaim that "the neoliberals want to eliminate government", but I've never seen anything coming from the mainstream development world that supports that rather extreme conclusion. Those accused of being "neoliberal" are generally supportive of effective state institutions. What they do not want is to see expanding state intervention in the economy, and there are good reasons for this. The "anti-neoliberals" often propose that state intervention is necessary to protect "the people" from "big business", but they fail to recognize that state intervention in much of the developing world has generally been aimed not at protecting "the people" but at protecting the interests of the governing elite.

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The IMF remains more of a bastion of narrow classical economics, but critics miss the point that it should be—it is an institution that is all about promoting fiscal solvency. In doing so it provides a useful reminder of the dangers of unsustainable state expenditure. Think of the IMF as your parents: No, they weren't always right, and certainly not very cool, but in retrospect aren't you glad they lectured/reminded/nagged you at times?
A senior Philippine politician once told me something like "we say we hate the IMF, but we love them. They make us do things we would have to do anyway, and they get the blame instead of us".

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Sadly, it was the case that some of the initial US development personnel in Iraq—political appointees or recent hires in most cases, not career USAID folks— were ideologically blinkered neoliberal/neocons, who treated it as a bit of a sandbox for ideas about radical privatization. Almost none of this worked out very well, and much of it was later abandoned or revised.
I can't disgree with that. I recall reading the Treasury Dept's proposals for the Iraqi economy, back when first released. It struck me as one of the saddest documents I've ever seen. In many ways it was a lovely plan, and it would have been ideal, if it was even remotely possible to implement. Of course it wasn't: it was utterly divorced from the reality on the ground and there was never the slightest chance that it could be put into effect. Economists have some very useful knowledge and some very valuable tools, but there's a lot they don't know about political and social environments that are alien to them. Economies are far too important to be left to economists.
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Old 07-06-2009   #31
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Although they are only analogies, and many caveats of course apply, I find it helpful to use the concepts of ecological succession and geomorphology when considering the why's of what is occurring.
The succession analogy brings to mind something I call "the running shoe curve". Back when I was a kid your running shoes (we called them sneakers) were made in Japan or Korea. As infrastructure improved and labor force efficiency grew those economies moved on to more profitable lines like simple electronics assembly, and the shoes moved on to Taiwan, Thailand, the Philippines. Eventually those economies moved on to the niches now vacated by the Japanese and Koreans in further steps up, and the shoes moved on to Vietnam, Indonesia, Bangladesh. Someday (one hopes) the shoes will be coming out of Zimbabwe, the Congo, Sudan.

Hardly a perfect model and of course it's way more complex than that... but as a target model one can do worse.
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Old 07-06-2009   #32
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Dayuhan - have you ever read The Economist's Tale? I'd think you'd get a heck of a kick out of it. About a World Bank consultant on the ground in Sierra Leone in the 1980s and his struggle to get the WB to reverse policy on rice subsidies. An outstanding real-world example of dysfunctional aid at work.

The entire book is excellent, but the best passages are about the difficulty of getting good real-world data on how Third World economies actually function, and how bad data (which abounds) can lead to decisions with appalling effects.
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Old 07-06-2009   #33
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I always liked the Peace Corps concept of income generating projects - small, village type projects to boost a bit the standard of living with no dollar amounts ever set in stone, no paper trail, no real government involvement except for a bit of seed money here and there, no real expectations except perhaps a bit of success here and there, nobody to blame for failure but themselves, nobody to take any money they made. In the real bush country of the world, the only way to ever get economies boosted is to infuse them with solar cooking devices, thus freeing up immense amounts of time that can be devoted to more gardening, more crafts and goods and animal production, farming, etc. We've got a big hunk of the bush population, the women, spending maybe 1/4th of their time scrounging wood, hanging around fires cooking and minding the damn pots and pans.
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Old 07-06-2009   #34
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Dayuhan - have you ever read The Economist's Tale? I'd think you'd get a heck of a kick out of it. About a World Bank consultant on the ground in Sierra Leone in the 1980s and his struggle to get the WB to reverse policy on rice subsidies. An outstanding real-world example of dysfunctional aid at work.

The entire book is excellent, but the best passages are about the difficulty of getting good real-world data on how Third World economies actually function, and how bad data (which abounds) can lead to decisions with appalling effects.
I agree, Tequila--it is a great book.. I set it as a reading in my intro development course when it came out.

Dayuhan: While I don't want to get too bogged down in semantics, I think the term neoliberal has had more traction--for good and for ill--than you suggest. It is a staple phrase of much the NGO community (that is to say, the folks who in many sectors actually deliver the bulk of ODA), and one of the chief critic of past "neoliberalism" has been former World Bank chief economist/senior VP Joseph Stiglitz--hardly just a marginal leftist academic. Of course, Stiglitz won his Nobel Prize in economics for highlighting the potential shortcomings and limits of market mechanisms, so that's not a surprise
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Old 07-06-2009   #35
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I always liked the Peace Corps concept of income generating projects - small, village type projects to boost a bit the standard of living with no dollar amounts ever set in stone, no paper trail, no real government involvement except for a bit of seed money here and there, no real expectations except perhaps a bit of success here and there, nobody to blame for failure but themselves, nobody to take any money they made. In the real bush country of the world, the only way to ever get economies boosted is to infuse them with solar cooking devices, thus freeing up immense amounts of time that can be devoted to more gardening, more crafts and goods and animal production, farming, etc. We've got a big hunk of the bush population, the women, spending maybe 1/4th of their time scrounging wood, hanging around fires cooking and minding the damn pots and pans.
I think you've hit the nail on the head. But, the projects you describe, or others such as "Oral re-hydration therapy" or distribution of "LifeStraw" that save a life for a couple of dollars don't pack the glamor of billion dollar projects.
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Old 07-15-2009   #36
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Originally Posted by goesh View Post
I always liked the Peace Corps concept of income generating projects - small, village type projects to boost a bit the standard of living with no dollar amounts ever set in stone, no paper trail, no real government involvement except for a bit of seed money here and there, no real expectations except perhaps a bit of success here and there, nobody to blame for failure but themselves, nobody to take any money they made.
Having been a Peace Corps volunteer and having observed many at close range, I have to comment that while the concept may be lovely, the reality generally falls far short. Volunteers are often very young and have little practical experience; by the time they get half a clue they are generally gone. The practice of bringing in recent graduates with little or no field experience doesn't help: I'd gladly trade one real live farmer for a dozen recent graduates of agricultural schools.

Many volunteers have life-changing experience. Very few leave any tangible difference in their host communities.

The idea of small projects is wonderful, but the real-world challenges of tailoring projects to community needs and avoiding often-hidden constraints are extremely difficult to overcome. Very often projects that are alleged to be community-driven are in fact donor-driven (NGOs push the projects they can sell to their funders). Every once in a while you get a gem, sometimes you see a few that work... most come and go like the tide on the beach.

There's a place for large projects and a place for small ones... but in both fields the return on investment is frighteningly small. In many cases both small and large projects fail because they fail to acknowledge constraints on development imposed by local political and security conditions.

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In the real bush country of the world, the only way to ever get economies boosted is to infuse them with solar cooking devices, thus freeing up immense amounts of time that can be devoted to more gardening, more crafts and goods and animal production, farming, etc. We've got a big hunk of the bush population, the women, spending maybe 1/4th of their time scrounging wood, hanging around fires cooking and minding the damn pots and pans.
I once listened to a bright-eyed volunteer give an enormously enthusiastic presentation on solar cookers to a group of women, who politely nodded and professed keen interest. After he left the consensus opinion emerged: there's no way we're going to cook standing in the sun, it's too hot. We want to cook in the coolest, shadiest place we can find, just like we always have.

It sounds like you're assuming that the key limiting factor on productivity in "the bush country" is time. In many places I think you'd find that assumption to be invalid. I also think you'd find that those women "hanging around the fires" may be performing other less visible functions as well, notably keeping half an eye on an array of children, including those whose parents are out in the fields being productive.

I'm not saying that solar cookers are useless... in many places they are very useful indeed. In other places they may just gather dust or be diverted to other original purposes (the day after the family planning roadshow comes to town every kid in the village is playing with balloons made from inflated condoms). In order to know the difference somebody has to spend a long time in that village, win the trust of its people, and get a real sense for the needs and the constraints... and there aren't that many people who have the time or the will to do that.
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Old 07-15-2009   #37
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Dayuhan - have you ever read The Economist's Tale? I'd think you'd get a heck of a kick out of it. About a World Bank consultant on the ground in Sierra Leone in the 1980s and his struggle to get the WB to reverse policy on rice subsidies. An outstanding real-world example of dysfunctional aid at work.

The entire book is excellent, but the best passages are about the difficulty of getting good real-world data on how Third World economies actually function, and how bad data (which abounds) can lead to decisions with appalling effects.
I haven't read it, but I suspect that I've lived it a few times. In fairness I'd have to say that NGOs can be every bit as obtuse as the big multilateral agencies, sometimes more so. They do less damage, having less capacity, but every bit as obtuse.

I'll look for the book... and maybe tell a story or two; after 30 years in SE Asia I've got quite the litany!
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Old 07-15-2009   #38
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I think you've hit the nail on the head. But, the projects you describe, or others such as "Oral re-hydration therapy" or distribution of "LifeStraw" that save a life for a couple of dollars don't pack the glamor of billion dollar projects.
Actually there's quite a bit of glamor in projects involving "giving"... movie stars and politicians love 'em, especially when they can claim credit. There's a place for that too, especially in areas where the dominant concern is relief from the worst impacts of underdevelopment.

The problem of course is that everything you give has a lifespan. You give away 10,000 packets of ORS, eventually they're gone, and the water is still dirty. In two years every mosquito net you give out today will have holes in it.

The giving is important... but it has to be followed up by programs aimed at creating or enabling sustainable economic activity. This is a whole lot more difficult than giving stuff away, often because local elites have powerful vested interests in maintaining existing economic structures - they may be dysfunctional for the society, but they are often very congenial for the local elites. Very often resources are poured into efforts to create livelihood while no effort is made to free indigenous entreprenurial impulses from crushing (and sometimes life-threatening) constraints. There are quite a few places out there where people see opportunities, but don't take them because they know that if they begin to generate prosperity they are likely to get hit on the head - or shot - by someone who wants what they've got.

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While I don't want to get too bogged down in semantics, I think the term neoliberal has had more traction--for good and for ill--than you suggest. It is a staple phrase of much the NGO community (that is to say, the folks who in many sectors actually deliver the bulk of ODA), and one of the chief critic of past "neoliberalism" has been former World Bank chief economist/senior VP Joseph Stiglitz--hardly just a marginal leftist academic. Of course, Stiglitz won his Nobel Prize in economics for highlighting the potential shortcomings and limits of market mechanisms, so that's not a surprise
Probably true, though I personally feel that NGOs have far more impact on the development discourse than they have in the field. In any event, I dislike the term and its overwhelmingly negative connotation because it is most often used (it seems to me) to obstruct and abort discussion: branding a policy "neoliberal", in the communities where the term is in vogue, is pretty close to branding a concept "satanic" among born-again Christians.

Certainly market mechanisms have their limits and their problems, and I think you'd find that very few of those who are dismissed as "neoliberals" would deny this. I think you'd also find that many, if not most, of the cases where market mechanisms are deliberately disregarded - even those couched in populist terms - are actually intended to serve quite narrow interests, and that their long-term results are frequently catastrophic.
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Old 07-16-2009   #39
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Sorry to drop a downer in here, but it has always been my understanding that "aid is the continuation of politics by other means," to paraphrase the Prussian.

All Aid organisations and NGOs are progressing political agendas, to a greater or lesser degree. Some work very hard to disguise it, but the "I'm just here to help," is essentially dishonest to in all practical terms.

I am well aware that this is an unpopular opinion, but until the context that brings is held up to the light, the real issues don't surface.
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Old 07-17-2009   #40
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Certainly aid is driven by interests, agendas, and ideologies, though these may at times be obscure and subject to accidental or deliberate misinterpretation - often by people driven by interests, agendas, and ideologies of their own.

The aid industry also has its own arcane internal politics, and competition for funds is intense, a reality that underlies much of the noble-sounding discourse surrounding aid.

There are also many misconceptions surrounding aid: I'm eternally amazed at how routinely relief/humanitarian aid and development aid, two entirely different animals, get treated as similar or even identical problems...
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