While external debt may be a problem in some cases, I strongly doubt, that it is regularly the case. When you say, the best people can do is working for the gov't this is not exactly a sign of too little funds for the gov't. Working for multinational corporations isn't bad - if the corporations have business in Africa.
One effect of questionable protection of property, is people in Africa, that somehow gathered funds, don't invest them in Africa, but (so far) in Switzerland. If not even the local people trust in the legal safety of business, foreigeners have even less reason to do so. Of course in recent years some countries have made progress, e.g. google 'gapminder' to see a tool to get access to UN statistics. Unfortunately there are countries like Zimbabwe, that have made steps backwards. Der Amerikaner ist die Orchidee unter den MenschenVolker Pispers
Another issue for Africa is that on most of the continent, the infrastructure really isn't anything to write home about, except in the sense that you'll have plenty of time to write home if you try to use it to get from A to B. And of course, there's the whole rainforest belt, where it's pretty limited how much European-style industrialisation you can do at all, due to the climate. Property protection really comes rather far down the list of Things To Do.
To illustrate, recall that Yeltsin's Russia had very good de jure property protection (considering the lack of popular legitimacy of the Yeltsin regime, de facto is another story...). This did not prevent a massive capital flight to flag-of-convenience countries.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
It is very clear, that Russian oligarchs tried to get their money out of Russia to get it out of reach of politics. Der Amerikaner ist die Orchidee unter den MenschenVolker Pispers
Actually regime changes are good opportunities to simply default on debt.
That did not happen even in the "heroic" examples of South Africa or, say, Poland. They had to "honour" debts of their oppressing predecessors. Nothing was forgiven with "good" regime changes is Latin America either.
As the external debt acts as a tax or a tribute, it is a persistent problem in the developing countries. It is as if the West ended overt colonization, but succeeded in keeping a financial yoke.
African local economies were bulldozed long ago - we hardly knew them. Only blocks close to the corrupt governments can usually "gather some funds" - and they often seem to be more in friendship with neo-collonist "business partners" than own citizen. Corruption in those governments is not exactly a trouble for Western elites, still.
Countries can just refuse to honour debt obligations, like Argentina did. The question is usually, if they remain credible to attract new credits afterwards. In case of Argentina, it seems yes.
If you wait for the creditor to say, hey, I don't want your money any longer, you can wait a long time. Why is the creditor a creditor in the first place?
Where is this a problem? I looked at wikipedia List of countries by external debt.
This is gross debt, not net debt. Bit for most poor countries, even if they would have zero assets elsewhere, the external debt to GDP ration isn't problematic. The net external debt is ~20% for the US, which can't have catch up, high growth development. Zimbabwe seems to be seriously overdebted, but that is probably more due to the shrinking GDP than due to the high debt before Mugabe.
Debts that really keep them from going would be something like net external debt several times the GDP, if all other stuff would be fine. There isn't a fraction of that.
African local economies were bulldozed long ago - we hardly knew them.
When were these African local economies there? Today in most African economies the HDI should be higher than at the time when the first colonial efforts were undertaken.
Only blocks close to the corrupt governments can usually "gather some funds"
Right, that is where the money is, e.g. due to development aid. What they need is a functioning private sector.
and they often seem to be more in friendship with neo-collonist "business partners" than own citizen
There partners aren't neo-colonist. They may be business partners or just criminals or both in a sense. The existence of criminals isn't shocking at all. Of course you will find someone to transfer your wealth out of the country, if you want, if you pay him. Should I complain about Italians colonising Germany, because their Mafia makes great deals, here? Those business people don't have a mandate by our people. And actually I trust my gov't to make decisions according to their best knowledge and usually sufficient integer. Corruption of course exists here, too.
Corruption in those governments is not exactly a trouble for Western elites, still.
'Western elites' mostly simply ignore Africa. So why should it be a big trouble? If you never set foot on that continent, never buy or sell anything there, from where should the big trouble come? Nevertheless most Western gov'ts have now laws, that make corruption in foreign countries a crime at home. It is not self evident, that one has to have such a law, because it hinders your own business people to make deals, when competitors from other countries engage in bribing. One can as well say, this is a sovereign country, and if the officer demands a fee so be it. That is the opposite of colonialism. You accept the rules, the locals make. Colonialism would be, when we make their rules. We don't and actually we can't. Do you want more Bush wars in countries to bring them democracy and freedom? Der Amerikaner ist die Orchidee unter den MenschenVolker Pispers
Countries can just refuse to honour debt obligations, like Argentina did. The question is usually, if they remain credible to attract new credits afterwards. In case of Argentina, it seems yes. If you wait for the creditor to say, hey, I don't want your money any longer, you can wait a long time. Why is the creditor a creditor in the first place?
I see the role of investors as overvalued. They provided just money - other aspects should be valued as well. As this crisis is settling down in East European countries (for example), reliance on external capital flows only increasingly looks like a doubtful strategy, especially when own industry is "gone" and trade balance perspectives are pure.
As the external debt acts as a tax or a tribute, it is a persistent problem in the developing countries. It is as if the West ended overt colonization, but succeeded in keeping a financial yoke. Where is this a problem? .... Debts that really keep them from going would be something like net external debt several times the GDP, if all other stuff would be fine .... ... What they need is a functioning private sector.
Where is this a problem? ....
Debts that really keep them from going would be something like net external debt several times the GDP, if all other stuff would be fine ....
... What they need is a functioning private sector.
If the global crisis is going to deepen, many countries may see their debts jump over total GDP, just as Zimbabwe. This is akin to going "underwater" with your mortgage.
African local economies were bulldozed long ago - we hardly knew them. When were these African local economies there? Today in most African economies the HDI should be higher than at the time when the first colonial efforts were undertaken.
I don't know how exactly you can measure Human Development Index (HDI) of past non-Western societies. But I guess that biological indications (thus excluding education, in particular) were less behind the West than they are now. And the tribes could possibly have social-economic tricks that, although not fitting into our general ideologies, were very useful in making the people happy.
and they often seem to be more in friendship with neo-collonist "business partners" than own citizen There partners aren't neo-colonist. They may be business partners or just criminals or both in a sense .... .... 'Western elites' mostly simply ignore Africa.
There partners aren't neo-colonist. They may be business partners or just criminals or both in a sense ....
.... 'Western elites' mostly simply ignore Africa.
Valued by whom? I don't think that gov'ts anywhere in the world see investors as more than money providers.
As this crisis is settling down in East European countries (for example), reliance on external capital flows only increasingly looks like a doubtful strategy, especially when own industry is "gone" and trade balance perspectives are pure.
But their industry isn't gone. The problems in Eastern Europe seem to me to be the result of a credit crunch. I can't see big underlying problems.
Africa isn't hard hit by the crisis. The low international dependency of Africa is this one time a good thing. Nevertheless, yes, in can happen. It can happen as well to rich nations as Iceland or Ireland. But it is not the reason for slow improvements on the last decades.
But I guess that biological indications (thus excluding education, in particular) were less behind the West than they are now.
I'm pretty sure, that child mortality is now much lower than in precolonial times, or what do you mean with biological conditions. In linear terms the difference to the West should be as well smaller. On logarithmic scale, the difference may not be smaller, because the West had gains there as well.
And the tribes could possibly have social-economic tricks that, although not fitting into our general ideologies, were very useful in making the people happy.
Quite possible. I doubt there is any way back, though; or at least 'conventional' development will be as doable as going back.
Some circle is still lazily profiting from dirty deals and debt collections. How much do we know, which 'Western elites' are not included?
From sheer volume, we know, that probably not much are included. Most banks etc. simply don't have business in Africa.
While there is so much disparity between human suffering and exported wealth, the term "colonist" applies.
The bulk of denied wealth is denied by people, that have come to power in genuinely African movements. Westerners [individuals] stand by as bankers, dealers, advisors; (usually) not making African law with military invasions. The term colonist doesn't apply. Real colonialism probably would be better for Africans today than their own sovereignty. Despite all problems French oversea territories are better off than their independent neighbours. But who wants to do colonialism today, when pillage and robbery isn't accepted any more? Not so long ago in the West aristocrats sold their subjects as soldiers [so no volunteering as mercenary, but mandatory military service] for foreign wars to finance opulent live styles. Seems to me to be similar to what African leaders do now. This is simply normal feudal ruling. Nothing unusual. Der Amerikaner ist die Orchidee unter den MenschenVolker Pispers
I see the role of investors as overvalued. They provided just money - other aspects should be valued as well. Valued by whom? I don't think that gov'ts anywhere in the world see investors as more than money providers.
Secondly, all policy decisions are made for the sake of pleasing the investor class. We may debate, whether those policy decisions are really improving economy in some or other sense, but one thing is clear: each new reform ir policy decision "somehow" is making money providers happier compared to other people. This is especially clear in "developing" economies like Eastern Europe, where everything is rationalized and done for the sake of investors.
As this crisis is settling down in East European countries (for example), reliance on external capital flows only increasingly looks like a doubtful strategy, especially when own industry is "gone" and trade balance perspectives are pure. But their industry isn't gone. The problems in Eastern Europe seem to me to be the result of a credit crunch. I can't see big underlying problems.
The underlying problem is: macro-economically East Europeans cannot offer anything significant to the world markets. Their dreadful trade balances were concealed by a credit bubble for some time. And it is not only the global credit crunch and trade imbalances made naked. Now their people have a big post-bubble debt burden to pay-off. In the contracting economy that looms very large.
While there is so much disparity between human suffering and exported wealth, the term "colonist" applies. The bulk of denied wealth is denied by people, that have come to power in genuinely African movements. Westerners [individuals] stand by as bankers, dealers, advisors; (usually) not making African law with military invasions. The term colonist doesn't apply. Real colonialism probably would be better for Africans today than their own sovereignty. Despite all problems French oversea territories are better off than their independent neighbours. But who wants to do colonialism today, when pillage and robbery isn't accepted any more?
The bulk of denied wealth is denied by people, that have come to power in genuinely African movements. Westerners [individuals] stand by as bankers, dealers, advisors; (usually) not making African law with military invasions. The term colonist doesn't apply. Real colonialism probably would be better for Africans today than their own sovereignty. Despite all problems French oversea territories are better off than their independent neighbours. But who wants to do colonialism today, when pillage and robbery isn't accepted any more?
'Western elites' mostly simply ignore Africa
Apart from the massively lucrative diamond, gold, oil and more prosaic mineral rights, and certain kinds of agriculture.
Africa is potentially a ridiculously rich continent, made poor by some very traditional colonial pillage.
Apartheid was always as much about diamonds and gold as it was about simple racism.
And that market exists in The West(TM).
Clamp down on all the diamond smuggling, dirty oil deals and so on and so forth, and you might actually create an incentive structure that isn't quite so badly skewed towards looting.
Kinda the same way that a British effort at prosecuting Russian oligarchs in London for tax evasions might have stopped the looting of Russia.
