About the Author:
Paul Collier is one of the world’s leading economists on African economies. He is a Professor of Economics and Director of the CEnter for the Study of African Economies at Oxford University. He is a former director of development research at the World Bank and advisor to the British government’s Commission on Africa. He has published a good number of books, including Breaking the Conflict Trap.
Rating: 3 / 5 stars (Mediocre)
This book is a disappointment, despite having received high praise from New York Times, The Economist, Financial Times, Larry Summers and George Soros. In the caption, Collier writes: “Why the Poorest Countries are Failing and What can be Done About it”. He goes big on the first, but is lean on the second. Having had an impressive experience with African economies, it is little surprise that he has a comprehensive understanding of the intricacies concerning the bottom billion of this world. However, the attempts he makes at proposing solutions to actually solve these problems were, at best, vague and unimpressive. It makes me wonder why this book has received such generous acclaim, when it stops short of its core function – that of proposing feasible solutions for the bottom billion to break out of its trap.
He begins with a blast, detailing and explaining four very specific reasons why the bottom billion have stayed where they are over the past 40 years despite unprecedented global progress in wealth and industry. Unlike Jeffrey Sachs, who only knows the adolescent binary division of “rich-world” and “poor-world”, Collier is comprehensive where it comes to defining the bottom billion. He specifies certain countries in Africa and Asia trapped in continuous poverty. He moves on to explore these traps – namely, the Conflict trap, Natural resource trap, Landlocked with bad neighbours, and Bad governance within a small country. Given his vast expertise dealing directly with heads of states in these countries, this initial section is truly an exhilarating read, because few authors deliver so bold and maverick insights to current problems like Collier does.
A problem recurring throughout the book deals with Collier’s insistence of relying almost solely upon his own data and statistics derived from his work with colleagues and students. He refuses to cite even his own research, and provides only a meager list of “references” – hardly enough for a book which consistently attempts to determine causality through the use of statistics. This makes a good deal of “proofs” and “theories” proposed highly ambiguous and therefore, unacceptable. The indicators used to determine causal factors are also sorely lacking in detail, in direct contrast to his thesis on the bottom billion’s issues.
The next major part of his book deals with the solutions for getting out of these traps, which he prefers to call “Instruments”. This is the bane of the book, to some extent. He begins with aid and its interactions with the traps mentioned above, and propose three methods in which aid can facilitate a turnaround – aid as an incentive (ex post instead of ex ante government conditionality), skill (sustained technical assistance in the form of economic consultants to formulate reforms which should be implemented when political reforms are made) and reinforcement (with a venture aid fund to sustain and support turnaround cases in nations contained the bottom billion).
The next two chapters devoted to the military and law are far from impressive, but the last instrument, dealing with trade policy, is by far, the worst. He begins with an offensive on Christian Aid’s (most respected British NGO) findings in Africa, accusing its pro-aid, anti-liberalisation Africa campaign of being “Marxist”. He spends an entire page detailing how he banded with the highest echelons in the economics ladder to disparage their findings by virtue of the fact that the research was done by an unknown academic. The academic found that modest reductions in Africa’s trade barriers had cost the region $272 billion. Collier’s line of argument was tht since author was not be well-known (perhaps not as reputed as himself, perhaps?), therefore his research is not trust-worthy. He never mentioned, not once, about the truth behind the author’s findings.
Then he continues rampaging the intellectual “real estate” he has painstakingly built up from the start of the book. he says that the trade policies of the developed world, being too protectionist and inward-looking in nature, is part of the problem. This borders on simplicity. What is the exact rationale of EU’s sky-high agricultural subsidies or US’s astronomical protections of its cotton and potato industry? Unlike other forms of trade barriers where protectionism is used as a harmful tool to keep inefficient industries alive, the basis of Western protectionism is self-survival. It is to ensure that the EU has a constant supply of food, while the US manufacturers enjoy an uninterrupted supply of raw materials for textile and consumption. Collier threw this rationale forcefully out of the picture. He also found bottom-billion tade barriers to be part of the problem, believing that they were a direct product of corruption between closely-related political and business figures in the poor nations. Collier firmly argued that it was this “parasitic industry” of the bottom billion that brought the costs of living up to the locals. This is wrong on two fronts: firstly, the costs of living in these countries are currently the lowest in the world and people have been surviving (no surprise here), secondly, in all his Friedmanite proposals to liberalise the market (albeit in a slower fashion), Collier failed to consider the employment that these local firms provided. If they were phased out due to their ineffiency, then MNCs (multi-national corporations) would fill the employment vacuum. The direct result, as has been all too repeated in Asia, production centre of the world, is an acute drop in real income, complete disregard for workers’ basic rights, and unconceivable envrionmental degradation.
Collier provided two main reasons why regional integration among the bottom billion was doomed to fail – tiny national markets (therefore little bargaining power when it came to trade negotiations), and insufficient differences among them (in terms of labour and exports). He provides the twin exampes of East and West Africa respectively. But once again he omits the whole picture. He conceded earlier that the only real connection the African countries had with the world was capital flight (that means that the credit and wealth, already so sparse in the region, would be exported, because of the non-existent investment opportunities that Africa had to offer). If these countries (concentrated in Africa) had no true global bandwagon on which they could ride on, then the only way in which regional co-operation can be fostered is through a regional bloc. This means that the nation-states in the bloc were forced by way of economic necessity to trade with one another, provide coastal access to port and shipping facilities, and formulate inter-national macroeconomic policies that would synergise with one another. In his attempt to paint a pessimistic picture, he veils himself from the solutions that the bottom billion so urgently needs.
The last proposal, which Collier himself admits is rather unfeasible, is that of a pro-Africa, anti-Asia stance that the developed nations have to take in order to lift the poorest of the poor out of poverty. In other words, he proposes that the developed nations adopt a tariff-free policy towards African exports – textile, manufacturing, services (if present). While he may be an authority in the African economies, he is certainly no expert in the Asian field. The full extent of his ignorance is his proposal that Africa should be protected from Asia. Collier doesn’t realise that Asian societies are among the most unequal in the world, with an ever widening chasm between the obscenely rich and destitute poverty who have yet to move up the income ladder. Nor does he know that economic growth is not a zero sum game; growth poles can mutually reinforce one another. Asia’s growth offers unprecedented economies of agglomeration, and firms all around the world are not going to stop investing their resources into Asia just because an economist specialising in Africa proposes such a plan.
One should approach this book with a cautious mind – the necessity to question just how feasible his solutions are is more than apparent. Despite an unparalleled comprehension of Africa’s problems, Collier’s proposed solutions leave a lot of doubt untouched. This book is definitely worth a read, but the later sections should be treated very lightly.
(Image courtesy of Amazon.com user-contributed front cover.)
