“Africa is suffering from a new AIDs crisis: ‘Air-conditioned Induced Decisions.’  Our leaders live in air-conditioned homes, travel in air-conditioned cars, work in air-conditioned offices.  And it affects the decisions they make.” ~Maiko Zulu, Zambian reggae music star and activist

I had a chance to meet Maiko Zulu last week.  He wears frustration and disappointment with his country on his sleeve (and in his music).  Zambia is a country that should be improving economically.  Driven by mining large copper and cobalt reserves, economic growth has been high for the last decade, not less than 5% per year and more than 7% as recently as 2010.  The Economist in 2011 listed Zambia as one of the world’s 10 fastest-growing economies. Since, 2000, average income per capita has grown by more than 40%, lifting Zambia from “low-income country” to a “lower middle-income country.”

But high economic growth and increased average income have not translated into reduced poverty or better conditions for most Zambians.  If Zambia’s national income was a dollar, the poorest 10% of Zambians receive less than $0.02 and the richest 10% control $0.43, making Zambia one of the most unequal countries on earth. Despite good news on growth and income, Zambia is becoming more unequal and poverty is actually rising.

This analysis comes from a very important report released last week, Equity in Extractives, launched by the Africa Progress Panel.  It looks closely at the 20 African resource-rich countries that depend on extractive industries and finds they are performing quite badly in converting their mineral and energy wealth into benefits for the public. A few factoids:

• Twelve of the 25 countries in the world with the highest child mortality rates are resource-rich African countries.
• Equatorial Guinea, rich with oil, is actually now classified as a high-income country with an average income of more than $27,000 a year, higher than Poland.  But Equatorial Guinea’s child-death rate is 20 times higher than Poland’s.

In general, the resource-rich African countries are badly under-performing on basic human development and poverty reduction, despite how much money they’re making.  This chart tells the story: on the left are the countries’ ranking on wealth (actually income), and on the right is their ranking on human development indicators.  That rightward slope means people aren’t getting the health, education, and opportunity that they deserve.  Most resource-rich countries under-perform in every indicator. (Tanzania and Ghana are notable.)

One of the most interesting bits of the report is a forensic analysis that shows that inequality is growing in resource-rich countries, or at least in those the report analyzed.  The data is hard to come by, but seems to show that not only is the economic growth and revenue from oil and mining boom not being shared, but the elite are capturing (stealing?) ever more of the money over time. This means less poverty reduction than there should be, and in some cases more poverty than there was.

More than that, revenues that rightfully belong to the people of these countries are diverted through poor governance, thereby robbing the majority of citizens from the chance to improve their lives via social services and government investment intended to diversify economies. By not widening opportunities away from dependence on extractives and creating more jobs, inequality is not addressed.

Gawain Kripke and Maiko Zulu in Cape Town last week.

The paper is important, and not only if you’re interested in extractive industries.  The analysis provides useful insights and ways to look at the issues that will interest anyone who cares about development and poverty.  The paper is studiously optimistic about the role extractive resources can play in benefiting development and poverty reduction.

Meanwhile, the truth of the inequality of growth is becoming more evident to the public in these countries.  As Maiko Zulu observes above, there is a disconnect between the public interest and those of the plutocrats and oligarchs who are running the countries.

“We can’t speak of economic growth when people are dying of poverty.”

Will disconnect eventually lead to discontent?  That’s a risky proposition that could lead anywhere…

To read the Equity in Extractives report, click here.

“Exports via food aid are a small drop in the market…Our concern is less about decreasing an important revenue stream for U.S. agriculture. It’s more about the loss of a sense of pride.” ~Veronica Nigh, an economist with the American Farm Bureau Federation in 5/1 Reuters article

A vegetable seller measures bitter eggplants grown in Touba Ngembe for a customer in the village market of Ndiaganiao, Senegal. Photo: Rebecca Blackwell / Oxfam America

Dear Ms. Nigh and the American Farm Bureau,

We’re glad you’re proud of supplying the US food aid program. But there are millions of people around the world facing hunger and crisis who might appreciate it if you’d step aside and let Congress and our leaders improve the program.

The program is vital to address hunger around the world, but is desperately in need of reform. It’s inefficient, slow, wastes money, and as a result, doesn’t help nearly as many people as it could.

Maybe you could be gratified by doing the right thing, that is, making sure that food aid supports small farmers and local economies and is delivered more efficiently and effectively.

Doing so might actually help feed an additional 4 million people worldwide, which is truly something of which Americans could be proud.

Sincerely, Oxfam America

Rep. Ron Kind (D-WI) and Rep. Earl Blumenauer (D-OR) are promoting legislation that would force the US to be a scofflaw. Last week, two members introduced legislation that would prohibit the US from making an annual payment of $147 million to Brazil.  They’re outraged that the US makes this payment – a sort of hush-money – to induce Brazil from punishing the US with more painful penalties under a WTO ruling against US cotton subsidies.

A cotton field in North Carolina. Photo: Liliana Rodriguez / Oxfam America

Kind and Blumenauer think it’s absurd to be paying off Brazil when we have a budget crisis, and want to bring pressure on Congress to reform the cotton subsidies rather than make this annual payment.  This would happen through the Farm Bill, which Congress was unable—or unwilling—to pass last year.  The House Agriculture Committee will restart the process on May 15 with a “markup” in the committee.

Even if Congress does pass a new Farm Bill, it’s not clear that it will reform cotton subsidies.  Last year’s draft versions of the Farm Bill didn’t come close, and Brazil could still retaliate.

Strangely, Brazil has been very gentle with the US and has refrained from harsher penalties for years.  When Congress failed to pass a Farm Bill and reform cotton subsidies last year, Brazil meekly agreed to keep the current payment.  They might not get their full payment this year, actually, as US Agriculture Secretary Vilsack may think the budget sequester, which shaves spending all over the government, will apply to the Brazil payment.

Perhaps, Brazil’s patience with the US over cotton subsidies can be explained by the fact that the Brazilian Ambassador to the WTO, Roberto Azevedo, is vying for a new job as head of the WTO. It certainly wouldn’t help his campaign to alienate one of the biggest member states. I’ve met Minister Azevedo and respect and like him a lot, so I don’t mean to impugn him or imply anything unethical.

At some point, the WTO job will be filled and then, perhaps, the US will have run out of leverage and exhausted Brazil’s patience.

There is big debate going about what should happen when the Millennium Development Goals (MDGs) expire in 2015.

I spent a day in New York recently talking about how the successors to MDGs could incorporate goals around inequality.  Other people are following the post-2015 debate closer than I am.  And others know more about inequality.  But I’m interested in how reducing inequality can be included in the next round of “post-2015” goals, and thereby be established as one of the goals of humanity.

When the current MDGs expire, most people assume that the world – via the UN – will embrace a new set of goals, and that they will look something like the existing MDGs.  For inequality, there are a few options, including:

(1) a stand-alone goal on inequality;
(2) integrating inequality indicators in other goals; or
(3) finding a more symbolic or aspirational way to support reducing inequality, without making it a measurable commitment.

It’s worth noting that some goals, like ending extreme poverty or ensuring 100% of children are enrolled in quality schools, are universal and inherently support greater equality.  To some extent, the more ambitious the goals, the more likely they are to help reduce inequality.

But there’s an argument for including a goal (or goals) on inequality in their own right, not as a secondary or incidental benefit of other goals.  For one thing, a stand-alone goal makes clear what the value-statement is and would be a powerful driver for action.

There are serious technical questions about how you could do this.  The standard GINI indicator is widely used, but has flaws that can obscure important aspects of inequality.  Other methods have also been proposed.

While I’m focused on inequality of income, or perhaps wealth, other dimensions of inequality are also important and could make alternative or complementary goals, e.g. inequality of geography, gender, or ethnicity are important and salient in different contexts.

Technical questions have technical answers.  The bigger challenges lie in the politics.  There’s a presumption that a stand-alone inequality goal is a non-starter and would be blocked by the powers that be.  Indeed, the gossip mill reports that when inequality has been proposed in the High Level Panel discussions, the UK Prime Minister has flatly refused to consider it.  But he isn’t the decider.  Or is he?

It’s depressing that the High Level Panel may neglect inequality, but there are plenty of other stakeholders and intervention points.  For example, you can have a say in the U.N. global survey for citizens. (Consider writing in “inequality” as a priority.)

The resistance of some key leaders doesn’t square with the reality that inequality rates very high as a public concern, in countries north and south, rich and poor.

It’s easy to understand why the one percent might not like all this attention to inequality,  and also why they might oppose setting an objective to reduce it.  But why would everyone else?  And why would political leaders like Cameron oppose it?

Unless they cared more about the super-rich than everyone else?

The President’s State of the Union address last night contained a lesser announcement of the launching of a US-EU free trade agreement:

“And tonight, I am announcing that we will launch talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union – because trade that is free and fair across the Atlantic supports millions of good-paying American jobs.”

This idea has been floating for some months, pushed more from the European side than the US. The US and EU are already massive trading partners with mostly low tariffs and few serious trade disputes.  Nonetheless, making a trade marriage of it has hurdles.  The crux of the US-EU deal will be regulatory and ‘behind the border’ issues.  For example, both the US and EU have extensive farm subsidies and have been critical of one another.  Europeans have some regulatory measures that US exporters see as problematic. (Think GMOs.)

The question is—do developing countries have a stake in this?

The answer is—they could.

What if both sides committed to embracing the pro-development trade policies of the other to harmonize and improve the trade opportunities for poor countries?  The US has a handful of “trade preference” programs that offer special access to developing countries, like the Generalized System of Preferences (GSP), the African Grown and Opportunity Act (AGOA), and regional programs for the Caribbean and Andean countries.  The Europeans have the “Everything But Arms” initiative that offers free export access to least developed countries.

Each side has some pros, and also some cons.  Very broadly, the European program is broader (more products included) and more generous (zero tariffs) than anything the US offers.  But the US programs,  especially AGOA, offer more favorable “rules of origin,” which help poor countries export more complex products like garments, rather than being stuck exporting low-value commodities and products.

Neither the US, nor the EU provide full “duty-free, quota-free” access for all least developed countries (LDCs), which has been a key goal for development advocates in the long-stalled Doha Round trade negotiations.  In fact, LDCs have not seen any of the promised outcomes from the so-called “development round” of the World Trade Organization.  Their request to extend the soon-to-expire exemption to implement intellectual property rules for LDCs has failed to gain support from the US in particular.

If the US and EU want to demonstrate global leadership and do something very positive for the world, they could start by using the trade agreement negotiations to start a “race to the top” in creating economic opportunities for poor countries.

Imagine this:  in a few months, the heads of most of the biggest and most important countries will get together for a couple of days.  A few leaders from developing countries will tag along.  The media will cover the event in detail because…well, because why not?  And for a few hours, a lot of the world’s power and attention will be focused in a single place.

What if I told you that the agenda for the meeting isn’t set, and that the outcomes of the meeting have not yet been decided?  Do you think you might have some ideas?

This is the G8 summit, a traveling carnival that reappears every year.  Leaders of some of the most powerful countries gather to discuss weighty topics.  Sometimes they make big promises.  Sometimes they don’t.

For anti-poverty campaigners, this combination of factors is absolutely irresistible.  Or it might be better to say that ignoring such an opportunity would be absolutely irresponsible.  If you believe in making a difference, advancing a cause, having an impact, changing policies and the world, you really must try to take advantage of the G8 summit—and it’s supporting processes and negotiations—for your mission.

Despite some significant and measurable achievements, the G8 and campaigners at the summit have come under some criticism in recent years.  The argument is that while it’s an enormous public relations event, it has a declining value as a negotiating venue and achievements are only symbolic.  Some argue that a better target is the G20.  Others argue that these summits are all losing (or have long lost) their significance.

But if the G8 and the G20 didn’t exist, would anti-poverty campaigners have to invent them?  There’s just no bigger and better way to get these global issues onto a world stage and put pressure on critical leaders to make commitments and then follow them up.  Done.

On Wednesday a coalition of UK groups, including Oxfam, launched the “Enough food for everyone IF” campaign.  The goal is to push Prime Minister David Cameron “relentlessly and every which way” to take action on hunger with the G8.  The campaign has a platform that includes promoting more foreign assistance, clamping down on tax dodging by big companies, stopping land-grabs, and increasing transparency.

[youtube]http://www.youtube.com/watch?v=Xi38ZtG4NhM&feature=player_embedded[/youtube]

I like this effort.  It’s positive without being pandering.  There are some real asks that aren’t easy, but aren’t completely unreasonable.  It has focus, but there’s enough room for a broad coalition.  (For additional commentary about the campaign, see these posts from Duncan Green of Oxfam UK, David Harewood of Cafod, David McNair of Save the Children UK, Lawrence Haddad of IDS, and Leni Wild of ODI and Sarah Mulley of IPPR.)

What many seem to miss is that if the campaign and this year’s G8 will be a success, the US will have to step up and take a lead.  The issue of food security and agriculture has actually been championed more by the US than other G8 members in the past.  President Obama managed a modest coup by pulling a significant agriculture and food security initiative out of the otherwise embarrassingly disorganized G8 in 2009, hosted by Silvio Berlusconi.

But what can President Obama deliver this time round?  For now, the newly re-inaugurated President is putting together his team.  Senator Kerry at State Department and Jack Lew at Treasury will both have a hand in the G8 discussions, assuming they are confirmed by the Senate.  President Obama’s key staffer on the G8, National Security Council aide Michael Froman, is strongly rumored to be moving into a new job as the US Trade Representative.  So there’s a lot of uncertainty and movement.

Let’s hope President Obama gets his team in place and his game-plan organized, so we can make something big out of this year’s G8.

Policy-makers put a lot of faith in education as a pathway toward prosperity—for individuals, for families, and even for entire countries. And for many, education offers the possibility of economic mobility and, perhaps equality of opportunity.

For Oxfam building human capital through education is not just good for society and families, but should be considered as something closer to a human right.

'Numbers and letters' class (pre-primary) at N. V. Massaquoi School, West Point, Monrovia, Liberia. Aubrey Wade/Oxfam GB

This case is easier to make—and more salient—for primary and secondary education. For more advanced education, a careful analysis is worthwhile to make sure the value to individuals, families, and societies is worth it. In general, the presumed answer is yes. But, as the costs of getting a college education rise, the question increasingly gets asked and doubts creep in about whether it’s worth it.

I came across a report released earlier this year on “the economic case for higher education” in the USA produced by the US Departments of Treasury and the US Department of Education.  Those are formidable authors, so I thought it would be an impressive document. And it is.

The paper finds that college tuition has increased rapidly since 1991. This is offset a bit by increased financial aid (from various sources) and government tax breaks. But even taking these into account, college tuition has increased by 58 percent since 1991 for public schools and 25 percent for private schools. Public schools educate the large majority of students, so rising public school costs affect more people. Rising costs in public schools reflect the relentless budget cutting happening in the states, as well as increasing costs and administration of those schools.

Despite increasing cost, college education has a high return-on-investment. Incomes for people who have college education are 64 percent higher than for those who do not. And people with college education often receive other benefits, like pensions, health insurance, paid time off. And they are employed more, or rather, experience less unemployment.

In general, the wage premium for going to college has accelerated since the early 1980s. This might imply a shortage of college-educated people for the labor force, but it also reflects the stagnation of wages for non-college educated people.

For individuals and families, it’s clear that college is a good bet. Individuals that start life in a poor family (in the lowest income quartile), but who get a college education, reduce the chance that they will also be poor by more than half.

But the positive story of college education and prosperity begins to fray with this graph:

Here we see that college is still a distant dream for the overwhelming majority of poor Americans (bottom or first quartile on the left).  Less than one-third starts college, and less than one-tenth graduate. Compared to people in families with more money, poorer kids enroll at much lower rates, and once they enroll have a much harder time graduating. While the trend has been upward for poor people over three decades of college enrollment and graduation, the improvement has been for every income level, not just poor families (the orange v. blue bars). In fact, the improvements have been faster for higher income levels—with the rate of  improvement in college entry and graduation highest for kids in families in the third quartile.

Despite increasing cost, college education has a high return-on-investment. But it is still a distant dream for the majority of poor Americans. Photo: Nikki Eads/Oxfam America.

So richer kids have an easier time getting to college, more success sticking with it, and get higher incomes as a result. Things have been getting better for them over the years.

A college education is a great opportunity and is an engine for class mobility. It could be an engine for increased equality. But is an engine that is unavailable to kids from the lowest class really an engine of opportunity at all? If college delivers higher income to graduates, but is denied to poorer families, then does it actually help transmit increased inequality?

Every now and then, I get a call from a colleague in Geneva, asking me about the Farm Bill. Although colleagues in Geneva often find Farm Bill politics confusing, they are quite interested in Farm Bill policy. That’s because US agriculture policy is, effectively, trade policy, since the USA is such a large exporter of agriculture products. And Geneva is the global capital of trade policy, home to the World Trade Organization.

A useful analysis of the next Farm Bill comes from the Geneva-based ICTSD. The authors question whether the new Farm Bill will distort trade more or less than the old one. To do this, they dig through the House and Senate versions of the Farm Bill and try to understand the dazzling complexity of both the existing and new proposed farm programs. Of course, the new Farm Bill is not a finished product, and the House of Representatives has not even passed a bill yet. But the authors do their best.

Central to the new Farm Bill policy is eliminating “direct payments” and using the savings to create or enhance a variety of price and revenue guarantees. Direct payments don’t vary at all based on behavior, weather or prices—they are just automatic payments to farmers. Trade purists like direct payments because they don’t influence farmers’ planting decisions (because they are paid no matter what) and don’t distort trade. But everyone else hates them because they seem like a ridiculous government payout to farmers for doing almost nothing.

The paper concludes that:

“The overall thrust of the new farm bill is that decoupled direct payments that have minimal impact on planting decisions will be replaced by coupled safety net programs that potentially have a large impact on planting decisions.”

The authors project the impact of the new Farm Bill programs, and find rather modest changes; this is because current high crop prices mean government subsidy programs don’t have to pay out. But if prices decline in the future, the new Farm Bill could be more expensive to taxpayers and more influential on farmer’s business decisions.

The paper argues that the new Farm Bill will be more likely to distort trade and harm foreign producers of agriculture products than the status quo. The authors do us a favor and identify which countries’ farmers might be most bothered by the new Farm Bill:

The new Farm Bill will shift the balance of support among commodities. The study finds that projected subsidies for cotton are about three times higher than for other  commodities, which could induce farmers to shift to cotton from other crops—something Brazil is likely to be unhappy about.  And rice producers get a pretty sweet deal in the new Farm Bill, which could induce farmers to produce more rice, something Haitian rice producers might not be excited about. 

Why are cotton and rice winning the Farm Bill? Two maps tell the story.

This map shows where different commodities are grown—notice cotton and rice in orange and black:

And this map shows where farmers are more dependent on government direct payments for their crops in blue and orange :

You can see a rough correlation between farmers who depend more on government direct payments (first map) and areas where cotton and rice (and peanuts) are grown (second map).

In the insular and circular logic of the Farm Bill, commodities that lose subsidies in one area demand—and expect—those subsidies to be made up somewhere else. Since direct payments are being eliminated, the lobbyists for cotton, rice and peanuts have pushed hard—and successfully—for a bigger share of the new Farm Bill subsidies.

But more trade-distorting subsidies for cotton and rice and peanuts is the wrong direction for US farm policy. A better farm policy would be supporting a robust, diverse, and resilient agriculture that is more flexible, less tied to government policy. We need farmers to respond to changing markets and changing weather, rather than Farm Bill dictates. They should invest in creative farming rather than lobbyists. Rigging subsidies and markets only makes the system more rigid, more vulnerable to corruption, to disaster, to bad behavior. Government policy should not be picking one crop over another, one sort of farmer over another.

A few months ago, I was talking to my colleague Kimberly, about how difficult it is to talk about the future of agriculture in public without things spinning out of control. Most people don’t much care. But those who do, REALLY CARE. It doesn’t take long in any conversation, for example, before someone in the conversation begins accusing someone else of being part of a corporate conspiracy, or someone accuses a whole community of being “peasant romanticists”. The energy and anger of the interchanges sometimes seems out of proportion and quite unconstructive.

Oxfam has been engaged in agriculture policy and programming since our early beginnings—so we brush against these partisans all the time. Indeed, there are many partisans among us. Often, our favored course is to keep our heads low and avoid the rough and tumble.

But, that’s not really possible in the current era. With the launch of our GROW Campaign, we have put the issues of food, hunger, and sustainable, inclusive agriculture at the center of Oxfam’s public engagement and the heart of our policy agenda. So, how do we broach these subjects without instigating mortal combat and without making Oxfam a target of every possible interest and ideology?

Well, the best idea we came up with was to host a conversation and hope that good ideas and some elements of a consensus emerge. So that’s what we’re doing.

Starting Monday, we’re hosting a ten-day Future of Agriculture online discussion and debate. We’ve invited experts and leaders in the field to contribute provocative essays, and we’ll invite everyone else to weigh in. That means you.

Set your browsers and ready your keyboards. And jump right in!

[youtube]http://www.youtube.com/watch?v=A6twOVM40QY[/youtube]

Although I don’t know quite what to say, I can’t not say something about this.

Erik Prince and his private security services company, Blackwater, gained notoriety in Iraq.  Prince had an inside track with the Bush administration, flew around with Dick Cheney on Air Force Two, secured billions in government contracts without open competition, and lunged into all sorts of difficult and sensitive places guns drawn. In Iraq, Blackwater was involved in 195 shooting incidents that involved civilians—many of which resulted in injuries or deaths of civilians. But that was just the tip of the iceberg of scandals and violations. In 2010, Prince sold Blackwater, which has been renamed several times, trying to escape the stench of scandal and atrocity.

Now, it seems, Prince has reinvented himself as an investment advisor. From a comfortable perch in Abu Dhabi (no extradition treaty with the US), Prince now raises funds and advises clients on the wonderful investment opportunities in Africa. He claims he’s raised $100 million and is shooting (err) for $400 million more. His new company, Frontier Resource Group (motto: fortuna audaces iuvat or fortune favors the bold) offers support for investors mixed with “security and logistical capacity”.

Ever the bottom dweller, Prince has focused his efforts on some of the more problematic investments (natural resources extraction), and problematic countries; DRC, Guinea, and South Sudan. Which should be appealing to problematic investors (based in Hong Kong).

So.  What can I say?

Sorry, Africa.