Excerpt from yesterday's Wall Street Journal Europe (A9, article on the World Bank's President Paul Wolfowitz):
Leon Louw, the South African economist, says that in the past 30 years the world has poured $ 450 billions of aid into Africa, but the average per capita income is lower than in the late 1960s. According to the World Bank's data, 39% of sub-Saharan Africa's private wealth was somewhere else than Africa in 1990 - compared to 3 % for South Asia, and only 10 % even for Latin America.
Why invest in Africa if Africans won't? "It's a very fair question, and I think part of the answer is to deal with the kinds of regulations and taxes that I've been talking about," Mr. Wolfowitz says. "I'm absolutely sure that part of the answer is dealing with the corruption factor."
His favorite new source book is the World Bank's "Doing Business" report, an annual guide to the obstacles that countries impose on their own entrepreneurs. The 2006 version is just out, and for the first time Mr. Wolfowitz had it rank countries, from 1 to 155, on the "ease of doing business." New Zealand ranked first, and the U.S. third (after Singapore), but African nations held down 25 of the last 30 places.
Take Burkina Faso, a landlocked West African country that came in at ...154. If you were in a food supply business, " Mr. Wolfowitz says, "registering a business would require minimum capital equal to nearly five times annual income. Fees alone cost 11/2 times income per capita... to register your land, you have to pay fees, 16% of the value of the land. So the result is, in a country of 12 million people, only 500'000 are in the "formal" economy.
Something is wrong with development aid. What is needed, is not a protection from globalisation but, on the contrary, a radical cut of provisons and reglemtations etc. (both in Africa and the wealthy countries; the Africans have to be allowed to compete with their western counterparts, for instance in agriculture).
UPDATE (27.09.2005; 1600): You'll find the World Bank's ranking here
is ranked 17th...