Developing countries soon to take the lead?

 

These are exciting times!

A couple of days ago, I attended Norfund’s summer conference in Oslo. Norfund is the Norwegian state’s investment company intended to invest in profitable and sustainable enterprises in developing countries. The conference speakers had many interesting things to say regarding today’s investment landspace in the developing world, as well as different aspects that proves to be challenging at this point, and that we should focus on in the years to come.

First of all, I’m positive to the mandate of Norfund, and the ideology that is behind it. Kjell Roland, the first speaker and adm. dir. of Norfund, started the conference by talking a bit about the traditional “Washington” view of development aid, and the new “Beijing” approach taken by the Chinese in investing in different projects in Africa. I’m strongly persuaded to think that big governemental development aid plans are often misguided, wrong-focused and doomed to failure. The Washington approach has been to apply tha exact kind of model on all reciever countries, thinking that aid alone without any sense of responsibility or demand of results will straighten things out. This is of course never the case. What China has done, is to listen to the locals, hear what it is they want, respect differences between countries, invest in projects that are going to do well, and make everyone in each link responsible for theis assignments. An important stipulate is that both the investor and the locals are interested in achieving the same things.

These are principals that it seems like both Norfund and the Norwegian aid politic in general seems to show some interest in. This is very positive, I think. If we can keep in mind that development also has to be sustainable, and has to respect democratic principals and human rights, the evolvement is very positive indeed.

As it looks now, the western countries with U.S.A. and certain EU countries at the lead, seems to be lagging behind developmentwise. The economic growth in Germany was reportedly on 0.1% from january to march this year, which in reality means that the engines on the German locomotive has stopped. The Western world is coming to a halt. On the other hand, many african countries experiences a surge in the economic growth, with some countries nearing a 10% increase. This is completely new in history. Of course, the developing world has a long way to go, but it’s good to see that the speed is rapidly increasing.

So what are the challenges? One can talk about many things.

A major issue is the water problem. Many african countries are suffering from periods of drought, and with the climate changes, this is only getting worse. The hunger crisis on the horn of Africa is an all too real example. With proper irrigation systems, this could be prevented, and much bigger land areas could have been used for agriculture. This could have been used to feed populations where too many now are starving. This is an absolute condition to help a country develop as a whole; no-one can grow and flourish without food and a good health.

Agriculture is in my opinion the number one thing we have to focus on in all developments aid and investments. African countries have to get self-sustained. And with the high food prices at the world market right now, african countries can have a lot to gain on exporting wares as well. But I think it’s also important to remember that there is in reality enough food being produced as it is. It’s just that the unfair systems that governs politics globally, ensures that the world’s resources are unjustly distributed. This is the reason why almost one billion people are cronicly hungry. Had these systems not been in work, hunger had not been a problem anywhere. So let’s not lose the perspective on reality.

Corruption is another challenge, and it’s an important part of many cultures. This is why we always should demand responsibility, accountability and results in our dealings with development aid.

But the main challenge is to procure good leadership and get the necessary human resources. Without it, nothing else will function. And this is something we always have to keep in mind.

With the global economic situation being what it is, the progress in the time to come will be extremely interesting to follow. Will the situation turn towards a more optimistic outcome for Europe? Or can it be that the traditional industrialised western countries will lose it’s economical and cultural hegemony? Will the NIC-countries and soon also african countries be the new winners? Is it the beginning of a new era where we wil have to get used to being inferior? Or will the economic recession in western countries pull the rest of the world along with it, making the whole world stop?

As it is, we have yet to find out.

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