Why Regional Integration Is Essential To Africa

5 August 2013

Ventures Africa

Africa's growing economy can accommodate partnerships with developed and emerging economies. Yes, this is true. So many reports get published stating what this leader or that leader emphasises or says about development in Africa.

Hello, put your hand up, those business leaders that have injected over $50 million in one specific region in any particular country on the continent that now as a direct result of "putting you money where your mouth is", inject life into that specific economy.

New partnerships are based on market forces, not colonialism. However, foreign investors should help build more local skills capacity. How is it that at the WEF Africa 2013, the continent's leaders are saying we can develop Africa ourselves and then, we get drawn back into the FDI issue?

We all know that Africa has enough income generated from natural resources on the continent to aid segmented development, regionally. What Africa lacks is the history of business leadership's involvement in the real development Africa, opting for profits instead. History has this crazy way of coming back around to bite us from behind. A sound reminder and lesson that we fail to learn from.

In the period from 1865 to 1900, the United States Government aided the development of the West by granting land to railroad companies. The development of the American west was greatly aided by the development of the railroad.

The development of the railroads in America eventually became a corrupt process. Government involvement lead to a scandal under the administration of U.S. Grant. The control of the railroads by a few companies also brought them into conflict with farmers and the government later on.

Before his assassination in April 1865, Abraham Lincoln had announced moderate plans for reconstruction to reintegrate the former Confederates as fast as possible. Lincoln set up the Freedman's Bureau in March 1865, aiding former slaves with education, health care, and employment.

The final abolition of slavery was achieved by the Thirteenth Amendment, ratified in December 1865. So, Africa has - per continent that is, probably has the most sustainable natural resources than any other continent. We have till this day experienced numerous revolutions, multiple civil wars, and continued unrest. We accused the West of making slaves out of our people both on the continent and abroad, yet the majority of Africa still lives in object poverty.

The majority of our people are still subject to conditions worse than that of slaves who were taken abroad. This continent's leaders still grapple with the simple tasks of affording basic to decent education, basic services such as running water, in many areas in Africa our people don't have food.

Cape Town, South Africa, 10 May 2013 - Regional integration within Africa and the continent's integration with developed economies are essential to its growth and development, Carl Bildt, Minister of Foreign Affairs of Sweden, told a Bloomberg televised session on Africa's Global Partnerships at the World Economic Forum on Africa in Cape Town today.

Yes, so let's integrate. Let's integrate while a stack of hungry people, who can't really walk far because their shoes are so broken, they may only use it in the mud huts.

Let us review some figures related to the African continent;

Let us begin in South Africa - Africa's largest economy. Statistics South Africa has published "Poverty Profile of South Africa: Application of the poverty lines on the LCS 2008/2009".

A key finding was that between 2008 and 2009 about 26,3% of population lived below the food poverty line of R305 per person per month (the amount that an individual will need to consume enough food in a month); 39% were living below the lower-bound poverty line of R416 and 52% were living below the upper-bound poverty line of R577 per person per month.

Using the international poverty lines, 10.7% of the population were living on less than $1,25 per day and 36.4% were living below the $2,50 per day poverty line. The poverty gap, using the food poverty line was 8.5% and the severity of poverty was 3.8%.

The United Nations Food and Agriculture Organization estimates that nearly 870 million people (or one in eight) people in the world suffered from chronic undernourishment in 2010-2012. Almost all the hungry people, 852 million, live in developing countries, representing 15 percent of the population of developing counties. There are 16 million people undernourished in developed countries (FAO 2012).

Developed regions also saw the number of hungry rise, from 13 million in 2004-2006 to 16 million in 2010-2012, reversing a steady decrease in previous years from 20 million in 1990-1992 (FAO 2012).

What exactly do you want us to integrate?
Children are the most visible victims of under-nutrition. Children who are poorly nourished suffer up to 160 days of illness each year. Poor nutrition plays a role in at least half of the 10.9 million child deaths each year-five million deaths. Under-nutrition magnifies the effect of every disease, including measles and malaria.

The estimated proportions of deaths in which under-nutrition is an underlying cause are roughly similar for diarrhea (61 percent), malaria (57 percent), pneumonia (52 percent), and measles (45 percent). According to the most recent estimate that Hunger Notes could find, malnutrition, as measured by stunting, affects 32.5 percent of children in developing countries-one of three.

What is the amount of money made from any large infrastructure development project? I am struggling to find an answer. Thinking about it, some companies involved should make a sizable amount of money.

What is the price of human life? Again we are struggling to find these answers. What we do find comparatively is the effort garnered to find solutions for infrastructure projects compared to the amount of money the Africa is willing to receive from Aid funding to supposedly feed our own starving!

Local Economic Development - Another History Lesson
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area. Economic development can also be referred to as the quantitative and qualitative changes in the economy.

Economic development originated in the post war period of reconstruction initiated by the US. During his 1949 inaugural speech President Harry Truman identified the development of undeveloped as a priority for the west. There have been several major phases of development theory since 1945.

From the 1940s to the 1960s the state played a large role in promoting industrialization in developing countries, following the idea of modernization theory. This period was followed by a brief period of basic needs development focusing on human capital development and redistribution in the 1970s. Neo-liberalism emerged in the 1980s pushing an agenda of free trade and Import Substitution Industrialization.

Dependency theorists argue that poor countries have sometimes experienced economic growth with little or no economic development initiatives; for instance, in cases where they have functioned mainly as resource-providers to wealthy industrialized countries. There is an opposing argument, however, that growth causes development because some of the increase in income gets spent on human development such as education and health.

According to Ranis et al., economic growth is a two-way relationship. Moreover, the first chain consists of economic growth benefiting human development. With the rise in economic growth, families and individuals will likely increase expenditures with heightened incomes, which in turn leads to growth in human development.

Further, with the increased consumption, health and education grow, also contributing to economic growth. In addition to increasing private incomes, economic growth also generate additional resources that can be used to improve social services (such as healthcare, safe drinking water, etc.).

By generating additional resources for social services, unequal income distribution will be mitigated as such social services are distributed equally across each community, thereby benefiting each individual. Concisely, the relationship between human development and economic development can be explained in three ways.

First, increase in average income leads to improvement in health and nutrition (known as Capability Expansion through Economic Growth). Second, it is believed that social outcomes can only be improved by reducing income poverty (known as Capability Expansion through Poverty Reduction). Lastly, social outcomes can also be improved with essential services such as education, healthcare, and clean drinking water (known as Capability Expansion through Social Services).

John Joseph Puthenkalam's research aims at the process of economic growth theories that lead to economic development. If we continue on our path, we might just set Africa back another 50 years.

Category: General

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