Tony Blair answers my development question

Blair now runs a project called the Africa Governance Initiative which promotes better government in Sierra Leone, Rwanda and Liberia. In Owen Barder’s insightful Development Drums podcast, Blair talks about his work, making some good points about how to make technical assistance run smoothly. As a successful politician he clearly knows how governments tick. I like his emphasis on prioritisation: a president who lists 50 priorities won’t achieve anything. Cut the list to 5, and success is more likely.

Owen asks my question at 21 mins 30. To paraphrase:

Isn’t the promotion of good governance a bit like blaming the victims, when many of Africa’s problems originate overseas — such as the global financial crisis? We still can’t strike a global trade deal that will benefit Africa. Wouldn’t you be better using your political weight to tackle those issues rather than trying to improve public administration?

Blair says that it’s an important point but that he disagrees. Ever the politician, he points to the debt-relief he and other global leaders secured at the Gleneagles G8 summit in 2005, as if to suggest that the international community is already doing as much as it can. He also says that some economic problems originate inside Africa rather than overseas, pointing out that trade barriers within the continent are a big obstacle to development (not that he is doing much about them). African countries no longer see themselves as victims and are taking their destinies in their own hands.

My question wasn’t intended to induce guilt for colonial misdeeds. Perhaps I shouldn’t have used the word ‘victim’. I admire attempts by developing country governments to sort out their own problems without aid or blaming others. And I agree that trade barriers slow growth. When I worked in Kenya it became clear that the East African Community wouldn’t increase trade much unless it built better roads and railways and policemen stopped setting up roadblocks.

Governance matters, and doubtless the Africa Governance Initiative has some brilliant people working on important things. But governance isn’t everything. There’s a pile of literature on the developing countries that were horribly corrupt yet still developed quickly — such as Indonesia and Malaysia. Some even argue that corruption aligns the interests of the politicians and the nation. If the economy grows fast, there’s more to steal.

And development has to be put into the international context. Blair’s answer typifies his liberal Whiggishness. He appears to think that poverty can be tackled through teaching the underprivileged the error of their ways, or through handouts, left to moral choice rather than built in via taxes. As British Prime Minister he adopted the attitude that poor people could sort out their own problems and that redistribution was largely unnecessary. Single mothers needed to be taught to say no. Antisocial behaviour orders would whip errant youth into line.

He was wrong. As Richard Wilkinson and Kate Pickett show in The Spirit Level, inequality hinders development. The poor mostly aren’t to blame for their own plight. Redistribution through taxes reduces poverty and makes life better for everyone — including the rich — in the form of less crime, better education and a more cohesive society. Poverty is a structural problem that needs structural solutions.

Similarly it’s no good preaching only good governance to politicians in Africa. Pulling their socks up will only get them so far. Just like poverty in Britain depends partly on the economic system, African underdevelopment is unavoidably international. In my original question I singled out three recent links: trade, the financial crisis and tax havens (unfortunately Owen didn’t put the last point to Blair).

Tax havens continue to drain capital from resource-rich developing countries. Liberia is an excellent example of a country that’s been ravaged by the iniquities of secrecy jurisdictions, allowing kleptocrats to stash diamond wealth in hidden Swiss bank accounts. Nicholas Shaxson in his brilliant book Treasure Islands suggests that Transparency International‘s corruption perceptions index has things the wrong way round: we should rank countries on banking secrecy, not graft. The real economic issue is that rich nations harbour ill-gotten spoils, not that Charles Taylor foists himself on Liberia.

Internal African trade is only a small part of the growth equation. African countries still export far more to the US and Europe than they trade amongst themselves, and that won’t change even if infrastructure improves and trade barriers fall. Combined, the US and European economies make up 52% of world GDP, dwarfing Africa’s 2.75%. Africa needs access to rich markets.

Indeed the failure of international trade talks hampers trade inside the continent. The need to strike an Economic Partnership Agreement deal with Europe threatened East African unity. Kenya’s needs are different to those of least-developed Rwanda and Burundi, while protectionist Uganda clashed with liberal Kenya over market-opening. As a result of the EPAs, a similar schism struck the Southern African Development Community.

The global economic crisis wreaked havoc in developing countries in the form of a collapse in trade, lower investment flows and now a boom in food prices. The poison leaked from the developed world, and its leaders (and former leaders) are in a position to do something about it.

I’m not trying to suggest that the rest of the world is exclusively at fault for Africa’s ills. Governance can improve. And it’s dangerous to encourage power-hungry politicians to blame others for their underperformance. But failing to see the international dimension to poverty is a big blind spot. Someone of Blair’s global stature should surely know this.