Author: jboyle

http://www.ted.com/talks/ngozi_okonjo_iweala_on_aid_versus_trade.html

Here’s an interesting TED talk from Ngozi Okonjo-Iweala, the former finance minister of Nigeria, speaking on the importance of using aid productively in Africa. In particular, she makes note of the donor coordination problem that is plaguing the aid world and leading to a good deal of aid misallocation on the continent. It’s interesting to note that what she’s saying doesn’t seem to run contrary to the arguments made by Dambisa Moyo; she argues that aid can currently be used in a productive way that will relatively quickly reduce reliance on it. Rather than being used as a humanitarian band-aid, aid can help alleviate the pathologies currently hindering African development until the ‘virtuous cycle’ positive feedback loop of economic development can cover for the aid and even reduce the need for funding allocations in those areas. She takes an infrastructure based approach to aid investment that also hints at the end about the utility to expanding business (presumably through means such as microfinancing or start-up grants), particularly among female Africans who are often neglected from the development agenda as active agents, and who can be viewed as a relatively untapped economic and social resource.

http://www.nytimes.com/2010/11/18/world/asia/18micro.html?ref=world

This is an interesting article on the microfinance industry in India, which is now on the verge of collapse due to widespread defaulting. It seems that many microfinance companies began to treat these loans as a profit oriented venture, instead of as a development assistance program. As a result, companies began predatory lending practices, resulting in a similar backlash to the US sub-prime lending crisis.

This case study is important; this could have serious implications for the future of the entire microcredit industry. It also serves as a reminder of the dangers of lack of regulation in development practices. Microcredit by its own right is not necessarily problematic; for example, Peru has generally been seen as a country that has benefited from microcredit programs in terms of increased quality of life. The difference between Peru and the current problem in India is that the role of predatory lending institutions has become exaggerated in India as the industry has become more affluent. Perhaps the lesson to be learned here is that, if microcredit is to be seen as part of a development agenda, then it should be channeled through centralized international authorities and/or subject to much stricter international regulations regarding to whom loans can be extended and at what interest rates, which should be fixed according to pragmatic concerns, and not profit concerns.

http://www.google.com/hostednews/afp/article/ALeqM5g4gvOGUxZYf32Zh3hCP7eOuUfH3A

South Sudan has taken an initiative to update the weaponry and training of local defence militia groups as part of a larger strategy to eliminate the LRA. While local defense against LRA attacks is desirable, I’m skeptical about the increased militarization of paramilitary groups as a viable strategy against guerrilla insurgency. The record from countries such as Colombia, where the paramilitary AUC has actually caused more problems and prolonged the violence moreso than the insurgent FARC, demonstrates that creating a distinct and (semi)autonomous military group to fight insurgency can actually serve to intensify conflict.

What do you guys think about this?