China’s Successful Economic Model Eliminates Poverty

China’s new Magnetic Levitation train for 2020 will be able to travel 360 miles per hour. (courtesy of (Motor1.com)

November 11, 2019

The article below by Helga Zepp LaRouche, founder of the Schiller Institute, provides a useful overview of China’s successful economic model. However, Chinese leaders have repeatedly pointed out that they are not asking other nations to adopt this model for their emerging economies. 

“Rather than seeing the rise of China as a threat, we in the West should acknowledge the enormous benefits for mankind flowing from the unprecedented economic miracle that China has achieved in the past 40 years. Unfortunately, most people in the United States and Europe know very little about China and its 5,000-year-old culture, which makes it relatively easy for the geo-politically motivated mainstream media and exponents of the anti-China lobby to paint a completely distorted picture of the country.

“In fact, China has opened a new, totally inspiring chapter of universal history, by setting an irrefutable example, for all other developing countries, of a way to overcome poverty in a relatively short period of time and achieve a good standard of living for a growing segment of its population. Over the past 40 years, China has implemented the most massive anti-poverty program in human history, lifting 850 million of its own citizens out of poverty, and contributing 70% of the total global poverty alleviation efforts. Its average economic growth from 1978 to 2018 was an impressive 9.5% per year, and even the decline this year to only 6% growth, due to various factors, still represents a level that European nations and the United States can only dream of.”

Read: The Secret of China’s Success Model

CGTN: China Reaches New Stage of Development With CIIE

CGTN, China’s media giant published my article on the second China International Import Expo-CIIE, on the opening day of the conference in Shanghai.

CGTN

China reaches new stage of development with CIIE

by Lawrence Freeman

November 5, 2019

Editor’s Note: Lawrence Freeman is a political-economic analyst for Africa with 30 years of experience in Africa promoting infrastructure development policies. The article reflects the author’s opinions, and not necessarily the views of CGTN.

China’s Belt and Road Initiative (BRI) introduced by President Xi Jinping in 2013 is changing the world economy. China has signed cooperation documents on the BRI with 136 countries and 30 international organizations as of the end of July. Four years later, in May 2017, President Xi personally announced the creation of the China International Import Expo (CIIE) that took place in November 2018.

The global BRI, which now involves the majority of nations in the world, is creating new infrastructure platforms to stimulate economic growth. China’s second CIIE will again be held in Shanghai from November 5 to 10, 2019. Although the CIIE is focused on attracting imports to China’s large domestic market, it complements the BRI, demonstrating China’s emergence as an export-import engine promoting global development.

Read: China Reaches New Stage of Development With CIIE

Grand Renaissance Dam Essential for Africa’s Economic Growth

Artist rendition of Grand Ethiopian Renaissance Dam-GERD

Grand Renaissance Dam Essential for Africa’s Economic Growth

Lawrence K Freeman

October 14, 2019

Completion and operation of the Grand Ethiopian Renaissance Dam-(GERD) will profoundly affect not only the future of Ethiopia, but all of the Horn of Africa, and the entire African continent. It reflects the bold visionary thinking that characterizes Ethiopia’s unwavering determination to eradicate poverty in the second largest nation on the continent with 103 million people. Ethiopia has been a leader in economic growth for the last decade due to its unparalleled commitment to constructing new infrastructure projects. Although an emerging nation, Ethiopia with assistance from China, completed the Addis-Ababa to Djibouti railroad in October 2016. This is the first and only electrified rail line in sub-Saharan Africa- (SSA), reducing travel time from several days by truck to hours by rail, effectively freeing Ethiopia from the limitations of a landlocked nation via Djibouti’s port.

Ethiopia’s former Prime Minster, Meles Zenawi, who conceptualized the developmental state, proposed building a dam on the Blue Nile, laying the first foundation stone on April 2, 2011. Thus, initiating the construction of a massive hydroelectric dam on the Blue Nile that will be the largest in Africa. The GERD will be 175 meters tall, 1,800 meters wide, with a reservoir of 79 billion cubic meters-(BCM), more than twice the size of the Hoover Dam in the US. It will have the potential to generate upwards of 6,200 megawatts (MW) of electricity. Upon completion, Ethiopia will be the largest net exporter of electricity in Africa with transmission lines to its neighbors that include Sudan, South Sudan, and Kenya. Ethiopia will also become second only to South Africa in power generation in SSA, as it strives to achieve its interim goal of producing 15,000 MW. The GERD, self-financed by bonds sold to the Ethiopian people, is not only a source of tremendous pride, but an indispensable component of Ethiopia’s resolve to expand its manufacturing sector and become a “middle income” nation by 2025. A nation must have abundant and accessible electricity in order to power an industrialized economy. With more than 60% of its population deprived of access to electricity, and energy demands growing every year, Ethiopia wisely realized that utilizing the potential hydro-power of the Blue Nile to drive its economic growth was not an option; but a necessity.

Sovereignty Superior to Colonialism

 Egypt is accusing Ethiopia of violating the 1959 agreement for utilization of water from the Nile River, which stipulated that 55.5 BCM of waters be allocated to Egypt, 18.5 BCM to Sudan and that no other nation could interfere with the flow of water in the Nile.  There is no basis in law or physical topography for Ethiopia to adhere to this agreement for the following reasons:

  • The 1959 water agreement is a rewrite of the British imperialist 1929 water treaty, when Egypt was a British colony that governed Sudan under the Anglo-Egyptian Condominium (1899-1956).
  • The Blue Nile flowing from Lake Tana in the Ethiopian highlands that joins the White Nile in Khartoum, provides 85% of the Nile water as it travels north through Egypt to the Mediterranean Sea.
  • Ethiopia, as an independent nation that was never colonialized, was not a signatory to either water agreement.
  • Ethiopia has the sovereign right and obligation to utilize its natural resources, in this case water, to improve the living conditions of its people.

The Nile River, although the longest in the world at 6,650 kilometers, is not the most voluminous. Historically, the Nile was the only water way to cross the Sahara Desert from SSA. Today ten nations in Eastern and Central Africa are part of the Nile Basin with their total population approaching 500 million, whose present and future needs exceed the 84 BCM of Nile water. For development of the Nile Basin, it is urgently required that:

  • a new approach to water management for the region, which supersedes the archaic colonial agreement.
  • a new system for generating additional water. A crash program to create billions of cubic meters of fresh water through desalination is an obvious solution.

In essence, a “second Nile” must be created. Nuclear energy, utilizing its higher heat source, would be ideal for removing salt through evaporation, and, equally as important, supplying thousands of megawatts of power to energy-starved nations.

Ethiopian Prime Minister Abiy Ahmed, Awarded Nobel Peace Prize 2020 (Courtesy of MGN.TV)

Shared Common Interest

The Declaration of Principles, signed in Khartoum on March 23, 2015 by the heads of state of Egypt, Sudan, and Ethiopia calls for cooperation among the three nations to resolve disputes concerning the GERD among themselves. The report states: “The Three Countries shall cooperate on the basis of sovereign equality, territorial integrity, mutual benefit and good faith in order to attain optimal utilization and adequate protection of the River.”

The shared vision of the Nile Basin should be to promote prosperity for all the nations involved. The common shared interest of the upstream and downstream nations is one and the same: to uplift millions of Africans out of poverty and present the expanding youth population with economic opportunities to obtain a meaningful and productive life that secures a future for their families.

 Egypt’s foreign minister, Sameh Shourky warned Ethiopia: “Ethiopia’s moving forward with the operation and filling of the Renaissance Dam is unacceptable and a clear violation of the Declaration of Principles and will have negative consequences for stability in the region.” Within Egypt threats of military action have recently resurfaced, but such unwarranted aggression is highly unlikely, and would be roundly condemned by the international community.

According to Xinhua News, Egypt is looking for the United States to play an “international instrumental role,” a position presently not supported by the US State Department. Egypt’s attempt to bring in an outside party to mediate disputes concerning the Nile waters is in direct violation of the Declaration of Principles.

Exercising its sovereign rights, Ethiopia has already completed 60% of the construction of the GERD, and although there have been delays, it is expected to begin producing electricity by the end of 2020. Egypt has no choice but to accept this reality and continue to engage discussions regarding the management of the Nile.  There are substantive legitimate issues respecting the effects of the GERD on Egypt, a downstream nation that is almost totally dependent on Nile water. However, Ethiopia’s sovereignty over the Blue Nile is inviolate. In 2018 the National Independent Scientific Research Group-(NISRG) was established to discuss the filling of the dam’s reservoir. The NISRG consisting of scientists from Sudan, Egypt, and Ethiopia, has met several times, and has reported to the Minister of Water Affairs of each nation.

How many years will it take to fill the GERD’s reservoir, and what will be the flow rate of the Nile at the Aswan Dam, are yet to be resolved. These are technical matters that scientists and engineers must continue to examine in an atmosphere of good will and good faith. Such cooperation is essential to promote the common interests of all nations for a prosperous Nile Basin.

Lawrence Freeman is a Political Economic Analyst for Africa with thirty years of experience in Africa promoting infrastructure development policies.

Africa Enters New Era of Trade and Development with AfCFTA

July 9, 2019

(Courtesy Africa Feeds)
12th Extra-Ordinary African Union Summit in Niamey, Niger, July 7, 2019. (Courtesy Africa Feeds)

China Global Television Network, or CGTN  published my article on the African Union’s creation of the Africa Continental Freed Trade Area-AfCFTA

Read below.

Six decades after African nations began liberating their people from the yoke of European colonialists, the African Union has launched the “operational phase” of the Africa Continental Free Trade Area (AfCFTA), taking a giant step toward uniting the 54 African nations and fostering economic progress.

The landmark move was made at the 12th Extraordinary African Union Summit in Niamey, the capital of Niger, on July 7. Moussa Faki Mahamat, chairperson of the African Union Commission, referred to it as a “historic moment.”

Many prominent African leaders view this new free trade agreement as a “game changer” with the potential to catapult the continent into a foremost position in global trade and development, especially with Africa’s population projected to double in the next 30 years to 2.4 billion.

 Continue ReadingAfrica Enters New Era of Trade and Development-with-AfCFTA

For more on the AfCFTA watch this video interview with Amb. Chihombori-Quao: 

AU Amb Chihombori-Quao: “The African Sleeping Giant is Rising”-The Significance of the Africa Continental Free Trade Area

Hunger and Poverty Are Killing Africa’s Children. It is a Crime Against Humanity: Must Cease Now!

July 2, 2019
Hunger in Africa is rising (courtesy of Africanews.com)

Although I do not agree in full with the analysis in the report: “For Lack of Will: Child Hunger in Africa,” written by the Ethiopian based African Child Policy Forum-ACPF, none the less, it provides a startling study of the horrific effects of hunger on Africa’s children that should be read by all. (See link below for PDF).

The study states that child hunger in Africa is increasing, and presents the following shocking statistics on hunger in Africa:

Globally 10,000 children die every day due to hunger, and in Africa, hunger contributes to about 45% of childhood mortality. One third of child deaths in Africa is attributable to micronutrient deficiencies. Almost half of all child deaths on the continent are caused by hunger!

  • Ninety per cent of children do not meet the criteria for minimum acceptable diet.
  • Sixty per cent of children do not meet the minimum meal frequency.
  • In 2017 alone 14 million children were affected by wasting.

Africa Needs Real Economic Growth

The report correctly identifies poverty as the primary cause for hunger-access to food, estimating that in 2013, 49% of children in sub-Saharan Africa lived in extreme poverty-less than $2 per day.

Unfortunately, the report commits a fundamental error when it repeats the commonly accepted specious statistics of economic growth for African nations.

“Growth in Africa over the last two decades has been impressive by historical and world standards. But it has not been inclusive, with little impact on child hunger.”  

If African economies had experienced real physical growth over recent years, then poverty and hunger would have declined. Instead, both poverty and hunger have increased in many sections of the sub-Saharan continent.

The reports of economic growth are inflated in a specific way; they do not measure real physical growth, but substitute calculations of price valuations of goods and services. There is a fundamental difference, which I will repeat here, because the actual criteria of economic growth is poorly understood.

Very briefly, true economic growth refers to enhancements in the physical production of goods necessary to sustain an expanding population at a constantly improving standard of living. The success of this growth depends on three essential features of an economy. An integrated infrastructure platform of rail, road, energy, and water. A viable manufacturing sector. Plus, the application of continued technology and scientific progress by an educated and healthy workforce. Of course, there is much more to be considered, but these requirements are indispensable. Simply adding up the price-valuations of extracted raw materials, real estate, services, stock exchanges, bank profits, etc. are measurements of monetarist values; not economic growth. Read my early post for fuller analysis: Africa Needs Real Economic Growth Not IMF Accountants

Various sleight of hand tricks and out right sophistry has been used to hide the reality that despite reports of so-called economic growth, poverty is increasing in sub-Saharan Africa, disproportionately compared to the rest of the world. Fallacious explanations have been given, like jobless economic growth, or growth that has not trickled down to the people, or non-inclusive growth. However, the bold truth is that Africa has not experienced the reputed growth that has been touted by all the financial intuitions, which sadly many Africans still believe and repeat.

According to this study, malnourishment has increased from 215.5 million in 2014 to 256.5 million in 2017. Other indicators of Africa’s poverty are; 338 million Africans living in extreme poverty, and 3.2 million children under the age of 5 die each other. Applying the figure of 45% of child deaths due to hunger, this would mean approximately 1.5 million African children die from hunger-poverty yearly.

What Need To Be Done

Under the section: “What is to be done?” the report states “No child should go hungry. This is a moral imperative.” I would add, that no adult, no human being should go hungry. While the study calls for radical transformative policies to be put in place, which is absolutely true, it then calls for “…government commitment to giving greater political visibility to ending child hunger.”

This is a grossly inadequate response to genocidal like elimination of Africans due to hunger. Since the liberation of African nations from colonial rule over six decades ago, the glaring lack of infrastructure and industrialization has plagued the continent. It has led to crippled economies, resulting in the deaths of hundreds of millions of Africans, which were preventable. While infrastructure in roads, rail, energy, ports etc. has finally begun to be built in the last decade, it is insufficient to address the glaring need of Africa’s existing 1.2 billion people and projected 2.5 billion by 2050.

Nothing less than a brute-force military-like commitment by Africans and their allies to inundate-saturate the continent with infrastructure, is required. This is the only pathway to eliminating hunger and poverty.  It should have been done years ago. It must be done now.

Read: Child Hunger in Africa

 

 

 

China, Belt & Road: Eliminate Poverty, Not “Debt-Trap”

April 21, 2019

President Xi Jinping Hands-on Drive to Eliminate Poverty

As part of his government’s plan to entirely eliminate poverty from China by the end of 2020, President Xi Jinping carried out “an inspection tour to southwest China’s Chongqing Municipality” earlier this week, Xinhua reported, in which he pledged to address the issue like “a hammer driving a nail.” Xi first flew to Chongqing, China’s fourth largest city, and then spent another three hours, first by train and then by road, to reach Huaxi Village, where 302 people living in 85 households are registered as living below the poverty line.

Xinhua added: “Huaxi Village is a typical case of China’s impoverished regions. The basic needs for food and clothing have been met, but more efforts are needed for compulsory education, basic medical care and safe housing.”

It is to be noted that China’s criteria for poverty reduction are not strictly monetary, but include key physical-economic parameters such as education, health, and housing. As of 2018 there were still 16.6 million rural residents living in poverty in China. The government plans to lift about 10 million of those out of poverty during 2019. Xinhua then quoted Xi during his tour:

“The battle against poverty has entered a decisive and critical stage. We must press ahead with our full strength and strongest resolve and never stop until we secure a complete victory. After visiting the village, I feel reassured. We may have about 6 million impoverished people and 60 impoverished counties left at the beginning of 2020. If we make sure this year’s work is well-implemented and push ahead next year, we will eliminate poverty. We are confident about accomplishing the mission.

“Less than two years are left before fulfilling the objective of poverty alleviation. This year is particularly crucial,” Xi said at a symposium held Tuesday afternoon in Chongqing. “The most important thing at this stage is to prevent laxity and backsliding.” Xinhua’s account emphasized the top-down involvement of government officials in achieving this national goal. “Throughout the years, more than three million officials from governments above the county level, state-owned enterprises and public institutions have stayed in impoverished villages to offer assistance.

_______________________________________________________________

FOCAC Summit 2018 (courtesy africa.cgtn.com)
I am posting the following article even though it is from last year, because the author accurately disproves the “debt-trap” propaganda being used by western institutions against China-Africa cooperation.

“2018 FOCAC: Africa in the New Reality of Reduced Chinese Lending”

August 31, 2018

W. Gyude Moore is a visiting fellow at the Center for Global Development. He previously served as Liberia’s Minister of Public Works with oversight over the construction and maintenance of public infrastructure from December 2014 to January 2018.

Debt Trap or Much-Needed Investment?

The debt trap diplomacy case, however, has never been convincingly argued and its application in Africa is, at best, tenuous. The reality of Africa’s debt to China is not particularly remarkable when taken against the sources of continent’s external debt stock (see figure below). A number of African countries’ (Djibouti, Kenya, and Angola) debt obligations to China are alarming—as they would be regardless of creditor. China’s $115 billion credit to Africa between 2000 and 2016 is still less than 2 percent of the total $6.9 trillion of low and middle income countries’ debt stock. Recent studies have shown that China is not a driver of debt distress in Africa—yet. The language of debt trap diplomacy resonates more in Western countries, especially the United States, and is rooted in anxiety about China’s rise as a global power rather than in the reality of Africa.

A column chart of external government debt for Sub-Saharan Africa by official, private, and Chinese creditors

Continue reading entire article

_____________________________________________________________

China’s Belt And Road Forum to Gather 37 World Leaders, and Representatives from Five Continents

There will be no less than 37 heads of state and government attending China’s Second Belt and Road forum in Beijing next week, Chinese Foreign Minister Wang Yi said on Friday. In addition there will be 360 attendees at ministerial level, 100 leaders of international organizations and 5,000 participants. 4,000 reporters will also be attending the Forum, whose theme is “Belt and Road Cooperation, Shaping a Brighter Shared Future.”

“The second Belt and Road Forum will be held in Beijing on April 25-27. It will become China’s largest international event this year. Thirty-seven leaders of state and government will participate in the forum,” Wang told a press conference.  This will include the leaders of Austria, Egypt, Hungary, Italy, Russia, the United Arab Emirates and others. “Senior representatives” of France, Germany, Britain, Spain, Japan, the Republic of Korea and the European Union will also participate; other diplomatic representatives of the United States and North Korea will also be there. International Monetary Fund Managing Director, Christine Lagarde, and Antonio Guterres, the UN secretary- general, are also expected to participate, according to Wang.

This is the highest level event for cooperation on the Belt and Road Initiative, Minister Wang said. He said this year’s event will be characterized by a clear direction, a solid foundation, a warm response from participants, a program of practical cooperation and clearly defined results. A Leaders’ Round-Table Summit will issue a Joint Communique to show the political consensus of the leaders in building the Belt and Road.

The long-term effects of the Initiative will be to strengthen multilateralism, to enrich the principles of cooperation, to build a network of partnership and to build a strong support system for continued development. Wang Yi also underlined the connection between the BRI and China’s new phase of “opening up.” The new phase of  China’s “reform and opening up” will “bring more opportunities for promoting the ‘Belt and Road Initiative’ and the common development of all countries,” he said. “I believe that the forum will inject stronger impetus into the world economy, open even broader horizon for the development of the countries, and contribute to the building of a community with a shared future for humanity,” Wang continued.

Will Africa Emulate China in Eliminating Poverty with BRI? More Electrical Power Needed

March 7, 2019

Rwanda Acknowledges Partnership With China Is Beneficial for Both Nations

President Xi Jinping left and President Paul Kegame-right (East African)

Answering a media query in Kigali on March 5, Rwandan Foreign Minister Richard Sezibera said that the Belt and Road Initiative is a partnership that is mutually beneficial for Rwanda and China, and addresses Rwanda’s development challenges, Xinhua reported. China is an important partner for Rwanda at all levels, and Rwanda welcomes the growing partnership with China, he said, adding that Rwanda and China have important relationships in infrastructure development, party-to-party and people-to-people exchanges, and at the political level.

Last August, {China Daily} reported Rwandan Ambassador to China Charles Kayonga telling the newspaper, through e-mail, that in Rwanda, “we have had financing for a number of roads, and we have seen direct investment by Chinese companies in a number of businesses rise.” 

 Africa is in need of infrastructure, among other things, to achieve sustainable economic transformation, he said, adding that cooperation with China will help finance the infrastructure projects to help spur the continent’s industrial development, which will, in turn, favor China in its vision of going global.

Prescient Xi: China is Eliminating Poverty

Speaking today with deputies from Gansu Province, President Xi Jinping underlined the importance of reaching the goal of eliminating poverty by 2020.

“There should be no retreat until a complete victory is won,” Xi said. “Decisive progress has been achieved in the country’s tough fight against poverty over the past years, marking a new chapter in the poverty reduction history of mankind.” Xi stressed, that the goal to eradicate extreme poverty must be achieved on time. He warned that the tasks ahead remain arduous and hard, as those still in poverty are the worst stricken. He also warned that, “the practices of ‘formalities for formalities’ sake and bureaucratism hamper the effective advancement of poverty reduction.” He also warned against the tendency to celebrate short-term gains when it comes to addressing the problem of poverty. He insisted that claims of success should be grounded in reality, and that the results of poverty alleviation work must be able to stand the test of time.

 Also today, a comprehensive briefing was given on the success of poverty reduction over the last few years by Liu Yongfu, Director of the State Council Leading Group Office of Poverty Alleviation and Development. He held a press conference outlining the progress of the poverty-alleviation campaign. Liu noted that between 2012 and 2018, some 80 million people had been brought out of poverty at an average of 13 million people a year. Of the nine eastern provinces, eight were now free of poverty. He said there are 832 counties still enmired in poverty. In 2016, there were 28 counties that had been lifted out of poverty, and in 2017, some 125 counties, and in 2018, an estimated 280 counties. In 2013 there were 128,000 villages in poverty, while in 2018 there were 20,000. Poverty has been reduced during that period by 85%, Liu said, and the goal this year is to bring 10 million more people out of poverty. In 2019 the government will increase the funds devoted to poverty alleviation by 18.9%


African Development Bank Funding New Power Transmission Line For East Africa

In an article on its website, the African Development Bank (AfDB), pointing to regular power cuts in the East African countries from Kenya to Tanzania, from Uganda to Ethiopia, said this is about to change with the upcoming commissioning of a power transmission line to interconnect Kenya and Ethiopia. This project falls under one of the AfDB’s ‘High 5 priorities’ to ‘Light up and Power Africa.’ Working with
institutional partners, the Bank has mobilized resources to ensure the success of this project. At a cost of $1.26 billion, the project was co-funded by the African Development Bank ($338 million), the World Bank ($684 million), the Government of Kenya ($88 million), and the Government of Ethiopia ($32 million), the article noted.

The interconnection will function by means of a 1,068-km, 500-kilovolt high-voltage direct current transmission line, 437 km in Ethiopia and 631 km in Kenya with related facilities at Wolayta-Sodo (Ethiopia) and Suswa (Kenya). By December 2020, it will have a transmission capacity of 2,000 MW. This will make Ethiopia the energy giant of East Africa, while Kenya will become the epicenter of electricity trading in this part of the continent.

“The project will initially be able to transfer 400 MW from Ethiopia to Kenya, but negotiations are under way to better match the capacity of the line to Kenyan demand,” said Joseph Njogore, first secretary at the Kenyan Ministry of Energy, at an energy forum held in Nairobi in August 2018, the website noted.

 

National Emergency in Sudan: Regime Change is Not a Solution

Watch two interviews with Lawrence Freeman on the cause of the crisis in Sudan and the solution. He discusses, poverty, regime change, George Soros, National Endowment of Democracy, President Omar al Bashir, Open Society, the International Criminal Court, the International Monetary Fund, poverty, infrastructure. China, US, and UK.

Africa Needs Real Economic Growth, Not IMF Accountants

February 4, 2019

A recent forum sponsored by Brookings Institute in Washington DC entitled: “Top priorities for Africa in 2019” produced a healthy discussion that alluded to important fundamental conceptions of economics. Although the deeper principles of what should be called economic science were not elucidated, issues raised in the dialogue serve as a useful starting point for further elaboration of that subject.

The event was organized to present FORESIGHT AFRICA, a new publication by the Africa Growth Initiative. Representative from the International Monetary Fund-(IMF), and Mo Ibrahim Foundation, joined Ambassador Linda-Thomas Greenfield, and Brahima Coulibaly, director of the African Growth Initiative, for a wide-ranging discussion on the future of Africa to a packed audience.  

Members of the audience challenged the prevailing assumptions of the International Monetary Fund. One participant raised the inadequacy of the IMF’s rigid macro-analytic approach, when what is needed, she said, is a fine-tuned micro-economic intervention to deal with the scope of the challenges facing African nations. Another suggested the need for a state-funded public sector job program to put the millions of unemployed youth to work—a proposal which the IMF representative categorically rejected. The IMF’s hostility to state sector involvement belies the several hundred-year historical record of the modern economy, which is replete with successful and indispensable interventions by the state to foster economic growth.

Measuring Real Economic Growth      

While the Brookings report, FORESIGHT AFRICA, provides some relevant statistics, its analysis rests on erroneous axioms of what comprises economic growth

The commonly accepted notion that African nations today are experiencing “jobless economic growth” reveals the fundamental antagonism between the analysis of the IMF and its co-thinkers, and proponents of real i.e. physical-economic growth. Jobless growth is a moronic oxymoron.  Real*economic growth augments the productive power of society to increase its surplus of tangible wealth in order to sustain an expanding population at a higher standard of living. The IMF pretends to measure growth by adding up monetary values such as the price of extracted resources and real estate, stock market gains, etc.  The aggregation of prices is not a measure of the economy’s growth.  The only true calculation for economic growth is the result: an improvement in the living conditions of the population.

Africa’s Bright Economic Future Is Its Youth

Creating Real Economic Growth          

An excellent example of this defective thinking is highlighted in the article from the Brookings report entitled “How Industries without smokestacks can address Africa’s youth unemployment crisis.”  Author John Page reports that Africa has not only failed to industrialize, but shockingly, its share of global manufacturing today is smaller than it was in 1980! He forecast that Africa’s working age population (15-64 years of age) will grow by 450 million between 2015 and 2035, and that “20 percent of new employment for wages will be in the service sector, and only 4 to 5 percent will be in a wage paying job in industry.” His conclusions for the future of youth employment in Africa are ill-founded and deadly when he states that since: “industry has declined as a share of output and employment…over the past four decades…Africa may not be able to rely on industry to lead structural change…”

Page then proceeds to dangerously postulate the equivalence of employment in manufacturing with tourists and service jobs. He writes: “The same forces that limit Africa’s opportunities in industry, however, are also creating a growing number of tradeable services—such as tourism and remote office services…”

“Growth in tourism is outpacing manufacturing in many African countries… It has the potential to create some of the millions of formal sector jobs Africa needs each year to employ youth entering the labor force…”

This is not an academic question for the people of Africa. We should all be level-headed about the implications of this prognostication: without industrialization Africans will die. African are dying every day due to lack of infrastructure, a diminutive manufacturing sector, and an inefficient food-producing industry. The industrialization of Africa with a massive expansion of its manufacturing base is not an option, but a life-or-death necessity!

Nor is this conjecture on my part. From the standpoint of economic science of physical economy there is no equivalence. Manufacturing, by transforming nature and producing needed goods, contributes real value to society; tourism and services do not. A variety of services are required for a functioning society, but this sector should not perform role of a primary employer for new entrants into the labor force. Tourism serves no vital task except to promote the natural beauty of a county.  No new wealth is created by tourism; it is essentially collecting other people’s earned income.

Service-related jobs, whether useful or not, will never lead to real economic growth for one elementary reason. They do not contribute to the creation of new wealth. A properly organized economy would only have a relatively small percentage of its employed labor in the service sector. To do otherwise, as some African nations unfortunately are, is not sustainable, and will lead to calamity. To equate non-goods producing employment with manufacturing jobs is a grave fundamental error that should be rejected by serious economists and leaders.

Africa’s Youth Bulge Is Not A Curse

FORESIGHT AFRICA estimates that today 60% of Africa’s 1.25 billion people are under 25 years of age. That amounts to 750 million youth, a majority of which are unemployed or mis-employed in the pathological informal economy. It is projected that in sub-Saharan Africa alone, the youth population will expand by 522 million, and comprise one-third of the world’s youth by 2050. Thus, making  Africa the continent with the youngest population, and potentially the largest workforce on the planet.

While these figures are striking, they do not justify enforced population reduction measures, as extremists advocate. Human life is intrinsically sacred because it is endowed with the divine spark of creativity. Contrary to popular misguided opinion, human creativity is the underlying source of all wealth; not money or even natural resources.  Paleoanthropology shows us that millions of years ago before the emergence of homo sapiens-sapiens (wise-wise man), proto-humans, homo hablis, (handy man) designed tools first in the mind’s eye before shaping rocks into useful implements that were used to transform the environment for the benefit of mankind. Africa is not facing a crisis of too many people, but rather the urgency to formulate the best policies today that will incorporate millions of youth as productive members of the labor force.

What African nations most desperately need, and which will have the greatest impact of their economies, is infrastructure, infrastructure, and more infrastructure.  It is not hyperbole to state that the lack of infrastructure is responsible for millions of deaths on the continent. The dearth of on-grid energy, arguably the most crucial component of an industrialized-manufacturing society, is preventing African nations from attaining the levels of economic growth required to sustain their populations.

For example. If we desire, as we should, that Africans enjoy the same relative living standard as Western nations, then each of the 2.5 billion Africans in the year 2050 should have access to at least one kilowatt (1,000 watts) of power every day. That would require, starting immediately, erecting enough power plants to generate 2,400 gigawatts of electricity. Itemize the bill of materials to build that many thermal, hydro, and nuclear power plants.

Now contemplate the number of workers that would be employed in this endeavor. Extend the same mode of thinking to constructing hundreds of thousands of kilometers of high-speed rail lines to connect the major cities, ports, and manufacturing centers across this vast continent. Add to that the number of new roads, hospitals, schools, libraries, and water ways that need to be built to provide an adequate standard of living. How many tens of millions or more youths will Africa need to employ in just the construction of primary infrastructure projects? Imagine how many additional jobs will be created in the spin-off industries.

Nuclear Energy is Critical to Meet Africa’s Energy Needs (ESI Africa)

Africa’s Future Begins Today

Trillions of dollars of long-term low interest credit must be made available to fund these projects. Only state-issued public credit will suffice for this scope of investment. The private sector, investments funds, or any other fund that is motivated by seeking high yield and quick financial returns on their investment will never, ever, underwrite the credit necessary. The overriding concern of the nation state is not making quick monetary profits, but the welfare of its citizens living and their posterity.  The IMF thus far shown itself to be mentally, emotionally, and ideologically incapable of comprehending the true economic needs of Africa, or how to fund them. Those who are blinded by their erroneous view of evaluating an economy by its monetary worth, will forever be incompetent, and are not qualified to give advice, much less diktats to developing nations.

Credit issuance by the nation state is not a new or novel concept. The success of United States’ economy, which was maintained with ups and downs until its decline over the last five decades, emanated from the accomplishment of President George Washington’s Treasury Secretary, Alexander Hamilton.  It was Hamilton’s understanding of credit and the central role of manufacturing that created the basis for U.S. economic growth from thirteen indebted colonies.  Over the last 230 years, those leaders, in the U.S. or abroad, who were wise enough to comprehend and apply Hamilton’s understanding of national banking and credit, have been successful in stimulating economic growth for their nations.

Africa’s future does not begin in 2050; it begins now. It is incumbent on Africans, with the assistance of their friends and allies, to prioritize crucial transformative infrastructure and related projects that must be built and funded. This cannot wait. This is a war to eradicate poverty, hunger, and disease, and secure a productive life for billions of Africans living and yet to be born. Thus, this campaign should be conducted with a military-like commitment to achieve objectives and goals each month and each year. Hence, we are not waiting for the future; we are creating the future in the present.

*real and true are interchangeable terms signifying a physical (non-monetary) improvement in the economy.

Lawrence Freeman has been involved in Africa for over 25 years as a writer, analyst, and consultant. He teaches courses on African History in Maryland. In 2014 he was appointed Vice chairman of the Scientific Advisory Committee to the Lake Chad Basin Commission.

Guardian of Nigeria Publishes “Proposal for Nigeria’s Future” by Lawrence Freeman

The Guardian of Nigeria published on Monday, January 28, 2019, my article: “Proposal for Nigeria’s Future”  with included pictures of President Trump, President Xi, and myself that were omitted from the on-line article.

 

Proposal for Nigeria’s future