Here at VisualPolitik we talked about how we now live in a world where every day there
is less poverty and people are able to live better lives.
A change that is even reaching the most unprotected region in the world, sub-Saharan Africa.
We already talked about the African lions, and paid special attention to cases like Rwanda.
However, we still need to talk about when and why this region of the world, which so
many considered hopelessly destitute, began to change.
Well, that is precisely what we are going to talk about in this video--that and what
we can expect in the upcoming years.
For years talking about Africa has also meant talking about extreme poverty, natural disasters
and all kinds of conflicts.
And in a way, things are still that way.
See, no more or less than half, yes, half of all the people who suffer from extreme
poverty in the world live in the sub-Saharan African region.
We’re talking about almost 400 million people.
Also, news like this isn’t surprising either:
“We are facing the largest humanitarian crisis since the creation of the United Nations
[in 1945].
(...) Now, more than 20 million people across four countries face starvation and famine”.
- Stephen O’Brien, the UN under secretary-general for humanitarian affairs
Due to all of this, I’m sure nobody is a stranger to those NGO campaigns seeking to
raise funds for all kinds of humanitarian catastrophes in Africa.
Or for governments to allocate billions of dollars each year for Official Development
Assistance.
In fact, government aid is as high as it’s ever been: every year, the African continent
receives about 50 billion dollars.
And this has been going on for... decades.
However, the truth is that for years all this money didn’t help that much.
Let's take a look at, for example, the 90s.
While international aid in this area of the world amounted to tens and tens of billions...
What do you think happened with poverty?
Do you think it decreased?
Well... no, none of that.
Between 1990 and 1998, poverty levels went from 55% to 58%.
But how could that be?
Well… because intentions are one thing.
Reality is a very different one….
Some experts claim that for years official aid weakened local producers.
“Evidence overwhelmingly demonstrates that aid to Africa has made the poor poorer, and
the growth slower.”
Dambisa Moyo an economist and author of "Dead Aid: Why Aid Is Not Working and How There
Is a Better Way for Africa."
For example, in Tanzania it was cheaper to buy subsidized milk from the European Union
than from local producers
However, my friends, with the beginning of the new century, suddenly everything began
to change …
THE GREAT CHANGE
Suddenly, when Africa seemed helpless, everything began to change.
With the beginning of the 21st century, statistics turned around...
Since the year 2000, extreme poverty has dropped by almost 40%; average life expectancy has
grown by more than 10 years; infant mortality has decreased
to less than half; the same happened with HIV infections in children and virtually any
other statistic.
If we look at the economy, we’ll be able to see how between the year 2000 and the year
2015 sub-Saharan Africa economies, excluding South Africa – which is a bit of a peculiar
case, as we saw here in VisualPolitik – grew an average by 6%, which is more than twice
than, for example, Latin America.
Another great indicator of how things are changing is tourism.
Yes, tourism, you heard it.
The tourism sector has some peculiar characteristics that reveal a lot of information.
On the one hand, this sector has great transformational power for the poorest because it’s very
labor-intensive; and on the other hand, we need to take into account that people don’t
vacation in countries that are at war, or have famine or epidemics.
When this industry improves in the poorest countries, it is usually a good indicator
that things are improving as a whole.
Well, if we see the date, we might be quite surprised, because this sector, my friends,
has been growing at an average annual rate, of no less than 9% for 20 years.
That is two full decades.
Yes, it seems like things are moving forward.
But at this point, you may be wondering something.
I certainly am.
What on earth happened to lead to such a change?
Check out this graph, which may give us a clue:
But what exactly led to this kind of "miracle"?
Let's see.
PREPARING FOR TAKE-OFF
Many things drive change, but we will now see how three particular events in Africa
began to change, and I think forever, this continent’s reality.
The first one was remittances.
See, in Africa the population grows very quickly, which along with the terrible living conditions,
has led many Africans to emigrate to richer countries in the past few decades.
Today, these people send tens of billions of dollars home every year.
This money is used in local markets or to set up businesses, for example.
These are remittances, which are actually much more important than development aid.
Can immigration be a good solidarity policy?
Well... it looks like it may be.
Second, and very importantly.
In March 2000, the US Congress finally approved a law that had been promoted by Bill Clinton
in his last years in command: the "African Growth and Opportunity act".
This is basically a law that establishes a preferential trade agreement that eliminates
tariffs and reduces barriers to trade thousands and thousands of products from sub-Saharan
Africa.
See, since this agreement was approved, we can see that between 2000 and 2016 – which
wasn’t exactly a good year – trade between the United States and sub-Saharan Africa multiplied
by 2.5, which means a 6% growth rate every year.
And third, perhaps the key to everything: China.
Yes, you heard it right.
In 2001 China joined the World Trade Organization and became something like "the factory of
the world".
Well, what has happened since then has been quite impressive: China's huge growth has
lifted tens of millions of people out of poverty... both in China and in Africa.
Allow me to explain myself, the Asian giant’s gigantic growth has increased this country’s
demand for all kinds of products: raw materials, food, manufacturing...
everything!
Well, many African countries took advantage of this opportunity.
Since the year 2000, trade between China and Africa has multiplied by no less than 17 times,
representing an annual growth rate of almost 20%.
Since 2009, China is already, by far, the continent’s largest trading partner.
But not only that, the Chinese, as we mentioned here, have also been investing a lot of money
all over the world.
And Africa is no exception.
In 2016, 4 out of 10 euros that foreigners invested in Africa came from China.
Today more than 10,000 Chinese companies are doing business in the African continent, mostly
private companies that work in all kinds of industries.
And that number just keeps rising.
Yes, my friends, this is how Africa has managed to start turning the statistics around.
The great catalyst for this entire change wasn’t some kind of super-earthly miracle
nor did it have much to do with development aid.
This change was driven by trade and investment.
And, Africans themselves seem to see it very clearly.
Don’t believe me?
Well... take a look:
“African countries are forging ahead to complete negotiations for a continental free
trade area between 55 countries by early next year.
The idea, adopted by the African Union in 2012, is to create a single market which includes
the free movement of goods, services and people.”
Yes, that's right, Africa is working to expand trade to every corner of the continent.
Not all countries are developing equally, but this quite normal in all parts of the
world.
FOLLOWING THE ASIAN STAR
At this point, we need to ask ourselves another question.
Can we really dream of Africa's final takeoff?
See, I suspect that many of you may be thinking: well everything you say in VisualPolitik is
very nice... but it isn’t a general rule.
Surely, in Africa there are countries that are doing well and others that are doing not
so well.
Well, you know what?
That's true, but it's also... normal.
See, it may sound shocking today, but in the 50s, Asia was as poor as Africa.
You heard that right.
Yes, I know, seeing cities like Shanghai, Hong Kong or Taipei makes it very hard to
imagine that they were once so poor.
But, when South Korea or Taiwan began to grow, they weren’t richer than Ghana or Senegal,
for example.
And China, India or Vietnam were, of course, much poorer.
How things have changed!
Well, we can get some ideas from this:
My friends, Asian countries didn’t grow all at once either, not at all.
While Korea, Singapore, Japan and Taiwan grew, other countries such as China, Indonesia and
India remained immersed in poverty.
Also, they weren’t exactly democratic models.
South Korea and Taiwan were under hard dictatorships until very recently.
Singapore is in a similar state... and China...
well what can I say...
In short, lots of poverty, some more advanced countries with others further behind, dictatorships...
what we are seeing in Africa today isn’t so different from what was happening in Asia
50 years ago.
READY FOR TAKE-OFF?
Yes, things in Africa are changing.
Out of the 10 countries that are apparently growing the most in 2017, 5 are here, in Africa.
If we take a look at the latest Doing Business, the World Bank indicator for measuring how
easy it is to do business in certain economies, we can see that out of the 10 countries that
have improved the most, 4 are also African.
True, poverty is still very high, and these countries are facing a difficult challenge:
such large population growth that the continent’s population will actually multiply in the upcoming
decades.
However, my friends, the good news is that everything indicates that thanks to trade
and international investment, Africa is finding its way and is maybe, once and for all, ready
for take-off.
But now it’s your turn, do you think that Africa will emulate the development that Asia
has had in recent decades?
Leave your answer in the comments as well as in the survey.
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Also, don’t forget to check out our friends at the Reconsider Media Podcast - they provided
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And as always, thanks for watching!