africa

Yale Center for the Study of Globalization
Revenues from this source could possibly reach some US$400 billion annually—
quite significant in scale compared with Africa’s US$50 billion in development aid
receipts. Such resource flows create policy space to resolve the key problem of how
to jack up investment rates, growth rates, and so on, close the gaps in infrastructure,
energy, human resources, and technology, and build strong institutions—all common
problems for Africa. In effect, enhanced resource flows on the projected scale should
open up opportunities for the resource-rich countries to build more competitive and
rapidly growing economies and contribute to Africa’s rise in the global economy.
One cannot imagine that, armed with much larger resources, countries would regress
to the old normal, because the population is going to hold policymakers to account,
try to defend what has been achieved, and protect the public interest.
To take Ghana’s example, again, there was much talking, by a vibrant press and
the common man in the street, when the exchange rate started moving fast over
the last year. The movement was seen to be out of line with the standards of macro
stability and the notional benchmarks of success that have become embedded in
the rational expectations of the public. The policymakers responded with a sense
of urgency, seeking to mobilize a national consensus to restore confidence in the
development agenda. This sort of meta-surveillance by the public and civil society
over government policies can be a powerful force for restraint and stability in a
liberal democracy, in Ghana and elsewhere in Africa.
But then the skeptic would point out that Africa is establishing competitive democratic
governance systems with political leaders who can and do prey on the aspirations of
the public, making very ambitious promises and raising expectations when seeking
or working to consolidate power. Thus, securing full accountability and transparency
in resource management may not be enough: it may moderate but not curtail the
power of governing parties to undertake large populist spending programs designed
to achieve short-term political objectives, appeasing the constituency rather than
promoting longer-term development goals. And so the resource curse virus is alive
and well.
A fair statement of political risk is that resources, irrespective of the source, might
be used to underwrite spending programs with low returns to society. That view
370