The reductive seduction of OPP (Other people’s problems)

Courtney Martin has an interesting post at the Development Set about the “reductive seduction” of other people’s problems. Problems we know something about (gun control in America as her example for the Americans) seem complex, political, and intractable, whereas problems we know less about (rural hunger or girl’s secondary education or homophobia in Uganda) seem more straightforward.

Which reminds me a little of the difference between statements from leaders on education in their own country and in other people’s countries.

Here’s Julia Gillard on education in Australia:

"We need a commitment to transparency and accountability. It's my strong view that lack of transparency both hides failure and helps us ignore it. It feeds a culture where all the adults involved - the teachers, the principals, the community leaders and the members of parliament - avoid accountability. And lack of transparency prevents us from identifying where greater effort and investment are needed. Importantly, transparency and accountability are overwhelmingly supported by parents."

And Julia Gillard on education in developing countries:

"More money.

Constantly improving ways of working.

An even greater embrace of the power of partnership."

Gordon Brown on education in the UK

"we will focus on classroom standards, ensure that we monitor exam standards rigorously, reform the qualifications system … World class education, we know, achieves high standards for 100% of the children when there are systems of accountability, funding and pupil tracking that leave no child behind and personalised learning is tailored to the unique potential of every child with one-to-one tutoring and support. That world class education depends on a systematic intolerance of failure and a preparedness of public authorities to intervene and to innovate to eradicate failure"

And Gordon Brown on education in developing countries

"The biggest obstacle to what would be a spectacular achievement - as is so often the case - is a shortage of money."

All economists care about is money

"The love of money as a possession -as distinguished from the love of money as a means to the enjoyments and realities of life -will be recognised for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease. ... the love of money is detestable"

JM Keynes, writing in 1930 about what the world might be like in 2030.

Cash Rules Everything Around Me (South Sudanese Pound Music Video Edition)

HT: Bored in Post Conflict

South Sudan needs macroeconomists

Urgently.

South Sudan will launch its new currency next Monday, just over a week after splitting from the north to become the world's newest nation, the country's finance minister said on Monday. [AFP]

And as Keynes said,

"Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some... Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."

My new (second) favourite charity

After IPA, obviously, is GiveDirectly, which allows you to, er, give, directly, to poor people in Kenya. The poor are identified as anyone living in a house made of mud or grass, and are then given a sim card so they can receive cash via SMS through M-PESA. 10% goes to admin and 90% into the hands of the poor. And because the CEO is Jeremy Shapiro, they are also doing an impact evaluation of the program with IPA.

Now I just need to decide how much I can afford and am willing to donate (the 1% of Peter Singer's campaign or the whopping 10% of Giving What We Can?). And how I should divide my giving between GiveDirectly, the Proven Impact Fund, and maybe also Pratham, and whether I should wait for the Givewell evaluation of GiveDirectly or the RCT results. I'm inclined to think though that when you are putting cash directly into the hands of poor people, and you are confident that those people are indeed poor, then evaluation is almost an irrelevance.

Aid and tax dodging

Scott Gilmore has a great article discussing the absurdity of the UN, donors, and their contractors operating tax-free in developing countries. We even pay advisors to go to developing countries to help them improve their systems of taxation, whilst these very same advisors are getting paid tax-free, helping to undermine those systems. Apparently the irony is lost.

#Stuffexpataidworkerslike: Tax-Dodging.

More Awesome News from the (non-)nation of Somaliland

Monty Munford thinks that Somaliland, not content with democratic elections and biometric passports, is also likely to become the first nation to become a cashless society, due to expansion in mobile money transfers and retail payments.

He also throws in these tidbits:

“For every dollar there are almost 17,000 Somaliland Shillings”

“The state itself runs on a budget of only $40 million dollars”

“competition between the country’s carriers means calls from Somaliland are five to six times cheaper than other African countries.”

I really have to go visit.

Is Khartoum deliberately weakening the Southern economy?

The Central Bank of Sudan has stopped sending oil revenues in hard currency to Juba again. Instead, the revenues which GoSS are entitled to are being sent in local currency, causing a major shortage of foreign currency in the South. This is a problem for importers, who now can’t pay for their imports.

The Minister of Finance in the South has publicly stated that “It is an attempt by the National Congress Party to stifle the southern Sudanese economy” (AFP).

Whilst I wouldn’t rule this out completely, it’s probably something altogether less Machiavellian.

The Sudanese Pound began weakening against the US dollar in 2008. This increased the cost of importing goods. At some point the elites in Khartoum got sick of the rising cost of their imported goods.

In July 2009 the Central Bank of Sudan began using its foreign currency reserves to buy Sudanese Pounds - bidding up the value of the Pound, and making imports cheaper again.

You can see this on the chart, where the Bank was clearly targeting an exchange rate of around $0.45 to the Sudanese Pound. Assuming that the Pound would otherwise have continued to weaken, this quickly must have turned into an expensive operation. The Bank would have had to keep on spending all of its foreign reserves on buying up Sudanese Pounds.

Eventually, sometime around May 2010, Khartoum ran out of foreign currency, and let the Pound fall in value a bit.

Chances are then that Khartoum has stopped sending dollars to Juba simply because it has so few left itself that it wants to build up a reserve again. None of this takes away though from the economic damage being inflicted upon the South. Good luck Juba.

Toilet Paper Only. No Zim Dollars.

Apparently from the Restroom of a border crossing between South African and Zimbabwe. HT: Good Morning Afrika

Kenya fact of the day

11% of Kenya's GDP is transferred annually over cell phones (HT: Watson).

Or is it?

Since its inception [2007], the cumulative value of the money transferred via M-Pesa was over US$3.7 billion -- almost 10 percent of Kenya’s annual GDP (Safaricom, 2009). Aker and Mbiti

So somewhere between 4% and 11% then. Still not to be sniffed at.

Currency Conundrums

Until recently this is how many notes it took to buy a beer in Zimbabwe. The country has now moved to the dollar which has halted the runaway inflation but has drawbacks of its own. One being that nobody has any small change (a friend was apparently given lollipops instead).

No big deal right? Except even in a rich advanced country, over a quarter of payments made are worth less than £1. How are such small value payments made in Zimbabwe?

What does 1 trillion dollars look like?

Huge

via TH