Archive for September, 2009

micro-financing and ‘meso financing,’ not either or

Just listened to BBC World Service’s The Forum, where economist George Ayittey, if I am not mistaken, argues that what African small farmers need is not micro-financing but what he calls ‘meso financing.’ He advocates that rather than giving 1000 farmers $100 each, the $100,000 should instead be used to buy a truck to transport what the farmers produce to the market.

I have been thinking about this for a couple of years now, and I believe both micro and what professor Ayittey calls meso-financing are necessary in order to end poverty and build the middle class. By now it is clear that micro-financing has lifted many families out of poverty in the developing world, and it would be irresponsible to end it. At the same time, small loans in the amounts of $100 to $200 will not be enough to build a large middle class in an impoverished African country.

In addition to a free and good educational system (from elementary school to university level), a developing nation needs an affordable and accessible small business loan program in order to build a vibrant entrepreneurial class. Using professor Aittey’s example, a business man or woman should be able to borrow say $20,000 or $50,000 in order to buy a truck to transport farm produce to the market.  Or, in addition to lending the farmers $100 each to improve their output, why not also encourage them to create a coop and then lend the coop the amount of money needed to buy the truck?

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Limiting Political Dynastic Rule in Africa

As expected, Ali Bongo has been elected the next president of Gabon. There is no doubt that Ali Bongo won this election because he is the son of Omar Bongo. Similarly, the only reason Joseph Kabila is the president of the Democratic Republic of Congo is because he is the son of the late president Laurent Kabila.

Does anybody honestly believe that these two men are the best qualified to lead their countries, or that their ascendancy to the throne furthers the cause of democracy in their respected countries?

So, what should be done to limit, if not end, political dynasties in Africa?

One way would be to prohibit immediate family members of political office holders from running for the same office for a specified period of time, say 10 years after their immediate relative vacates the office. For example, in Gabon, Ali Bongo would have had to wait until 2019 if he wanted to run for the presidency. This would have given the people of Gabon the chance to closely evaluate the qualifications and ideas of the other lesser known candidates. It may even have encouraged more, perhaps even better qualified, candidates to run for the presidency if they had known that Ali Bongo would be bared from running until 2019.

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