Isobel Coleman

Democracy in Development

Coleman maps the intersections between political reform, economic growth, and U.S. policy in the developing world.

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Missing Pieces: Foreign Aid, Global Growth, and More

by Isobel Coleman
January 27, 2012

Kadija Mohamed cooks food for her children in a camp set up for internally displaced people in Dinsoor, Somalia, January 5, 2012 (Feisal Omar/Courtesy Reuters). Kadija Mohamed cooks food for her children in a camp set up for internally displaced people in Dinsoor, Somalia, January 5, 2012 (Feisal Omar/Courtesy Reuters).

Charles Landow reviews writings on the foreign aid debate, global economic growth, democracy in Asia, and state capitalism in this week’s Missing Pieces. Enjoy!

  • Assessing Aid Efforts: Is foreign aid a success or a waste? The debate is long-running. A recent report from Oxfam and Save the Children evaluates international assistance to combat last year’s Horn of Africa famine. It faults donors and relief providers (including those NGOs themselves) for delays in mounting a full response, despite warnings of failing rains starting in 2010. It is a positive example of humanitarian actors holding themselves and others accountable and suggesting ways to improve. Meanwhile, Bill Gates offers a full-throated defense of foreign aid in an International Herald Tribune op-ed this week and his recent Gates Foundation annual letter. He notes that child mortality and extreme poverty in the world have fallen by more than half in the last fifty years, gains he credits “in large part to aid-funded programs to buy vaccines and boost farmers’ productivity.” As he concludes in his letter, “The relatively small amount of money invested in development has changed the future prospects of billions of people—and it can do the same for billions more if we make the choice to continue investing in innovation.” For more on the foreign assistance debate, see video interviews by Isobel Coleman with Don Steinberg, deputy administrator of USAID, and Daniel Yohannes, CEO of the Millennium Challenge Corporation.
  • More Gloomy Global Growth: Following last week’s Global Economic Prospects from the World Bank, the IMF this week released its latest World Economic Outlook. The second sentence sums things up: “Financial conditions have deteriorated, growth prospects have dimmed, and downside risks have escalated.” Developing economies are projected to grow by 5.4 percent this year and 5.9 percent in 2013, reductions of 0.7 and 0.6 percent from the last IMF report in September. Projected growth in China, India, Brazil, and Mexico remains fairly strong, though generally slower than in recent years. In the Middle East, Libya and other oil exporters are expected to fare well; most oil importers’ growth will be “muted.”
  • Asia’s Democratic Age? In a recent Journal of Democracy article posted this week on TheAtlantic.com, Larry Diamond argues that East Asia, not the Middle East, is the likeliest locus of democratic advance in the coming decades. Singapore’s politics are growing more competitive and its society more open. Opponents of Malaysia’s long-entrenched ruling party are gaining. Thailand has “apparently” re-established electoral democracy. Burma has launched heartening reforms. And in China, Diamond concludes, growing wealth and modernization, frustrations over corruption and environmental ills, Taiwan’s democratic example, and difficult demographic trends could topple the Communist Party—“quite possibly within the next ten years.”
  • State Capitalism: An Economist article and special report examine state capitalism, a hallmark of development in many emerging markets, where government ownership, control, or support has spawned giant firms ranging from PetroChina to Dubai Ports. The report examines the flavors of state capitalism in Brazil, China, Russia, and the Persian Gulf, revealing a continuum of government involvment and a range of techniques for melding corporate and political power. State capitalism has built strong infrastructure and produced globally competitive firms, the report says. But it cites “fatal flaws” in the state capitalist model, including corruption, political interference, and excessively concentrated authority.

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