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Monday, April 25, 2005

The Wrong Focus (Updated)

Developing nations want what we’ve got, and that often isn’t what would help them the most. High tech, for example, is sometimes seen as the miracle cure that could solve education and economic problems for these nations by opening their small industries up to larger markets. Nice thought, but it doesn’t work that way.

Mozambican Prime Minister Luisa Diogo on Saturday warned that most developing countries are being left on the sidelines, with the advances in information and communications technologies still benefiting only the developed world.

In a speech in Jakarta at the Asia-Africa Summit, attended by some 50 heads of state and government, Diogo said, “current reality has shown that the dividends from globalisation are only being reaped by the developed countries”.

Most other countries were pushed to the margins of the world economy, she observed.

The problem with viewing technology as the solution isn’t just that the cost of deployment is expensive (although it is when it means not just the cost of running wire but of updating the entire (potentially nonexistent) computer and communication infrastructure of the major population centers of an entire nation. The real problem is the nature of technology in countries that can’t support the technology with home-grown maintenance. Like the roads throughout much of Africa, computers and communication technology will fall into disrepair.

More interestingly, without an intelligent plan for implementing technology solutions in a business plan, technology on its own doesn’t actually solve problems. It just sits around being flashy and impressive, costing tons, while not, you know, helping.

A better series of solutions could be suggested that would bring technology advancements.

First, focus on building and maintaining reasonably liberal and stable governments. Foreign investment is a tough sell when the home government has a violent coup ever decade or so, and it doesn’t help when foreign investors are worried that their investment could be “nationalized” on any given day.

Second, focus on building infrastructure around the population centers. Technology needs reliable energy, manufacturing needs reliable fuel delivery and useable streets, and a stable workforce requires both basic education and sanitation. If a company like Nike (God bless their capitalist little souls) chooses to bestow a manufacturing facility on a country, they will bring money, economic stability, and a boom in other industries (housing, food, and transportation, for instance). But they won’t come if they can’t be provided with a steady work force and the infrastructure needed to ship the manufactured goods and receive the raw materials.

We can turn our noses up at sweat shop labor, but our context is skewed for understanding the change that one of Nike’s plants can bring to a region. What may not sound like much to us is often a huge wage in a developing nation.

What would a country like Zimbabwe, with it 70% unemployment rate do to land a few plants to employ a few thousand of its citizens? The benefit is hardly confined to the newly employed; tax revenues would increase, employment in other sectors of the economy would rise, and economic stability would be one step closer to being a reality. Of course, as much as Zimbabwe might like to be host to a manufacturing concern of that nature, the reality is that the political situation and infrastructure won’t support that kind of an investment from a Western company. The opportunity for failure would be too high to take the risk.

Third, in the absence of direct foreign investment, create regional trading zones to bolster economies (which Luisa Diogo also suggested). Regional trade can often be less expensive and more efficient than focusing trade goals on far-off economic powers. It can also help create stability by ensuring closer ties between neighbors. Instead of working to undermine each other, the nations find that cooperation becomes beneficial to national interest.

Regional trade can be especially effective in agriculture, one of the places that a third world nation can occasionally compete with the big economic powers. Note to the anti-GM forces: helping third world nations find ways to implement GM crops could make them even more competitive since most of those crops are designed to be resistant to bugs and blights. Better crops mean more competitive power and if technology is key to finding solutions, then this is the area where technology could play the largest role.

Computers and the Internet won’t solve the problems. Stability, political reform, stable infrastructure, education, and health care are where the solutions can be found. The goal of having what the US and other Western nations have is a worthy one, but not a realistic one if the expectation is that it will happen within the next two years. The goal of progress and stability, though, is within reach for many of the nations that haven’t yet completely failed. It’s also a goal that is in the United States’ interest to support both in the hopes of continuing to have a constructive hand in guiding the development of third world nations and in the hopes of avoiding another Afghanistan--that is, a completely failed nation that plays easy host to terrorists.

Read the story.

Update: John Hays kindly references this post. Thank you very much.

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