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The Informal Economy

by: Amaris Mae

The Informal Economy IAFF 2093

Amaris Mae
GPA 3.75
Africa: Problems and Promise

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About this Document

Notes from lecture on the 10th of February with Ambassador Shinn. Lecture notes are in black and text notes are in blue
Africa: Problems and Promise
Class Notes
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This 4 page Class Notes was uploaded by Amaris Mae on Sunday February 22, 2015. The Class Notes belongs to IAFF 2093 at George Washington University taught by Shinn in Winter2015. Since its upload, it has received 122 views. For similar materials see Africa: Problems and Promise in International Affairs at George Washington University.

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Date Created: 02/22/15
2102015 News Two Boko Haram attacks in Niger Cease re has been violated in south sudan BenUu Cameroon bus passengers kidnappe d Nigerian elections have been postponed Bank in California Merchants Bank handles about 80 of money transfers in Somalia Are stopping that operation Concerned abut that money is being funneled to extremists However all of the economy will collapse if this is to be conUnued Considered a life blood for Somalis 12 18 billino And Somali government is about 14 of the funds that are sent to the diaspora as remittances They don39t have any banks this is their revenueloans system Guinea has announced that it is expanding experimental ebola treatment Ebola is proving especially hard to eliminate in guinea Boko Haram has done committed two deadly attacks in Cameroon And two in Niger Gabon has lifted a ban on political opposition parties Egypt is retrying two Al jazeera journalists 25 people killed as people rioted outside of a soccer match US should link future aid to Ethiopia for journalists and bloggers Ethiopia has more journalists and bloggers arrested except for Iran Somali member of pearlimeant was shot dead in Mogadishu by alShabaab Al Shabaab coordinated the Nairobi mall attack in Kenya in 2012 Corruption in Politics Clientalism an effective instrument of mass politics Because it uses face to face or house to house contact in order to accrue support Works especially well with those that are poor Petty corruption rampant in African countries Ex a policeman stops you when you quotran a stopsignquot but you never ran a stop sign So you have to bribe him to drop the fake charge High level corruption Not much more of it in Africa than the rest of the world But it is seen as more detrimental in African societies Why It39s stipening funds that could have been used for other uses Funds that are very scarce Discourages foreign investment Less checks Some countries can adapt to corruption Possibly Corruption in Africa is not unique Dependenence on state power and public resources in postcolonial penod Little private sector Use of clientalism Although this is seen thoruhout the developing world Clientalism and corruption Characterized by the widespread corruption Competeing patronclient networks Wanting public resources Obtain the support of localregional power brokers It39s all about access to state resources But there aren39t many public resources So clientelism was usually not able to meet the needs of regime supporters Could not give favors back to everyone Could not satisfy the demands of the masses 9 Why Nigeria has survived major corruption 0 Because of oil enough of it to go around 9 Togo doesn39t have enough resources to go around African states became obsessed with clientalism always falling behind Led to one party states Exports and Corruption Allows governments to entrench themselves in power Big advantage for an incumbent government ALTHOUGH Zambia has wealth but haven39t had the regime Could go wrong very quickly Ex oil price bottoms out Ex Sudan lost 75 of its oil South Sudan And then south sudan wans t able to use it Spend all of their effort on oilminerals and re ning it No diversi cation of the economy 9 MAJOR PROBLEM Clientilism and ldneity Religious ethnic regional or in some cases racial south Africa Corruption undermined the integrity of state institution And is associated with ethnicity identiy groups So they need to move away from politics of personal acquisition And they need to move away from brutal violence 9 Otherwise it leads to genocide Shadow State Shadow State Clandestine economies The most corrupt regimes in Africa Liberia Sierra Leone Congo Especially Sese Seko Brutal corrupt leader Wanted to purge all coonial cultural in uence while enjoying support by the US due ot his anticommunist stance Deposed Patrice Lumumba in a coup d39etat Rulers can undermine the formal institutions of government Technically still exist But they don39t accomplish anything or do anything Because the ruler of the country has designed a totally corrupt system Organizationally incompatible with public resources All the resources go to the leader And his supporters The regime is based on the concept of personalized power Very little safety quoton their ownquot If a shadow state permitted the state the means to achieve its own goals they might oppose the power holders so they are suppressed Shadow state may have an element of physical control Low crime rates Any attempt at opposition is squashed But they still have to create some stability for their own operations So they recruit and arm young men Ex AlShabaab in Somalia Opens the door for foreign aid Shadow states nd foreing aid and respectability during the cold war Rather than after the cold war We would rather support an autocrat than a communist Like we did with Somoza in Nicaragua quotHe is an SOB but he is our SOBquot Reagan Millenium Challenge George W Bush Grant aid Noloans Rewarded good performers Good economic and political performs Somewhat ethnocentric Wanted them to be quotwesternquot Shadow state would never have quali ed That was the point Poor candidates to attract foreign investment be Minerals and Shadow State Sierra Leone diomands Angola oil Sudan oil South Sudan oil One of the most corrupt states Chad DRC mineral wealth Vigerous anticorruption protests may infact destabilize the shadow state to the point of anarchy and not ef ciency Corruption Index The Least Corrupt States 1 Denmark 2 New Zealand 3 Finland US is 17 in order of least corrupt to shadow state We are tied for it The best African country is 31 Botswana Second best African country is 42 Cape Verde Number 174 North Korea and Somalia somewhat unfair because Somalia doesn39t have a government Six of the 10 lowest scoring African countries Signi cant oil or mineral producing


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