World Bank Enquiry Introduction In this task, the hypothetical given is the World Bank has been asked to implement a new “development program” in one of the eight African countries (Angola, Botswana, Mozambique, Namibia, South Africa, Tanzania, Zambia, Zimbabwe).
The program is aimed towards social and economic objectives based on the following criteria: Reduce the rate of natural increase, improve educational opportunities especially for females, foster economic development through trade and by raising GNP per capita, reduce indebtedness and ensure more equal distribution of wealth, and lastly, ensure access to basic needs and resources especially safe water, food and shelter. Therefore, I have been asked to decide one of eight African countries aforementioned that is most deserved the development program by taking demographic, socio-economic, political factors, and trade off into consideration.
Background information of Africa Africa is the second largest continent and the most populous continent with 1072. 3 million population in 2012 (World population data sheet, 2012). In addition, Africa is known as the poorest continent in the world; in African countries the percentage of population living below poverty line are among the highest. The countries have experienced lots of civil wars, with major civil wars such as Rwandan civil war (Rwandan genocide) and war in Somalia which hindered development of the countries affected by the wars.
Despite its rich availability of natural resources such as oil, iron ore, diamonds, and platinum, African countries are still lacking in ability to use the resources effectively. In fact, some conflicts in Africa were caused by the Foreign Direct Investment exploitation on the natural resources in addition to high level of government corruption. Political map of Africa (Bruce Jones Design Inc. 1992) Africa is a highly indebted continent as stated in United Nation report, “In 2009, with an external debt of around US$300 billion, African countries spent about 16% of the continent’s export earnings on servicing their external debt. (External debt in Africa. 2010). The African countries tried to promote development by encouraging trade; they became a part of African Union. Lastly, there is a high level of deadly disease such as HIV/AIDS; In Africa percentage of population aged 15-49 with HIV/AIDS is the highest among continents, 4. 5%. Methodology 1. Rank the 8 African countries based on general understanding 2. Rank the countries based on HDI 3. Choose 8 other development indicators that show the rank of countries based on each criteria of development.
Use the data ranging from year 2005 to 2011 thus the data are not outdated 4. Indicators were put into table 5. Rank the countries based on each development indicators 6. The rank of each country were averaged to get the overall ranking 7. Take the bottom three least developed countries to be taken into consideration in getting the development program from World Bank. 8. After doing some background research of three least developed countries, choose one country which is most deserved the development program. Justification of indicators used
As the modern definition of development says, a country is said to be developed or developing when it’s having an improvements not only economically but also in the quality of life of the people. One of the indicators used is HDI. Human Development Index is a composite measure of development which includes three basic components of development: Longevity (life expectancy), adult literacy and average of number of years schooling and standard of living – income adjusted to local cost of living (Nagle, G & Cooke, B. 2011).
That makes HDI a good indicator of development as by looking at the figure of a country’s HDI, we can see the general development state of the country as it takes both quantitative and qualitative measure of development into consideration. Another indicator is rate of natural increase which gives us an idea about the change of the number of population. Low rate of natural increase indicates better developed country; the country has promoted family planning well, the government able to look after people with the aid of pension, increase in the number of working women, and better health care.
To find out about the educational opportunities in the country, the indicators used are the literacy rate and the percentage secondary school enrollment for both sexes. Those indicators will show the disparities between female and male in the chance of getting education. Another qualitative measure of development used is the percentage of population with sustainable access to an Improved Water Source to show how much of the population have access to basic needs, for example water.
GDP and GNI per capita PPP is used to show the economic development of those African countries mentioned before. Both indicators measure the number of goods and services produced in a country. Moreover, the GNI per capita PPP also shows the balance of income and payments from and to other countries, which means it takes international trade, export, import, and remittances into consideration, thus making it a good quantitative indicator. Conclusion of the chosen country and the justification behinds it
From Table 4, we can see that three least developed countries are Angola, Tanzania, and Mozambique. From those three countries, we can take Angola out of consideration of getting the development program as it has highest debt among the three countries mentioned. According to Global World Debt, the amount of public debt of Angola is $ 20,291,530,055. Therefore if the country gets development program, the money obtained will go for paying the debt instead of being used to promote development. Now we are left with two least developed countries; Tanzania and Mozambique.
Based on table 4, we can see that Tanzania is more developed than Mozambique in every aspect measured by each indicator except for natural increase. Moreover, HDI already shows that Tanzania is more developed. Based on the indicators value, we can fairly say that Mozambique is the country that needs the development program the most. Tanzania is located in Eastern Africa, bordering the Indian Ocean, between Kenya and Mozambique (CIA Factbook, 2012). There are several reasons behind why the country doesn’t deserve the development program.
Firstly, the country has higher debt (public debt $ 10,004,644,809) compare to Mozambique which has $ 5,240,163,934 public debt. Therefore the development program money given to the country will most likely being used up to pay back the debt instead of being spent for the country’s development like making new infrastructures. Moreover, the country has corruption issues which mean if World Bank gives the country a certain amountof money to encourage development, the biggest possibility is it’ll go to government and authorities’ pocket. According to an article in africaw. com (Otindo,O. n. d. there are some major corruption issues happened in Tanzania: * “The Prime Minister and two other ministers were forced to resign and the entire cabinet was dissolved in early 2008 due to corruption scandals in political and administrative systems” * “An audit of Tanzania Central Bank exposing ministers and political leaders from the ruling Chama Cha Mapinduzi (CCM). It revealed that an estimates US$ 120 million had been lost in a scandal where local companies were paid by them most of them being fictious. They also granted an American-based company a large contract in which they had vested interests” * “Bureaucratic corruption.
Bribes have to be paid to get things done, making it time intensive and cumbersome dealing with permits and licenses” * “Richmond affair. Prime Minister, Edward Lowassa, was identified as one of the major architects of the 2006 contract between the Tanzanian government and Texas-based Richmond Development company. It was to provide 10MW to the national grid for $179 million, the generators never appeared and Richmond appears to a shell corporation. He resigned and Jakaya Kikwete, the President, fired the entire cabinet. ” * “Illicit payments are made to government officials in order to influence policy making.
They are made either to affect the content of the government decrees or the votes of parliament members. ” * “Commonwealth Human Rights released a report in 2006 claiming that the police department was the most corrupt in Tanzania. ” * Mismanagement of natural resources; “it’s estimated that revenue collected by timber from villages only a little percentage of it go to the villages and local authorities. Most of it is pocketed by the politicians. It has been revealed that most of the companies involved in timber importing and exporting have close ties with high level politicians. ”
However, despite the corruption problems in highly indebted Tanzania, the country has higher level of education equality compare to Mozambique. From table 4 we can see that Literacy rate of females and males don’t have a big difference and secondary enrollment of both sexes is equal. Education equality in Tanzania indicates that the country has more educated thus better quality of human resources to help the country development. Moreover, Tanzania has lots of natural resources; hydropower, tin, phosphates, iron ore, coal, diamonds, gemstones, gold, natural gas, nickel (CIA fact book, 2012) which can be used as export commodity.
If the country manages to maintain the balance of payment and get trade surplus, the money obtained can be used to develop the country. Based on that reasons, Tanzania doesn’t seem to be in need of development program as it can actually develop itself as long as the corruption problems are diminished, trade is more encouraged, better allocation of resources both human and natural resources, thus the money obtained from all aforementioned can be spent for development.
Therefore I think Tanzania needs SAP (Structural Adjustment Programs) more than the development program. On the other hand, Mozambique is clearly in need of the development programfrom World Bank. The country is located in Southeastern Africa, bordering the Mozambique Channel, between South Africa and Tanzania (CIA Fact book, 2012). To gain its independence, Mozambique had a war against the colonialism ofPortuguese. The war started in 25th of September 1964 and ended in 1975 in which Mozambique gained its independence.
During the war period, Mozambique experienced famine, deaths of its people and destruction of its country that hinders the country development. Two years after, there was a civil war in 1977 to 1992 that leads to displacement of more than 5 millions civilians and 900000 people dead in the war, again holding back the country development. The country was still recovering when another problems came up; natural disasters. In the late February 2000, Cyclone Eline hit Mozambique, followed by Cyclone Hudan in the mid April 2000.
The cyclones caused flood, forced over 450000 people away from their homes and estimated 500 people were killed. There was lack of access to clean drinking water, food resources, medical facilities, and a shortage of many other essential items. Moreover, many people got diseases such as malaria, diarrhea, measles, meningitis, dysentery, and respiration infections. In addition to all that, CNN reports that three millions of mines in the landmines from the previous civil war has been flooded, caused the mines to be washed away thus danger the location surrounding the landmines.
The mines was actually had been mapped, ready to be cleared, if only the Cyclones didn’t hit the place. UNDP predicted that Mozambique needed $450 million to rebuild the houses, schools, hospitals and roads destroyed. The country thus haddifficulties in getting the money to stabilize the country condition and encourage development after all those wars and disasters. The country has efforts in lessening corruption thus they can ensure that the development program money from World Bank be used to develop the country.
In 2004, the anti-corruption law was established, followed by the law of procurement in 2005. Moreover, if Mozambique able to develop after getting the development program, there is a possibility of trickle-down effect from Mozambique to Tanzania the two countries are close to each other in terms of the geographical location; it’s a win-win solution for both countries! Form the analysis above, World Bank has decided to give the development program to Mozambique.