Posts tagged with: tony blair

Blog author: kjayabalan
posted by on Friday, December 2, 2011

In my opinion, those words coming from the mouth of Declan Ganley were the most memorable from our distinguished speakers at yesterday’s conference “From Aid to Enterprise: Economic Liberty and Solutions to Poverty” in London.

Ganley compared what European governments were doing in their attempts to deal with their sovereign debt problems with the attempts of rock stars to solve the problem of hunger in Africa with Live Aid back in the 1980s. It was just one of many precious remarks coming from the Irish entrepreneur who also led his country’s ultimately unsuccessful campaign against the Lisbon Treaty. As someone who’s quite committed to a unified Europe, he worries a lot about the future of the European project, should the euro no longer serve as a common currency. We’d all be better off if governments just let creditors that made bad loans bear the brunt of their decisions, Ganley told us, instead of trying to prop up banks that are considered “too big to fail.” The problems affecting Europe is also the same one that plagues many developing nations – the collusion of big government and big business to squash competition. As a result, Europe and to a lesser degree the United State are in no position to preach and need to get their own houses in order, a lack of meddling that could well benefit poor countries in the end if we recover the importance of enterprise and trade.

Some of the other speakers, such as Lord Brian Griffiths and our own Anielka Munkel, very ably addressed the importance and centrality of the human person along with the vital role played by social institutions such as the family and churches in the free society. It’s a relatively straightforward, even obvious point but one that’s under attack in international development circles. (I can add from my personal experience with the Holy See at the United Nations that many developed, and especially European, governments refuse to admit the role of parents and the family in development, and I have the battle scars to prove it!)

Antoinette Kankindi of Strathmore University in Nairobi did something I’d never seen before as a student of political philosophy and economics by bringing Aristotle and his discussion of work and leisure into a conference on foreign aid. Prof. James Tooley gave the remarkable story of low-cost private schools in many parts of the developing world and how they thrive where governments are most inefficient and and ineffective, all drawn from his book The Beautiful Tree. The Ghanian entrepreneur Herman Chinery-Hesse also related many funny-if-not-sad accounts of doing business in places where State officials try to pick winners and losers.

For me, the most edifying presentation was the one by Marcela Escobari from the Kennedy School of Government at Harvard, of all places. Using a lot of new mapping data, she destroyed many of the myths surround how countries grow out of poverty and underlined the importance of increasing economic complexity, the diversity of knowledge and even imitation, rather than narrow specialization and an overemphasis on innovation, for developing countries. We don’t often have a speaker with such a good grasp of new research and important technical details at an Acton conference but her contribution makes me think that we should.

There were many good questions from the audience about the challenges of Christian individuals and organizations in the development field and I’d say the take-away message from our panel was: do not involve yourselves in misguided foreign aid schemes in the name of charity, which only serve to exacerbate the scandal of poverty and corruption in many parts of the world. It looks like the message was well-received, even if, in the end, a certain Londoner named Tony did not grace us with his presence.

Blog author: kjayabalan
posted by on Wednesday, November 30, 2011

Greetings from London, which is only partially shut down today due to a public sector strike over the British government’s not-so-temporary austerity plan. The worst fears of extremely long delays at the airports and of possible violence have yet to materialize and let’s hope they never do.

We’ll be holding the last of our Poverty and Development conferences here tomorrow on the theme “From Aid to Enterprise: Economic Liberty and Solutions to Poverty.” Our speakers will look at the (rare) successes and (recurring) failures of government-to-government development assistance, and it just so turns out that former British Prime Minister Tony Blair weighted in on the subject with a Washington Post op-ed last Sunday entitled “Ending global aid in a generation.” Blair boldly and confidently predicts: “I believe that within a generation no country need be dependent on aid. This matters around the world but especially to Africa, the continent most dependent on aid and a focus of my own work. ” You’d be forgiven for thinking that Blair was the keynote speaker at our event, having seen the light on the futility of Official Development Assistance (ODA).

Alas, you’d be wrong. For while Blair does cite the positive example of South Korea’s development based on enterprise, he still clings to the dogma of the church of ODA: governments must still fulfill their commitments to provide 0.7 percent of GDP to ODA. He doesn’t seem to ask the obvious question, which will surely be raised at our conference: if ODA is generally ineffective, in some cases counterproductive to the cause of development and only serves to breed economic dependence, why should governments continue to honor their commitments to a failed policy? Courage in the service of an ignoble end is no virtue, after all.

I, for one, still note an lingering prejudice against free enterprise in Blair’s supposed conversion: “Lord, make me trade with others as equals, but not yet”, to adapt St. Augustine. Like everyone else in these times of austerity, Blair preaches the need for economic growth. But also like many others, he doesn’t seem to realize how to achieve it. Yes, he addresses important factors such as governance and investment, which only leaves me wondering why he couldn’t seem to mention that dreaded word “business” in his article. Development, for Blair, remains in the hands of government leaders and aid experts, rather than in the hands of the people who take risks, seek new opportunities to provide goods and services to others, and thereby create wealth.

In the words of a former U.S. president, “Yo, Blair!” You should stop by our conference tomorrow to complete your bold vision of world without foreign aid.

In a report commissioned by the UK government, Sir Nicholas Stern, a former chief economist of the World Bank, argues that the cost of waiting to take action to curb CO2 emissions will outpace other economic arguments against action on climate change.

The BBC reports (HT: Slashdot) that Stern found “that global warming could shrink the global economy by 20%,” but that this opportunity cost for not taking action immediately could be offset by moving now: “Taking action now would cost just 1% of global gross domestic product, the 700-page study says.” This is essentially the same economic argument I’ve previously used against action on climate change, but reversed to endorse action.

UK prime minister Tony Blair echoed the report’s conclusions, “For every ਱ invested now we can save ਵ, or possibly more, by acting now.”

“We can’t wait the five years it took to negotiate Kyoto – we simply don’t have the time. We accept we have to go further (than Kyoto),” Blair said.

The BBC claims that Stern’s report “is the first major contribution to the global warming debate by an economist, rather than a scientist.” This may be true in a sense, but the Copenhagen Consensus of 2004 embodies the conclusions of a number of economists, although it does not, in point of fact, examine the issue at a length in excess of 700 pages.

The conclusions of the consensus differ from Stern’s. Robert W. Fogel writes, “The environment is considered to be important, but it is not yet time to do anything massive about climate change. But with continued research and development (R&D) it will be possible to address future catastrophes and climate change mitigation and adaptation.”

Vernon L. Smith concludes, “It is clear from both the science and the economics of intervention that those of us who care about the environment are not well advised to favour initiating a costly attempt to reduce greenhouse gases (ghgs) build-up in the atmosphere in the near future based on available information. Although the ultimate dangers may turn out to prompt action, the current evidence indicates that it is much too soon to act relative to the many other important and pressing opportunities that demand immediate attention.”

The group’s consensus is, however, that our knowledge of the problem and potential solutions will increase over time, so that they leave open the possibility of recommending action in the future. Nancy L. Stokey sums it up well: “Future decision makers will be better equipped to decide whether more aggressive action is needed.”

Is two more years long enough? Have we learned enough in the intervening period to give greater weight to Stern’s conclusions?

One other item that Stern notes is that he’s hopeful about the possibility of curbing climate change. “I’m optimistic – having done this review – that we have the time and knowledge to act. But only if we act internationally, strongly and urgently,” he says.

Stern puts the emphasis on acting internationally. “Unless it’s international, we will not make the reductions on the scale which will be required,” says Stern. Just what international organization is envisioned as the arbiter of global climate change policy? The UN? The WTO? Or some as-yet uncreated entity, a la the Kyoto Protocol?

In the review summary (PDF), Stern writes, “The UN Framework Convention on Climate Change (UNFCCC), Kyoto Protocol and a range of other informal partnerships and dialogues provide a framework that supports co-operation, and a foundation from which to build further collective action.”

Update: Arnold Kling adds some commentary on the report over at EconLog.

Futher Update: Not too surprisingly, an OPEC spokesman contends that the Stern report propounds “scenarios that have no foundations in either science or economics.”