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Africa Within a World in Transition

Posted on Nov 6, 2013 in Development, Featured, Infrastructure, Politics

Africa Within a World in Transition

The world is indeed in the throes of one of the most profound transitions in history. Not only do technological and economic changes have world-embracing effects, but also the prevailing socio-political dynamics has no historical precedence. This is not to say that in the past the world has not had periods of deep and game-changing transitions. For example the advent of industrialization in the 17th and 18th century culminated in the dawn of a new world order in which the West emerged as a dominant economic, military and colonial power. The ancient civilizations of India, Africa, China, Ottomans and Persians were subjugated for a few centuries to come. Yet in comparison with the contemporary transformative forces, the industrial revolution had limited reach and its impact was slow.   The many forces of contemporary transformation in human and social life may be broadly divided into two categories. One group tends to integrate socio-political, economic, and cultural life across regions and continents. Such integrative forces tend to narrow the gaps across communities and nations, build bridges within and across cultures, and create rising levels of social capital even in the midst of very diverse and segmented groupings.  The emergence of a global and fully integrated financial market is a case in point. Within the socio-political arena, the rise and growth of “borderless associations” such as ‘doctors without borders’, or ‘environmental activists without borders’ (Green Peace), and the like are all but part of the same dynamics.   The other category of forces is inherently disintegrative. Whether in socio-political arena, or within the religious, cultural or economic sphere, such forces are inherently disruptive and conducive to the spread of mistrust within human communities. More often than not, such forces are driven by historic and failed ideologies of narrow self-protection and deep-rooted fear of “otherness”- I call this “otherphobia”.   At present, the integrative and disintegrative forces are at play in every land simultaneously. Interestingly, modern communication technologies and social media platforms have facilitated the spread of both these forces and processes. Access to the worldwide web in real time across the globe, the international availability of technology nearly in all sectors, and the rising awareness of what is possible, viable and desirable, have helped create a variety of new communities- mostly virtual. Such virtual and deeply connected communities are a real threat to the establishments across the world. Globally, financial, economic, cultural, religious, social and political establishments are vulnerable to attacks by these virtual communities.   Fairness and transparency, accountability and value-consistency appear to be the watchwords of the majority of these emerging virtual movements worldwide.  Increasingly, to them the national boundaries and the conventional sovereignty considerations are of little importance.   In this milieu, Africa is facing a multi-layered challenge. The continent’s economic growth has taken roots for the first time, and all indications are that industrial diversification could lead to sustainable growth. Yet on many other fronts the continent is struggling to establish institutions that are the effective conduits for channeling growth into social development and human welfare. Far too often, the post-colonial political establishments clash with the emerging social quest for accountability and transparency. A few exceptions aside, political institutions on the continent are largely extractive by nature. This means political leaders regard the machinery of the state as a means of self-enrichment and control. This, of course, they do in the name of sovereignty and political leadership. Legal and judicial institutions are equally and far too commonly bureaucratic, slow, and at time politically compromised. Economic and financial establishments are likewise typically dismissive of social and environmental care. Often...

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Modernizing Food Security in Africa

Posted on Nov 6, 2013 in Development, Featured, Infrastructure

Modernizing Food Security in Africa

One of the glaring ironies of Africa remains food insecurity and hunger in the midst of plenty. The continent has plenty of arable land, much of it is not used for cultivation and whatever is cultivated it is done so, by and large, without modern technology for production and with little, if any, consideration of optimal financial structuring for the farmers and for the society at large. Consequently, in effect when it comes to food security, much is left to chance and too many risks are unmitigated. Of course, commercial farmers on the continent do the best they can to insure against some of their risks. Te private sector insurance against agriculture is, however, known to be an incomplete market, it is as such inadequate and sub-optimal for meaningful risk mitigation in the sector.   Food security has a substantial ‘public good’ dimension. When droughts, floods, and disease wipe out production, the farmers do suffer, but so does the society at large. Food shortages and sharp price increases are hard to manage for most in the society. Significantly, in the process, the poor suffer the most- many of them go hungry. Widespread malnutrition and even death do obtain. More often than not, socio-political instability also follows.   Given the continent’s rapid growth over the past decade, and in view of the expected rise in living standards, it is a fact that food consumption is set to rise considerably and consistently. Meanwhile, worldwide food production has not kept pace with the acceleration in demand arising from the rapid increase in the standard of living of the population in the emerging economies. In South East Asia alone, an estimated one billion people have joined the rank of middle class with vastly different levels of food consumption. Africa’s own middle class is rising too. It is not surprising that access to land and investment in agriculture activities are in vogue again. On the continent there is a growing scramble by foreign investment houses for arable land. This has raised some socio-political concerns too. Given the history of colonialism and land dispossession, this is understandable.   Mitigating the various risks in food security in Africa requires a number of interventions, amongst them three are the most critical. First and foremost is the clarification of land use regime. Whether in the form of private ownership or via long-term lease arrangements, the commercial use of land requires socio-political and legal clarity.  Second is the application of modern production techniques and the promotion of sustainable institutional structures for ongoing research and development in the complex field of food and agriculture technologies. The third, and a vital, element is the use of appropriate public-private partnership to put in place an effective,efficient and sustainable crop insurance system.   Worldwide, crop insurance has, conventionally, been perceived as a private sector activity and as such left to the insurance market to provide solutions. And, the insurance industry has provided some solutions too. However, the existing solutions are, by and large, inadequate and do not take care of the public good dimensions of food security and agriculture production.   From a national and social interest perspective, crop insurance should be designed as a package of private and public risk mitigation solution. Internationally, there is a growing awareness that the existing private insurance market solutions are not effective. At the same time, governments’ support of the agriculture sector is often in the form of drought relief or some or other disaster relief interventions. These governmental schemes are typically neither timeous nor efficient. As such the combination of both private sector insurance and...

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SA Quagmire Plunges the Rand

Posted on Nov 6, 2013 in Economy, Featured, Infrastructure

SA Quagmire Plunges the Rand

On May 30th, soon after President Zuma addressed a hastily arranged press conference to deal with South Africa’ falling foreign exchange value, the currency plunged by another 2% breaking through the key level of 10 rand per US dollar- trading at R10.07/US$ at the time of writing! That was a shock to the economy and a culmination of a process questioning the president’s leadership and his approach to the complex issues of macroeconomic management. Whilst the President’s speech did not cause the rapid fall in the currency value, his cabinet’s inability to deal with the sophisticated structural issues of the SA economy has been the root cause of the steady decline in the value of the SA currency over the past few years. Despite the unprecedented and colossal “quantitative easing” in the global financial markets, the SA currency today is over 30% cheaper than when the Zuma administration took charge. In effect, in global currency terms, South Africans collectively are at least 30% poorer today than two years ago, and their average welfare has fallen accordingly.   The SA rand has been sliding for the past few years, after recovering from its rapid depreciation in 2009 which followed the sharp contraction in economic activity due to the global “great recession” of 2007/2008. The primary technical factor contributing to SA currency depreciation has been the steady fall in the country’s export earnings. In addition to the unfavourable global economic conditions and the fall in the price of commodities, the SA economy has been shackled by an interrelated set of structural bottlenecks. The shortage of energy, inadequate rail and export logistics and a perilously inefficient, and at times corrupt, public sector have combined to undermine the export sector and its ability to secure foreign earnings. Meanwhile, imports, especially those items needed for country’s infrastructure expansion programme, have continued apace. Consequently, a growing gap has emerged in the current account of the balance of payments, exceeding 6% of the GDP. In the recent past the shortfall in balance of trade was made up by the constant inflow of capital into South Africa’s equities and the bond markets.   The political economy events of the past year, however, have weighed heavily on the propensity of the domestic and foreign institutions and investors to buy exposure to South Africa and hence on the currency market. To begin with, over the past few years we have had a rising level of social discontent due to the government’s inability to deliver quality services to the communities. The average number of daily service delivery community protests has risen sharply and steadily over the period. In August 2012, a mix of labour relations issues within the mining sector, ultimately led to the tragic massacre of 44 mine workers by the police at Marikana. This marked the beginning of an ongoing violent disruption within the mining sector.  As the GDP contracted and tax revenues declined, the government’s fiscal position in the meantime deteriorated. This aggravated a pattern which had been building up since 2008. These trends together with a steady decline in the overall confidence level within the economy culminated in October 2012 of the first ever downgrade of the country’s sovereign credit rating since the inception of the new democratic dispensation in 1994.   This vicious circle of political economy trends was further exacerbated by the ongoing infighting within the ruling Tripartite Alliance (ANC, COSATU and SA Communist Party). Meanwhile, the continued workplace disruptions in the mining sector, and to a lesser extent within the agriculture sector, undermined production and exports. General business confidence was gradually eroded and...

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University of Pretoria Public Lecture on the Bahá’í Faith

Posted on Nov 6, 2013 in Ethics, Featured, Spirituality

University of Pretoria Public Lecture on the Bahá’í Faith

On 14 March 2012, Iraj Abedian delivered a public lecture at the University of Pretoria entitled: “Social Development and Religion: A Bahá’í Perspective”. The lecture had been organized by the Dept of Theology of University of Pretoria. All theology students were obliged to attend as it was part of their academic curriculum.  In addition other interested individuals were free to attend. The lecture was publicized on the university campus. In addition to the students from theology, political  science and sociology, the following high ranking university academics also attended the lecture:   Professor  Johan Buitendag, The Dean of Theology, Prof. Antony Melck, Executive Director of the University of Pretoria, Prof.  Niek Schoeman, the Dean of the Faculty of Economics and Management Sciences, Prof. Maxi Schoeman, Head of Dept of Political Sciences Prof. Alfonso Groenewald, Dept of Theology;   Counsellor Christopher Songok together with NSA member Mrs Freshteh Samadi were present too. Also present were two members of the LSA of Tshwane, as well as Miss Khwezi Fudu of Bahai Diplomatic Office of the External Affairs Directorate. Members of Pretoria University’s Bahai Students Association as well as some Bahai students from Wits University participated too. All in all, an estimated 600 people were present at the public lecture. The lecture explored the role of religion in the progressive evolution of socio-economic development on earth from a Bahai perspective. Explicit references to the Bahai Faith, its theological and socio-economic teachings were made right through the lecture.  The analysis presented argued that “….in nearly all spheres of human activity the dominance of the materialistic approach has caused systemic distortions with deep social, political and economic impact.” The reality is that : “The debate about religion in the public sphere, however, has been driven by the voices and actions of extreme proponents on both sides — those who impose their religious ideology by force, whose most visible expression is terrorism — and those who deny any place for expressions of faith or belief in the public sphere. Yet neither extreme is representative of the majority of humankind and neither promotes a sustainable peace”. The lecture concluded that: “Clearly, humanity stands at a crossroads of convergence or divergence between religion and social development. From the perspective of the Bahai scriptures, the concurrent transformation of the individual, the institutions, and the society is vital for the effective and constructive processes of social development. In this process, religion has a pivotal role to play.”   As part of their academic programme, all 250 theology students were expected to write a short ‘project report’ on the Bahá’í Faith based on the lecture. A short write up on the lecture is posted on the website of the university of Pretoria’s Theology Dept at the following URL address:   http://web.up.ac.za/default.asp?ipkCategoryID=4721&ArticleID=10564 The full transcript of the lecture is available from the National...

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Modern Societies and Ethical Values

Posted on Nov 6, 2013 in Ethics, Featured, Politics

Modern Societies and Ethical Values

Nowadays, the world over, a tangible and troubling rift has emerged between the prevailing socio-economic ‘formal (professed)’ as opposed to ‘informal (practised)’ ethics. For example, in the business sector business executives and corporations formally subscribe to the ‘codes of good corporate governance’. Their annual ‘glossy’ reports are decorated with “impressive evidences” of their socially responsible citizenship. Yet operationally they do not hesitate to collude and/or abuse their market powers. The current “horse meat saga” in Europe and its counterpart in South Africa are cases in point. The conduct of global bank executives in Europe and North America since 2008 has left little doubt about their lack of ethical values. Ironically, their corporations, and hence their shareholders, have been convicted to pay billions of US dollars in penalties. Evidences of price fixing amongst pharmaceutical companies, construction companies, cement manufacturers, bread producers and steel manufacturers have been high profile cases over the past few years in South Africa. Sasol, South Africa’s most celebrated petrochemical corporation, has been heavily fined, both locally and internationally in the EU, for its extensive anti-competitive practices. The country’s banking sector is also accused of malpractices and a report in this regard is yet to be made public by the Competition Commission. The banking sector is alleged to be exerting every pressure to halt its publication. The cellular phone companies are likewise accused of collusion to fleece the consumers in South Africa. There are also allegations against tyre manufacturers in the country, and so on….. South Africa is by no means an exception! The gap between the formal and informal ethics within the government sector is even more pervasive and pronounced. Frequently, government ministers and departmental executives espouse ‘global best practices’, and yet operationally in their organizational and managerial behaviour there is little evidence of the values, standards, or practices that conform to their formal statements. Whilst the political leaders often express commitment to serving the people, the experience of the citizens speaks of a contrary and divergent conduct.  Duality of the values is equally prevalent in labour unions, the media sector and other social structures and organisations. In the recent past there has emerged much publicized and high profile global cases of value duality within the institutionalized religious establishments too. Sporting personalities and organizations likewise have been proved to be polluted by value inconsistencies. Pervasive duality of values within the society leads to a vast array of social ills. The most visible of these is the spread of corruption in both the private and the public sectors. Disturbingly, the prevalence of corruption is no longer a phenomenon confined to any particular continent, region, country, culture, religion or developmental status of the society. There are convincing and growing evidence that the facts as well as the allegations of corruption in the society have gradually tarnished the internal and external perceptions of the state operations as well as the political authority of the governments. As a result, social trust in governments has been considerably undermined.  Whilst the economy and the society at large suffer the consequences of widespread corruption, the poor within the society bear the brunt of its impact. After all, the poor are far more dependent on the performance of the public sector. The growing gap between the rich and the poor over the past decade is in part due to the growing spread of corruption, and more broadly the duality of values, across all sectors and spheres of the economy. The duality of values has been accentuated by the processes of socio-political globalization. In general, it is much easier to create convergence of values in...

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Normalizing Economy Facing Geopolitical Risks

Posted on Nov 6, 2013 in Economy, Featured, Infrastructure, Politics

Normalizing Economy Facing Geopolitical Risks

Five years after the ‘great recession’ of 2008, the global economy is showing the early signs of ‘back to normality’. Chances are that 2013 will mark the tipping point. Normalization in common economic jargon means a global economy which is growing at or around its long term growth path and is subject to cyclical variations together with regional divergences in economic performance. Clearly, the global financial and banking crisis is by and large over- thanks to the gigantic bail out by many governments and central bankers. The housing market is also gradually returning to normality. Even the EU political debacles surrounding the euro and its associated political economy issues appear to be managed down. Predictions of the EU split have proven no more than false alarms or hasty predictions by those who have clearly under-estimated the collective intelligence and commitment of the European leaders to stay the evolutionary course of their political integration.  Whilst the banks are back in a fairly sound financial status, the same could not be said about their respective governments. In many countries, financial interventions by governments have left the national fiscus in fairly vulnerable state- that is if not already bankrupt. Countries like Ireland, Spain and Portugal are in dire fiscal conditions, whilst UK, USA and France teeter on the verge of fiscal vulnerability.   All said and done, it is by now clear that since August 2008 the unprecedented measures taken by national governments and the central bankers, mostly in the OECD member countries, have averted a total global economic and financial collapse. This has been achieved, to a large measure, at the expense of the poorer groups within the society. Because when the government finances are short, it is the poor who ultimately bear the brunt of it, especially in the short term.  With job shedding in the public sectors and drastic cut back in public subsidies and welfare budgets, the societies experience all kinds of social tensions. Political leadership in such a milieu faces a major credibility deficit. Lack of confidence in political and social leadership in turn undermines the societal cohesion, destroying much hard-earned social capital.   On the economic front, one of the direct effects of the monetary policy stance has been a sustained low interest rate policy worldwide and a global capital market operating in a liquidity trap.  Such prolonged configuration has many political economy side effects, two of which merit special attention. One is the rise in speculative activities diverting resources from real economic enterprises. Consequently, constructive and job creating ventures are substituted by financial transactions that offer high short term return on capital.  Predictably then even when economic growth is registered, the level of employment creation is either stagnant or at a much lower scale. Whilst this is a worldwide phenomenon, for the emerging economies it entails profound socio-political risks. Some of the emerging economies may even find the consequences too problematic- politically speaking. In such conditions, countries such as Argentina, Russia, South Africa, India and Nigeria are in danger of degenerating from an emerging economy status to a “sub-merging” state, however gradual it might be. The second, and as concerning, effect is the rapid rise of income inequality at both national and global levels. The combined effects of these development lead to socio-political instability.   Globally, regional economic performances are bound to differ considerably. As economic normalization takes root, it is more so that regions with better and superior fundamentals will begin to benefit more and perform at a higher sustainable growth levels. Paying attention to the basics of adequate infrastructure, governance institutional integrity, policy...

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