Monday, December 18, 2006

More About STI and the Least Developed Nations

My friend came back after my last posting, and asked for a few clarifications. Here they are in Q&A Form:

Question: THE OBJECTIVE--APPLYING STI TO REDUCE HUNGER, DISEASE, AND POVERTY--SEEMS TO BE AT THE HEART OF MOST STI-FOCUSED AID FROM DONORS ACROSS A WHOLE SPECTRUM OF DEVELOPING COUNTRIES. THE QUESTION I'M STRUGGLING WITH IS HOW THAT OBJECTIVE IS RESPONDED TO DIFFERENTLY IN THE LDC CONTEXT.

Answer: I suggest that you think of governance of the donor agencies when you consider their objectives. The bilateral agencies respond to their governments, and those governments differ among themselves. They all can get support for humanitarian interventions from their constituencies. Other priorities vary from donor to donor.

The United States government in addition to humanitarian objectives has been interested in geo-political objectives; cold war objectives have been replaced by counter-terrorism objectives, while the Middle East objectives seem to include both support for Israel and concerns for the supply of oil. There was recently a study that pointed out that U.S. aid was increased to developing nations when they got spots on the UN Security Council, and the aid dropped off again when they were replaced.

The Soviet Union, in the days of the Cold War, also based its foreign assistance on what its government perceived as its geopolitical interests. Some countries, such as those in Scandanavia, seem really interested in economic growth per se. The French and English have post-colonial interests, and the French seem to have a cultural interest in the Francophonie. Japan has been seen as especially interested in tying aid to its international economic affairs, and as focusing on an Asian sphere of influence.

The least developed nations have been seen as having relatively little geo-political importance to the great powers. They have been marginal to the global economy and do not have much military clout. Only in the last decade has it become obvious that the failed states constitute a refuge for terrorists who threaten the developed nations.

I don't think it is coincidental that some of the economically most successful countries in the past generation, such as Taiwan, South Korea, Chile, and Israel were seen as key nations in need of development for geo-political reasons, and that some of the countries that did worst such as North Korea and Cuba were seen by the large donors as nations that should be encouraged to fail unless they changed their governance.

Going back to the question of governance, I would suggest that the Development Banks such as the World Bank, the African Development Bank, the EBRD, and the Asian Development Bank are governed by their Boards. Their governors are elected as the result of a complex formulae, but ones weighted by the contributions of the donor nations.

On the other hand, WHO, FAO, UNIDO, etc. do what their general assemblies tell them to do, and those assemblies are dominated by the G77. Thus these UN agencies focus more on the needs and desires of the 50 least developed nations, since those nations constitute an important voting block. Even these agencies depend heavily on "voluntary contributions" which are controlled by the donors, rather than the dues paid by all member states.

Within the United Nations system, however, the donors exert more control on some of the agencies that do not have one-nation-one-vote governance. The UNDP and some of the other UN agencies that handle money seem, for example, to historically be run by directors chosen by and from the donor nations.

Question: IS IT THAT DONORS WOULDN'T TAKE A COMPETITIVENESS-ENHANCEMENT ANGLE WITH THEIR STI SUPPORT IN THE SAME WAY THAT THEY WOULD IN KAZAKHSTAN? OR IS IT THAT THE EMPHASIS IS SMALLER IN COMPARISON TO OTHER AREAS FOR SUPPORT?

Answer: Oil changes the balance, and Kazakhstan is energy rich! The natural resources make it important for Europe, Russia, China, Japan, and the United States. Turkey I suspect sees it as an important regional ally, including due to its use of a Turkic language. I think its placement as a secular, Muslim culture on the border of a region increasingly dominated by theocratic cultures will make it increasingly geo-politically important.

Kazakhstan, at the end of the Soviet era, had to rebuild political institutions and construct the institutions underlying a market economy, but it had many strong institutions as well. It had an educated population speaking a world language (Russian). With its natural resources providing a source of investment capital, and access to regional markets, it could fairly quickly begin to attract foreign direct investment, and the related infusion of technologies from abroad.

From the point of view of STI, Kazakhstan had at the end of the Soviet era some strong universities, and a network of Institutes of the Academy of Science. It had a world class space technology facility at Baikonur. As a nuclear power, and the home of the test site for Soviet nuclear weapons, it made some strong friendships by decommissioning its nuclear weapons. It will be interesting to see whether Kazakhstan can build on these elements and its economic prospects to develop knowledge based industries.

Question: OR IS IT THAT DONORS THINK MUCH MORE INSTRUMENALLY OR ALMOST INCIDENTALLY ABOUT STI IN THE LDCS--SCIENCE, TECHNOLOGY AND INNOVATION ARE TOOLS OR, PERHAPS, INTEGRAL PARTS TO THINGS LIKE HEALTH SYSTEMS, HIV/AIDS PREVENTION, ETC. STI CAPACITY BUILDING IS LESS THE GOAL AS ARE THE SECTORAL GOALS OF MORE FOOD, LESS DISEASE, MORE ROADS?

Answer: I think there is also an issue of the nature of the institutions in poor countries. Look at the Cultural Map of the World, and it is pretty clear that there is something different about the African nations verses the Confucian nations which is strongly related to economic performance and STI performance. I think it is not only human capital, but social capital that results from the nature of the institutions in the Newly Industrializing Countries (NICs).

Some years ago the World Development Report pointed out that at one time Ghana and South Korea had comparable economies, but their economic, industrial and technological trajectories were very different in the later 20th century. I think that the success of South Korea was very important to Japan and the United States after the Korean war, and that as a result of their concern South Korea had advantages (such as access to markets and foreign direct investment) that Ghana did not. On the other hand, I think there were political problems and economic policies in Ghana that were the result of Ghanaian culture and institutions that proved ruinous.

Many years ago USAID funded a project with Georgia Tech to develop industrial extension services aimed at small and medium enterprises. They worked in four countries. A post project evaluation indicated that the project had been wonderfully successful in Korea, and very unsuccessful in the Philippines. I think the difference was that Korea had policies and institutions that fostered rapid economic growth, and as a result there were incentives for technological innovation and improvement. In the Philippines there was not a comparable growth environment, and firms were much more passive technologically.

Question: THE GREEN REVOLUTION WAS CONSIDERED A FAILURE IN AFRICA, WHICH IS RIFE WITH LDCS. WAS THAT DUE TO A PARTICULAR NON-LDC BIAS THAT THE DONORS BEHIND THE GREEN REVOLUTION HAD? AND IF SO, IS THAT BIAS STILL WITH US TODAY?

Answer: The Green Revolution was based on dwarf varieties of rice, wheat and corn that needed fairly heavy inputs (fertilizer, pesticides, improved seeds, irrigation) to achieve high yields. The improved varieties worked where countries used irrigation, and did not work in Africa where grain production was rain-fed. I suggest that the irrigation was needed to reduce the risk of investing in the other inputs. If you spend a lot of money on fertilizer and chemicals, and there is a drought and you get no crop, you have lost a lot of money.

Africa also had war and terrible governance. Its economic policies favored urban consumers over rural producers.

But remember, China and India -- where the Green Revolution was successful -- were full of very poor subsistence farmers before their agricultural success stories. India was seen by many in the 1950's and 60's as a "triage" case that had to be left to periodic famine because it could never adequately feed itself. I don't think you can put the difference in success of improved crop varieties between India and Africa to donors favoring India and being against Africa.

Question: WHAT ARE THESE COMMUNITY KIOSKS? ANY INFO ON THEM YOU COULD SEND ME? A LINK, MAYBE?

Answer: The idea goes back to some of the early work from the World Bank by Bernard Woods and others. You set up a set of computers linked to the Internet in a community center. There are many ways to do so, and a growing body of information on the "business models" that allow them to be financially viable and to be staffed by people who will keep them working and open to the user community. A key element is of course to provide content so that there is something for the users to use, and to provide training so that they can do so.

But in those circumstances,
* producer-cooperatives can use the kiosk to find markets with good prices for their products,
* educators can download content for their classes and communicate with ministry of education offices for logistic support,
* health service providers can consult with experts on medical problems, report outbreaks of infectious diseases, and order supplies,
* land registration agents can file titles in regional and national depositories.
The list is endless. But the point is that sharing the facilities can result in a package of benefits that support the technology, even where a poor nation can not afford Internet connectivity in every cooperative office, school or health post.

Check Somos Telecentros or the Development Gateway list of telecenter links for a lot more information.

Concluding remarks: I think science and technology must play an important role in the development of the least developed nations. A key element in such a process is to improve productive technology in order to improve economic productivity. The least developed nations have agricultural economies based in subsistence production, and so it is important to increase the productivity of the subsistence farms. In part this is done by providing better seed and helping farmers to use that seed effectively. In part it is done by improving the infrastructure so that they can begin to participate in a market economy and can begin to benefit from modern inputs. And in part it is done by using science based approaches to understanding soils, water resources, crop pest problems, and crop diseases in order to help the farmer be more productive.

The humanitarian concern for basic educational and health services can also be seen as investing in human capital for the least developed nations, in the sense that these services will also help to improve the productivity of the work force. Thus innovations in public health technology and drawing on science-based approaches to better understand health problems provide double benefits -- both serving humanitarian ends and contributing to increased economic productivity.

Eventually, one hopes, the least developed nations will develop manufacturing industries and will also develop knowledge-based industries. But they will have to learn to walk before they learn to run. There are comparative advantages among nations, and the least developed nations do not have the institutions, the human capital, nor other factors now to compete with the NICs in manufacturing, nor with the most developed nations in knowledge based industries.

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