Dec 10, 2007

Recent Themes Roundup

by Laura Starita

We typically don’t do “weekly highlights"-type posts, but there has been a spate of recent stories covering some of Philanthropy Action’s recurring themes—business development in sub-Saharan Africa, food policy, and effective giving—which we thought worth reading.

Business Development

Just after our recent post about “cheetahs”—George Ayittey’s term for the emerging entrepreneurs of Africa—Business Week ran a cover story titled “Can Greed Save Africa?” The piece examines several entrepreneurial companies on the continent that are attracting international capital, and highlights the growing competition among hedge funds and other investment firms for investment opportunities. The article also touches on the challenges to sustainment faced by the current African boom: the fickleness of international capital, the impact of a commodities crash and the need for more efficient goods and capital markets.

On a more technical note, The Bread for the World Institute examines development data for Africa and exposes the uneven growth rates among different countries south of the Sahara, a dynamic which can be easily missed by just looking at summary statistics for the entire continent. In a blog post, the contributors break down the latest World Bank figures for growth in Africa and separate the continent into three groups: those with the fastest growth which are
almost entirely dependent on oil, those with moderate but diversified (and thus potentially sustainable) growth, and those that are falling behind. They say their taxonomy closely follows the one used by Oxford Economist Paul Collier in his book The Bottom Billion. Unfortunately they don’t tell us exactly how many countries, and which ones, are in each group.

Food Policy

This week’s Economist cover story focuses on rising world food prices and the food policies that have helped create widespread distortion in agricultural markets. One of the reasons that the food supply is not meeting current demand is long-term subsidies for farmers in the developed world have contributed to reduced production in the developing world, especially in sub-Saharan Africa. The Economist points out that the rising prices (and consequent increased income for farmers) present a unique opportunity to reform farm aid to everyone’s benefit. Yet many countries are responding with price controls instead.

Chris Tomlinson, the AP reporter who recently wrote about economic growth in Africa, follows up with a story about the impact of American agricultural policy told through the eyes of a Kenyan and Iowan. The story points out, as Celia Dugger of the New York Times did recently, that many sub-Saharan African countries are abandoning the economic policy orthodoxy of the last decade and re-instituting subsidies on fertilizer and improved seeds.

Effective Giving

The Wall Street Journal has its annual Philanthropy report out today. While there is generally little to distinguish it from all of the
other year-end reports (or from last year’s report for that matter), the Journal’s Wealth Report blogger, Robert Frank, does have a post about Philip Berber and charity’s failure to understand the “new” wealthy donors. Philip and Donna Berber were among the 10 effective philanthropists recently highlighted by Barron’s. Mr. Frank cites the declining charity-participation in surveys conducted by the Wise Giving Alliance as an example of charities’ not understanding how important results are to these new wealthy donors. Yet it seems more likely that the reason fewer charities are responding is because there is no payback: donors for the most part aren’t paying attention to whether a charity is effective or not. So it’s not just charities who are not paying enough attention to results—donors aren’t paying enough attention either.

Business Week: Can Greed Save Africa?

Bread for the World Institute: Out of Africa—Some Good News

The Economist: The End of Cheap Food
Cheap No More

ABC News: Farmers in Africa, West Rethink Subsidies

Wall Street Journal: Philanthropy Report
Why the Rich Are Losing Trust in Charities