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. Last Updated: 08/21/2014
Strategic Sense: Ian Pryde, founder of Eurasia Strategy & Communications, analyzes government and corporate strategy on his “Strategic Sense” blog and offers solutions when policies aren't working. 
<br />
 He has written for the Economist Intelligence Unit, Business Monitor International, the Royal Institute of International Affairs, the Cambridge Review of International Affairs, RIA-Novosti and, in Russian, for Gazeta.ru, Novaya Gazeta and Finansovye Izvestia. 
<br />
 He also has appeared on Russian radio and worked on projects for companies such as Yukos, Rosneft and Basic Element. He has native fluency in Russian and German.

Africa and Russia: Victimhood vs. Empowerment?

By Ian Pryde

In his writeup of this year's gathering of politicians and businessmen in Davos ("Complacency in a Leaderless, Multipolar World," The Moscow Times, Feb. 12, 2013), Nobel laureate in economics Joseph Stiglitz quotes with apparent approval a development expert who claimed that "The West never had any moral authority."

Stiglitz goes on to explain that "colonialism, slavery, the splintering of Africa into small countries and a long history of resource exploitation may be matters of the distant past to the perpetrators, but not so to those who suffered as a result."

The view that the West is to blame for all the ills of Africa, and indeed the rest of the world, is astonishingly widespread in Western Europe and North America but hardly stands up to scrutiny.

The last 40 years have seen a constant stream of books, films and TV series in the West about the insidious practices of slavery and colonialism or highlighting racial and ethnic tensions. A few examples include "Amistad," "1492:Conquest of Paradise," "Passage to India," "The Jewel in the Crown," "Gandhi," "The Far Pavilions," "Out of Africa" and "The English Patient." Films such as Mel Gibson's "Apocalypto," which show the sheer viciousness of the supposedly idyllic life of traditional societies and tribes before the nasty Europeans arrived, are of course much rarer.

"The splintering of Africa into small countries" is also at odds with the facts. Many African countries are indeed small, but Africa boasts 17 countries larger than mainland France, Europe's biggest country by area excluding European Russia and Ukraine. In any event, small countries are no bar to wealth, as Switzerland, Luxemburg, Singapore and Norway prove — and the last two are former colonies themselves! True, borders often cut across tribal lines, but sub-Saharan Africa mostly lacked the institutions such as centralized states necessary for modernization and industrialization anyway. In the Former Soviet Union, the three small Baltic countries of Estonia, Latvia and Lithuania are law-based states with much higher per capita incomes than Ukraine. And how would Russia and Kazakhstan fare without their commodity exports?

The claim of resource exploitation — presumably by Western colonial powers and rapacious companies — is also rather odd now that China is copying Britain's trick of "building the railways in India" and providing infrastructure in Africa to gain access to the raw materials it needs for its breakneck industrialization. Africa might still not be moving up the value chain as quickly as it could, but this is no longer anything to do with colonialism.

As for Russia, it has not been a colony since it evicted the Mongols in the Middle Ages, and indeed expanded into a huge empire itself. But it too is finding it hard to move up the value chain and is a keen exporter of energy, metals, timber and, weather and good harvests permitting, grain — while at the same time complaining that "they only want our oil"! The conspiracy theorists never ask if that's the case, why didn't the West invade when the Soviet Union and Russia were on their knees instead of sending trainloads of humanitarian assistance? Most Russians have of course completely forgotten all about the charity drives and phone-ins held across Europe to help Russia.

Far worse, though, is that Stiglitz does Africa a great disservice by playing into the sense of victimhood which has long debilitated the continent rather than empowering it. As a result, he dwells on past wrongs, but offers no solutions to Africa's current problems.

Britain, for instance, abolished the slave trade throughout the empire over 200 years ago, in 1807, and yet Stiglitz is curiously silent about the huge numbers of people, including children, still living in slave-like conditions of forced labour and prostitution in Africa and Asia — estimates range from 12 to nearly 30 million. Other practices in Africa which also frequently hit the headlines but are difficult to pin on the West range from female circumcision to the persecution of albinos.

One of the biggest paradoxes about Russia — and a huge difference with Africa — is that as a former empire it combines a deep sense of entitlement expressed in its attempts to reassert itself as a great power and its desire for global recognition and respect with an equally deep sense of victimhood, especially in recent years. Russia's centuries-old schizophrenia about its identity continues to hamstring the country. Similar confused views about victimhood and power are prevalent in India and China too.

Stiglitz also fails to mention the rampant corruption of many African elites since their countries gained independence and their refusal to criticize other African leaders guilty of egregious human rights abuses.

In short, the comment of the Indian historian Romila Thapar during a recent BBC interview applies with equal force to Africa: "The promises of independence have simply not been met."

Russia too has been disappointed since gaining "independence" on the breakup of the Soviet Union: the country's pro-western stance and dreams of its instant transmogrification into a consumer society and advanced western-style democracy have long since been forgotten. Like many "victims", Russians tends to blame everyone but themselves for their problems — including fifth columnists at home.

Stiglitz presents a dismal, deterministic view of the continent's past, present and future. Because Africa's past was so bad, the continent can longer no reach escape velocity. This view, called path dependency, is held by many economists and sociologists, but it is flat wrong. Fortunately, not all Africans share this western pessimism and instead are just getting on with it.

Africa's per capita GDP has risen by one third since 2000, albeit from a low base. As of late 2012, the IMF expected sub-Saharan Africa to have grown by 5 percent in 2012, when 4 of the 10 fastest-growing economies in the world were African. Chinese investment is indeed improving infrastructure and developing manufacturing, while a rising African middle class is demanding better governance and a number of countries have been implementing better policies, in some cases for decades.

The Kimberley process begun in 2000 was meant to end the trade in conflict diamonds which fueled civil war in several African countries, but Botswana, which has some of the best diamond mines in the world, boasts a 15 percent stake in De Beers, a budget surplus, the highest credit rating in Africa and a very respectable per capita income of $16,800 in 2012, placing it firmly in the ranks of the middle-income countries. Botswana expects growth of "only" 5.9 percent in 2013, down from 6.1 percent last year, although unofficial estimates put unemployment at close to 40 percent. The biggest blight is that the country's HIV/AIDS rate is the second-highest in the world.

But Botswana shows what can be done if governments are ready, willing and able to pursue fiscal discipline and sound management, a course it has followed consistently since gaining independence in 1966.

Russia, on the other hand, still suffers from its heavy dependence on energy exports, which has actually increased since 2000. The economy's narrow base meant that during the financial crisis, GDP fell by 7.9 percent, the biggest drop among the G20.

In recent years, modern technology has helped Africa to modernize and overcome many of its structural problems. Mobile telephony has allowed many parts of Africa to leapfrog the lack of fixed lines, link up villages with each other and larger towns, develop small and informal businesses and provide banking services to first-time account holders.

Parts of Africa are also reducing trade barriers and revitalizing their colonial railways and investing in new lines, which should help move food and freight and reduce transport costs.

The upshot is that both direct and portfolio investment are increasing. In IT, global giants such as IBM, Microsoft and Google are expanding their presence in Africa. Microsoft has offices in 14 of Africa's 54 countries, while IBM has offices in over 20, including a research laboratory, one of 12 it maintains worldwide. In January, Google CEO Eric Schmidt said that Nairobi had emerged as a serious tech hub. Broadband, big data and the cloud are all expanding and fibre-optic cables being laid.

International inflows into African equities are at a two-year peak as international investors seek higher growth opportunities than those to be found in the developed countries, although African stock exchanges remain small and often only list one or two large companies. Investors are therefore hoping for state companies to be privatized.

Despite its huge problems of disease and poverty, Africa is more dynamic and empowered than western observers stuck in the past realize.

The paradox — and the tragedy — of Russia is that on "independence" in 1991, it was far better off than Africa. But as Russian experts themselves concede, it has actually gone backward in its educational, scientific and technical levels and achievements and is being rapidly overtaken by its former pupil China. The  Institute of Contemporary Development, a think tank set up by then-President-elect Dmitry Medvedev in 2008, has pointed out that Russia's modernity is all imported.

So while many economists are upbeat at least about some parts of Africa, it is much harder to find optimistic views on Russia, despite the country's huge potential.
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Ian Pryde, founder of Eurasia Strategy & Communications, analyzes government and corporate strategy on his “Strategic Sense” blog and offers solutions when policies aren't working. He has written for the Economist Intelligence Unit, Business Monitor International, the Royal Institute of International Affairs, the Cambridge Review of International Affairs, RIA-Novosti and, in Russian, for Gazeta.ru, Novaya Gazeta and Finansovye Izvestia. He also has appeared on Russian radio and worked on projects for companies such as Yukos, Rosneft and Basic Element. He has native fluency in Russian and German.

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