Why resource-rich Africa remains poor

Many politicians and intellectuals insist that this continent’s pervasive poverty is a consequence of colonialism. Rather, it traces to this era’s politicians and intellectuals.

Former colonies feature prominently among the 21st century’s most competitive, and thus most dynamic, economies, whereas African nations often enjoy impressive growth spurts but these are typically provoked by unsustainable spikes in commodity demand.

While exceptional political leadership is required to transform a low-income country’s commodity wealth into broad prosperity, resource abundance tempts rampant patronage.

Only Ethiopia and Liberia avoided the 1880s European colonisation known as “the Scramble for Africa” which has now been over for nearly as long as it lasted. Conversely, the Middle East was part of the Ottoman Empire for more than 400 years, and this colonial era ended just over a century ago. Colonisation cannot explain why that region is becoming so much better positioned than Africa to sustain impressive middle-class growth.

LEADERSHIP

Geography outweighs geology, yet development is mostly about governance. Many Middle Eastern business cultures were shaped by trading traditions reflecting the region’s position at the intersection of three continents. It was only in the last century that the region’s most significant resource deposits were discovered — and only in recent years was their long-term value seriously compromised by environmental concerns.

Sub-Saharan Africa has been far less conducive to trading. Most communities in this isolated region have always focused on producing low-value, bulky grains while being clustered far from oceans or navigable waterways.

No Middle Eastern country benefits from a constitution as robust as ours, yet many of that region’s leaders are choosing to transform their economies through global integration.

Geographic isolation from a hyper-integrated global economy undermines Africa’s prospects while often helping to embolden and entrench devious leaders.

Possibilities for creating a predominantly middle-class society have never been better. Yet the nonnegotiable has become trading with nations that have the broad purchasing capacity that only wealthy countries with a large affluent middle class can provide. Conversely, exporting commodities creates few jobs while encouraging patronage.

Today’s economic momentum stems from disruptive innovations alongside a broad shift to services-led growth. As countries overly reliant on commodity exporting will remain laggards, many Middle Eastern leaders have recognised that they must develop their young workers’ productive capacity while integrating them into global supply chains.

Sub-Saharan Africa’s transition path is impeded less by its colonial experience than its historical isolation. Yet, as the global economy becomes increasingly integrated, services-based and digitally driven, distance becomes less commercially relevant.

EXPORTS

Countries of the Global South individually and collectively lack sufficient purchasing power to sustain healthy growth. Even East Asia’s vibrancy remains reliant on exporting to the West. Thus prudent Middle Eastern leaders are seeking to transform their economies from overreliance on commodity exporting towards reviving their traditional roles as intercontinental traders.

While isolationist policies appeal to patronage-focused leaders of commodity-exporting nations, they devastate prospects for young adults. SA’s ultra-elevated and deeply entrenched youth unemployment follows from localisation and other anticompetitive policies.

Conversely, the Abraham Accords signalled an unequivocal break with the past for five forward-looking Middle East countries. Meanwhile, China, India and the EU are advancing major trade corridors through the Middle East and northeast Africa.

Generalisations should be avoided, yet key shifts merit attention. Until recently it would have been hard to argue that Middle Eastern leaders were significantly more committed to spurring broad upliftment than their African counterparts.

Africa is home to nearly 80% of the world’s extreme poverty, and its share continues to grow. To reverse this dire trend this region’s leaders would need to pivot from patronage towards emphasising productivity, competitiveness and global integration.

Just as the UK, Japan and the United Arab Emirates provided playbooks for their regions to achieve sustained high growth, SA should have provided economic leadership for this region. Instead, the governing ANC’s embrace of patronage has induced the world’s most dire youth unemployment crisis. This corroborates our governing party’s willingness to subordinate citizen wellbeing to party priorities.

INTELLECTUALS

From Harvard to online talking heads, today’s intellectuals are predominantly biased critics who, while feigning to be above-the-fray, know-best commentators, routinely sidestep the trade-offs central to advancing solutions. They more frequently promote victimhood than illuminate possibilities.

Instead of university and media elites helping their audiences to appreciate how advancing the greatest good can best be balanced with prioritising the interests of those who are least well off, they programme students and adults to see nearly all issues within an oppressor-oppressed context. Whether they are advocating for a cause or seeking to advance a political agenda, today’s intellectuals emphasise judging while rarely showing interest in exploring solutions.

Instead of this year beginning with a focus on workable peace plans for Gaza, such as the outline proposed by Egypt, Gaza’s respected Arab neighbour, the African nation most distant from the horrific conflict managed to direct the world’s attention to judging. People wearing wigs have been debating legal definitions and points of law.

SHOWMANSHIP

What sort of person sees a building on fire and rushes to call a gang of lawyers? There are few, if any, realistic scenarios where Gazans benefit from the showmanship on display at the International Court of Justice. Instead, under most plausible scenarios this legal circus will extend their suffering.

The Egyptian leaders are right to focus not on judging, but rather on how a lasting peace can be achieved.

They, like the leaders of most Arab nations, appreciate that Hamas must not rule Gaza.

For millennia Jews and Arabs have done business together the oldfashioned way, by building trust. And despite their citizens’ inflamed anger, leaders of future-focused Arab nations still desire normal relations with Israel.

Such “unpopular pragmatism” is necessary to advance the interests of the region’s many underemployed young Arabs. Conversely, Hamas’ politics and provocations spotlight this era’s stoking of oppressor/oppressed narratives to fan racial hatred.

SA should have been to Africa what the United Arab Emirates has been to the Middle East. Instead, Africa’s potential remains poorly developed.

MANY MIDDLE EASTERN BUSINESS CULTURES WERE SHAPED BY TRADING TRADITIONS REFLECTING THE REGION’S POSITION AT THE INTERSECTION OF THREE CONTINENTS