Culture, Development and Economy PDF

Culture, Development & the Economy The Issue of Exchange AK Awedoba: July, 2016  Outline of Lecture Culture and the Economy: the Case of Exchange - The GDP and per capita income mismatches - The resource curse - Corruption as bane for development - Case of Judgeme...

Culture, Development & the Economy The Issue of Exchange AK Awedoba: July, 2016  Outline of Lecture Culture and the Economy: the Case of Exchange - The GDP and per capita income mismatches - The resource curse - Corruption as bane for development - Case of Judgement Debts & Judicial Corruption - Transparency Indices; - The gift and its characteristics; Gift Taxation? - Bribery; - Transformations of gift culture;  Some Reading Collier, Paul , ‘How to reduce corruption’, The African Development Review, Vol. 12 (2), 2000. [see e-copy in Sakai course website] Ayee, J. R. A. 2002 ‘Political & Social Consequences of Corruption’ in Corruption and Development in Africa. Proceedings of a Seminar Organised by the Ghana Academy of Arts and Sciences with the Friedrich Ebert Foundation. Pp. 36-51 Chapt 4: Culture and Development: UGRC 220 text- book published by Inst of Continuing & Distance Education  Culture, Development and Economy Definition of culture or development is incomplete without reference to economy. Implicitly or explicitly, economy is implied in the definition of culture. Goods & services: food, shelter, clothing – necessities, and luxury/non-essentials. Production & consumption patterns. The MDGs, equally concerned with economic issues. i.e. eradication of poverty & hunger. - People needing to live on more than $ a day. - Employment guarantees But how well are African economies doing? Africa’s Share of World Total Production of Selected Minerals, 2005 (in percentages) Cobalt 57 DRC, Zambia, Morocco Diamond 53 Botswana, DRC, South Africa, Angola, Namibia Manganese 39 South Africa, Gabon, Ghana Phosphate 31 Morocco, Tunisia, Egypt, South Africa, Senegal Gold 21 South Africa, Ghana, Mali, Tanzania Bauxite 9 Guinea, Sierra Leone, Ghana Nickel 7.5 South Africa, Botswana, Zimbabwe Copper 5 Zambia, DRC, South Africa Source: Calculations from British and US Geological Services data  Other estimates of African Natural Resources Global land space 20.4% Cobalt 90%, Gold 50% Platinum 90% Tantalite 70% Chromium 98% Manganese 64% Uranium 33% Diamond 60% Phosphate 51% Proven Oil reserves 12% Natural Gas 10% The paradox of poverty in Africa: Williams Ofori Atta http://myjoyonline.com/opinion/2013/October-11th/the-paradox-of-poverty-in-africa.php  Agricultural Produce, etc. In addition to mineral wealth, Africa’s abundant land, rich vegetation, warm climate and soils hold potentials for agricultural production: Such as - Tropical food & cash crops: Cocoa, coffee, tea, rice, etc. Timber, and forest products. Tourism (eco tourism, cultural tourism. etc.)  The Curse: The Resource Curse Revenues from minerals and natural resources should provide funds for badly needed development, but instead have – - fuelled greed & state corruption, - Conflicts and disputes, - Environmental degradation, - Poverty, and violence. Rather than being a blessing, Africa’s natural resources have largely been a curse.  Comments: The African Resource Curse World Bank Report concludes that discovery of oil and mineral resources does little to improve prospects for poor people, whose lot may even worsen. Resource-rich countries ie Congo-Brazzaville, Gabon and Angola continue to see increase in percentage of the population living in extreme poverty. In fact, countries with considerable mineral wealth are theatres of conflict: Nigeria, Congo, Liberia, Sierra Leone, etc.  Features of the Ghanaian Economy Gross Domestic Product (GDP) $90.41 billion (2013 est.) GDP Per capita: $3,500 (2013 est.) Population below poverty line: 28.5% (2007 est.) Sectors of the Economy: Agriculture: 21.5% Industry: 28.7% Services: 49.8% (2013 est.) Labour force: agriculture: 56% industry: 15% services: 29% (2005 est.) Unemployment rate: 11% (2000 est.) NYEP/ GYEEDA to the rescue  Profile of Nigerian Economy GDP (ppp): $377.9 billion (2010 est.) GDP - per capita (PPP): $6,000 (2014 est.) Population below poverty line: 70% (2007 est.) GDP - composition by sector: Agriculture: 20.6% Industry: 25.6% Services: 53.8% (2014 est.) Labour Force Agriculture: 30% Industry: 32% Services: 38% (2010 est.) Unemployment rate: 23.9% (2011 est.)  Profile of Togo GDP (ppp): $10.14 billion (2014 est.) GDP - per capita: $1,400 (2014 est.) Population below poverty line: 32% (1989 est.) GDP - composition by sector: Agriculture: 27.6% Industry: 33.9% Services: 38.5% (2014 est.) Labor force: 2.595 million (2007) Labor force - by occupation: agriculture: 65% industry: 5% services: 30% (1998 est.)  Profile of Britain GDP $2.387 trillion (2013 est) Per Capita GDP $37,300 (2013 est.) Population below poverty line: 16.2% (2011 est.) GPD Composition Agriculture: 0.7% Industry: 20.5% Services: 78.9% (2013 est.) Labour force by occupation agriculture: 1.4% industry: 18.2% services: 80.4% (2006 est.) The Statistics of Unequal Development A country may have a high GDP and per capita income, yet many of its nationals live below poverty line. Wealth distribution is often skewed. – Many parents can’t afford education for their children. – Many people unable to pay for health services - hospital treatment. NHIS benefits the rich. – People begging openly for their daily bread. – Many are unemployed.  The Ghanaian CHRAJ Case While the per capita GDP of a Ghanaian is $3,500 (2013 est.) how many Ghanaians actually earn this? – Few. Many live on less than $3.10 pd or $1,131 per year. At the same time, the CHRAJ boss spends $4,500 per month or $54,000 a year on rent alone.  Face of State Corruption: Equatorial Guinea “Equatorial Guinea is the third biggest oil producer in sub-Saharan Africa. In terms of per capita national income it is - on paper - one of the world's richest countries. But most of the population lives on little more than $1 a day. Average life expectancy barely reaches 55.” President Obiang, in power for 33 years, is building a new capital at Oyala, in a remove region, etc. His son, Teodorin, has a six-storey Paris mansion, 12 luxury cars, home in Malibu, private jet and $2m of Michael Jackson memorabilia. He diverts tens of millions of dollars of state revenues into personal accounts. The Resource Curse: Why Poverty in the Midst of Wealth If gross inequalities impact negatively on development, then why should they exist? Many possible reasons. Mismanagement of the economy by Governments Policies don’t favour income redistribution; High levels of unemployment: Many people unemployed & therefore not earning reasonable incomes.  Some Reasons for Poverty Problems in the labour front (‘Workers pretend to work and governments pretend to pay ’) Lack of incentives for private and public production. Government priorities are misplaced. Unreasonable consumption habits: craving for foreign luxury goods rather than local ones. Tax regimes are inadequate: Govts not able to collect taxes for its programmes? The rich & powerful extorting from the poor. Heavy corruption - state and private and distortions.  The Issue of Corruption Anti-corruption campaigners argue that corruption not only impoverishes, it also kills: An estimated $1tn (£600bn) a year is being taken out of poor countries and millions of lives are lost because of corruption, … 3.6 million deaths yearly are blamed on corruption See ‘Corruption 'impoverishes and kills millions' http://www.bbc.com/news/world-29040793 2 September 2014. Accessed 3-9-14  Corruption: Meeting MDGs targets The discourse on development needs to address corruption. Many reasons account for failure to meet MDGs targets. While governments cannot escape blame, since they should create conducive atmosphere for attaining MDGs, citizens must also share blame for MDG failures. Corruption can be cited as reason for not attaining the MDGs, especially where it is pervasive and the country is in the grip of a culture of corruption.  Corruption an Everyday Issue Corruption is so important because of its remote and immediate effects on countries, communities, and individuals. There is therefore talk of corruption everywhere – on radio, TV, news- papers, in churches, private conversations, etc. High Commissioners (British) concerned about it. There is talk of ‘hand-go-hand-come’, ‘greasing the palms’, ‘seeing people in power, kalabule, judge- ment debts, causing financial loss to state, Anas Aremeyaw and the Judges, etc. Corruption is of concern in most African countries. Opinion on Corruption: We Are All Guilty The greatest problem facing Ghana today is corruption that has became a deep-seated menace in the minds of Ghanaians; it has even become a way of life to most Ghanaians from top government officials, politicians down to the lowest ranking civil servant. Most of the corruption by top government officials is perpetrated with the collaboration of a junior cashier who raises a bogus cheque and receives a paltry amount from the loot; oblivious of the fact that by that collaboration, he has denied his child, his family members and his community at large access to quality education or good health care.. http://news.myjoyonline.com/features/200910/36700.asp Thursday, 22 October 2009, 2:18 GMT The point is that there are no bystanders  What is corruption? It is malfeasance: an act lacking in transparency, a moral wrong; a crime against the public, the society and the individual; LOCAL CONCEPTS tell the story of corruption: Akan: proye implying that things have gone bad; ketasihye [kata ase hye]– lit. putting something under the mat); Nsisi (cheating), Ewidie (theft), kronnobo (theft) etc. Ewe: zanoxoxo, zanuðuðu and zanunana [zanu – night: nana gift]. It suggests things being given and received under cover of darkness. Those involve do not wish to be found out.  Checkpoint Corruption The Government of Ghana has been losing a whopping US$1,459,635.00 annually due to the corrupt practices of some uniformed officials at checkpoints along the Tema-Ouagadougou corridor. This was disclosed at a stakeholder's forum on the theme "Accelerating Economic Development through Improved Road Transport Governance" at Paga in the Upper East Region of Ghana http://news.myjoyonline.com/news/200910/36966.asp Updated: Wed., 28 October 2009, 4:16 GMT State Institutions Recently implicated SADA (Savannah Accelerated Development Authority) GYEEDA National Service Secretariat The judges caught on camera taking bribes CHRAJ (Commissioner spending on her personal comfort) Football Association DVLA and Photo-X: $3.6 ml becomes $9.9 ml  The Faces of Corruption Corruption can take various forms including: - Demanding, giving and taking of bribes; - Pursuit of personal gain: violation of laid down procedures for disbursement of public resources, e.g. awarding contracts to the wrong people; - Destruction of public assets to hide economic crimes. - Nepotisms & cronyisms – lodge brotherhoods, etc.; - Embezzlement /misappropriation of public resources. - Profiteering (kalabule), custom & trade malpractices - selling unwholesome goods – poisonous palm oil, etc.; - Journalists demanding ‘soli’ for news coverage.  Faces of Corruption II - Non-payment of taxes, duties, etc. w/out exemption. - Causing final loss to the state through negligence. - Incurring judge debts. - Electoral malpractices – rigging, multiple voting, etc.; Sundry abuses: exam malpractices, forgery, internet fraud, lateness to work, and malingering: not putting in a fair day’s work while claiming salaries / wages. Completing your lectures in a few weeks although it ought to take a semester. Even queue jumping in traffic, at the bank etc.  The Case of Judgement Debts “A total amount of GHȼ687.65 million was paid as judgment debts by the state between 2009 and 2011 -- equal to the budgetary allocation to agriculture in the three years. 80 percent of these judgement debt payments were awarded for breach of contract by government. The figure comes from the Auditor-General's Reports of 2009- 11, http://www.myjoyonline.com/business/2014/October- 27th/study-judgement-debt-payments-equal-size-of-agric- budget.php  Judgement Debts Scenarios Currently, Ghana is besotted with ‘judgement debts’. A Judgement Debt Commission had to be set up to investigate the issue. Most famous: the Wayome case [on appeal]. Scenarios : Somebody illegally claims money not owed him / her by the state. Attorney Gen. Dept ought to debunk this claim, but allegedly, willfully or carelessly does not defend the state and money is illegally paid out.  Judgement Debt Scenario II Abuse of power: For personal/political reasons, govt. officials refuse to settle a legitimate claim made by an individual or corporation. – Maybe claimant refused to pay a bribe to officials prior to the processing of the claim; – Maybe claimant not in the good books of the government of the day. When eventually matter gets to court, and judgement is in favour of claimant, legal costs and interests will entail.  The outcome of corruption Serious corruption in a nation leads, among others, to ff: - Distortions and misallocations of resources; - Inefficiencies: ‘square’ pegs are put in ‘round’ holes; - A sense of helplessness : people don’t see themselves to matter; - Loss of human dignity and feeling of marginalisation; - Entrenchment of poverty – the poor become poorer; - Capital flight: investors find cost of doing business too high, and will therefore take their business elsewhere. All MDGs are affected in one way or the other.  Transparency Indicators of corruption Published yearly by Transparency International COUNTRY YEAR and RANK YEAR and CPI Scores 2012 2011 2009 2008 2012 2011 2009 2008 BOTSWANA 30 32 37 36 6.5 6.1 5.6 5.8 South Africa 69 64 55 54 4.3 4.1 4.7 4.9 GHANA 64 69 69 67 4.5 3.9 3.9 3.9 NIGERIA 139 143 130 121 2.7 2.4 2.5 2.7 CAMEROON 144 134 146 141 2.6 2.5 2.2 2.3 KENYA 139 154 146 147 2.7 2.2 2.2 2.1 While Scandinavian countries - Sweden, Denmark, Finland and Norway have CPI of 9+ most African countries lie at the bottom with scores of