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June 12, 2005


Paddy Carter

Not only did Ms Klein make that error, but she also seems to have overlooked the fact - from the report she cites - that returns in Sub-Sarharn Africa are high because just about the only FDI in the region is oil related, and returns in other parts of Africa are miserable (Egypt offering the worst in the world). She also seems (and I can't quite believe this) to have confused revenues with profit, when she complains about foreign oil companies only letting host nations retain a proportion of revenues, as if nationalised oil companies return 100% as profit.

I am quite prepared to believe that foreign oil companies have screwed over Africa by negotiating advantageous terms for themselves (although equally I see no reason to presuppose it - the host nation is in well positioned to negotiate good terms) but she presents absolutely no relevant information to make her case.

She also seems to think free market capitalism has been invalidated becuase France doesn't like it and Russia is a mess, and that the World Bank exists to get rich by lending money to poor countries.

and this is one of the leading commentators on the global economy, at least as far as an awful lot of people are concerned. Pure shite.

Angry Economist

Few journalists are even half decent economists or analysts full stop.

The thing I like about newspapers is that you can choose to skip over or dismiss this crap. On the telly you can't - its forced on you in an endless stream.

Anyhow agree with the thesis that Naomi Klein is talking pure shite.

Like crap monolithic state socialism is the answer either. The Russians actually did reject this while the French aspire to it (apparently). The Russians are on the backs of the oligarchs because they have been told they are anti-patriots bleeding the heart out of Russia. Patriotism was always the major political force in Russia - not socialism.

Mind you, since the most rated economics journalist from the Guardian used to be Will Hutton - this speaks volumes (where is the 30/30/40 society now!?). I think sometimes the Guardian raises the bar of standards for journalism and we're gutted when they duck under the bar!

I am in a particularly bad mood today. Anger has given way to bitter sarcasm.

EU Serf

This very high return shows how Afriac's problems might be at least partially solved by inward investment.

If a government makes a positive move in the imposition of the rule of law, the risk premium needed falls such that investors can make a killing. If an onward programme of reform is carried out this becomes self reinforcing.

Ease of setting up a business is one of the easiest ways that African governments can improve their economies. In many countries it costs several months of wages and several months to register a business. Most of the econmy therefore remains unregistered and many of Africa's brightest and best spend all their time having to bribe officials rather than running their businesses.

Much of Africa is governed by laws that seem to almost have disuading investors not to invest, and this is when the laws works.

I am sure you are right as far as the herd instinct goes though. If the trend changed such that "What is your Africa Strategy" became a common question, then things would be reversed.

Rob Read

"as Keynes said, it’s better to fail conventionally than succeed unconventionally"

Another reason to ignore everything that fool Keynes says.

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