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With short term U.S. treasury paper paying zero percent, where in the world can you get 14.7%? Cote d’Ivoire. The yield on Ivorian Eurobonds spiked on fears of a resumption of civil war and prospects of a default on a payment due December 31st. Bondholders are right to worry.
This is a joint post with Cindy Prieto.
As the Cote d’Ivoire standoff moves into Day Ten, pressure is mounting on Laurent Gbagbo who lost the election to Alassane Ouattara but refuses to stand down. The African Union and ECOWAS have suspended the country, and the United States and Europe have each threatened Gbagbo with financial sanctions, asset freezes, and travel bans unless he relents.
As cash becomes scarce and the junta more desperate, Gbagbo and his inner circle might try to quickly borrow money or start a fire sale. This would not only provide fuel for potential conflict, but also saddle the Ouattara government with new debts once they get in the seat. One additional way of squeezing Gbagbo and avoiding this outcome is contract sanctions, as proposed in the recent report of CGD’s Prevention of Odious Debt Working Group led by John Williamson, Michael Kremer, and Seema Jayachandran.
This is a joint post with Kaci Farrell.
During a House Financial Services subcommittee hearing on the global financial crisis and Nigeria’s financial reforms, CGD vice president for programs and senior fellow Todd Moss said Nigeria’s economic and political stability are inextricably linked to each other and to U.S. national interests. He urged members to support the African Development Bank and the World Bank and proposed a new idea: Nigeria should consider using oil revenues to finance cash transfers to citizens in the Niger Delta.
This is a joint post with Stephanie Majerowicz.
Our colleagues Sarah Jane Staats and Connie Veillette have already explained how the recent election results might affect foreign aid. The 150 Account, which includes aid, is a prime target as Congress takes aim at the budget deficit. One silver lining may be that belt-tightening could also force compromise on long-overdue reforms.
But what can we learn from history?
Long-delayed elections finally happened last Sunday in Cote d’Ivoire and Guinea (even the New Yorker noticed). Good for those countries and for West Africa. But it strikes me that there are three absolutely huge elections coming up in the next six months that—at the risk of being over-dramatic—will determine nothing less than the future of Africa.
The Economist has a nice piece here on the True Size of Africa. It’s about geographic size (Africa is bigger than you think – which is true for all countries and regions near the equator that don’t benefit from the Mercator distortion in our two-dimensional map world).
That’s right. Ghana announced today that its GDP isn’t actually $15.7 billion, but rather $25.6 billion. This sudden 63% jump occurred not because of a sudden oil find (the oil doesn’t arrive until next month), but rather because of a technical rebasing of the way GDP is calculated. Turns out that services like telecoms are a lot bigger than everyone believed yesterday. Here are a few of my quick reactions:
The big news out of the U.S. midterm elections is the Republican victory and control of the House of Representatives. Thirty nine of the sixty new House Republicans align themselves with the Tea Party. One of the few things the pundits agree on is that there is no clear Tea Party foreign policy agenda, much less a unified view about whether and how to engage developing countries.
This post originally appeared on the Huffington Post.
While talking beautifully about its development plans, the Administration is really not living up to its rhetoric of elevating development to equal status with diplomacy and defense, the so-called 3Ds. If development is really such an equal partner alongside defense and diplomacy, why is USAID increasingly a minor subcomponent of the State department? The promises of making USAID the “world’s premier development agency” are ringing embarrassingly hollow. How can an agency be influential when it doesn’t even control its own budget or set its own strategic priorities? Even in areas where USAID has traditionally been very strong—disaster relief and food security, for instance—the State Department has taken over. (The Feed-the-Future initiative is effectively directed by State and, despite early promises that USAID would lead on Haitian earthquake relief and reconstruction, it was recently leaked that a State coordinator is running the show.) And it should hardly be surprising that USAID is getting its lunch eaten in the interagency when it had no head for a year and, nearly two years in, still has less than half of its top managers on the job.
But what if the problems of the 3Ds aren’t really about the staff vacancies, the battle of Washington egos, and an empire-building State Department? What if the real problem is that the much-vaunted “whole-of-government” approach is fundamentally unworkable in the United States?
Plenty in the blogosphere today (here and here) about the opening of the UN summit on the Millennium Development Goals. With just five years to go, there is a lot of worrying about which countries can make it. Of course it’s probably too late to do much at this stage, no matter how much new money is spent.