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How to Re-Invent Money: Notes for Cryptocurrency Techno-Warriors

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Ultimately money is a social contract DAVID NDII argues. And though Bitcoin and cryptocurrencies may yet emerge as transformative disrupters of human and economic relations, certain fundamentals need to be in place if they are not to go the way of other fads past. History teaches us that ultimately monetary delinquency is one of the more reliable harbingers of revolution. If government makes a mess of our money, we can always behead the King.

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How to Re-Invent Money: Notes for Cryptocurrency Techno-Warriors
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Ten years ago, an anonymous person or people known as Satoshi Nakamoto published a paper announcing a monetary innovation described as a peer-to-peer electronic cash system. “Peer-to-peer” means a system of exchange that does not require intermediaries, such as banks, to function. When we use a card to buy something at the supermarket, the holder’s account is debited and the account of the merchant is credited. There are at least three intermediaries to this transaction namely, the card-holder’s bank, the supermarket’s bank and the card issuer all who make some money from it, and there is of course the governments which are the ultimate guarantors of the payment systems we use.

The system devised by Satoshi Nakamoto known as Bitcoin became the progenitor of cryptocurrencies. Instead of the accounting systems of banks and other intermediaries, the cryptocurrency systems use a digital public register, known as a blockchain. When people transact, the transaction appears on the public register. The transaction’s security and validation services that we rely on: banks, card issuers, central banks and lately telcos and “fintechs” in the case of mobile phone payments platforms, is done by techies called “miners” who compete to verify transactions by solving puzzles. The miner who completes the verification first earns some bitcoins. So in effect, the claim that there is no third party intermediary is not quite accurate. What they have done is to replace centralized systems and authorities with a decentralized free-for-all system.

Bitcoin appeared have settled at around $1000 up until January 2017, when it began what was to become an unprecedented rise. In December 2017 it peaked at a little over $19,400. A year later it is down to under $4000. Bitcoin is now billed as the most spectacular financial bubble on record.

At the height of the cryptocurrency boom, enthusiasts were declaring fiat currencies history. Fiat money is a currency decreed by governments to be the “legal tender” in its jurisdiction and is one of three types of money that have existed in history. The other two are commodity and credit money. Commodity money is something of intrinsic value such as precious metals that is generally accepted for payment. Credit money arises when debt instruments typically issued by a reputable party such as a bank, wealthy enterprise or government becomes accepted for payment. The word “banknote” originates from the “free banking era” in the US, when promissory notes issued by banks were generally accepted as means of payment. Today’s prominent fiat currencies such as the US dollar began life as promissory notes issued by governments mostly to finance wars.

Bitcoin appeared have settled at around $1000 up until January 2017, when it began what was to become an unprecedented rise. In December 2017 it peaked at a little over $19,400. A year later it is down to under $4000. Bitcoin is now billed as the most spectacular financial bubble on record.

As Bitcoin soared, Initial Coin Offerings (ICOs) began to look uncannily like the prospectuses of South Sea Bubble companies (such as my personal favourite: “For carrying out an undertaking of great advantage; but nobody to know what it is”). Economists, who pointed this out, including this columnist, were dismissed as luddites who were stuck in old school thinking. Cryptocurrency and blockchain were the ultimate technological disrupter. We were on the cusp of a new economic architecture where the old rules would no longer apply.

Today’s prominent fiat currencies such as the US dollar began life as promissory notes issued by governments mostly to finance wars.

The cryptocurrency techno-warriors may yet have the last laugh. But to do that they would do well to learn a thing or two about the competition.

Up until they were colonized a century ago, my Agikuyu forebears were moneyless. In Elspeth Huxley’s irreverent parody of the Agikuyu’s early encounters with Europeans Red Strangers, this is what ensues when Muthengi is offered a job that pays five rupees a month: 

“I do not want these metal objects,” Muthengi answered. “What can I do with them? Why does he not give me goats?”

It is the same as if he gave you goats” the interpreter said. “You can exchange rupees for goats.”

“How many are needed to obtain a goat?”

One rupee will buy one goat?”

Muthengi could conceal his incredulity no longer. It was impossible to believe that the world held anyone so foolish as a man who would surrender a goat for a useless piece of metal possessed, it seemed, of no magical powers. But the thought of five goats a month burrowed like a mole underneath Muthengi’s mind. It seemed incredible, yet what if it could be true? Five goats a month, thirty goats a season, two hundred and ten goats in four seasons with the increase of one to each female in a season…it was impossible to encompass so many goats with the mind’s eye.

Muthengi accepts, dutifully converts his five rupees pay into goats every month, and becomes very rich.

In economics, we tend to look at money like Muthengi. Since money is not of itself productive people ought not hold on it longer than necessary, they would convert it to goats as soon as they are able. Money would be constantly changing hands, lubricating commerce. Why then, is money such a big deal?

To study questions like these, economists sometimes resort to reverse engineering to see whether we can build a model in which the thing in question arises “endogenously.” By “endogenous” we mean that it is not introduced by an outside agent, such as the mysterious Satoshi Nakamoto.

As Bitcoin soared, Initial Coin Offerings (ICOs) began to look uncannily like the prospectuses of South Sea Bubble companies. Economists who pointed this out were dismissed as luddites who were stuck in old school thinking. Cryptocurrency and blockchain were the ultimate technological disrupter. We were on the cusp of a new economic architecture where the old rules would no longer apply… The cryptocurrency techno-warriors may yet have the last laugh. But to do that they would do well to learn a thing or two about the competition.

Students of economics know that money serves three functions: a medium of exchange, a unit of account and a store of value. Our earliest ancestors were hunter-gatherers. We do not know for sure whether hunter-gatherers invented money. It is not evident that small bands of hunter-gatherers would find need to invent a medium of exchange, or units of account.

But one thing we are sure of is that hunter-gatherers grew old. They would have had to figure out some means of surviving in old age. One of these is to cultivate social bonds which obligate progeny to provide for the elderly. This is quite evidently true, but it is not entirely sufficient since not everyone will have children, and it is far from certain that children will survive to support their parents in old age. Thus, kinship-based old age security will result in some old people enjoying good care from their progeny, and others dying of destitution, quite an unsatisfactory situation.

Trading seems to be one of the things that we do naturally. Two hunter-gatherers, one who has caught an antelope and the other has harvested wild honey bump into each other on the way home. Can I have some of that, for some of this? Markets enable strangers to meet each other’s needs. Can the market find a solution for the old age security problem?

Now, imagine a small hunter-gatherer community with a population of two hundred people. Each person lives for two periods, youth and old age, and is endowed with three units of a consumption good, manna from heaven if you like, when young and one unit when old. As per the law of diminishing returns, consuming the first unit yields 20 units of happiness, the second yields 15 and the third yields 5 units. As shown in the table, if each person consumes only their endowment, they enjoy 60 units of happiness. If they can trade so that each person consumes two units in each stage, each person would enjoy 70 units of happiness in their lifetime.

In economics, we tend to look at money like Muthengi. Since money is not of itself productive people ought not hold on it longer than necessary, they would convert it to goats as soon as they are able. Money would be constantly changing hands, lubricating commerce. Why then, is money such a big deal?

This set up is called an overlapping generations model and is one of two devices that economists use to study long run economic dynamics (the other one is called an infinite horizon model). It was formulated by French economist Maurice Allais and refined by Paul Samuelson in a seminal 1958 paper titled A Consumption Loans Model of Interest with or without the Social Contrivance of Money. My set-up here conveys the gist of Samuelson’s model but the formulation and parameters are my own.

If the community can find a way to trade, everyone will enjoy 10 more units of happiness.  One way of thinking about this is as an increase in life expectancy from 60 to 70 years. The problem with this trade is that it cannot be conducted bilaterally, peer-to-peer if you like.  The young can support the old today, who will then die. For their own old age security, they will need the support of the next young generation which is as yet unborn. However, if society were to device a voucher, a receipt if you like, that is given to each prime-age adult in exchange for giving up one consumption good unit to support an old person, they can trade vouchers with the subsequent generation.

Be it a strip of buffalo hide, or a string of cowrie shells, a social security card or a promissory note, it stands to reason that once it’s invented each successive generation will value them, since everyone will also need to secure their old age with the successor generation. Individuals need no longer fear old age destitution on account of not having family support in their old age. In fact, this market system could have the unintended consequence of undermining the kinship system, as Alessandro Cigno observes in his book Economics of the Family:

“the growth of the financial sector (including in that the social security system, as well as banks, private insurance and the stock exchange) tends to coincide, in the development of an economy, with a sharp fall in fertility, the break up of extended family networks and a widespread reluctance on the part of the middle aged to accept responsibility of elderly relatives.”

Now that we have a theory of money, we can examine what attributes sound money should have. First, it needs to be trusted. Every voucher must be a legitimate store of value. It is not difficult to see that people entrusted with its production may be tempted to game the system by producing more vouchers than needed, and some people will find themselves with vouchers that command less than what they put it. Second, it should be possible to increase the number of vouchers in tandem with the population growth To see this, let us suppose the next generation increase to 110 people, an additional ten vouchers will be needed otherwise some of its members will be locked out of the intergenerational trade.

What then, are the lessons to be learned by people seized with the idea of re-inventing money?

One of the key requirements of sound money is a credible supply rule. In our simple model, the anchor is population growth. But it so happens that in our model population growth and economic expansion are identical, therefore it is the same as a money supply rule that is anchored on the size of the economy. Satoshi Nakamoto decreed that the bitcoin algorithm would cease after 21 million of them were mined. Why 21 million? Nobody seems to know. In effect, as a currency, bitcoin had the same flaw that undermined gold and silver, namely arbitrary supply that is unrelated to demand.

A second flaw is the tech-hype the cryptocurrency as the ultimate disruptive technology that would liberate society from the state-financial capitalist stranglehold. Because the value of technology innovations is highly uncertain, the value of bitcoin became entwined with people’s subjective guesses and predictions of what that value might turn out to be, as opposed to the economic fundamentals. We call this a sunspot equilibrium. For an asset purporting to be money, it is a highly undesirable attribute. It is this particular flaw that fueled the speculative bubble. This eventuality could have been mitigated by creating two assets: one that would profit from the innovation and one that reflected the economic fundamentals.

One of the key requirements of sound money is a credible supply rule. In our simple model, the anchor is population growth. But it so happens that in our model population growth and economic expansion are identical, therefore it is the same as a money supply rule that is anchored on the size of the economy. Satoshi Nakamoto decreed that the bitcoin algorithm would cease after 21 million of them were mined. Why 21 million? Nobody seems to know.

The third and perhaps fatal flaw is that cryptocurrency inventors failure to appreciate that fundamentally, money is a social contract. Social acceptance is what makes cowrie shells, beaver pelt, silver, gold or pieces of paper issued by government a currency. Of all our social contrivances, the one that money shares most attributes with is the state. It should not surprise then, that money has evolved into government-issued fiat currencies. But just like in governing, it does not mean that governments will excel in monetary affairs. In fact, the quality of a country’s money and governance tend to be closely correlated. Robert Mugabe’s ZANU-PF regime is but the latest to make a mess of both.

Monetary delinquency is one of the surer harbingers of revolution. If government makes a mess of our money, we can always behead the King. Which is just as well that Satoshi Nakamoto had the foresight to be anonymous. Could be he/she/they knew something that their starry-eyed cryptocurrency enthusiasts did not.

David Ndii
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David Ndii is a leading Kenyan economist and public intellectual.

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The Role of Kenyan Civil Society in Democratic Governance

Kenyan civil society has played a critical role in holding the State to account and in promoting a human rights-based approach to governance.

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The Role of Kenyan Civil Society in Democratic Governance
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In defense of democracy, human rights and the rule of law is the motto of conscientious human rights defenders. A human rights defender is any person fighting for a cause to improve the well-being of human beings or to correct a violation to human dignity or breach of law for remedy. Human rights are rights that belong to everyone simply because they are human beings. By belonging to everyone it means that every person is a holder of these rights and they may not be taken away or denied because of a person’s social or economic status. Human rights are universal. They belong to everyone. They are interrelated, interdependent and indivisible. No right is greater than the other.

The primary obligation to promote and protect human rights rests with the State. However, every individual, and other non-State actors also have the responsibility and duty to respect the rights of his or her fellow human being. It is vital that in the establishment of a human rights culture that no one is excluded and that the most vulnerable are included. For democracy to prevail, it is imperative that it reaches every citizen. It is often said that it is easier to struggle for democracy but more difficult to sustain it.

This is critical especially in situations where people have limited respect for and trust in the government. The world is facing the greatest test – the COVID-19 pandemic. It is my personal experience that pandemics or upheavals in countries and societies have always had serious consequences to human trights democracy and rule of law. In most cases, such occurrences exacerbate existing human rights violations. It is the moment when human rights defenders in their active and vibrant civil society are necessary to hold the State accountable, especially because the State capitalises on such calamities to grab more power and cause egregious violations.

A new United Nations report on the global response to COVID-19 has noted the central role of a human rights-based approach to the pandemic. “This is not a time to neglect human rights; it is a time when, more than ever, human rights are needed to navigate this crisis in a way that will allow us, as soon as possible, to focus again on achieving equitable sustainable development and sustaining peace,” stated the report. This is a time when, more than ever, government needs to be open and transparent, responsive and accountable to the people they are seeking to protect. Civil society organisations, particularly grassroots community-based organisations, are better placed to reach exposed populations quickly and in ways that factor in the specific sensitivities of each community and that ensure that critical information reaches diverse segments of the society.

Perhaps the biggest challenge that human rights defenders and civil society in general have faced during this pandemic is the State taking advantage of the pandemic to grab and consolidate more power. States have turned COVID-19 into a security matter, giving themselves enormous powers to curtail crucial freedoms and rights while remaining covertly opaque in their decision-making processes. This poses a dilemma for civil society on how to respond while being sensitive to the public’s concerns.

Who constitutes civil society?

In my own understanding, civil society is not what many Kenyans see as particular individuals and/or the organisations they work for. No! Civil society should been seen in the context of the heterogeneity of an entire range of organised groups, individuals, and institutions that are independent of the state, voluntary, and at least to some extent self-generating and self-reliant. This includes those individuals and organisations that the majority of Kenyans see as the being the civil society, as well as independent media, think tanks, universities, and social and religious groups.

To be part of civil society, such individuals and groups, formally or informally, must have respect for the rule of law, for the rights of individuals, and for the rights of other groups to express their interests and opinions, and must also exercise tolerance and the accommodation of pluralism and diversity of ideas and formations.

States have turned COVID-19 into a security matter, giving themselves enormous powers to curtail crucial freedoms and rights while remaining covertly opaque in their decision-making processes.

 There is consensus that civil society in all its different formations and characters needs to ensure its own legitimacy, openness and transparency. Legitimacy stems from several sources:

Firstly, from a strong moral conviction, through acting on the basis of universally-recognised rights and freedoms of speech, assembly and association to articulate public concerns that are inadequately addressed by the government.

Secondly, from a political and civic legitimacy or credibility, through approval of the community or constituency represented by the voluntary association, asserting people’s sovereignty and community control.

Thirdly, from competence or performance legitimacy, by delivering results through being closer to local reality than governmental institutions, helping to bridge a government-community gap and promoting social cohesion.

Fourthly, from legal recognition, although laws may prevent truly independent civil society from functioning, or formal registration may undermine rather than enhance their reputation.

And finally, and most importantly, from the legitimacy that comes from accountability and transparency in its work.

A strong civil society is one in which voluntary formations are effective and strategic organisations that work cohesively in influential networks or coalitions in an environment governed by civil norms, such as respect, reciprocity, tolerance and inclusion. Such norms promote open discourse and citizens’ engagement in informed dialogue.

A narrow view of civil society results in a failure to develop civil society organisations that keep the government in check and nurture democratic practices and values as a multi-generational effort. A broader view of civil society requires cultural and attitudinal changes to help people understand, support, and protect civil society organisations as representatives of their interests. Yet goverments are able to keep replenishing and tapping good ideas and brains to help them overcome citizens’ pressure. Civil society, which is facing very turbulent times on many fronts, will have to become more innovative in enabling collaboration and improving practices in order to remain relevant and effective in influencing public policy. It cannot remain conventional with the same traditional approaches.

In my view, there are several important principles to follow in seeking to strengthen civil society. Firstly, it is critical to start where civil society is: measures to strengthen its capacities need to be based on local needs, assets and institutional ecosystems. Civil society organisations need to know their own strengths. Outsiders cannot necessarily connect with local society.

Secondly, decision-making needs to be in the hands of those undertaking the strengthening measures, so it is informed by indigenous values, concerns and environment. Thirdly, action must be based on well documented and analysed data and evidence and sustainable resources to inform local engagement across sectors and levels. A people-oriented participatory approach is key. It creates constituency and legitimacy. Fourthly, action should support and reinforce existing compatible interventions. This will need to have a combination of multidimensional tools for execution. For instance, how do online actions combine and reinforce offline actions? Fifth, there should be realistic time horizons since institutional development does not occur instantaneously.

Finally, building alliances within a sector or domain will support individual sector members or issue-based communities. This leads to improved information through sharing best practices and avoiding duplication. Through collaborative action in alliances there can be a greater impact at the policy level, and a means to set standards in accountability. Alliances and networking create solidarity. Bridge-building across sector boundaries strengthen both by generating a larger body of interest and also new resources, for example, through cooperation with the public or private sector. Transnational or international engagement enhances civil society roles in different spheres of public discourses.

In my experience with civil society, I see have seen it playing pivotal roles of advocacy, watchdog and service provider of public goods. The roles are intertwined. Perhaps what have been different are approaches, which has created unnecessary frictions and misunderstanding. As dynamic and multidimensional entities, civil society moves from one role to another and/or assumes several roles. This can be illustrated by an organisation whose initial role is service delivery; it turns to advocacy to overcome problems it meets in fulfilling its service provision role; and it subsequently becomes a watchdog in trying to prevent the recurrence or worsening of the problems while continuing to provide its original services. The role of service delivery is regarded, at least by governments, as the least controversial function of civil society. However, many people express concern that while civil society is performing a crucial activity, the government can take advantage of this service provider role and fail to assume its own responsibilities and obligations.

Most agree that Kenyan civil society has contributed enormously towards both the substance and process of democracy and human rights. Civil society has been an important driver of the State’s democratisation process by providing a vital link between citizens and the State as well as by mobilising communities for collective actions. It also provides an environment that can be used to enhance community cohesion and decision-making. Information is vital to civic participation and also encourages inclusive development and participatory democracy. When people get better informed, they are more likely to participate in policy discussions and communicate their ideas and concerns freely.

Achievements of Kenyan civil society

The following is a summary on the role civil society played in Kenya in advancing human rights, democracy and the rule of law in different contexts. (The list is not exhaustive.)

First, civil society has been an incubator and supplier of ideas on content and strategies on State transformation and building an open pluralistic society. Perhaps the struggle for multipartyism and a new constitutional order culminating in the progressive Constitution of Kenya 2010 amplifies this critical role of civil society. Today, there is a growing movement of civil society on the implementation of the constitution and championing of devolution of powers and resources under the banner of Tekeleza Katiba Movement. Further, civil society has not shied away from working and organising political parties into a formidable socio-political movement. This capacity was demonstrated in 1997 and 2002.

The role of service delivery is regarded, at least by governments, as the least controversial function of civil society. However, many people express concern that while civil society is performing a crucial activity, the government can take advantage of this service provider role and fail to assume its own responsibilities and obligations.

Secondly, civil society has been a strong deterrent and catalyst in defanging the power of the State. A true democracy needs a well-functioning and legitimate State.  Kenyan civil society has been highly successful in deploying different methods to ensure that the State is tamed through checking, monitoring, and taking actions to restrain the power of political leaders and State officials. Civil society actors have been aggressive watchdogs on how State officials and agencies use their powers through raising public concern and awareness about any abuse of power and robustly taking advocacy actions ranging from public demonstrations to picketing and litigation.

Thirdly, research and documentation to expose the corrupt conduct of public officials and demands for accountability and improved governance have been a great success. This is also very important in collection and preservation of evidence. Civil society in its different formations has been a leading light in tackling corruption, especially through push for public access to information, whistle blowing and public campaigns. This is upon realising that even where anti-corruption laws and bodies exist, they cannot function effectively without the active support and participation of civil society. Civil society have come up with transparency and accountability tools as some potential solutions to some of the corruption problems in that they allow communities to identify breakdowns and hold responsible agents or decision makers to account. A fourth function of civil society is to promote political and public participation.  Civic education on citizens’ rights and obligations has been a bulwark in developing citizens’ skills to work with one another to solve common problems, to debate public issues, and express their views.

Fifth, civil society has been a major player in conflict mitigation efforts and propagating values of democratic life, such as tolerance, moderation, compromise, and respect for opposing points of view.  Without this deeper culture of accommodation, democracy cannot be stable. Civil society understands that these values cannot simply be taught; they must also be experienced through practice and interlocutors. Civil society has developed formal programmes and training of trainers to relieve political and ethnic conflict and teach groups to solve their disputes through bargaining and accommodation. This brings the crucial connection between policy and practice in civil society work.

Sixth, civil society has been an arena for the expression of diverse interests. One role of civil society organisations has been to push for the needs and concerns of their members, as women, students, farmers, environmentalists, trade unionists, lawyers, doctors, and so on.  Civil societies, in all their diversity, have been presenting their views and those of different constituencies they represent to different State institutions for redress.  They also establish a dialogue with relevant government ministries and agencies to lobby for their interests and concerns. And it is not only the resourceful and well-organised whose voices have been heard.  Over time, groups that have historically been oppressed and confined to the margins of society have organised to assert their rights and defend their interests.

Kenyan civil society has been highly successful in deploying different methods to ensure that the State is tamed through checking, monitoring, and taking actions to restrain the power of political leaders and State officials.

Seventh, different civil society platforms have been vital focal points for strengthening democracy in actions by providing new diverse forms of interests and solidarity.  For civil society, democracy cannot be stable if people only associate with others of the same social, political or status identity orientation.  When people of different religions, ethnic identities, professionals backgrounds and sectors come together on the basis of their common interests as women, artists, doctors, students, workers, farmers, lawyers, human rights activists, environmentalists, and so on, civic life becomes richer, more complex, and more tolerant. Civil society has very efficiently provided this platform. Historically, groups and individuals never saw themselves as part of civil society; today there find crucial space for civic engagement.

Eighth, civil society provides a training ground for political, civic and private leaders.  Civil society has helped to identify and train new types of leaders who have dealt with important public issues and are recruited to run for political office at all levels and to serve in local and national positions, both in politics and private/professional sectors.  Evidence shows that civil society has been a particularly important arena from which to recruit and train women leaders in different fields.

Ninth, civil society has helped to inform the public about important public policy issues.  This is not only the role of the mass media, which is also part of civil society, but individuals or groups of organisations coming together to provide fora for debating public policies and disseminating information about issues that affect the interests of different groups, or of society at large, using different methods. Civil society leads in taking action that safeguards public interest like litigating and drafting petitions and policy papers and presenting those policy positions to the relevant State institutions.

Tenth, civil society organisations have played vital role in monitoring electoral processes and management.  This has seen a broad coalition of organisations unconnected to political parties or candidates deploying neutral monitors at all the different polling stations to ensure that voting and vote-counting is entirely free, fair, peaceful, and transparent.  It is very hard to have credible and fair elections in a democracy unless civil society groups play this role. The outcomes of such vital civil society processes have been useful as evidence in electoral disputes.

Twelfth, civil society has been very instrumental in advocating for fair rules in the digital world and influence at the policy level. This has been important in establishing spaces for civil society to engage and bring social change through digital activism.

Finally, it is important to stress that civil society is not simply in tension with the State.  Because civil society is independent of the State does not mean that it must always criticise and oppose the state.  In fact, by making the State at all levels more accountable, responsive, inclusive, and effective, and hence more legitimate, a vigorous civil society strengthens citizens’ respect for the State and promotes their positive democratic engagement with the State. However, Kenyan civil society is in the state of fluid transition as global dynamics shift.

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Food Crimes: Why WFP Doesn’t Deserve the Nobel Peace Prize

The UN’s food assistance agency has neither improved conditions for peace in conflict-affected countries nor prevented the use of hunger as a weapon of war. On the contrary, it is responsible for prolonging conflict in some countries and suppressing local food production in others.

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Food Crimes: Why WFP Doesn’t Deserve the Nobel Peace Prize
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Those who believe that food aid does more harm than good were probably flabbergasted by the decision by the Norwegian Nobel Committee to award this year’s Nobel Peace Prize to the World Food Programme (WFP) for “its efforts to combat hunger, for its contribution to bettering conditions for peace in conflict-affected areas and for acting as a driving force in efforts to prevent the use of hunger as a weapon of war and conflict”.

Fredrik S. Heffermehl, a Norwegian lawyer and long-time critic of the political and bureaucratic processes behind the awarding of the Nobel Peace Prize, for instance, stated: “We recognise the great value of the World Food Programme, but the 2020 prize is much less ambitious than [Alfred] Nobel’s idea of ‘conferring the greatest benefit to humankind’.”

Mukesh Kapila, a former United Nations representative to the Sudan who blew the whistle on atrocities committed by the Sudanese government in Darfur, and who is now a professor of global health and humanitarian affairs at the University of Manchester, was even more scathing. “It’s a bizarre choice, and it’s a complete waste of the prize, in my opinion,” he told Devex. “I don’t think the World Food Programme needs this money, and I really object to awarding prizes to people or organisations who are just doing their paid jobs.”

Apart from the fact that WFP’s raison d’être is to deliver food to vulnerable populations, and its staff are paid generously to deliver food aid, critics who know the food aid business have in the past pointed out that food aid is, in fact, detrimental in the long run because it suppresses local food production, making it harder for poor or conflict-ridden countries to feed themselves. In fact, studies have found that direct cash transfers are a much more efficient and effective method to alleviate hardship and improve the overall welfare of beneficiary communities.

A few years ago, none other than the European Union (EU)’s representative to Somalia, Georges-Marc André (now retired), admitted this to me when I was researching for my book War Crimes, which explores how foreign aid has negatively affected Somalia. He told me that United Nations agencies such as WFP might have actually “slowed down” Somalia’s recovery by focusing exclusively on food aid instead of supporting local farmers and markets. “The EU is against food aid that substitutes local food production,” he said.

His views are also shared by Michael Maren, a former food aid monitor for the United States Agency for International Development (USAID) in Somalia, whose book, The Road to Hell: The Ravaging Effects of Foreign Aid and International Charity, chronicles how aid became a political tool in Somalia that was manipulated by both the donors and the recipient country. Maren, who lived and worked in Somalia in the 1980s, believes that food aid to Somalia may have actually prolonged the civil war in the country. “I had learned to view development aid with skepticism, a skill I had hoped to put to good use to help ensure that aid projects, at worst, didn’t hurt people. But Somalia added a whole new dimension to my view of the aid business. My experience there made me see that aid could be worse than incompetent and inadvertently destructive. It could be positively evil,” he wrote.

In his book, Maren quotes a former civil servant working for Somalia’s National Refugee Commission during President Siad Barre’s regime who told him that traditionally, Somalis never relied on food aid, even during droughts. There was a credit system; pastoralists would come to urban areas where they would take out loans that they would repay when things returned to normal. Aid essentially destroyed a centuries-old system that built resilience and sustained communities during periods of hardship.

Food aid hurts local farmers

Food aid also suppresses local food production. Many Somali farmers have reported that NGOs working with WFP are notorious for bringing in food aid just before the harvest, which brings down the price of local food. They have also complained that the food aid is imported, rather than bought locally. At the height of the famine in Somalia in 2011 (which many believe was exaggerated by the UN), for example, WFP bought food worth £50 million from Glencore, a London-listed commodities trader, despite a pledge by the UN’s food agency that it would buy food from “very poor farmers who suffer because they are not connected to local markets”.

Let us be clear about one thing – food aid is big business and extremely beneficial to those donating it. (“Somebody always gets rich off a famine”, Maren told Might Magazine in 1997.) Under current United States law, for instance, almost all US food aid (worth billions of dollars) must be purchased in the US and at least half of it must be transported on US-flagged vessels.

Aid essentially destroyed a centuries-old system that built resilience and sustained communities during periods of hardship.

Most of this food aid is actually surplus food that Americans can’t consume domestically. Under the US government’s Food for Peace programme (formerly known as Public Law 480), the US government is allowed to sell or donate US food surpluses in order to alleviate hunger in other countries. Famines in other countries are, therefore, very profitable to the US government and to highly subsidised American farmers, who benefit from federal government commodity price guarantees. (Interestingly, since 1992, all WFP Executive Directors have been US citizens. This could be because the US is the largest contributor to WFP, but it could also be that the Executive Director of the UN’s food agency is expected to promote US policies regarding food aid.)

In a 1988 paper titled “How American Food Aid Keeps the Third World Hungry”, Juliana Geran described Food for Peace as “the most harmful programs of aid to Third World countries”, and urged the US government to discontinue it. She noted that US food aid often distorts local markets and disrupts agricultural activity in recipient countries.

For example, massive dumping of wheat in India in the 1950s and ‘60s disrupted India’s agriculture. In 1982, Peru “begged” the US Department of Agriculture not to send any more rice to the country as it was feared that the rice would glut the local market and drive down food prices for farmers who were already struggling. “But the US rice lobby turned up the heat on Washington and the Peruvian government was told that it could either take the rice or receive no food at all,” wrote Geran.

But what happened in Guatemala was truly catastrophic, as Geran narrates: “In 1976, an earthquake hit Guatemala, killing 23,000 people and leaving over a million homeless. Just prior to the disaster, the country had harvested one of the largest wheat crops on record, and food was plentiful. As earthquake relief, the US rushed 27,000 metric tons of wheat to Guatemala. The US gift knocked the bottom out of the local grain markets and depressed food prices so much that it was harder for villagers to recover. The Guatemalan government ultimately barred the import of more basic grains.”

Stealing food to aid militias

One of the most evident distortions caused by food aid (apart from the fact that farmers have no incentive to grow food when the market is flooded with free food) is the temptation to steal it. There have been reports of blatant theft of food aid under the not-so-watchful eyes of WFP. UN monitors have routinely reported the theft of food aid to Somalia, for example, but to no avail. In its 2010 report, for instance, the UN Monitoring Group on Somalia and Eritrea reported that local NGOs (known in development circles as “implementing partners”), WFP personnel and armed groups that controlled areas where food aid was being distributed were diverting up to half of the food. WFP vehemently denied these allegations, even though an Associated Press report the following year showed American, Japanese and Kuwaiti food aid being openly sold in Mogadishu’s markets.

It is also important to remember that WFP’s international staff usually do not distribute food directly in conflict or disaster zones; instead they hire local NGOs to do the work. Many of these NGOs are not vetted; in fact, in Somalia, some of them have even been linked to militias who act as “gatekeepers”, deciding who gets the aid and who doesn’t.

When Maren was in charge of monitoring food aid donated by the US government to refugees fleeing the Ogaden war of 1977-78, he found that about two-thirds of the food went missing. Trucks would arrive at the Mogadishu port, collect the food and disappear, never to be found again. Even when food arrived at the refugee camps, much of it would be stolen.

Aid thus became a profitable source of income for criminal elements within Somalia. And Siad Barre learned to exploit this well. In fact, Maren believes that international aid not only sustained the dictator’s regime but also facilitated the unravelling of Somali society.

The looting of aid continued even after Barre was ousted in 1991. Battles between warlords were won or lost depending on how much aid each warlord had access to. However, it was not just the warlords who profited from food aid; corrupt NGO cartels also benefitted. Because many parts of Somalia were considered a no-go-zone by international humanitarian agencies, and therefore rendered inaccessible, enterprising Somalis formed NGOs that liaised with these agencies to provide humanitarian assistance and services on the ground. These businesses-cum-NGOs signed lucrative contracts with aid agencies; some controlled entire sectors of the aid industry, from transport to distribution. Others were run by warlords, who often diverted food aid, which was then sold openly in markets to fund their militias.

“By engaging with the warlords to ensure the delivery of aid, the United Nations and other actors only encouraged the spread of the conflict and the establishment of a thriving aid-based and black market economy,” wrote political scientist Kate Seaman in Globalizing Somalia: Multilateral, International and Transactional Repercussions of Conflicts. “In essence they became a party to the conflict, losing their neutrality and only serving to perpetuate the conflict by providing resources which were then manipulated by the multitude of armed groups operating within Somalia.”

Battles between warlords were won or lost depending on how much aid each warlord had access to. However, it was not just the warlords who profited from food aid; corrupt NGO cartels also benefitted.

When an international humanitarian agency comes in to provide food to starving people, bad governments are let off the hook, and are allowed to continue with their bad policies that can lead to more famines in the future. Internationalising the responsibility of food security to UN institutions, international NGOs and foreign governments makes practically everyone across the globe a stakeholder in famine relief. “The process of internationalisation is the key to the appropriation of power by international institutions and the retreat from domestic accountability in famine-vulnerable countries,” wrote Alex de Waal in his book Famine Crimes: Politics and the Disaster Relief Industry in Africa.

Bad management practices at WFP

If the Norwegian Nobel Committee had bothered to find out how WFP staff view the organisation they work for, it might not have been so quick to award WFP the prestigious Nobel Peace Prize. Like at many UN agencies, senior staff at WFP have been accused of abusing their authority, an allegation that has tarnished this Rome-based agency’s reputation. A confidential internal WFP survey of staff attitudes (whose findings were first leaked to the Italian Insider, and then to other news organisations, such as Foreign Policy in October last year) found that 35 per cent of the more than 8,000 WFP employees surveyed reported experiencing or witnessing some form of abuse of authority, the most typical being the granting of “preferential treatment” for recruitment to close associates.

“The senior leadership of the World Food Program – once one of the most highly regarded United Nations agencies – have abused their authority, committed or enabled harassment, discriminated against women and ethnic minorities, and retaliated against those who spoke up in protest,” wrote Colum Lynch in Foreign Policy on 8 October 2019.

What was evident in the survey was that WFP, like the rest of the UN, is extremely hierarchical and authoritarian. Respondents admitted that senior managers “aimed to further their own self-interest rather than the mission of WFP, and abuse their power to further themselves and their favorites”.

Moreover, 29 per cent of those surveyed said they had witnessed some form of harassment, while 23 per cent said they had encountered discrimination. Some 12 per cent of staff said they had experienced some form of retaliation for speaking up about abusive practices (which is fairly common in the UN, where protection for whistleblowers is virtually non-existent, as I have illustrated here). An even more alarming finding was that 28 of the WFP employees interviewed had experienced “rape, attempted rape or other sexual assault” while working at the agency.

What was evident in the survey was that WFP, like the rest of the UN, is extremely hierarchical and authoritarian. Respondents admitted that senior managers “aimed to further their own self-interest rather than the mission of WFP, and abuse their power to further themselves and their favorites”.

The results of the WFP survey (which was conducted by an independent management consultancy) are consistent with other UN surveys on staff attitudes and experiences. Results from a UN Staff Union survey conducted in 2018 in response to the #MeToo movement showed that sexual harassment made up about 16 per cent of all forms of harassment at the UN; 44 per cent of those surveyed said that they had experienced abuse of authority and 20 per cent felt that they had experienced retaliation after reporting misconduct. The survey also found that a large number of staff members’ complaints were never investigated.

It is, therefore, difficult to understand why the Norwegian Nobel Committee found it fit to award WFP the Nobel Peace Prize, given that the UN’s food agency has failed to adhere to almost all best practices in human resources management, and has not done enough to protect those who report internal abuse or wrongdoing. Nor has WFP improved conditions for peace in conflict-affected countries or prevented the use of hunger as a weapon of war, as I have illustrated above.

What then could have motivated the Committee to award WFP the prestigious Nobel Peace Prize – apart from some misguided notion that what the world needs most right now is food hand-outs? In a world that is being ravaged by the coronavirus pandemic, increasing xenophobia, racism and sexism, a global recession and climate change (all of which threaten peace and security), couldn’t the Committee have picked a more worthy candidate?

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‘Why Are Africans Not Dying?’

If the coronavirus has taught us anything, it is that not even a pandemic can erase the inherent racism in the Western media and in humanitarian organisations.

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‘Why Are Africans Not Dying?’
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Western experts and international media are apparently bewildered by COVID-19 figures emerging from the African continent that suggest that African countries might have “flattened the curve” much faster than countries in the West, whose infection and death rates continue to rise.

Various theories on why Africans are not dying in large numbers have been proposed, ranging from Africa’s youthful population to the continent’s hot climate. Few have dared to suggest that some African countries might actually have been better at handling the pandemic than countries in the West because this might topple the “West knows best” narrative. Uganda, Senegal and Rwanda, which successfully contained the virus through a series of rigorous measures and strategies, are not being hailed as success stories in the fight against COVID-19, nor do we hear much about Vietnam, where only a few dozen people have died from the virus since the start of the pandemic.

This is in sharp contrast to the massive death toll in the United States. The latest figures from the US show that nearly 7.5 million Americans have been infected with the coronavirus and more than 200,000 have died. Had such horrifying figures been emanating from the African continent, there would by now have been a massive fundraising drive and countless media reports on dying Africans. But there has been no such response for the United States. While there is acknowledgement by the US medical fraternity that there is something that the US is not doing right, there is no international outcry or fundraising initiative. Nor has any country threatened sanctions against Donald Trump for bungling the COVID-19 response which has resulted in the death of his own people.

To be fair, it is not entirely the Western media’s fault for expecting a catastrophe in Africa. Everyone, from billionaire philanthropist Bill Gates to the United Nations Secretary General, predicted that millions of Africans would die from the virus, and they were all geared up for a fundraising campaign for the continent. But on this one, Africa disappointed them. Africans just did not die in sufficient numbers. Yet instead of congratulating African countries for bucking the trend, the Western media and Western experts began looking for reasons that border on racism.

This racism also extends to the Asian continent. Writing in the Medium, Indi Samarajiva talks about a New York Times article where a journalist wondered whether “there is a genetic component in which the immune systems of Thais and others in the Mekong River region are more resistant to the coronavirus”.

Samarajiva calls this racist reporting. “Instead of looking at what the Thai people did, they’re asking if it’s something in their veins. Because Thai people couldn’t possibly just be competent, it must be alchemy”, he wrote.

The truth is if Thailand or Uganda were European or North American countries, we would be showcasing them as “best practices” and manuals would be written on how to deal with a pandemic based on their experiences.

Part of the problem is that the aid and development sector – which the Western media relies on for figures and logistical support when reporting disasters in African countries – is imbued with what an anonymous writer in the Guardian newspaper referred to as a “white supremacy problem”. White supremacy is what drives Western journalists to write paternalistic – and quite often exaggerated – stories about “starving African babies” and other tragedies that not only generate pity (and therefore funds) for Africans, but contempt as well. The anonymous author of the article (who most likely works in the aid sector) explains the inherent bias in international aid organisations:

The insidious racism by white leadership devalues local hires who are predominantly non-white in the countries we work in, and is exemplified by organisations that deem it acceptable to operate with continuous six-month contract commitments for international staff. They ship around highly mobile young people, who have limited contextual and institutional knowledge. Aside from the obvious inefficiencies, to imply this is preferable to hiring locally is an insult to staff, communities and authorities. All these factors lead to a situation where those least affected by decisions are the ones making them. The way that organisations rationalise these actions is deeply perplexing . . . Instead, the prevalence and persistence of white international staff in senior leadership and the continued devaluing of local expertise and people, brings back echoes of the white civiliser, offering superior skills, convinced this is the natural and inevitable order of things.

This quote reminded me of a time when I wrote to a Belgian official working for a UN agency in an Asian country to ask if there was any possibility of me working there. Despite my nearly two decades of experience in the UN and in the development sector, my Asian ancestry and the fact that I speak three Indian languages, he was quick to tell me that I did not have “enough Asian experience”, so I could not be considered for any position. (And there was also the issue of the “budget”.) How a European man felt he was more qualified to work in Asia than a Kenyan Asian woman like me beats me.

There is also the fact that people from rich donor countries who work for aid or humanitarian organisations feel that the appointment of an African or Asian to a managerial position is doing them a favour. The mindset is that these people and their countries are beneficiaries of aid from rich countries, and so their appointment to a high-level position is an extension of that aid. This kind of paternalism also extends to women, who continue to remain underrepresented in senior management positions.

Rosebell Kagumire, a writer and award-winning blogger, says that her short stint at a United Nations agency made her feel like a “token black woman” and a “diversity hire”. At the height of the Black Lives Matter (BLM) protests around the globe, Kagumire wrote an article where she talked about how white privilege and institutionalised racism operate in an organisation committed to human rights and racial and gender equality. She quoted a former colleague from southern Africa who told her, “A white intern can become your supervisor in the blink of an eye, and they will always tell you ‘budget’, but the same budget is not an issue for white people”.

Kagumire talks about how black people are expected not only to work harder than white people, but are also expected to perform better. “One case I’m aware of involved a new recruit from a conflict country who was tasked with producing a key document for the unit – a big task for someone coming from outside the organisation. A few days in, a supervisor, a European white man, said: ‘If she doesn’t have my strategy by the end of the day I will put her on the next plane back’. She had literally fled that country, bullets raining, and survived as a refugee before joining the organisation”, recalled Kagumire.

Another former colleague from Haiti told her: “They wanted my contribution but not my voice at the table because they wanted me to act like I don’t see the injustice. I was the department help and made to feel that I must be grateful to be sitting at the table. The department’s toxic culture eventually got me fired because I refused to act grateful and demanded to be treated equally and to be heard. Eventually, I was no longer allowed at the table and was silenced”.

Kagumire’s article was particularly timely because it came just after UN Secretary-General Antonio Guterres had issued a memo to UN staff based in New York ordering them not to participate in BLM protests in the city, ostensibly because as international civil servants, they were expected to remain apolitical and neutral.

The UN Secretary-General’s directive made many wonder what the UN really stands for. If the UN could not support BLM at a time when people around the world were bringing down statues of slavers and colonial administrators, then what was the point of the UN? Was the Secretary-General afraid that by supporting the movement, the UN might be accused of offending the US government, the biggest contributor to the UN’s budget?

Guterres later said there was no ban on “personal expressions of solidarity or acts of peaceful civic engagement, provided they are carried out in an entirely private capacity”. In other words, if a UN staff member wants to defends human rights (a stated goal of the UN Charter), then that support should be a personal matter.

If COVID-19 has taught us anything, it is that not even a pandemic that has disproportionately affected European countries and the United States can erase the racism inherent in the Western media and in humanitarian organisations.

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