Think Again

Think Again: A Marshall Plan for Africa

America brought Europe back to life a half-century ago. Why not give Africa the same chance?

Just six months into his term, U.S. President Barack Obama is already modeling himself after the country's most transformational Democratic leader, Franklin D. Roosevelt. As Secretary of State Hillary Clinton visits Africa this month, now would be the perfect time to follow in the steps of Roosevelt -- and the most transformational Democratic secretary of state, George Marshall -- by announcing a second Marshall Plan. More than half a century after the United States helped rebuild a war-torn Europe, it's time Africa got the same chance.

The Marshall Plan was fundamentally different from the aid that Africa has received over the past four decades. The Marshall Plan made loans to European businesses, which repaid them to their local governments, which in turn used that revenue for commercial infrastructure -- ports, roads, railways -- to serve those same businesses. Aid to Africa has instead funded government and NGO development projects, without any involvement of the local business sector. The Marshall Plan worked. Aid to Africa has not. An African Marshall Plan is long, long overdue.

Aid groups will argue that such a plan, grounded in building up the local African economy, can never work. Here are the objections they'll make to an African Marshall Plan -- and why they're wrong.

"The Market Failed in Africa."

It never had a chance. No lesser masters of the market than Bill Gates and Warren Buffett have declared that the market has failed poor countries. In an era of global trade, most Africans have benefited not at all. Despite a flourishing market in most of the rest of the world, Africa remains a continent of poor villages and sprawling slums. So rather than investing in the continent's businesses and ventures, these billionaires fund NGOs and government projects for health, education, and technology. And they call for U.S. foreign assistance to do the same.

But take a look at the World Bank's annual report, "Doing Business," and you'll realize that many African economies have never had a business market to fail -- thanks to their governments' dense, unnavigable regulations. "Doing Business" ranks countries according to how easy it is for citizens to start and run businesses -- things such as registering a company, hiring and firing workers, getting credit, and so on. Poor countries in general and African ones in particular rank at the bottom of the list. The major reason is that their governments have never had an interest in fostering business because favor and aid for government and NGO projects comes so much easier. In essence, the market never failed because it never really existed.

The Marshall Plan in Europe came with conditions: Each country had to adopt policies that allowed its businesses to operate normally. It made the same offer to all of them, and those that refused got no aid. The offer went out to all Europe, but the Eastern bloc, under Soviet threat, declined. Some African countries will also decline. That means they don't get the aid.

"Strong Businesses in Africa Will Be the New Colonialists."

Yes, but that might be a good thing.A whole contingent of aid advocates admit the faults of African governments, but trace them back to colonialism. Under colonial rule, they say, foreign governments and businesses exploited Africa and left it poor. Pro-business policies, they worry, would lead to a new colonialism, with foreign companies exploiting Africa anew.

This argument flies in the race of reality. First, Africa was poor before colonialism, and for many countries, colonialism may well have made Africa richer. There were some exceptions, such as the Belgian Congo in the early 20th century, where forced labor for rubber extraction made the people poorer. But overall, Africans in 1960 were healthier, lived longer, and had higher incomes than Africans in 1900. Ghanaian economist George Ayittey calls the colonial era the "golden age of peasant prosperity" in Africa, when the vast mass of rural Africans joined the world economy for the first time. By 1960, this was even true in the Belgian Congo. The hospitals, ports, schools, railways, and roads of Africa date from the colonial era. Certainly Europeans benefited unfairly from colonialism, but for Africans the result was still an improvement over their former poverty.

What has not made Africans richer, however, are their countries' own governments, which have cut off that prosperity in favor of government and NGO assistance and foreign investment that benefits only the elite. Enabling the majority of Africa's population to access and participate in strong local businesses, through a Marshall Plan, would be a welcome breath of fresh air -- not to mention a good revenue stream for the common man and woman. The "Doing Business" rankings show clearly that countries that let their businesses thrive -- like Mauritius (No. 24), Botswana (38), and Ghana (87) -- do better for their citizens than those that don't -- like Mozambique (No. 141), Zimbabwe (158), and the Democratic Republic of the Congo (181).

"Infrastructure Must Come Before Business."

Wrong. It's the other way around. The conventional wisdom about the Marshall Plan is that it brought prosperity back to Europe by funding infrastructure. Following that logic, aid to Africa should finance physical infrastructure such as roads, ports, and telecommunications, as well as the social infrastructure of health and education. Only after that infrastructure raises Africa to a viable level can business thrive.

But this story gets it exactly backward. In all rich countries, the development of a thriving business sector came before physical and social infrastructure. In fact, the Marshall Plan worked because it made loans to European businesses first, which then paid money back into a national pot to fund commercial infrastructure. Africa has already demonstrated its potential for achieving the same. In telecommunications, for example, Africa has become the first continent where cell phones outnumber land lines, thanks to many excellent African entrepreneurs (and the many terrible government land-line systems). Besides, businesses that have a stake in the maintenance and viability of a given project are bound to be far more apt at building and maintaining infrastructure than aid agencies, which have been trying to do it and failing for the past 40 years. Given that many parts of the continent still lack basic roads, water systems, electrical grids, and more, isn't it time to retire the current, aid-driven system?

"Democracy Must Come First."

Then it may never come. A growing number of Africa watchers see the continent's problems beginning and ending with politics. They argue that only democratic countries can use economic aid well, so aid itself should fund democracy before or in addition to other priorities. In The Bottom Billion, economist Paul Collier even argues that outsiders should invade poor countries to impose democracy at the point of a gun. The model is Liberia, where peacekeeping forces defeated President Charles Taylor and handed control of the country over to an interim government, followed by an elected leader, Ellen Johnson Sirleaf, in 2005. Economic development is impossible under a brutal tyrant like Taylor and is now feasible under a normal democratic system.

But Africa has had many elections during the past 40 years. Democratic governments come and go. Liberia is Africa's oldest democracy, dating from 1847. The real question is not how to promote free elections -- which are certainly a good thing -- but how to promote lasting democracy. For that, the answer is very old and common across the globe: a middle class, created by local business. That's how it worked in Europe, the United States, and in every other enduring democracy on Earth. Liberia may have elected Sirleaf, but it still ranks No. 157 in "Doing Business." Without local business, without a Liberian middle class, how long will democracy last? A vibrant business sector leads to democracy -- as in Botswana or Mauritius -- not the other way around.

"Microfinance Is Enough."

Not even close. Microfinance loans are meant for small entrepreneurs whose operations aren't yet large enough to garner the usual business loan. Over the past 20 years that microfinance has joined the mainstream of aid, it has stood out for its success in getting many a microbusiness rolling. The original microfinance organization, Grameen Bank in Bangladesh, started out with 42 borrowers and now has more than 8 million. Grameen's founder, Muhammad Yunus, received the Nobel Peace Prize in 2006 and this year was awarded a U.S. Presidential Medal of Freedom. Hundreds of organizations have followed Yunus' lead and now make millions of loans a year to tens of millions of poor people around the world.

But what happens if one of those entrepreneurs is successful enough for a bigger loan, one that microfinance cannot provide? In the current climate, once a microbusiness grows large enough to want to get a regular bank loan -- it can't. The "Doing Business" rankings show that most poor countries put up huge barriers of red tape that prevent citizens from starting small businesses and getting credit for them. Microfinance goes to unregistered businesses, so it stays under the radar. Yet small and medium businesses are the long-term answer to poverty -- as they have been in developed countries -- and microfinance cannot help them. A Marshall Plan that rewards countries for unshackling their local businesses is the next step up from microfinance to overcoming poverty.

"Anti-Corruption Measures Will Make Aid Programs Work Better."

Hardly. Looking back at the Soviet Union of the 1980s, would you say all it needed was a good anti-corruption campaign? Certainly the Soviet government was corrupt, but the real problem was the underlying economic system. Citizens were not allowed to start and run their own businesses. Aid to Africa for government and NGO projects -- even without corruption -- has the same problem: It does nothing to help local business.

In Africa today, anti-corruption programs are doomed to failure because they leave the anti-business economic system intact. That economic system is based on aid, where the basic unit is government or NGO projects, rather than local businesses, as it is in prosperous countries. Anti-corruption measures do nothing to correct this flawed equation; in fact, they reinforce it. And no amount of transparency will yield economic growth until the structure of the African economy changes.

If she listens to the current, broken aid system, Secretary Clinton will feed that same, backward system that has helped make Africa what it is today. Instead, she should listen to her long-ago predecessor, George Marshall, who gave the aid world its biggest success story. He did it by working with local businesses and respecting the power of markets. Africa needs nothing less.

Correction: This article incorrectly referred to George Marshall as Secretary of State under President Roosevelt; he was in fact secretary under President Truman. FP regrets the error.


Think Again

Think Again: Twitter

The groundbreaking microblogging service is great for sharing links and communicating with friends. It's not so good at spreading democracy and overthrowing dictatorships.

"Authoritarian regimes should fear Twitter"

Not at all. You can't fear what doesn't exist -- and Twitter barely exists, if it exists at all, in most authoritarian countries. Generally, either they have their own microblogging services or Internet access is too slow and expensive for Twitter to be broadly useful. Furthermore, anyone who does use Twitter probably speaks English, has international contacts, and travels more than the rest of the population -- in other words, they are already lost causes, as far as the regime is concerned.

Combined with other tools - e-mail, social networking, and blogs -- Twitter can certainly be helpful in spreading news about upcoming flashmobs and protests. The demonstrations following Moldova's disputed election earlier this year were a perfect example, where a dozen local Twitter maniacs used the service to spread news about their flashmob. Eventually, their campaign (which went beyond Twitter and included Facebook and LiveJournal as well) attracted thousands of people and spilled into loud protests. While the Moldovan "Twitterati" had very little impact on the events on the ground, they did a great job using Twitter's global, viral reach to keep the protests in the international news.

However, Twitter use in authoritarian countries comes with major drawbacks. Twitter creates an extensive online paper trail that can be easily used against dissidents. In fact, as Twitter use becomes more common, authoritarian governments are likely to exploit Twitter to gather open-source intelligence on the opposition -- not a difficult task for anyone with an Internet hook-up. So Twitter could help authorities identify dissent at very early stages, tracking not just individual activists, but entire activist networks. An online friend list could enable a serious crack-down.

"Twitter was the best source of news about the post-election protests in Iran."

It depends. Twitter was a great resource during the protests -- for people who knew how to use it. If you had spent the previous six months carefully studying the Iranian Twitterverse, you would already know who to trust and who to ignore. Unfortunately, 99.9 percent of the readers around the world who turned to Twitter during the uprising had absolutely no idea what they were looking at.

Most of them relied on particular "keywords" (like #iranelection) to read everything that was being posted about the events in Tehran. After a few days, the #iranelection and #moussavi channels contained so much noise that they became attractive destinations for spammers and marketers. (Many of these spammers are clearly run on some sort of auto-pilot, because #iranelection is still one of the most popular trending topics on Twitter, though very few users seem to still be talking about the election.)

To make things worse, supporters of President Mahmoud Ahmadinejad began spreading misinformation.  Some of them were quickly ferreted out on sites like, but the damage was done.

Of course, not everyone was going into the Iranian Twitterworld blind. The best way to read the Iranian tweeters was probably second-hand on the sites of established bloggers like The Atlantic's Andrew Sullivan and The Huffington Post's Nico Pitney, both of whom did admirable work curating the valuable posts and vetting out the junk. Still, the Iranian protests pointed out some of the dangers of relying on Twitter for breaking news from abroad.

"Twitter is a great organizing tool."

Perhaps. If your objective is to get 500 people to do the Thriller dance in Grand Central Station, Twitter, with its penchant for all things viral, is your best friend. The NYPD (which also Twitters, by the way) might even decide to let you get away with it.  But if you're trying to overthrow a tyrannical government somewhere in the Middle East, you may want to think twice. Members of the local Mukhabarat (secret police) may trail behind the NYPD in their tech-enthusiasm, but chances are they are also reading your feed. You'd be much better off organizing your revolution with more secure tools -- like encrypted e-mail or even instant messaging -- and turning to Twitter only to publicize the protests that are already underway. 

The events in Moldova fell somewhere in between: a flashmob that, rather unexpectedly, grew into a mini-revolution. The events in Iran were part of an organized campaign by the Moussavi camp and, as such, were probably carefully planned offline by a handful of Moussavi's top aides who spread the word using tools they learned as young revolutionaries in 1979. Leaflets, posters, and even fax machines can still be very effective organizing tools, precisely because they are not dependent on the Internet -- which, as Iranians found out during the protests, can suffer from unbearable slowness or equally unbearable censorship. Twitter was instrumental as a publicity tool, but played little role in instigating or coordinating the protests.

"Twitter is replacing blogging."

Not quite. Twitter is surely taking over many of the niches previously reserved for blogging: simple link-sharing, for one. It also seems much better positioned to allow discussions of breaking news -- checking multiple blogs takes an eternity compared with Twitter's instant flow of information. But blogs still have a good chance of survival.  One-hundred-forty characters is not very much; blogs could become a space for longer, more analytical writing, an ironic fate for a medium once mocked for its own brevity and shallowness.

The mainstream news media also continues to be suspicious of Twitter. It took about five years to convince most newspapers and magazines that blogging was an acceptable medium for reporting news, and many are still catching up. Twitter may take less time to sink in, but don't expect it to happen overnight.

The situation in the developing world is different, particularly in countries where blogging hasn't yet fully taken off or where zany platforms predominate that define what "blogging" is and how it's done. Russians love LiveJournal, Brazilians love Orkut, and the Chinese love QQ; for them, these sites offer a platform not only for blogging, but also for social networking, instant messaging, and other online distractions. Thus, even if they do find Twitter very appealing, their primary digital life happens on other platforms. 

On the other hand, the proliferation of the mobile Internet in Africa might cause millions of new Web users to skip the blogging stage altogether and jump straight to Twitter: After all, it's hard to write an 800-word essay on a cellphone keypad.

"Twitter doesn't have a business model and might go under soon."

Don't worry. First, Twitter is very addictive -- and people are usually eager to pay to keep their addictions going. Second, it's a great intelligence-gathering tool for news organizations, marketers, and even the CIA. As with very good network, its value will rise as more members join. There's still a need for better tools to make sense of all the data generated on Twitter -- but this is not an insurmountable task. Someone will eventually figure out how to unlock Twitter's data reservoirs for the wider public (that is, the wider paying public).

Third, it still makes a very appealing acquisition target for Google, Yahoo, or Microsoft. The problem is that none of them know how to keep its entrepreneurial spirit alive. (Google already has a dismal record of killing similar companies by buying them. Just look at Twitter's early, ill-fated competitor, Jaiku -- or, actually, don't look.) But this problem isn't impossible to solve either.

Finally, the more we talk about "Twitter revolutions," the more American diplomats and policymakers fall in love with the tool. "Twitter diplomacy" might soon replace the expensive efforts of the struggling Broadcasting Board of Governors (BBG). So what that they would only get 140 characters to express the American position on a given subject? Stripping these messages of the legalese would only add to their appeal, while helping to tap into the otherwise ADD-ed minds of the "digital natives" who might never have heard the radio broadcast of BBG's Voice of America because they don't know what radio is. And given how much U.S. government money has spent to bolster the BBG, even buying Twitter outright would look like a rounding mistake.

"Twitter is brimming with spammers, impostors, and just plain crazy people."

Sure.  But that's also true of the Internet as a whole, and it doesn't stop us from using it. Compared to e-mail, Twitter spam doesn't really look that menacing, and its administrators are beginning to crack down on those who abuse the system to push sex, drugs, and rock 'n' roll on unsuspecting tweeters.

Impostors are indeed in vast supply. For instance, I suspect that the funny "Slavoj Zizek" that I am following on Twitter is not really the radical Slovenian philosopher. But this endless guesswork only makes it more fun. Twitter is a very curious universe in which even impostors add value, as long as they share cool and interesting links. (Would the real Zizek have turned me on to the marvelous site "White People Who Study Hegel?") The proliferation of impostors might even present Twitter with an actual business model, something it lacks at the moment: charging celebrities for authenticating their accounts and displaying a proud "I've been authenticated" badge. Successful companies have been built on less.

"Twitter conversations are shallow and serious people should avoid it."

Who cares? Obviously, Twitter is not the letters section of the New York Review of Books. Those looking for deep, long, insightful conversations shouldn't bother. But what attracts so many smart people to Twitter is a chance to follow what other smart people are reading and browsing -- and to do so in real time. What "Twitter virgins" do not understand is that Twitter actually facilitates the discovery of all those long and uber-insightful conversations that are happening elsewhere. As a discovery tool that works for everyone, it beats everything else out there, from syndication services like Delicious and RSS to aggregator blogs like Kottke and BoingBoing.

In the Twitter universe, you are what you follow -- so if you find Twitter boring, you're probably following the wrong people. Figuring out how to sift through all the noise and actually get hold of signal can be a challenging task, of course, requiring time and a fair amount of tinkering. But ultimately it pays off. A carefully maintained Twitter feed can deliver you information that is far more diverse and interesting than it was in the pre-Twitter days. One-hundred-forty characters are more than enough to describe a link or express one idea. 

So far, Twitter's influence on global politics is still very marginal; while it helps to draw public attention to otherwise overlooked problems and places, this will stop as soon as the media discovers yet another digital darling. But despite what you may hear from the overly conservative naysayers, Twitter's cultural impact is far greater. We may currently be at the very dawn of the era of Twitter Renaissance. Avoid it at your own peril.