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Thursday, January 5, 2017

Obama is from Venus, Putin is from Mars. Obama is an Idealist, Putin is a Realist

The current global political, and security environment remains chaotic, dangerous, and unstable. While the Obama Administration has done its best to address them, there is no doubt that the incoming Donald Trump Administration will inherit one of the most difficult and challenging set of problems since the end of the Second World War. Under Obama’s presidency, America has seen its global leadership challenged by China in the South China Sea and by Russia in the Middle East and Ukraine.

In 2015, United States' allies in Europe including UK, France, Germany and Italy defied US to join China’s newly established World Bank-style Asian Infrastructure Investment Bank. Australia and South Korea (two key US allies) have indicated that they would join the AIIB. Philippines, a long-time US ally is moving towards China’s orbit. China’s $45 billion investment in infrastructure building in Pakistan (part of the China-Pakistan Economic Corridor) has seen Islamabad move ever more closer to Beijing. Africa and Latin American countries are also deepening their relationship with Beijing in an unprecedented fashion. But that is not all. Under Obama's leadership, cybersecurity threats have grown greatly from Russia, China, North Korea and from terrorist networks with the US claiming that its November 7, 2016 elections were influenced by Russia’s cyber intrusion.

Much of the chaos we are witnessing (cybersecurity threats; the growth of ISIS and terrorism; instability in Ukraine, Iraq, Syria, Libya, Afghanistan, Yemen) are partly the result of Obama's idealist foreign policy strategic thinking. Unlike the realists Vladimir Putin and Xi Jinping who think their countries are in a perpetual geopolitical struggle and competition with the United States for global power and dominance (including economic, military, political, technological and cultural dominance), an idealist Obama does not share such thinking. In fact, while for example Putin is obsessed with power and revival of Russia’s lost global influence, Obama has been more concerned with humanity, how to help America recover and restore its tattered image after its disastrous invasion of Iraq and Afghan.

Indeed, since assuming the presidency, Obama has made a number of foreign policy decisions that are different from the hawkish policies of his predecessor. One of such foreign policy actions was his decision to withdraw US troops from Iraq at a time when Al Qaeda was not completely defeated and was still causing havoc in the country. That decision to withdraw US troops led to the lightning rise of ISIS and the danger it continues to pose to Europe, Africa and the Middle East. However, the decision to withdraw the troops is located in Obama’s belief that the world and particularly the Middle East would be more peaceful without the United States permanently stationing troops in Iraq. That thinking also informed Obama’s planned (and later botched) troop withdrawal from Afghanistan.

Obama's idealist philosophy was clearly demonstrated when became reluctant to use force against Assad of Syria. Even when Assad crossed Obama’s redlines, the US President still did not order troops to attack Assad as was anticipated. Besides, Obama gave a tepid support to Syrian rebels fighting to unseat Assad. While Obama ordered US planes to bomb ISIS positions in Raqqa, he provided only limited military assets to the rebels which contributed to the rebels poor performance on the battlefield. On the other hand, the insertion of Putin in the Syrian conflict on the side of Assad, strategically changed the direction of the conflict in favour of Assad. In December 2016, Aleppo, Syria’s biggest city fell to Assad after Russia’s increased bombardment from the sky.

Obama's idealist leaning also explains his poor support for Ukrainians against Russia's incursions into Ukraine and subsequent annexation of Crimea. Putin’s aggressive posture in Ukraine is in line with his thinking that the United States and her European allies were trying to undermine Russia by encroaching Moscow's sphere of influence. Putin saw the collapse of the pro-Russia government of Viktor Yanucovich as the final proof that the United States and Europe were determined to limit Russia’s influence in its own neighbourhood. Putin therefore reacted in a typical realist fashion: the immediate deployment of Russia’s military and cybersecurity capabilities. Putin annexed Crimea and provided direct military support to rebels in Ukraine. Rather than Obama providing huge military support to enable the government in Kiev regain control of the eastern provinces, he rather mobilised European countries to impose sanctions on Moscow, a proof that he was less enthusiastic in escalating the conflict with Putin. The sanctions did not cause Putin to alter his behaviour in Ukraine.

There are also other decisions Obama made which point to his lack of belief in war and guns as way of resolving global conflict. President Obama was initially reluctance to fight ISIS in Iraq and Syria. When ISIS swept across northern Iraq and took Mosul and begun pursuing Yazidis, Christians and other minorities, Obama’s immediate response was to fly humanitarian supplies to those who fled to the Sinjar Mountain to escape ISIS onslaught.

Even when Obama resolved to fight ISIS in Iraq, he decided to let Iraqi soldiers take the lead in the fight to recapture Mosul. That decision is a continuation of Obama’s earlier decision in Libya where he decided to the let the United States lead from behind. Rather than let the United States lead the war against Gaddafi, he preferred to take a back seat and allowed France and Britain to lead the fight against Gaddafi. Similarly, when Houthi rebels seized Sanaa, Yemen’s capital, and ousted President Mansour Hadi, it was King Salman and Saudi Arabia (not Obama and the United States) that became the decider. President Obama decided to let regional powers take the lead in regional wars as against say in 1990 when US intervened to oust Iraq from Kuwait during the Gulf War 1. Meanwhile Putin was very decisive when Mikheil Saakachvili’s government in Tbilisi provoked Moscow in 2008. Putin’s quickly made it clear to the leadership in Georgia that they would risk destroying their country if they continued to provoke Moscow. Putin’s defeat of Mikheil Saakachvili was very humiliating for George Bush who did nothing to help its caucuses ally.

Putin is the opposite of Obama. To paraphrase Robert Kagan, Putin is from Mars. Obama is from Venus. Obama believes in the rule of law; multilateral approach to addressing global problems. He is sensitive to domestic and international public opinion, has a strong faith in diplomacy and negotiation as tools to resolving regional conflict. Putin on the other hand favours unilateralism, and the use of hard power. While President Putin is aggressively asserting Russia's influence in Russia's neighbourhood (e.g. in Ukraine, Georgia, Belarus, and in the Middle East e.g. Syria), Obama has done little to counterbalance Putin in the geopolitical struggle for control of Eurasia i.e. Europe and Asia.

In Asia, China's rise as great power continues to overwhelm its neighbours particularly Philippines, Vietnam, Indonesia, etc. China is challenging US primacy and as a hegemon in Asia. While Obama responded to China's rise with his pivot to Asia policy (intended to encircle and contain China, and boost US position in Asia), China has successfully weakened the pivot through a series of strategies including adamantly continuing to develop and build military assets on the disputed South China Sea littoral islands.

Obama was hailed as a pacifist trying to bring peace rather than war in the world and was rewarded with a Nobel Peace Prize. Under his 8 year tenure as POTUS (President of the United States), Obama made it a top priority to end the more than half a century old conflict between Israelis and the Palestinians. Though he did not succeed, his effort to bring peace to the region was more genuine than some of his predecessors.

Obama also attempted to reset US relations with Russia and tried hard to work cooperatively with the Kremlin. One of his major efforts was to denuclearise the world by engaging Russia to cut the number of their nuclear stockpiles. US and Russia currently possess about 90% of the close to 20,000 nuclear stockpiles in the world. Both countries combined have 3000 nuclear warheads that can be deployed at any time. It was Obama’s belief that the world will be more peaceful without nuclear weapons hence his insistence on reaching nuclear deal with Iran. Indeed, Obama’s negotiations with Iran to freeze to Tehran's nuclear activities and to free the Middle East from arms race and weapons of mass destruction could not have happened under any Realist president.

Obama's decision to end more than 50 years of animosity with its southern neighbour i.e. Cuba, represents a major paradigm shift in US foreign policy calculations. His visit to Cuba is a testament to his in peace and good neighbourliness. That Americans and Cubans can freely visit each other, do business together can only happen under a leader who does not believe in a zero sum foreign policy making.

Indeed Obama’s Cuba gestures has brought the final chapter of the Cold War to an end.
Climate change has been touted as one of the leading political, economic, social and environmental threats of our time. Obama has recognised the threat a warming planet and changing climate pose to humanity. He has pushed for emissions cut with major polluters like China, the European Union, India and other major polluters. The Paris climate agreement represents a hope for humanity.

How will history judge Obama? In my opinion Obama will be judged as a president whose love for humanity, global peace (as against Putin’s narrow national interests) forced him to take decisions that made his enemies gear for his blood while his admirers wished he had governed for a long time.
5 January 2017

Wednesday, January 4, 2017

Which way for Yahya Jammeh and The Gambia: Carrot or Stick, Persuasion or Coercion?

Which way for Yahya Jammeh and The Gambia: Carrot or Stick, Persuasion or Coercion? 

Yahya Jammeh must let wishes of the people stand and spare his country any bloodbath
Yahya Jammeh must let wishes of the people stand and spare his country any bloodbath

In 2004, a high-level panel instituted by Kofi Annan the then UN Secretary General formulated and championed the concept of the responsibility to protect. The panel argued that states have obligation to conduct their internal affairs in line with established international norms and practices and that in situations where a state fails to adhere to these accepted standards, other states have responsibility to intervene. This is the challenge facing ECOWAS in the ongoing crisis in The Gambia: to intervene or not to intervene.
After ruling the nearly 2 million inhabitants of The Gambia for more than two decades, the people of The Gambia said they have had enough of their president and so voted for the leader of the opposition.
President Jammeh’s initial acceptance of the December 1, 2016 election results was welcomed by everyone in Africa and beyond because it prevented the worst case scenario from happening. However, President Jammeh’s subsequent backtracking and rejection of the poll’s verdict a week later, has thrown the West African subregion into another unwanted, and unnecessary confusion.
But one thing is clear if Jammeh’s wishes are made to stand and go unchallenged, it will undermine the democratic, security and economic dividend the region has chalked in the last few years. It will also embolden other leaders with undemocratic intentions to pursue a similar path. In fact, it will be a recognition of democratisation of impunity in the subregion.
However, President Jammeh’s decision also presents a major challenge for the leadership in the subregion. It is a test not only to their leadership and diplomatic skills, but also their ability to present a common, unified response to the looming problem particularly for the four major economies and militarily strong countries i.e. Nigeria, Ghana, Senegal and Ivory Coast.
A key question is how to address the crisis in The Gambia. The leadership of ECOWAS should approach The Gambia problem in three phases: diplomacy; sanctions; and resort to force.
The first phase should involve negotiation, diplomacy, persuasion and the use of carrot through dialogue. This first phase will require patient on the part of ECOWAS’ leaders. The bloc's leadership must listen to any concerns that President Jammeh may have and address those concerns adequately and in timely manner. In this diplomatic effort Jammeh and his military and security backers must be persuaded that their country is bigger than anyone and that the interest of the country must supersede all other interests. They must also be assured that they will be needed to contribute their wisdom, and knowledge to promote orderly development of their country. If they think that by leaving power their life will be in danger, then they could have the option to live peacefully in any country of their choice in the subregion.
President Jammeh should be given assurance that he and his backers will not be prosecuted for crimes against the people and that if any prosecution will take place it will be within internationally recognised practices. These and other inducement should be presented in clear language to the Mr. Jammeh. Put differently, at the this initial stage of negotiations, ECOWAS should not rush into war but rather give diplomacy a chance.
President Jammeh’s key security and military backers must be spoken to and be persuaded to influence him to step down. They should be made to understand that putting the interest of their country over and above the parochial interest of the President is something worth trying. They must be made to accept that The Gambia is bigger than one person. Again they should be persuaded to accept the truth that they stand to lose their economic power should the struggle turned bloody. Their businesses will be inflame should they resist the people’s power. Additionally they should be to understand that they may jeopardise their own life as well as those of their families, friends and love ones. What if Jammeh refuses to step down after diplomatic efforts are exhausted? If this happens then ECOWAS, AU and the international community must implement the second phase i.e. sanctions
First, ECOWAS should work with the international community to freeze the assets of the The Gambian leadership that are held outside the country. This will make it difficult for them to use those assets to prosecute any eventual conflict with ECOWAS.
Second, ECOWAS should institute visa freeze and travel restrictions against the leadership, their families and close allies. Third, if the first two actions do not yield the desired objective, then ECOWAS and the African Union must implement direct economic blockage against the country. Senegal must be persuaded to close its borders with The Gambia. Gambia’s narrow access to the Atlantic Ocean must be blockaded to prevent the government to get supply. Fourth, if the above measures do not get Jammeh and his backers to leave power then Jammeh should be presented with hard choices: accepting the will of and his people or end up being hunted down just like those African tyrants such as Burkina Faso’s Blaise Campore or Niger’s Mamadou Tanja or Ivorian Laurent Gbabgo and Charles Taylor of Liberia. President Jammeh should be told in plain language that those who make peaceful and orderly transition or transfer of power impossible, make violent transfer of power possible.
If Jammeh rejects ECOWAS diplomatic efforts, then the bloc must implement the third phase i.e. declaration of war on Jammeh. In advocating for war as a last resort, I am aware of the short and long term impact it could have. War unlike elections, is a serious destructive force. While it is easy to start a war, it is not so easy to stop or end it. When it finally starts, (as we have seen in Libya, DRC and South Sudan, Somalia, Rwanda) the economic and human cost to the people, the country and region could be enormous. In deed the final outcome of a war is always uncertain. This is because of shifting priorities, goals, objectives; the enemy could adapt to the war environment, and change tactics and strategy.
Therefore, the war must have a clear objective, in Gambia's case to install a democratically elected president into office; to ensure the wishes of Gambians are respected; to promote political stability and constitutional rule; protect human rights, rule of law and respect for national institutions (example the Electoral Commission), regional conventions. There should also be detailed planning of the war and its aftermath to ensure that the objectives are achieved.
Lord Aikins Adusei

Sunday, December 25, 2016

ECG Privatisation: Privatising for who? The experience of Australia, UK

By Lord Aikins Adusei

The financial, managerial and technical challenges facing the Electricity Company of Ghana (ECG) have galvanised the apostles of privatisation, anti-state ownership of business and the neoliberal-free market capitalists to strongly advocate for ECG to be privatised.
Their argument is that selling ECG will make it more efficient, financially resilient and economically prosperous. ECG when privatised they argue, will bring huge benefits to Ghana in the form of security of power supply.
In other words power supply will be reliable and the current system of power cuts, blackouts and power rationing will be a thing of the past because privatisation will bring in additional capital, investments and technical and managerial talents.
In the long term prices will be stable or even fall and consumers will be happy. Taxes to government will increase and more jobs in the energy sector will be created. For the government of Ghana, money raised through the sale of ECG will enable it to increase expenditure, cut taxes or repay the nation’s debt.
At the same time privatising ECG will enable the government to access the $500 million Millennium Challenge Compact Funds promised by the US government.
But these are all illusions. In the first wave of privatisation that took place in Ghana in the 1990s, Ghanaians were told that the companies and individuals buying state owned companies would transform them into thriving enterprises providing Ghanaians with endless job opportunities and thus turning Ghana into a prosperous nation.
What they did not tell Ghanaians was that the IMF, the World Bank, the British and the U.S. governments through USAID were behind the push for Ghana to sell its assets as a condition for more loans. In other words these actors used Ghana’s poor financial situation to demand the dismantling of the state and its assets.
There is strong evidence that Mr. Jerry Rawlings and the PNDC resisted pressure to sell state owned-companies. But the IMF, the World Bank, the Ronald Reagan and Margaret Thatcher administrations piled on the pressure using several tactics.
A message from the White House to USAID representatives instructed that they should make sure Ghana sold everything.
Needing cash and unable to raise it at home, the National Democratic Congress party which replaced the PNDC went on a selling spree selling both performing and non-performing companies alike. By 1999 almost 70 percent of state owned assets had been sold. While majority of the state-owned companies sold went to Ghanaians, most of the high valued ones were sold to foreigners. As Prof Antoinette Handley of University of Toronto observed in 2007: “Of 212 divestitures, 169 were sold to locals. This may look like a high figure, but the firms sold to locals were overwhelmingly the smallest, least valuable firms and, in terms of value, may have comprised only ten percent of the total” [1].
One of the sectors of the economy which saw rapid privatisation was the mining sector. The most valuable company in the mining industry was the Ashanti Goldfields Company. For decades the company was controlled by the British firm Lonrho with Ghana having little to no shares at all. Lonrho needed to extend its leases in the 1960s and so it agreed to grant the Ghanaian government 20 percent share in the company to allow the leases to be renewed. When Acheampong’s military government took over power in 1972, it realised how Ghana had been shortchanged. How could Ghana which owned the gold be having only 20 percent shares while a foreign firm controlled everything? the leaders asked. Therefore, Acheampong seized another 35 percent for Ghana, bringing Ghana’s total shares to 55 percent.
However, in 1994 the Rawlings led-NDC government privatised AGC by selling 39.8 percent of its shares. Ghana received more than $454 million from the sale of AGC. What happened to that money is a story for another day. However, Ghana subsequently became a minority shareholder with only 15.2 percent shares in AGC when the NPP replaced the NDC in 2001. Ghana Consolidated Diamonds Limited and other mining firms were also sold.
How did the privatisation of AGC and the mining sector benefit Ghana and how will privatisation of ECG benefit the country? Several reports by the World Bank, United Nations, and Bank of Ghana have revealed that the privatisation of the mining sector has been detrimental to the economy and the welfare of the people of Ghana particularly the communities and farmers in the mining areas. According to the United Nations Conference on Trade and Development (UNCTAD), in 2003 for example, mineral exports from Ghana generated $893.6 million but Ghana got only $46.7 million or just 5% while the companies took the remaining 95% or 846.9 million [2]. Similarly, The UK based The Economist magazine reported that: “Gold accounted for 40% of [Ghana’s] exports in 2008, with a value of $2.2 billion. But the government received only $116m in taxes and royalties from mining firms” [3].
In 2003, the World Bank (the chief advocate of privatisation in Ghana) acknowledged that Ghana has not benefited from mining activities in terms of revenue, employment, infrastructure development and environmental sustainability and urged Ghana’s leaders to take steps to reverse the trend but nothing happened. Using very diplomatic words the World Bank wrote that:
“It is unclear what gold mining true benefits are to Ghana. Large scale mining by foreign companies has high import content and produces only modest amounts of net foreign exchange for Ghana after accounting for all its outflows. Similarly, its corporate tax payments are low due to various fiscal incentives necessary to attract and retain foreign investors. Employment creation is also modest given the highly capital intensive nature of modern surface mining techniques. Local communities affected by large scale mining have seen little benefits to date in the form of improved infrastructure or services provision because much of the rents from mining are used to finance recurrent, not capital expenditure. A broader cost-benefit analysis of large-scale mining that factors in social and environmental costs and includes consultations with the affected communities needs to be undertaken before granting future production licences” [4].
The suffering and agony of farmers and local communities affected by large scale surface mining and who have seen little benefits of mining to date was captured in a study by a Ghanaian scholar Jasper Ayelazuno in 2011. One female farmer from Dumasi in the Western Region told him:
“There is one important thing for us as peasant women in this village that I must mention. We are not educated to get a different job so we depend solely on our land. When we go to the forest, we can fetch firewood free for our own energy needs and to sell for income. But what has the Ghanaian state done? It has given all our land to the white man to mine for gold; and not to do underground mining but surface mining, destroying all our arable lands. In the midst of all this, I cannot say the state of Ghana is good to me or responsive to me. On top of that, the Ghanaian state has given the white man the authority to do whatever they want to us: I have my own land and I cannot have access to it; my water sources (the streams) have been polluted, etc. Up till date, the Ghanaian state has not come to our aid, either to check these mining activities or to provide us with potable water since the mines have polluted our water sources. For me, there is nothing that the Ghanaian state can do for me to view it as a responsive state; so both the past and present government have not helped us” [5].
Since the days of privatisation, more than 50,000 farmers have been displaced by the mining companies who continue to refuse to pay satisfactory compensation to the farmers. While a cocoa farmer could earn $25 a year from a single cocoa tree, mining companies only pay about $8 per tree when they cut the cocoa trees for their mining operations. The economic life of a cocoa tree is between 40 and 50 years [6]. This means most cocoa farmers lose between $1000 and $1250 per a cocoa tree. If this is multiplied by 50 or 100 cocoa trees the financial loss to a farmer could be between $50,000 and $125,000. This injustice is allowed to happen to cocoa farmers because of the mining companies’ closeness to Ghana’s elites. These facts and realities are hardly acknowledged by the torch-bearers of ECG privatisation.
The privatisation of ECG will not be different from what is happening in the mining sector, in fact its impact on Ghana may be far more severe because of electricity’s strategic role in the economy. ECG is a strategic asset, meaning it constitutes a vital part of Ghana’s economy and hence its security. For instance, a private company distributing electricity could decide to sabotage the economy by failing to distribute power to critical sectors of the economy.
One of the reasons why there are constant fuel shortages in Nigeria is due to the fact that import of petroleum products is controlled by few private companies and individuals who sometimes hold the country to ransom by failing to import and distribute fuel. They sometimes create artificial shortage to force prices up just to increase their profit margins. It is this energy and economic security fears which has led Prime Minister Theresa May of UK to kick against China’s involvement of the Hinkely Point C nuclear power project.
From the perspective of the Ghanaian state, the ultimate aim of electricity privatisation is to give consumers lower prices, promote efficiency and reliability, and drive better investment decisions.
But the experience of Australia, United Kingdom and the United States which have implemented electricity privatisation tells the opposite story. In the United Kingdom, the privatisation of electricity has resulted in six big private energy companies dominating the sector including British Gas, Npower, Scottish Power, E.ON, EDF Energy, and Scottish Power and Scottish and Southern Energy (SSE).
The profit-making motive of these companies has led to unusually high prices of energy in the UK. According to Prof Benjamin Sovacool of Vermont University, USA, "from 2004 to 2012 domestic electricity prices increased by more than 75 percent [an increase of more than 9 percent a year] and gas prices increased by 122 percent with gas prices increasing 15 percent from 2011 to 2012". According to the UK's Department of Energy and Climate Change "For several years prices have been the most influential factor in the movements in fuel poverty. Prices have risen at a rate well above that of income". This high energy prices has made electricity unaffordable for many companies, households and families leading to massive rise of households living in fuel poverty. Any time energy prices increase by 1%, more than 40,000 households become fuel poor. As a result, the number of households living in fuel poverty in all of UK has been rising steeply. It rose from more than 2 million in 2003 to more than 3 million in 2007 to more than 5 million in 2009. In fact, in 2009 about 18 percent of all households lived in fuel poverty and it has been estimated that as of 2015 more than 25 percent of households were living in fuel poverty [7].
Thus a combination of low household incomes,extremely high energy prices and high penalties for nonpayment of energy bills has made it difficult to contain the escalating rise in fuel poverty and its socioeconomic implications for millions of households. In fact, thousands of people die of fuel poverty every year especially during the cold winter and hot summer months. Between 2012 and 2013 over 31,000 died [8] while in 2014 over 15,000 people died [9]. Some families have to choose between food and heating and lighting their homes. Despite the presence of well-developed consumer advocacy groups and media campaigns, energy is the second most important factor after housing rent that takes away a large chunk of people’s income. Some families spend more than 10 percent of their monthly income on energy.
In Australia where some states have privatised electricity, Prof John Quiggin, an Economist at University of Queensland who spent 20 years analysing electricity privatisation in Australia points out that in states in Australia where electricity is privatised, "Privatisation has produced no benefits to consumers, but has resulted in large financial losses to the public".
Privatisation has resulted in dramatic rise in electricity prices as well as serious customer dissatisfaction and complaints. He observed that “Privatisation, corporatisation and the creation of competitive electricity markets were supposed to give consumers lower prices and more choice, promote efficiency and reliability, and drive better investment decisions for new generation and improved transmission and distribution networks. [Instead] prices have risen dramatically. A secure low-cost supply has been replaced with a bewildering array of offers, all at costs inflated by a huge expansion in marketing” [10].
His findings which is contained in a report titled “Electricity Privatisation in Australia: A Record Failure” include the following:
"Prices— have reversed their declining trend, and are highest in privatised States. Since the NEM [National Energy Market] was introduced, prices from 2005 have risen sharply.
"Quality — customer dissatisfaction has risen markedly since the NEM, profoundly for privatised States, where complaints to the relevant energy ombudsmen have grown from 500 per year to over 50,000’. ‘Reliability— has declined across a wide range of measures in Victoria [state], notwithstanding increased “physical audits” and expensive financial “market incentive” programs.
"Efficient investment — has not occurred, as the pricing mechanisms have not delivered coherent signals for optimal investment.’ ‘Efficient operation— resources have been diverted away from operational functions to management and marketing, resulting in higher costs and poorer service…The NEM and privatisation have reduced real labour productivity, as employment and training of tradespeople have been gutted and the numbers of less productive managerial and sales staff have exploded."
Consumers bear the cost of private owners’ debts— ‘In privatised States, customers’ bills include the cost of almost 10% per annum interest on the corporate owners’ debt on the electricity assets. This compares to government borrowing costs of closer to 3%. The NEM has mimicked these exorbitant borrowing costs to all customers.’ Private owners are receiving unjustifiably high rates of return based on the low investment risk — ‘The high rates of return to private owners for the low investment risk is unjustifiable and irresponsible. The private owners of price-regulated distribution assets have outperformed almost all investment classes, by making post-tax real rates of returns close to 10% annually since 2006.’
The examples from Australia and United Kingdom indicate that privatising ECG could deepen socio-economic inequality because affordability rather than access and needs will be the rule. Private companies, who will put profit-making above everything else, will use price increase as a strategy to make huge profits. They will expect Ghanaians to bear the cost of their investment through price hikes. Not all consumers in Ghana will be able to afford the huge price hikes. Electricity could even become a luxury commodity allowing those with the means to buy to live, leaving those without the means to live without it, with serious socio-economic consequences for them and their families. As Ghana seeks the best way to produce and distribute electricity, policymakers must know that privatisation is not always the answer and in Ghana’s case will be unbeneficial.
[1] Handley, A. (2007) ‘Business, Government, and the Privatisation of the Ashanti Goldfields Company in Ghana’ Canadian Journal of African Studies, 41:1, 1-37 (see pp 8 and 12)
[2] UNCTAD (2003) ‘Economic Development of Africa: Rethinking the Role of Foreign Direct Investment’ http://unctad.org/en/Docs/gdsafrica20051_en.pdf (see page 50)
[3] The Economist (2010) ‘Carats and sticks: mining in Ghana’ The Economist, 3 April 2010.
[4] World Bank (2003) ‘An assessment of the performance of Mining in Ghana’; http://lnweb90.worldbank.org/oed/oeddoclib.nsf/docunidviewforjavasearch/a89aedb05623fd6085256e37005cd815/$file/ppar_26197.pdf (see page 23)
[5] Ayelazuno, J (2011) ‘Continuous primitive accumulation in Ghana: the real-life stories of dispossessed peasants in three mining communities, Review of African Political Economy, 38:130, 537-550’ (see pp. 544-5),
[6] Tickner, V. (2008) ‘Africa: International Food Price Rises & Volatility’, Review of African Political Economy, 35:117, 508-514 (see page 4)
[7] Sovacool, B.K. (2013) 'Energy and Ethics: Justice and the global energy challenge'
[8] The Telegraph (2013) ‘Energy row erupts as winter deaths spiral 29 per cent to four year high of 31,000’ http://www.telegraph.co.uk/news/health/elder/10474966/Energy-row-erupts-as-winter-deaths-spiral-29-per-cent-to-four-year-high-of-31000.html
[9] The Independent (2015) ‘Fuel poverty killed 15,000 people last winter’ 30 April 2015 http://www.independent.co.uk/news/uk/home-news/fuel-poverty-killed-15000-people-last-winter-10217215.html
[10] Quiggin, J. (2014) ‘Electricity privatisation in Australia: A record of failure’ 20 February, 2014

Ghanafesto: The questions we must ask the candidates and the issues we must vote on

By Lord Aikins Adusei
It is less than 30 days to the elections and as it is expected the political climate in Ghana is highly charged. There are both excitements and emotions throughout the country as almost everyone is getting involved.
The reasons for the excitement and emotions are not farfetched. As one would-be voter told me: ‘It is my election. It is our election. It is the future of Ghana we are talking about here.’
As usual, politicians and political parties are busily unveiling their manifestos and are aggressively courting Ghanaians to vote for them. Celebrities including musicians, comedians and film actors are being recruited and deployed like fighter pilots to boost and defend their recruiters’ campaign and weaken their recruiters’ opponents. Even chiefs are lining up and declaring their support for some candidates and political parties. As part of their strategies to win the voters’ support, some politicians have abandoned issue-based politics and are highlighting the region they come from, the religion they adhere to, the language they speak, their tribe, ethnicity and blood ties.
However, voters must not vote for a candidate solely because he/she has been endorsed by a chief, a musician or a film actor. Neither must voters cast their votes for a candidate because he/she is of the same tribe or ethnic group as themselves or is from the same region, or speaks the same language or adhere to the same religion as themselves.
Rather the electorates must vote based on the issues, policies and programmes the candidates are offering and the commitment of the candidates to deliver. The electorates must elect a candidate who will put Ghana first and bring true meaning to Ghana as the Black Star of Africa. Voters must elect a candidate who has a strategic vision, commitment, dedication, a real passion and the willingness to transform Ghana from its current agrarian status to West Africa's economic, financial, industrial and technology powerhouse.
Voters must ask the following important questions:
Economic Security: Which candidate has a real economic policy (not just the usual talk and promises) to invest, grow and expand all the sectors of the economy including agriculture, service and most importantly manufacturing? Which candidate's economic policy will diversify Ghana’s economy away from dependence on the export of few raw materials and put an end to Ghana's delayed industrialisation? Which candidate's policy will bring investment, grow jobs, boost local manufacturing, support local businesses, and strengthen domestic trade and export? Which of the candidates has a policy and commitment to support start-up businesses and the self-employed? Which candidate’s policies offer fairer taxes to businesses, employees, employers? Which of the candidates has the best policy that will reduce the nation's growing debt, cut wasteful government expenditure, reduce inflation and interest rate, and bring price stability? Which of the candidates’ policies will enable Ghanaian companies to compete and become global champions? Which of the candidates has a policy that will narrow the North-South economic divide and the Rural-Urban economic divide?
Energy Security: Energy is the engine of Ghana’s economy. In the last several years, very few Ghanaians have not experienced power rationing, and blackouts. Despite paying one of the highest electricity tariffs in the world, electricity remains a luxury commodity with businesses and households always struggling to get power. The economic and financial cost of the irregular power supply is huge. For large and medium size companies, unavailable power has added a huge cost to their operations as they resort to diesel and petrol-powered generators to produce goods and provide services. For small scale businesses the devastation has been enormous as their limited capital makes it difficult for them to procure generators for their activities. Hospitals and schools are among those institutions also greatly affected. For households, the erratic power supply is equally disastrous as their thermal comfort and social life have been affected.
Voters must scrutinise the policies of the candidates to ascertain which of them has a realistic policy and programme to address Ghana’s energy security challenges? Which candidate has a realistic policy and willingness to put an end to erratic power and guarantee that households and businesses will have an adequate, reliable, and affordable supply of electricity always? Which candidate has a strategic policy to transform Ghana’s abundant but untapped energy resources (solar, wind, hydro, natural gas, crude oil) into electricity for national development? Which candidate’s policy will upgrade the existing energy infrastructure and build new ones to reduce or eliminate the huge infrastructure deficit that contributes to poor electricity generation and distribution? Which candidate recognises the importance of energy diplomacy and is willing to work with other energy-rich countries to ensure Ghana does not depend on a single country (e.g. Nigeria) for our energy imports?
Food and Water Security: A nation that cannot feed its population does not command respect among other nations. More importantly, a nation that relies on food import is never far away from political, financial and economic crises. Ghana spends almost $1 billion on food imports annually a situation which is not only destroying the agriculture sector and the domestic market but is also partly responsible for depreciation of the cedi, pressure on the exchange rate, high inflation and international trade imbalance. The hundreds of millions of dollars used to import foods annually could be channelled into the domestic agriculture economy to boost local production, provide jobs and make food available and accessible to every Ghanaian at affordable prices. Also in several cities, towns, and villages across the country, access to potable water is hard to come by. The taps are not only dry but there is a problem with the safety of water consumed in many households.
The question is which candidate’s policy will make nutritious food available, accessible and affordable to all Ghanaians at all times? Which of the candidate's policy will cut food imports and the increasing import bills? Which candidate’s policy will revive the shrinking agricultural sector, boost local food and cash crop production and consumption and stimulate the local economy? Which of the candidates has a policy that will protect Ghanaian farmers from dumping by foreign governments? Which of the candidates addresses land rights, land security, and land access? Which of the candidates has a realistic policy to make water accessible and affordable nationwide?
Technology: The world is not only becoming technologically dependent but technologically driven. In fact, we live in a digital age where smartphones, computers, tablets, satellite communication, fast internet broadband and applications are enabling people to work from home, connect to the rest of the world. Ghana has made strides but a lot more needs to be done to eliminate the technology backwardness confronting the nation. For example, many Ghanaian farmers still rely on rain-fed agriculture as well as low yielding seeds for food production. Canals, irrigation, silos, food storage and packaging are still beyond the reach of farmers. The cost of technology is very high compared to what exists in other countries. Making international calls is still out of reach for many Ghanaians. The Internet has still not penetrated many parts of the country and many mobile phone users have poor signals at home and as they change locations.
The questions voters must ask are: Which of the candidates has the policy to support Ghanaian-owned technology firms to go global? Which of the candidates has the best technology policy that will enable Ghanaians to have technology devices for their businesses, education, transportation, health, farming at an affordable cost? Which candidate has a policy that will provide internet security for Ghanaians against the growing threat from hackers and malicious software? Which of the candidates has a policy that will expand internet access, reduce international call charges, increase internet speed and lower charges consumers pay? Which of the candidate’s policy will increase competition among the companies and protects consumers?
Education: Education is the backbone of every country’s success story. It plays a critical role in developing and refining the minds and values of a country’s population. It inculcates discipline and critical thinking in the youth who later become a country’s leaders. Education makes a country’s workforce both productive and competitive in an increasingly globalised world. It has an added advantage of bringing social order, political stability, industrial and technological prowess to a country. It brings enormous economic benefit to a country and its population as can be seen in Ghana’s independent peers such as Singapore, Malaysia and South Korea. These countries were far behind Ghana in the immediate years of independence. Today they are five times ahead of Ghana in every human endeavour despite lacking some critical natural resources that are abundant in Ghana. What changed these countries so dramatically is their emphasis on education particularly Business and the STEM subjects: i.e. Science, Technology, Engineering and Mathematics. They embarked on a systematic change in the broader curriculum; placed a huge emphasis on research and implemented the results of the research to benefit society. They also made training, retraining and retaining teachers a top priority. They encouraged their citizens in Western universities to return and also attracted Western scholars to teach in their universities. For instance Prof Howard Thomas, former dean of Warwick Business School in the UK now teaches at Singapore Management University while Prof Arnoud de Meyer, former dean of University of Cambridge’s Judge Business School is now the President of Singapore Management University.
These countries have also established research collaboration and cooperation between their universities and top universities around the world and made learning materials available to their students. For example Yale-NUS College based in Singapore is a collaboration between the Yale University of US and the National University of Singapore and is headed by Prof Bertil Andersson, a former head of Linköping University in Sweden. Imperial College London and the Nanyang Technological University of Singapore jointly operate a medical school in Singapore to train physicians in the country. These collaborations have seen a dramatic rise in global ranking positions and citation impact scores of their universities. It has also led to the creation of national champions and global giants such as Samsung, Hyundai, Daewoo, LG of Korea and Petronas of Malaysia.
In Ghana, the quality, standard and method of delivering education has not changed much from the days of independence. In many primary, secondary and tertiary schools, teaching and learning are still delivered by means of blackboard and chalk. Ghanaian tertiary schools are still theory-driven rather than the context-driven system that is shaping Asia economies. There are little collaboration and cooperation between Ghana’s universities and other top universities around the world. Many research laboratories in Ghana do not have the equipment and instruments to work with. Few lecturers are able to publish five journal articles a year largely due to poor funding. Some students leave junior high school unable to read and write.
As Ghanaians go to the polls to elect a president they must ask questions about which of the candidates is committed to delivering high quality, accessible and better funding education in Ghana. Which candidate’s policy will make high-quality education accessible to all Ghanaians?
Which candidate is committed to early childhood development at the creche, nursery and primary level? Which of the candidates is committed to prioritising secondary, vocational and technical education in the country to make them the engine of Ghana’s development? Which candidate has real interest and willingness to invest in research and education, encourage data and solution-driven tertiary education system, and move Ghana away from an education system that only graduates students?
Which candidate is willing to provide the investment with the education sector needs, i.e. to properly pay teachers and equip students with the best learning materials and tools to produce the best human resource needed in the 21st century? Which candidate is willing to transform the research produced by tertiary institutions into policy that will benefit Ghana? In short, which candidates’ policy will turn Ghanaian academic institutions into centres of excellence, incubators of ideas, technological innovations, scientific powerhouses, and blueprints of national development?
Security and Defence: Ghana, like the rest of West Africa, faces several threatening non-traditional security challenges including terrorism, narcotics trafficking, armed robbery, piracy, internet scam, illegal fishing, human trafficking, weapons proliferation, climate change, pandemic diseases, land guards and youth unemployment.
Which candidate's security and defence policy can best protect Ghana and Ghanaians from the menace of terrorism, arm robbery, piracy, internet scam, illegal fishing, drug trafficking, human trafficking, weapons proliferation, land guards, and other crimes that impact on Ghana's security and its image? Which of candidates has a policy that will guarantee the autonomy and independence of the police and security agencies? Which candidate’s policy is capable of drawing the youth away from the recruitment strategies of terrorist groups? Which candidate has the best defence policy to modernise the Ghana Armed Forces into a modern fighting force with the best offensive and defensive capabilities and deterrents to protect the territorial integrity of Ghana? For example which of the candidates is committed to building the cyber capabilities of the armed forces and other technologically driven defence capabilities such as drones?
Corruption: Corruption is a drain on Ghana’s economy. It is destroying the entire fabric of the Ghanaian society. Corruption at various public and private institutions is the reason why Ghanaians enjoy poor services and substandard goods in the country. It is the reason why roads, bridges, and other public projects do not stand the test of time. It is the reason why prices of goods and services always keep rising. It is the reason why inefficiencies and poor performance exist in the public sector. And it is a major factor why investors shy away from investing in Ghana. Few people who are not working hard are getting rich overnight at the expense of the society. Ghanaians pay a bribe for every service they receive from the state. The poor cannot send their children to better schools or access hospitals because of endemic corruption. The Passport Office, Tema and Takoradi harbours, DVLA, Police, CEPS, Immigration, Ghana Cocoa Board, the Forestry Commission, Mines, Petroleum and several institutions of state are a goldmine for few people who have turned them into their personal, money-making fiefdoms.
Freedom of Information remains one of the tools through which corruption could be fought yet the politicians have shown little commitment to passing the needed laws that will allow Ghanaians to obtain information about the activities of government and its agencies.
The questions electorates must ask are: which of the candidates has realistic policies and willingness to protect the public purse? Which of the candidates will be willing to implement policies that will tackle and clean Ghana of the rampaging effect of corruption? Which of the candidates will allow corrupt officials to be punished? Which of the candidates is committed to passing the Freedom of Information Law so Ghanaians can know what their government is doing in their name?
Decentralisation: Too much economic, financial and political power and activity are concentrated in Accra and some very few cities and towns especially the regional and district capitals. This has contributed to the growing gap between rural-urban development and the associated tide in rural-urban migration leading to several crises in the cities such as housing crisis, employment crisis, homelessness, road congestion, land crisis. Between 50 and 90% of all foreign direct investment is concentrated in Accra alone. While the agricultural and mining areas produce the bulk of the nation’s wealth (gold, cocoa, cotton, maize, etc) the revenue realised from these activities is captured in Accra with very little in terms of infrastructure, employment and money going to the communities to the detriment of the communities and those who live there. Despite the fact that the people in the districts, municipalities and metropolis are the ones affected by the decisions and policies of the chief executives, the people do not get to choose the chief executives. The chief executives are imposed on them by the president. This is not only an affront to democracy but is also the very reason why most districts remain underdeveloped because the chief executives are answerable to the president and not the people.
The questions voters must ask are: which candidate is committed to economic, financial and political decentralisation of the country so that rural areas can also thrive and not be a hub for poverty and economic underdevelopment. Which candidate is committed to transferring political, economic and financial power to the districts so that they can become engines of development?
Constitutional Reform: Too much power is concentrated in the hands of the president and the executive arm of government at the expense of Parliament and the Judiciary. The President appoints almost every principal officer in the country, from the chief of staff of the Ghana Armed Forces, to the IGP of Ghana Police Service, Head of BNI, the Chief Justice and other Supreme Court Justices, Governor of Bank of Ghana, the Electoral Commissioner, the Commissioner for Human Rights and Administrative Justice (CHRAJ), ambassadors, attorney general and minister of justice, cabinet members, district chief executives, regional ministers and some members of the Council of State. Such unlimited, unquestionable and blank cheque power is the reason for the high level of corruption, patronage, personalised politics, underdeveloped institutions and poor governance in the country. Foreign Policy is conducted solely by the president with Parliament playing no role. Ghana’s Parliament is one of the weakest institutions in the country. It has few powers compared to what the constitution gives to the Executive and particularly the President. The President appoints some of his ministers from Parliament a situation which has contributed to weakening Parliament and turning it into the President’s other chamber. Meanwhile, the uncapped term limits of parliamentarians have encouraged a practice where people who are virtually not representing their constituencies get elected because of their association with political parties.
Voters must ask questions about the candidates most committed to promoting constitutional reform, strengthen Parliament, and make Ghana’s constitution work better for the citizens.
Voters must ask similar questions about Youth Employment; Health; Housing; Transportation; Infrastructure; Environment, Sanitation, Air quality, and Climate Change; Foreign Policy; Poverty reduction, and inequality; Rural and Urban Development.
By Lord Aikins Adusei


By Lord Aikins Adusei
The killing of Gaddafi on 20 October 2011 by NATO-backed rebels came as a shock to most Africans. While it is regrettable that he died such a terrible death, he was partly responsible for his own misfortune. He failed to build the defence capabilities that could defend Libya against the country’s many European and North American enemies. While Libya under Gaddafi had some of the best weapons in Africa, these weapons were not Libya made. They were designed and built in Europe, America and Asia. In other words, Gaddafi relied on military technologies developed by France, Britain, Italy, Russia, China, and the United States. Despite the billions of dollars of oil money, Gaddafi didn't help Libya to develop a sophisticated indigenous defence industry capable of producing some of the world's best defence systems such as Israel's David Sling, Iron Dome or the Jericho III intercontinental ballistic missiles (ICBM).
The negative consequences of Gaddafi's reliance on foreign particularly Western defence technologies became all too clear when these same countries used their other superior war machines to degrade the ones they had sold to him. Gaddafi's defence easily crumbled when NATO's onslaught started. Part of the reason is that the West who had sold him his weapons knew the weaknesses of the systems they had sold him and exploited these weaknesses to their advantage.
But Gaddafi is not the only African leader whose failure to develop an indigenous defence industry cost his government and country.
In 2011, during the post-election crisis in Ivory Coast, the entire Ivorian airforce was destroyed by France within some few minutes. Laurent Gbagbo could not fight back when France invaded his country. This was because like Gaddafi's Libya, the Ivorian airforce relied on defence systems and technologies made in France and other European countries. France was aware of the defence system and technologies the Ivorian airforce was using and hence used its other superior weapons to destroy Gbagbo's forces. If Ivory Coast had developed its own defence technologies and capabilities, France wouldn't have so easily destroyed the Ivorian airforce and humiliated Gbagbo.
Nigeria was humiliated by the United States when President Goodluck Jonathan's repeated request to the Obama Administration for military assistance to trace the Chibok girls and fight Boko Haram were denied. Nigeria could not trace the 276 Chkbok girls kidnapped by Boko Haram because the country lacked the defence technologies and capabilities capable of piercing through the thick dense Sambisa Forest where Boko Haram was hiding the girls. Up till now Nigeria doesn't have a well developed defence industry capable of supplying the country with submarines and advanced unmanned aerial (drones) capabilities because their strategic thinking about defence and national security are limited to recruiting few hundred men and women each year. In other words, while technologies have changed the nature of modern warfare, Nigeria continues to invest in human beings rather than technologies for its own defence.
While over the years, the North African countries have acquired sophisticated military capabilities, they are all similar to Libya under Gaddafi i.e. their military capabilities and the technologies behind them are from non-African countries. They aren't indigenously designed and built. While South Africa is self-sufficient in its defence needs, its weapons are of second and third tier type, meaning though they are good, they are not the world's best. In the words of Wezeman et al (2011, p.14), 'the lack of indigenous arms-production capacities means that most African countries are fully dependent on arms imports [abroad].' This must change and ought to change fast.
The tragedy of Gaddafi should be a lesson to all African countries to stop relying on the generosity of foreign countries and commit part of their GDP to research and develop military technologies that could protect the continent from hegemonic outside invaders. Some of these technologies such as drones could have dual usage i.e. military and civilian use.
African countries should learn from Israel, which although small in size (in land and in population), has succeeded in building one of the most advanced and enduring defence capabilities in the world. Israel's Jericho III missile for example is capable of hitting many countries in the world including in Europe, Africa, the Middle East, Asia and North America. Its Iron Dome could shoot down missiles sent by enemy forces. Africa can also learn from South Korea which has moved from being a recipient of military aid from America to a major supplier of defence hardware.
Besides gaining control over its own security, the economic advantage of Africa developing and building her own weapons systems is also very huge. In fact, Africa's economy could grow and expand tremendously to provide jobs for tens of thousands of the continent's engineers and other technical experts. At the same time developing and building defence industry will help to save the tens of billions of dollars Africa sends to support European, American, Chinese and Russian economies annually through the purchases that African countries undertake.
Every year African countries together spend tens of billions of dollars importing tanks, helicopters, helicopter carriers, self propelled guns, armoured personnel carriers (APCs), submarines, combat aircrafts, trainer combat aircraft, frigates and other defence systems. In 2013, Angola spent $6 billion on its defence part of which was used to import arms from across the globe. In 2014, Algeria bought 1 helicopter carrier from Italy, 48 air defence systems from Russia and about 50 self propelled guns from China. In 2014, Algeria placed orders for 2 submarines and 42 combat helicopters from Russia and 926 APCs from Germany. In 2013 Algeria spent $10 billion on its defence including arms purchases. In 2013, Ethiopia took delivery of the first of about 200 Ukrainian built T-72 tanks.
According to Wezeman et al, (2011, p.14) between 2006 and 2010 South Africa received 15 JAS-39 combat aircraft (as part of a total order of 26), 24 Hawk-100 trainer combat aircraft, 2 Type-209 submarines (of a total order of 3) and 4 MEKO-A200 frigates mainly from Germany, Sweden and the United Kingdom. Namibia imported 12 Chengdu F-7 combat aircraft from China between 2006 and 2008.
The Economist (2014) also notes that Chad and Uganda have been buying Russia built MiG and Sukhoi fighter jets. Cameroon and Ghana have also been importing transport planes and fighter jets from around the world. Indeed in 2013, Ghana took delivery of four new Mi-171 helicopters from Russia. Ghana also took delivery of three Diamond DA 42 MPP Guardian surveillance and training aircraft from Austria and two C295 transport planes from Airbus. It is also scheduled to take delivery of Brazilian built Embraer 190. Ghana intends to spend more than $300 million for its military acquisitions. African countries spend additional fortune buying spareparts from foreign weapons manufacturers.
These tens billions of dollars that is used to import the weapons and spareparts go to support the economies of the countries where they are imported from, creating jobs for the populations in these countries and providing profits and revenue to the companies and the countries concerned.
The money could be used to develop Africa’s almost non-existing defence industry to provide jobs, expand our economy and end our dependence on other countries. In South Africa where the defence industry is relatively well developed, the industry is estimated to have employed 13,646 people in 2007.
“South Africa is the only country in sub-Saharan Africa that has developed a sizeable arms industry capable of producing relatively advanced military products that can compete on the global market. In 2007 it was reported that 13,646 people worked in the South African arms industry, producing a wide range of military equipment. South Africa is the only country in sub-Saharan Africa that plays a discernible role as a supplier of arms to other countries in the region” (Wezeman et al, 2011, p.14).
Although Nigeria and Sudan produce some military products, the industries are not well developed. This could change if African countries pull their resources together to invest in research and development and build their own defence systems. It will not only enable Africa to defend herself from parasitic foreign powers, but will also contribute to expanding Africa's economy, spearheard her industrialisation efforts and wean the continent from dependency on foreign countries.
The Economist (2014) “Arms and the African: The continent’s armies are going on a spending spree” http://www.economist.com/news/middle-east-and-africa/21633901-continents-armies-are-going-spending-spree-arms-and-african
Wezeman, P. D., Wezeman, S. T. and Béraud-Sudreau, L. (2011) “Arms Flows to Sub-Saharan Africa” SIPRI

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