 Hello everybody. Welcome to the final Development Studies seminar of 2018-2019. We're really delighted to end the series on what I think will be a fantastic session, and we're delighted to have Professor Mwagi Wagi-Ditchi, our esteemed speaker joining us tonight, who's an associate professor of economics at the University of Massachusetts Amherst, where he's also a graduate program director of economics and co-director of the World Studies Interdisciplinary Project. He did his PhD at the University of California, Riverdale, and was previously an associate professor of economics and chair of Africana Studies at Gettysburg College, Pennsylvania. His work is focused on issues of class, gender and income distribution in relation to agrarian transition and nationhood in Africa, as well as the role of structural transformation and the global economy in the development process. He's the author of Ten Millionaires and Ten Million Beggars, published by Ashgate Press, which examines issues of income distribution, class and gender in Kenya, and co-author of an employment targeted economic program for Kenya, published by Edward Elgar, as well as numerous articles and chapters. His most recent work on identity and economic outcomes in African countries explores the interaction between identity formation, the development of capitalism, inequality and nationhood. Professor Gidegge has also undertaken extensive development consultancy, including with UNDP and the Economic Commission for Africa, so we're extremely pleased to welcome him to SOAS tonight to talk to us about agrarian transition and development in an age of globalized inequality, some questions from Africa. We also have joining us this evening as the discussant for the tour, Professor Alfredo Saadfilio, Professor of Political Economy in the SOAS Department of Development Studies, whose work is focused on the political economy of development, industrial policy, neoliberalism, alternative economic policies, and Latin American political and economic development. His most recent co-author books include Brazil, Neoliberalism versus Democracy, and the sixth edition of Marxist Capital, both of which have been published by Pluto Press. If you want to tweet during the event tonight, you can use the hashtag SOAS Dev Studies and ESRC, and thank you very much for your patience while we were slightly late getting started, but I'll hand over to Professor Gidegge now. Thank you. Thank you so much for the invitation. It's an honour to be here at SOAS, which has long been associated with critical approaches to development, so I'm really happy to be here. Sometimes when you're working in a school that does have critical approaches, you don't appreciate what the rest of the world is like, and so it's nice to be in a friendly venue. Thanks in particular to Joanne Tomkinson for making all my arrangements phase the smile for the invitation and patience with the topic and abstract, and Alfredo Saadfilio for suggesting I visit and facilitating the invitation. So the topic I picked for this, agrarian transition and development in an age of globalised inequality, some questions and now answers from Africa, is partially driven by kind of talking about what should I talk about, and much of our own research tends to be very narrow, very specific questions, but this gave me an opportunity to step back from a number of projects I'm working on and put them in the larger context of kind of structural transformation and development more generally. So that's the way this talk is going to be framed. A word of caution. I know all of you know Africa is not a country, so when I say Africa understand that I'm not thinking it's a country, there are lots of different countries with lots of different stories. I do think some, there are some general trends, and so I think the story I'll tell will fit varying degrees in different countries. The story I tell though is very much informed by work mostly in eastern Africa. So eastern Africa, the east African highlands when we think of the agricultural part, so that's what really drives a lot of it. I'll organise the story the talk as follows. Five main parts, putting in context a story of transition, discussing quite a bit what I'll call phases of African growth because I think there's some collective forgetfulness that the world has about African economic history, post-colonialism, and then thinking a little bit about what the transition is in a time of inequality and liberal rights, and then focusing on the rural transition and then coming back to a question of who does this. So kind of who actively a more political economy question. So the classic story we tell of structural transformation is one which is exemplified by South Korea, and what I have up are just a couple of graphs which highlights some main parts of this story. And the story is one of A, manufacturing and industrialisation taking off, and as manufacturing and industrialisation taking off, so that's our x-axis, right, then they absorb labour, and that labour comes out of the rural sector, and as they absorb more people from the rural sector, then the rural sector is forced to pay higher incomes, because there is now competition for that labour, and it's also forced to transform, adopt technologies, etc. So that results in this kind of shape where you have incomes in the rural sector going up as the country moves from being a predominantly rural formation to a more manufacturing-based formation, right, or a rural traditional formation to a more capitalist industrial formation. Now what else is interesting in the South Korea story is a story of inequality. Often economists will talk about this part of transition as one that occurs with increases in inequality. In the South Korea story, although there is some increase in inequality, these are measurements of genies over the period of rapid development for South Korea, there is some increase from maybe roughly around 34 to maybe roughly around 36, it's not much, it's not that much of an increase, and so there are two aspects to this that I want to emphasise. One, the successful transition, and two, a transition that does not have large increases in equality. A similar story can be told of Finland, where Finland, in fact, if you go back to the 1920s when it starts its transition, you have inequality actually going downwards, and we'll come back to this later on. It's something which I think is important. Now, while African economies, sorry, gone the wrong way, while African economies have had growth, they have not managed to go through the same amount of structural transformation. If you look at most African economies, they are still predominantly, or at least agriculture is still a very significant sector in production, whether it's by employment or output or sometimes both. But they do, they have had some growth. So, one, if we take post-independence Africa, so these are growth rates of per capita income, post-independence Africa, three averages, that's why it doesn't quite start it, it starts around 69, the data itself starts from 66, and what we compare here is the world and Africa. One of my reasons for putting this up is because Africa, in much of literature, has often been discussed as a place that has not grown till recently. And so, for me it's important, and we'll come back to this, to point out that there is this earlier phase, immediately after independence, where growth, particularly here just before 74, was as high as it's ever been in this more recent phase of growth. And so, there's an early phase of growth for African countries that is pretty high. So, for that phase you notice that Africa and the world go pretty much together, but during this point of crisis, they diverge, so the beginning of neoliberalism, the first structural adjustment programs in Africa about 1982, Zambia and Morocco, sorry, in Algeria, both are accompanied by bread riots. And so, through this period of what we might call structural adjustment in the movement into neoliberalism, you have mostly negative growth rates and that difference in the growth rates between the world and Africa. And then they kind of come back together till this later post-2008 period where actually Africa grows much faster than the rest of the world. So, I think of African growth as having three distinct periods, and let me talk a little bit about them. So, I see them as three distinct periods. The first one is about 1966 on the data, but post-independence, up to about 82 to the beginning of structural adjustment, and then 83 to 96, which is a period of most intense structural adjustment. So, that's a period when all the structural adjustment programs are in place, etc., and it's a period of negative or no growth. And then by 96, there is some change in policy, but not as much, and the structural adjustment has, for the most part, taken part. And then you have the post-97 to the present period, 2016 here, because that's where we have data till for the countries. These are marked by three different ideological and policy, I would say policy regimes. The first regime in the 60s up to the 80s, or up to depending on where you're looking at, but I would say up to the 80s, is one in which the state played an important part in development policy, often seen as either African socialism or some kind of nationalism, and it's important because sometimes I'll joke, and you've probably heard this joke from other people, people will say that African socialism was signalling left, but turning right. But why was there this African socialism? A lot of it was a response to colonialism, colonialism equal capitalism for Africans. Post-independence, in practically all countries, independence came with democratisation and multi-party elections, again, the 80s and the 90s are a return to multi-party elections, not an introduction of multi-party elections in Africa, a story that's forgotten. And you can't turn to people and say, look we're taking over from the colonialists and what we want to give you is the same thing they gave you. That doesn't make any sense. So everybody, whether you, you know, Hufebwne, who was going to implement capitalism, still talked about socialism over time, right? He differentiated himself from the colonialism, right? So, and you know it carried various names, African socialism in some countries, African humanism in others, Jamheria in Libya, so there were various names to this kind of idea of ideology and thinking. But the important part of this was to see the state as central in economic activity, so to the level of actually owning production or productive resources. Then we moved to the period 83 to 96 where there was a break and the forceful opening up of African markets, the removal of the state, both from active policy making as it started taking really policy directives from the IMF and the World Bank and its retreat from active production, active economic institutions. And then the present period where we do, the state has come back and it's more accepted that the state should play a role, particularly in public investment, right? So the difference between these two periods is that in the 1980s, we were starting to talk about the private sector providing public infrastructure, right? If you wanted to build roads, you wanted to build tall roads, right? Now there's a little more acceptance that there is a section of the society of the economy, the public sector which needs to be constructed by the state, although all production should now be left to the private sector. During these periods there were different drivers of growth and different outcomes and let me just go through the first period, each period completely alone. In the first period growth was driven by commodity prices. We were coming off the post war boom and Africa got the tail end of that boom that goes from the 50s through to the 70s. So as you can see it's kind of rising so we get the tail end of that boom so commodity prices were going up and Africa was able to take advantage of that. Development aid was also significant. The main export partner was Europe, the former colonial powers were where most African exports went to, right? And often people have asked, well, why did Africa keep this kind of structure? Why did it keep a structure in which they argued that there was exploitation yet when it was independent it did not break away from that structure of being a primary exporter of goods. My argument is that it's, and again this is where politics and economics come together, my argument is that it's fairly simple. African parties, African political groups come into power post colonialism. Pretty much across the board they understand that this structure is not to their advantage in the long run. But in the short term they've also made promises. They've made promises that they're going to improve schools, they're going to build roads, they're going to build more hospitals, right? And they do a lot of this, right? In the 1960s before Kenyan independence there were 90 schools, 90 high schools in Kenya. Four years later there were 700 high schools. The main road from Nairobi to Mombasa did not exist, right? It got built in 72. I am not a fan of the first president of Kenya. I think he's a cause of many of the problems. But there's one thing he said. He said at the 10th anniversary he said we have done more in 10 years than the colonialists did in 70 years. OK? And in terms of that kind of physical infrastructure there is some truth to it. But now think about this. You come to independence and you've promised these things and you have to think about where you're going to fund them. Well, if you immediately stop exporting what you exported before you don't have a means of funding these things. So for many of these countries the idea was we've got to keep doing this but then we'll transition out of it. OK? And therein lies a rub because it is actually very difficult to emphasise these exports and at the same time get out of them. OK? And then when they get hit by the crisis in the 70s you're stuck in primary production. So it wasn't a lack of understanding I would say but a real political economy of things both in the country and in the world. The lead sector in investment at that time was the public sector. The public sector was extremely important and the sectors themselves were agriculture, minerals and manufacturing were the most important and I'll come back to this. Manufacturing grew from practically nothing but nearly 11-12 per cent on average across the continent it has since fallen. Inequality for many of the countries that grew it's not for all the countries I've done an exercise elsewhere. We don't have figures on inequality per se but we have figures on life expectancy and health which are often highly correlated with equalising growth. It fell. So inequality fell for most countries and at the level of integration across African countries despite the rhetoric integration was low. We were still in the colonial era where structurally where if you were in Ghana and you wanted to talk to your cousin across the border you could either shout across the border or you could pick up your phone if you had one called Paris which then called London which then called your cousin was 400 yards away. So the nature there was the turn to Europe in many things. So in the next phase we had a number of changes as the world went through the crisis of the 70s there were ideological changes. Africa however still depended on commodity prices and significantly aid to support its growth or lack of growth thereof. Europe was still the most important partner but now there's a turn to the private sector becoming the most important sector in investment. Agriculture in this period and we'll show some other I'll show you in some other places remained or even became a more important sector and I'll explain why later and inequality started increasing. So from this period on inequality started increasing and integration between African countries remained low. Now let me just say quickly before I get to the last one a little bit on inequality because I think there is there used to be some perception before well it's interesting because we had some measurements but we didn't seem to take them seriously but there was kind of the assumption particularly through the 60s to the 90s that Africa was poor but equal that there were relatively low levels of inequality. People talked of Brazil as a place of inequality in Latin America but the truth is Africa has been highly unequal for a long time. So these are relative movements. In fact if you take historical data looking at historical data from about 1895 to 1996 of the 11 highest measures of inequality nine are African dominated by Kenya and Zambia. So you know there is a history of inequality in this place that often is not recognized. By the third phase growth is now positive and we've been celebrating or at least we were celebrating this growth. Everybody talking about Africa being the next place you know the new African middle class African renaissance all this stuff and there was some perception that it was really different but I think a lot of the growth has depended on commodity prices both minerals and agricultural goods the slight difference has been who has been buying them so the rise of China in India has shifted some of Africa's exports that also along with remittances remittances are underplayed but have been large. There are a significant number of African countries where between from 1990 to around the present if you take the average of remittances foreign direct investment and ODA you will find that in some cases in countries as important or as large as Nigeria, Kenya so both mineral exporters agriculture remittances can be as large as foreign direct investment and ODA combined. So it's not something small so the African diaspora has become an important contributor to African growth then the investment is mixed public and private now and minerals and services have become extremely important the service sector has now become a leading sector for many African countries and you know telephony for example in many countries the mobile telephone company is one of the largest if not the largest company and I'll mention that later as well inequality has been increasing and now it's being recognized that it's increasing and integration has also increased there's been more conscious action for regional integration it's actually very strange because part of the regional integration is coming at a time when many of the leaders are not as outwardly pan-Africanists as the leaders in the 1960s who are outwardly pan-Africanists but had a lot of tension between them which got in the way of actual integration there were two views of pan-Africanism the so-called Monrovia group and the Casablanca group where one view that led by Nyerere and for the Monrovia group viewed integration as something that would occur regionally and then built up whereas the other group led by Ncrumau wanted the big bang kind of integration the United States of Africa first so the political integration CQ first a political kingdom and all things shall be added to it kind of approach just quickly I won't mention spend much time here I just want you to notice a couple of things the differences in period one, you know this doesn't tell you the full impact of the sector because we don't have the size of the sector just how fast the value added is growing but notice from 1966 to 82 look how large how fast manufacturing grew so that's part of the story that's often forgotten that's an important part of the story the other part is how the service sector in this most recent period is the most important the third part is the third bit of the story that I want you to think about is how agriculture although the laggard in overall was the most important during the crisis period and it's kind of a reserve sector so as the economy slowed down people went back to agriculture or became more dependent on agriculture for survival and so during the worst of times it was a sector that had the biggest growth in value added despite getting less support so we come back to this question of we've had this growth but this growth has not been transformative in the classical sense and added to it is we now want to think about growth but we also want to think about it in the context of liberal rights what do I mean by that most growth or most transformation into capitalism into fully fledged capitalist countries for many countries have not heard under bourgeois liberal rights or bourgeois liberal rights have not been fully established so in fact the states and the elites have had lots of leeway in appropriated land engaging in the acts of primitive accumulation that allow for capitalism to develop now in the context of African countries today this kind of freedom has shrunk right it's shrunk internally as people have internalized more liberal rights and it's also shrunk externally as internationally people are more critical of authoritarian government so we have to think of it in that challenge so now how do you do these things which can be ugly how do you break the eggs without people screaming at you and refusing to cooperate okay and then we've got to think also of the internal structures of African economies that they have inherited okay so there is the question of politics and rights the question of internal structure and then lastly the question of a neoliberal global regime in which markets are still very central and it's hard to have policy against markets if you think generally of the structure of African economies this is the way I like to think of them I like to think of them as kind of two sector model with kind of a formal sector and a sector of reserve labour the formal sector is a small sector which is a capitalist sector you know large farms or large scale mining depending on the country government and services and a relatively small manufacturing sector which has decreased in time so I talked about it in the 70s reaching about 13% it's now dropped on average to about 8% it's actually gotten smaller the reserve labour sector has been pretty much the same large smallholder sector artisanal miners and small scale artisanal producers traders and retailers you know in the urban areas what has often been called the juwakali or the informal sector as I've noted before these economies are also characterised by high inequality and there are different kinds of inequality there is individual what we call vertical inequality differences between every individual but they are also complicating this horizontal or across groups or across region inequality that makes this story more complicated what's the impact of this the impact of this is that in fact growth given this structure has not led to large increases particularly in formal employment so if you look at every percentage 1% of growth the amount of employment the increase in employment in South Africa for example is just 0.5 in Kenya it's 0.67 which means that you're getting very little increase in employment so if you have a growing population in fact you end up with this story of the Kenya where in the 70s 4% of the jobs in the rural area were 4 more but by the 2000s that had dropped to 2.9 so it's like you're going backwards in the urban areas 25% of the jobs were 4 more in the 70s by now it's less than 12.5% so you're going backwards now what does this mean what this means is that you have in a sense an increase in reserve army of labour an increase in number of people who are looking for jobs which means that labour incomes are going to be depressed because all employers can offer less so it holds down formal jobs and translates into higher profits so it's also increasing inequality at the same time as this has happened because of the change externally the impact of exports on growth has also changed so in the first period and I didn't put up the calculation but you can just see from these graphs roughly under 6% of growth gave you 1.6% GDP per capita growth by this last period close to 8% only gives you 1.9% so in fact exports are translating into less growth than they have in the past and part of this is a problem that African countries are facing as late bloomers coming into increasing exports in a world where you already have the China's, the India's, the Brazil's countries with a large populations which means that they occupy more wrongs on the technological ladder that has happened in the past so in the past if you thought of countries like if you think of Japan's experience in Japan and East Asia Japan's was kind of the lead what has often been seen as the lead tiger or the lead geese in the East Asian story it started one form of production and as it graduated out of that form of production other East Asian countries moved into that onto that wrong of production if you think of a country like China a country like China at one time was both doing aeronautical and pharmaceutical right at the top of the scale production and at the same time having its experts visit Kenya to figure out how it could use flooring culture which Kenya was a leader in to get its poorest areas to give production opportunities for its poorest areas India at the same time as it's progressing on the industrial front now India is not as rich as China but still as it's progressing on the industrial front at the same time had experts visiting Kenya to see how they could translate tea production from simply large plantation to small holder so you have these large countries which are straddling the ladder rather than simply moving up the ladder which has complicated things how does the globalization and inequality affect this change going forward one, we have the story of a rising African middle class where is that story coming from, how does it relate to this one globalization has meant that the African rising middle class today is demanding wages that are equivalent to what western professionals are also paid right when I was growing up being an accountant or a lawyer in Kenya or in East Africa at least if you were a local not the expatriates but a local meant that you were paid relatively you were paid high compared to compatriots but low on the international scale today that's no longer the story lawyers and accountants are making much closer to international comparisons partially because of globalization partially because they can to a certain extent enter an international job market so that has meant that there has been some movement in terms of the incomes if total income is not rising as fast then it means that some of that income more of that income is going towards compensating them the other part is an old story which we stopped talking about in development studies is what was called the demonstration effect the demonstration effect was the idea that initially poor countries as they changed had just the goods produced in their own goods for consumption later producers or later developers actually see the consumption of their counterparts in rich countries right so if you are high income person in Kenya you see the high income person in England driving the Bentley or the Jaguar right and so rather than just agreeing to drive a car because that's what's available you now want to import the Bentley or the Jaguar right and now this is spread with globalization because it's come down to the level of food and the supermarket right so we are getting this very perverse thing where we are getting French, British and others American supermarkets now coming into Africa and selling the same goods that they sell in their own countries right and pushing out African goods and foods okay and at the same time you've had during this period with the opening up of market the AD industrialization as the more advanced competitors came in who had lower costs I'm going to skip because of time the list of things on local inequality because I'll come back to some of it in this in the discussion so at the end of this period we can think of African economies which are characterized by high inequality high unemployment and under employment a significantly poor infrastructure because after the 1970s was little investment till recently weak states and when I say weak states I don't mean that they're not necessarily repressive I just mean they're weak in actual policy formulation policy implementation the African state doesn't actually reach the village to so to say as much as we think it does okay there's a neoliberal global environment and these competitors on all steps of the technological ladder and of course the world crisis around the environment so then so the agrarian questions and the questions of change I think that we need to consider the principles that we need to think about if we're to have growth is that we need growth with some level of equity and particularly horizontal equity and the reason why it's important to have horizontal equity is that one of the things we have to think about is that equity or inequality is correlated with distrust distrust so we have empirical measures which show that where countries or where groups are unequal then the degree of trust is much lower okay the process of development is often a process of picking winners and losers okay and if you're going to have a state that is going to be forced to pick winners and losers it becomes much more difficult for such a state to do that in a context of distrust right because if I'm the state and I have to pick a winner or a loser each one of you is going to distrust why I'm picking a particular group or a particular firm as the winner whereas in a more equal in a more equal space where you all think you have equal opportunities you might be more trusting to give me the opportunity to pick the winner knowing that the broader outcome would be better for all we have to have more labour intensive growth which is a challenge in a world where 60 years ago we could tell people okay we need to build a road and we're literally going to build it by hand right now if you tell people we're going to build a road by hand they think you're taking them backwards but what it does mean is that you import the bulldozer which is driven by one person and does a job that maybe a hundred people did before right so there is a cost there is a cost to this we have to ensure and we have to ensure environmental sustainability what are some of the policies I think can work within this one land is still a crucial issue and in many countries we have to think about the question of land redistribution I know people get all tied up in knots when land distribution is spoken about but in fact one of the reasons are placed like South Korea and to a certain extent even China although not as much as South Korea and a better example is Finland why these countries have remained relatively equal was because the most important asset land was redistributed just before the growth space so in fact if you redistribute wealth broadly just before the growth phase then you have a chance that most people can equally participate in that growth phase in the African context what we have going on growth is accessible just to a small group of people so even when countries show 6% 7% rate of growth you still have increasing poverty because growth is accessible to just a small group of people the other reason to have land redistribution is because of the structures of these economies land has been used both a speculative device so where people buy and sell land which is not productive they just simply buy and sell in land you guys know about rotating credits and saving organisations in many African countries in now a number of places and Kenya particularly some of these have now just focused on buying and selling land so where people put money together you know every month they put money together sometimes it goes to one person sometimes they invest it and now there are some which just every few months go out buy a piece of land in the hope that the land value will go up they will subdivide it and make money even without direct land redistribution I think there is a fairly easy mechanism for land redistribution which is taxation of land which in many African countries believe it or not does not exist in many African countries land is not taxed or where it's taxed it's often only urban land where there rates for urban land and what this means is that you can hold land you can hold huge sections of land at no cost if land had some taxation even if you wanted to hold huge sections of land you would at least have to make it somewhat productive to maybe pay some of the taxes which means either you directly contribute to agriculture or you contribute to employment or you give up the land and somebody else uses it and you put your money somewhere else now part of doing this will require us to also improve kind of the financial instruments so that people who are speculated in land can take that money and invest it in other productive activity one of the things you're going to see going through this series of policy suggestions is that it's not only in the rural area that you need to make policy changes you have to make them across the board the other part of this and I won't go through all of it but is creating small commercial farmers a lot of discussion of African agriculture has often focused on kind of moving from small farms to large farms with the idea that there's an issue here one I think there's a misconception about returns to scale and how you think about returns to scale returns to scale is the idea that as things get larger it gets cheaper to do things right now if you think of the entire value chain rather than simply just the agricultural farming part right you can take advantage of returns to scale at different parts of the value chain okay and then that changes how you think about this so you know often the example I use is people will say but small farms produce very little but you know if any of you have an eighth of an acre in Burgundy and you want to give it up I'm willing to take it okay and the point is an eighth of an acre in Burgundy right producing wine has very high income compared to an eighth of an acre producing something else somewhere else okay so the question is how you think it's not just a smallness of the land it's what you do with the land okay recently there was an article I can't remember in which English paper but about one of your coffee shops or restaurants was bringing in Yemeni coffee and Yemeni coffee which now gets sold at something like $50 for 12 ounces okay because they found some small village that still produces it in an ancient way blah blah blah story I have a lot of Ethiopian villages like that for you okay so again it's there's a story here about what the commodity is and how it's sold and where you get the returns to scale okay so taking co-operative seriously I think is important and I'll just say in the question and answers you can ask me about this you know there's a model where Kenya moved from being a relatively low producer of tea to one of the two largest black exporters of black tea and which was done through a co-operative a large national co-operative and we can talk about that now the challenges are one via the structural adjustment period the neoliberal period they has a perception of co-operatives as being inefficient and bad has been produced such that when I interviewed the managing director of this co-operative I asked him so you guys are a co-operative and he said no we're a private company and I said no I understand that you govern yourself under the private companies act but you're a co-operative he said no no we're a private company I said okay so can I buy shares he says do you grow any tea so they only their owners are only tea farmers but they want to see themselves as a co-operative but they're actually I mean as a private company but they actually organise as a co-operative I am not all gaga about technology but they are places where technology has worked and there are ways to harness technology in a way that can improve farmers can do what a lot of old style co-operatives did and let me just mention this SNS system in in Rwanda the important part of this is to understand that technology does not work in a vacuum and the success of this technology has been round the fact that actually the government the Rwandese government has actually created a backbone in which it has given everybody an individual ID and it has given that individual ID is connected to the land registry which makes given credit information on farming on climatic conditions et cetera very efficient okay again I won't go through all this because of lack of time but we can come back to this then we need to think of how to create rural employment while ensuring sustainability rural environmental conservation is an important part of this which can be labour intensive so reforestation et cetera rural infrastructure is another important part of this African rural areas still have a dearth of roads and a dearth of water availability and production particularly for irrigation in most African countries apart from countries like Egypt less than 5% of farming is irrigated lastly rural homes are still often constructed very much in what with much less long long standing materials and so I think a process of rural home upgrading will proceed to a combination of improvement in skills and can also be the basis of kind of rural manufacturing so if you look at most industrialized countries construction is an important part and often a lead indicator of growth okay and so bringing that to the rural area can be an important part of growth let me make the point that although I talk about rural policies the question of transition is one that occurs not just in the rural area but one that must be connected to more general policy so rural policy cannot be talked about separate from issues of regional integration and trade so I think there are opportunities here Malawi sometimes runs a maze surplus when people in Kenya don't have maze then the maze we get ends up coming from the US which makes no sense right but it's a question of rural integration or sometimes it can be worse it can be maze in western Kenya and there is no maze in northern Kenya but the maze that gets to northern Kenya it comes from outside the country so we need to expand the financial system as I noted earlier when I talked about land reform the general improvement in skills development training and expanding basic consumer and agro input manufacturing alongside the cooperatives that we've talked that I have talked about now it's nice and easy to give you this list of policies long list which I haven't fully explained and feel free to ask me about them but then the question is who does this now in our lazy moments or when you're working as consultants for governments then you write this list of policies and you send them to the government but you're talking about a set of governments which A don't necessarily have the capacity or the belief in these kinds of policies but I would argue Africa's leading political economists often says the neoliberal consensus died in Washington but is still very much alive in Africa the people in charge in Africa were all trained under the neoliberal consensus the training that's going on in Africa continues along those same lines so you do have this problem of the lack in many instances of a developmental state so what you do in the absence of a developmental state the movers of much of the world are social movements right and I would argue that it's incumbent upon those of us who think this way of thinking of progressive movements which are not only political but also are the basis of material transformation okay so while you're doing your once political work you can think of co-operatives which are pharma owned worker owned farms that process or transport or service these rural goods that are being produced community owned firms that build or maintain the public structure that is going to be needed for this kind of transition so it's not simply enough to think about what the policies are we also have to think about how we do them and who is going to do them for this to take place and with that I will end excellent over to you Alfredo thank you thank you very much and this is a fantastic presentation it's very very much everything that you've said it's very very much in the sauce tradition and these are lines of work that absolutely belong here there are traditional debates within this institution about agriculture the role of agriculture in development the relationships between the agrarian economy and manufacturing growth this is a nice productivity debate which you mentioned and particularly in the case of Africa the influence and scope for structural transformation all this is very much at home here also the point of view that you took a macro point of view a class point of view and theoretically informed as opposed to what you see very commonly in this kind of discussions of this very descriptive telling stories a kind of approach that again that would not belong in sauce very easily what you presented as far as I can see is a story of dependence a story of external dependence and attempts to overcome dependence attempts to overcome structural economic dependence and attempts to overcome political and ideological and policy making dependence as well it is a story of this inclination true of African elites in general to understand those relationships of external dependence and pursue in a determined organized purposeful way the internalization of capacity to drive their own economic growth and to drive their own processes of social and economic transformation so this inclination could be seen perhaps as a question to you could this be seen as a political constraint to growth so in addition to the traditional constraints to growth balance of payments fiscal constraint labour constraint etc is there a political constraint to growth and what form does it take is it absolutely entirely conjunctural to each particular circumstance then you also I think advance on those traditional debates because you bring together those debates about agrarion change the political economy of agrarion change together with the heterodox literature on industrial policy and then apply that to Africa you have the traditional debates about economic independence and transitions to socialism that don't apply anymore you have an updated debate about manufacturing growth the scope for manufacturing development in sub Saharan Africa touching on something that I think mentioned but and then moved on to something else but I'm particularly curious about premature the industrialization in Africa what is happening around sub Saharan Africa in particular having said this very briefly and to complete a couple of additional questions how do you see your own work in relation to those agrarion debates of the 1970s and 80s and those current policy debates on the political economy of Africa as well and then a much bigger, broader question I suppose perhaps impossible to answer but let's try what are the limitations to successful developmental states in sub Saharan Africa why is it that success has been so limited great why don't you take a few minutes to reply and then we can open it out questions from the floor thanks so much Alfredo so I'll try to be quick so that we we leave sufficient time is there a political constraint to growth I completely agree I completely agree with that premise and what I would say is that one of the things that might help us or one of the things one of the ways I think about it is a political constraint to growth due to inequality right the inequality is not something that appears to be generous it's something that's created and there are people who are benefitting from an economy that produces this inequality okay so if you change the structure of that inequality the problems of inequality and why we need to focus on inequality one of the problems of it is that it generates a group that's benefitted and that group will block changes that would change the distribution of income now that means you have a problem but there are different ways to proceed one is of course having an open discussion about inequality you know people sometimes think talking is a waste of time but changing minds does matter I mean we are now in a world where people have started to recognize across the world that inequality is a problem okay in the 1970s I lived in a Kenya in which the president and the state did not want people talking about inequality okay those are conscious attempts not to do it in Kenya post independence there was an attempt to redistribute some of the land it wasn't very successful but there was an attempt to redistribute some of the land and we had a large farm survey and a small farm survey and you saw the large farm survey and in the early 1960s you see the number of large farms dropping then by 67 68 they start rising again is now a reconciliation of large farms under now African land holders by 72 the series itself just disappears okay it starts rising and then it's no longer published right so it was to that extent that you know there was an attempt to stop this discussion of inequality so both actually thinking of ways in which we can reduce inequality that's important talking about it I think is important because even those people who want to save capitalism have to think about this even if it's at that level and then thirdly it's always easier if there is some growth okay so if we're having growth then it's easier to redistribute at the margins I'm not saying that's the only thing you're going to do but it's always easier to redistribute at the margins and redistribute in what people themselves have and there's still a lot of low line fruit I think in African countries where if growth could be expanded or more consistent then redistributing at the margins could have some impact so short of a revolution that's that's that's what I would point to yes in fact this work connects to other work on industrialisation and I don't see the agrarian transition as separate from the question of industrialisation and industrial policy and one of the interesting things as you pointed out is that Africa went through a premature industrialisation but it was a very much policy driven deindustrialisation right what you had was all the support that infant industries get in the early phase were taken out under the idea that African countries had failed in kind of the import substituted industrialisation okay now one of the stories that is not told often is that even in the East Asian case we kind of start from export led growth but in all those cases without an exception there was a phase of import substituted industrialisation and what's key about these cases is those governments realise when they had to move from import substituted industrialisation to export led growth not that import substituted industrialisation was a failure but in fact it was what was often used to build the capital which then went into export export led export led growth so there's a premature industrialisation in the African context which is due to kind of which is due directly to structural adjustment another note of point here is that ISI never failed in Africa and here's my basic argument for why ISI never failed or did not fail in Africa if you look at the period that ISI had in Africa it was an extremely short period most countries end up getting the independence after 66 it's after 66 that you have more than 30 independent African countries so let's say we even take back and say around 64 or 62 when you have 20, 30, 30 independent African countries let's say a country in 63 decides it's just got an impairment it's going to do import substituting industrialisation and let's say it's got it's act completely together right so it's an ideal country so it's going to do import substituting industrialisation okay first of all it will take some time a year maybe to put together the plans for import substituting industrialisation okay so that's one thing it will take another couple of years to build the plans and the infrastructure so we're already three years into this we're about 66, 67 okay and then you start producing there's a learning process we're already at 1970 okay and then shortly thereafter you're hit by a worldwide crisis right so where these firms fail is due to the crisis and not due to import substituting industrialisation in of itself right because the ideal country did not even have sufficient time to really move beyond the infant industry phase okay so I've given you an ideal country most of these countries the industries were nowhere near full production by the time the crisis hits what are the limitations to successful development states the limitations to successful development states I think is that much of African politics has not been has not grown organically from the ground is not a class based politics and so the nature of the state itself is not representative of even a broader section of the elite okay so in the cases of successful developmental states it's not that they've necessarily been democratic but they have at least covered the majority of the elite so the elites as a group agree that this is what we want to see and are willing to push it through that has not been the case but politics, the elites themselves are highly divided for various reasons whether they are it's relation to people who are in elite positions because of relations of external dependence people who are in elite positions because they represent an old aristocracy or people who are in elite positions because they in some sense represent a group in the country so these various divisions that I think make it more difficult for even the elite if you take it from that perspective to produce developmental states now there are two places where there has been somewhat of an attempt I think of a successful attempt at developmental states and both of these states A are smaller and B have different histories so the most recent one of course is Rwanda and this is coming out of a very traumatic experience and out of that traumatic experience being able to unify a large section of the elites to actually engage in this process of developing a developmental state right a very clear understanding on the part of this elite that if you don't improve lives for Rwanda we as an elite cannot keep the positions that we have and we're going to keep coming back to essentially genocide that has occurred more than once in Rwanda and Burundi so there's a very conscious attempt by that elite to substitute improved material welfare for people giving up power the other case is Botswana was not colonised in the sense that other countries were colonised remember it was a labour reserve for South Africa and it's actually Botswana an aristocracy who come to Britain and say hey those South Africans were worried about them can we strike a deal right so the process of colonialism does not mean a kicking out of the old aristocracy but rather a management of the colonial economy by the old aristocracy who then continue to manage the economy post independence so Botswana is a very interesting case which has remained in fact despite having multi-party elections really a one party state that works okay how do I see my working relation to agrarian debates I see my work very much and depending on where I present very much in the tradition of the debates of the 70s and 80s very much in the work of thinking about modes of production thinking about articulation of different modes of production of different forms of production so I see it very much in that spirit I think where I disagree with a lot of people is around or a significant number of people in these debates about agrarian transformation is the issue around how agriculture changes okay and in particular the idea that you go this transformation from kind of either smaller agriculture or few to large agriculture to large capitalist agriculture right I think it's very particular I think there I would argue that there may be different paths in the same sense that within those debates there's kind of what's called the American road which is kind of a more capitalist road and the Juncker road which is kind of the old feudal farm becoming this agro industrial complex um you know I would argue that maybe there is a third road or even a third and a fourth road and what I would encourage us to explore in this sense is to look at agriculture not simply as farming because agriculture is no longer simply farming agriculture is the production of agricultural crops all the way to the market okay and if the African farmer controlled the coffee bean from their farm to the market literally to the retail market literally their payment increases 100 fold right each espresso you pay for how much do you pay for espresso in this country one shot three pounds three pounds each the farmer receives less than that for a pound of coffee the farmer receives less than three pounds for a pound of coffee each pound of coffee produces something like 120 cups of espresso that's a gap and the reason why I focus on coffee and not even something like tea is because you can take the raw coffee bean like Ethiopians do and literally roast it in your backyard what I'm pointing out it's not high technology here that's not it's not a rocket science that makes this junk it's packaging processing and a story right and so those are things which I think African firms African co-operatives can start exploiting and moving into the floor then hands up if you've got a question you'd like to ask Patrick will give you the mics thank you very much for your really interesting presentation I'm Hannah I'm studying about food security and rural development here at Saws so you are talking about the expansion of global supermarket in Africa so my questions I have two questions and they are both regarding expansion of the supermarket in Africa so my first question is that how do you think this expansion of global supermarket is affecting the food security in the community in Africa and second how this is affecting the local small farmers are they included or are they excluded if they are included how and then if they're excluded and then what is the structural change of rural community due to this change okay great next thank you so much for your talk I had a question about what's your name? I had a question about the new silk road and how you see that affecting growth the new silk road China's investment in transportation because it seems like so much of agriculture is about pricing due to infrastructure under lays these political growth questions so do you think that will change these growth patterns and will it improve or not improve inequality and growth okay those hand up the back okay we'll go here at the front you talked about coffee prices oh sorry Mohammed so you talked about coffee prices and how farmers don't get paid their due I mean it's a problem we've seen for quite a few decades now and I think if the opioids are in the first countries to introduce commodity exchanges yet 10 years down the line it hasn't really helped much the farmers and I think your solution was community led sort of cooperative that is community led but given that colonialism or today is quite disrupted community is quite disrupted and that village community isn't really as cohesive as it was in the past how can communities come together to improve their prices okay do you want to answer those? let me take those first okay quickly thanks for your questions these are all great questions and I wish I had I should do this lecture in a couple of lectures so hand on global supermarkets some of what I missed out first of all is the saddest part of this is first of all the global supermarkets are never successful if they come in first okay so in fact what you find in most African context is either mid scale small retailers or in some cases fully blown local supermarkets which actually create a home market which change consumer demand and get people going to supermarkets okay then after the customer has been produced because customers you know forget what all these people around shop therapies say that you kind of just create markets and then everything happens we have to be incockated with going to buy goods it's not something natural we have to be incockated with where to go and buy goods and so in some places people go to very different stores for all goods in other places people do go to supermarkets I grew up when people went to actual markets markets and small stores so moving people to supermarkets was the job that you needed to create that consumption culture or that kind of consumption culture and that was done by African markets, African supermarkets after the African supermarkets are successful and they have built up a scale that is large enough for the international supermarket then the international supermarket can come in and be successful okay and this is not just in supermarkets same thing happens with airline transportation okay after the crisis of 1972 the world's airlines forgot about Africa and I mean literally forgot about Africa in the late 1970s Nairobi had maybe 9, 10 international companies national airlines British overseas etc so on and so forth flying into Nairobi by 19 late 1980s most of them had stopped coming this space was then taken up by African airlines specifically the Kenya national airline Ethiopian Airlines and a little bit South African Airlines okay and which held this market continued developing it such that in 2006 Kenya Airways was amongst the most profitable airlines in the world in 2006 Kenya Airways flying 36 planes made $60 million okay Southwest which was the largest flew 400 planes and made about $300 million per passenger Southwest made $7 per passenger Kenya Airways made $37 per passenger okay what was that a signal for other airlines to say oh wait a minute there's some action here Ethiopian has also been successful throughout this period Nai Ethiopia has a much longer period Ethiopian Airlines has a much longer period of success and therefore has built a much larger unit but part of what we see now is all these airlines are back right and in large number and they're only back because there were airlines which during this kind of protected period where they ignored Africa right there were airlines that actually built these these networks so it's no longer a question of Qatar Airways or British Airways actually trying to work out how many passengers will it fly from Nairobi to London it is actually it can see Kenya Airways Ethiopia Airways et cetera flying thousands of passengers to London and say there's a market here that we can take advantage of so there's this first part of where essentially the Africans do the work and somebody else comes and gains later right given this kind of history and here the failure I think is a lot the state and the state's ability to support local production and to protect for a while local production how does it affect food security I think the global supermarkets have have met more access for middle class and higher income people in terms of what's available I come from a little village well my mother lives in a little village outside Nairobi now this is where she retired are there any Kenyans in the room ok people know a place called Kitangela which is you know it's a small village we now have a supermarket that looks like any market in central London or New York with the whole green section in fact I should have put a picture up so you get this and it does mean those people with higher incomes benefit the flip side of this is that there are some of these things which are not processed locally so I'll give you a slightly different story that I think may help is easier to understand and something which you know young people relate better to manufacturing of beer so if you look at beer for example the largest companies South African breweries one of the largest companies in the world and South African breweries has often been in the region in competition with Kenya breweries which is a large concern and in fact across the continent Kenya breweries is the only breweries which did get sucked up by South African breweries so one of the other parts of the story is the move of capital particularly up from South Africa and also from other African countries to African countries which is here now what's the difference between South African breweries and Kenyan breweries one of it part of it is scale and this part of scale comes back to the story of global supermarkets when South African breweries for example took over brewery one of the breweries in Tanzania the national brewery Kenya breweries under its parent group of South African breweries bought a smaller brewery in Tanzania now what was the difference within five years the people who used to produce for the national breweries the farmers who used to produce for them were no longer having their crops, their barley or hops purchased by South African breweries because it's got a global value chain where it can source these crops the cheapest elsewhere so literally it comes to your country and just adds water it's like Coca Cola Kenya breweries on the other hand doesn't have that capacity or any smaller concern doesn't have that capacity so when Kenya breweries moves to Tanzania it actually has to engage Tanzania farmers so in fact whereas Kenya breweries expanded opportunities for farmers South African breweries closed opportunities for the farmers and I think that's very similar to what's happening with the global supermarket chains global supermarket chains come already with units that deliver so there may be some foods which are particularly local which it may source locally but other foods which are international like grain and wheat which it can get on the international market whereas the African supermarket may have bought that from local farmers and milled it in Kenya it can just enforce so I think at some level it decreases opportunities for farmers and by decreasing the incentives for local farming decreases food security then Clara asked about the new silk road and infrastructure and will it change growth I'm not sure it will structurally change growth I think there are two parts to this one given the kind of inequality that exists we found that trade and growth gets distributed very badly so if you have growth now there are elites who can take advantage because they've got the wither all right you know if you have a flight that opens up a new destination and that opens up potential of trade who's got who has the ability to engage in that so there's one way which just the simple opening up doesn't necessarily change things structurally so so that's one issue so unless there's a conscious effort to think about how does this new infrastructure of connection how do we take advantage of it unless there is a conscious connection on the African side to think about it I don't think it will necessarily change growth it might increase the amount of growth which the connection to China has done right so it might increase the amount of growth but it may not increase the distribution of growth and I don't think for African countries it's not sufficient to just increase growth okay so I did an exercise remember I talked about the growth elasticity of of employment I did an exercise which looked at Kenya's plan what was called Kenya's 2030 plan vision 2030 which was the idea of how do we transform this country into a middle income country and the idea was okay one the main thing was 10% growth okay so the idea was if Kenya has 10% growth and then you know writing a lot of nice stuff more technology more this but when you read up through the plan carefully there was no real structural change right in terms of the one advocated policy that had structural change so I did a simple exercise I said okay since there is nothing in here that says to me there are ways in which the structures of production are going to change let me just take 10% growth right and see how much employment it generates okay and your reserve labour hardly decreases you know over 20 years you know you go from something like 80% rural to 70% rural in terms based on the employment okay now people might move out just because they move into the urban sector but there will still be then there will just be the informal sector right so there has to be a conscious attempt about how do these connections actually fit into the growth plan of a country then Mohammed you had this question about coffee prices and commodity exchanges and communities being very fragile and how do we do this okay so again commodity exchanges it's interesting to have started a commodity exchange in Ethiopia got her PHD roughly the same time as me also out of the UC system and we met a lot and she's a very genuine person and was looking at ways to actually improve the life of farmers but the idea was partially this idea that government always takes away from farmers if you can sell you can get higher prices at often now the truth is this thing is not new so Kenya has always auctioned its coffee and tea this is something that's not talked about it was through a government body but whereas everybody else went to New York Kenya had a Mombasa auction that did the coffee and tea and while the prices were slightly higher they didn't necessarily come down to the farmers but this is not you know if we if we go beyond kind of our blackboard economics and read a little bit of history we'll find that it's not always a case you know markets don't work in the way they work on the blackboard so that's one thing the fact that yes communities have have become fragile is both a negative and a positive in this sense and this is thinking of this dialectically one of the things that I found very interesting is in many ways in some parts of the country the collapse or partial collapse of some of these bodies that trade coffee and tea particularly has opened up a space for actual local firms to come back in and take advantage of this because if the farmer kept their coffee and tea and is just kind of planting around it which has happened in many cases right then if somebody comes in and says look I can get something for you out of basically not much because you've already established your coffee and the way to organize it is this way as a community then people go for it so I think there is space there is crisis opportunities as well and so I think there is space I don't think it's going to be easy you're absolutely correct and it's going to take sustained work it's going to take one of the things I miss talking about it's going to take sustained convincing the youth that farming is actually a very progressive activity rather the youth see farming as something there is an ideological mindset that has to be changed I don't know if some of you know there is a Kenyan known as Calestas Juma who died who was big on technology etc he was once invited to a Central American country I can't remember which so I won't mention a name in case I have the wrong one but the government invited him to start up an agriculture a school of agriculture in an area where farming was the main way of producing and they said look you have all these ideas about technology and agriculture we are giving you land and if you can get this community we will provide money for agriculture for agriculture school so you're going to be made the chancellor and so on so he went there and the local population was like no you don't want to hear about this don't talk to us about agriculture so he came with them and rather than talk about traditional agriculture which is much of what they were he started talking about hydroponics he started talking about green houses and other forms of other ways of producing and then he just left and went back six months later the community called him and said we have our own land where we want to develop a college of agriculture and we want you to help us so as a young people change their mindset and moved away from kind of the whole and that back-breaking work of agriculture to somehow see that as being this modern entrepreneurial activity their view on it changed so part of the story is also changing the view and getting people to see is very much part of the modern world after all some of the largest countries you know Australia for example are still very dependent on agricultural production they've not given up on agricultural production the US has low levels of labour in agriculture but agriculture is still a very big part of the economy moving people away from the mindset of agriculture being that subsistence agriculture where you're struggling would be part of this kind of more modern economy OK I mean thank you very much for that it sounds as if maybe there are people wanting to get into the room after us so whilst I did promise you the opportunity for more questions what I will do instead is invite you to a drinks reception some drinks and we can continue the discussion upstairs in the senior common room but before heading up there please would you like to join me in thanking our speakers this evening this is the final seminar of the series but do look out for them starting again in October 2019 and yeah it's been great to see you all here this evening thank you very much