A giant stumbles

From today's Economist: 

[China] is a statistical haze, but the trade figures for last month—with exports 2% lower than in November 2007 and imports 18% down—were shocking. Power generation, generally a reliable number, fell by 7%. Even though the World Bank and other forecasters still expect China’s GDP to grow by 7.5% in 2009, that is below the 8% level regarded, almost superstitiously, as essential if huge social dislocation is to be avoided. Just this month a senior party researcher gave warning of what he called, in party-speak, “a reactive situation of mass-scale social turmoil”. Indeed, demonstrations and protests, always common in China, are proliferating, as laid-off factory-workers join dispossessed farmers, environmental campaigners and victims of police harassment in taking to the streets.

Indeed, an increasing number of Chinese citizens appear to be taking to the streets, as businesses and factories continue to shut down. It will be curious to discover how Chinese officials will continue to deal with the downturn. Perhaps even more curious to see if China's economic woes will translate to increased migration to African states - attractive markets for many unable to secure livelihoods in the Motherland.

Entrepreneurship and development

In last Tuesday's NYTimes, Kristol touted the importance of the private sector as a tool for development:

I’m also a believer in aid, particularly health and education interventions. But I also believe that business can raise living standards on a scale that aid never can, and that we need to focus more on building manufacturing in poor countries [...] It’s something that I probably haven’t written enough about, and I’ll try to pursue the issue some more in the next year.

Interestingly, just two weeks ago the OECD and Eurostat published the first set of comparable data on measures of entrepreneurial activity such as entry and exit rates, and the rate of formation of high-growth companies. So far the data covers 15 European countries, the U.S., Canada and New Zealand. What I would love to see is a similar study conducted among African states. 

[HT: Doing Business]

Who wants to save Somalia?

Somalia's soldiers and police are deserting at an unprecedented rate.  The UN has been unable to put together a multinational military force to stabilize the country. The AU is pulling out, and any sort of U.S./EU "land invasion" to combat piracy appears highly unlikely (indeed now more than ever). So what's to become of this east African state? 

Unfortunately, I find myself agreeing with Ethan Zuckerman who writes:

My money’s on al-Shabab controlling Mogadishu within weeks, and moving to stabilize the country under Sharia law. This is likely to be less pleasant than the control the UIC imposed, but will likely have the effect of reducing piracy and, perhaps, allowing commerce to resume. In the medium term, it’s likely to threaten Ethiopia and perhaps Kenya in a serious way, and to provide safe haven for Islamic extremists. And in the long term, it’s likely to become a major security issue for the Obama administration, possibly rising to the level where it’s discussed by folks other than Africa policy wonks.

Al-Shabab is an extreme, intolerant, Al-Qaeda aligned Islamist insurgency group that has been active in Somalia since 2006. In 2008 it was classified as an official terrorist group by the U.S. State Department. In short, it's exactly the kind of 'governance' Somalia and its neighbors don't need. So.... who else wants to save Somalia?