Tag Archives: Foreign aid

Promoting Democracy and Demoting Autocracy

In the Oxford Handbook of Nigerian Politics, my good friend Eghosa Osaghae wrote a compelling chapter about Nigeria’s “epochs.” I have been thinking about the epochs associated with democracy and governance assistance, and democracy promotion in general. In the early years, much of this work was viewed with suspicion. Members of President Carter’s national security team had advocated for human rights as a wedge of sorts against the Soviet Union, not necessarily for advancing democracy. In the 1980s, the intelligence community stirred up a violent mess in Nicaragua’s neighborhood. My good friend, David MacMichael, the CIA’s Senior Estimates Officer for Central America (who recently passed away), testified before the World Court about the contra’s violations of international law. Democrat Rep. Paul Kanjorski regularly called for abolishing the National Endowment for Democracy.

Civil society activists from Nigeria speaking at the National Endowment for Democracy in October 2022

Then in the 1990s an emphasis on civil society emerged, in part because some of the early democratization successes at that time came from activists in places such as Benin and Poland – many of whom had little connection to the US. In Washington there was a presumption that nations needed a strong civil society as a counterforce to strong states that had only recently been undemocratic. This overlapped with western efforts to encourage free markets, so the left’s suspicion lingered on – often validated in by the pain from Structural Adjustment Programs.

When I arrived in Nigeria at the end of the decade, the democracy industry was focused on “capacity building,” a sensible shift that led to a state-bias of sorts when Bush launched the war on terror. Strong states were needed to defeat non-state actors like al-Qaeda, and this mean the projection of state sovereignty over space. So there were lots of discussion about “ungoverned spaces” with the assumption that they were breeding grounds for violent movements. Stewart Patrick helpfully cast doubt on this in Weak Links. Nevertheless, “strong states” were back in vogue.

At work in Nigeria’s National Assembly, June 2000

The current epoch rests on previous capacity building efforts, some of which were successful. For example, skills transfer is less central compared to cooperation; there appears to be a stronger sense of equality between the donor and the recipient in D&G work. In Nigeria, many local partners are now implementing work that was once the domain of beltway bandits, doing a lot of the heavy lifting and technical implementation. This is progress.

But as Chris Walker and others have pointed out, now democracy promotion coexists alongside an internationalization of autocracy. All of the above work on behalf of democracy operated on alliances with state reformers, civil society, and private sector actors who favored democracy. (On the latter I recommend Leo Arriola’s book, which shows how important business coalitions in Africa are for emergent opposition parties.) Transnational diffusion was part of democratization, as Levitsky and Way demonstrated. But from the practical point of view of democracy assistance, the US could until recently focus primarily – not entirely – on domestic conditions.

In conversations with USG officials over the last few months, I have emphasized that in the context of authoritarianism being actively exported, we can no longer presume a strong international norm that elections must be free and fair. The power of embarrassment and external legitimacy brought by international observer missions is weaker than it was just a few years ago. IOMs cannot be business as usual, following a template of optimism about youth, technical support for parallel vote counts, and party pledges to engage in peaceful campaigns – though all of those things are still necessary. (Both Afrobarometer and World Values surveys show some alarmingly weak support for democracy among youth.) The shock of the Ukraine war caught the democracy promotion industry off guard. Suddenly, exporting autocracy is not just about “sharp power” sharing of technology for spying on activists or shutting down the internet – it went kinetic. Countries are actively exporting autocracy, and the true meaning of Russia’s war in Ukraine is that they are willing to do it by force if necessary.

Shortly after the invasion began, I joined a call with democracy activists in Ukraine, who pleaded with the audience: we are not simply defending our country, we are defending democracy for you as well. Freedom House makes precisely that point in a new report.

How should democracies and democrats respond? The State Department’s Global Engagement Center is promising, a place where USG can counter mis/disinformation. I was also inspired by Larry Diamond’s recent call at a DC event for a new “USIA on steroids.” But the programmatic and organizational work to counter authoritarianism needs to flow from a broader strategy, and this broader vision still has not quite emerged from President Biden’s Democracy Summit and the related follow-up. This should follow from rich, innovative thinking about the relationship between information and participation, with the presumption that fact checking will not be enough. To understand how to confront fake news and disinformation, foreign policy will need a new wave of social science research that scales up findings that are slowly emerging from psychology about how to change people’s minds. (Kudos to Samantha Power for placing a behavioral economist into a high ranking position at USAID this week.) The vision must also include resources and policy guidelines for what the Carnegie Endowment for International Peace is calling “anti-coup” strategy. I was encouraged by the strong language in the White House’s Africa Strategy saying that the US “will condemn human rights violations and coups by security forces….” But I was then discouraged by the State Department’s recent response to Burkina Faso. The word “coup” appears nowhere in the October 1 statement on “the situation in Burkina Faso.” It should have.

To connect all this with a broader foreign policy, traditional D&G implementers need to sustain a level of independence from the USG which risks being lost in the scramble for contracts. The Democratic Erosion project is an important step in that direction. There is a danger that a new era of democracy promotion could spillover into the more antagonistic elements of grand strategy vis-à-vis China or Russia. This would unfortunately not merely be a competition of ideas or models of governance. We don’t want a new cold war.

Biden’s African Leaders Summit needs to be a venue for bringing together conceptual thinking, shared strategic principles. The programmatic work of D&G traditionally thrives on depth, individuals immersed in the operations of freedom. To defend and expand democracy around the world, it will also require breadth.

The COVID-19 Debt Crisis in Sub-Saharan Africa

By Jordan Morrisey

Slowing economic growth and increasing levels of debt painted a relatively stark economic picture for sub-Saharan African countries even before the outbreak of the COVID-19 pandemic and the health and additional economic impacts it has wrought. New approaches to these concurrent challenges is needed to mitigate against the worst effects.

Debt levels across sub-Saharan Africa (SSA) remained relatively low until around 2012, when only a handful of SSA countries were carrying debt-to-GDP ratios above 50%. Up until this point, the absolute level of African debt had continued to grow, but economies in SSA also expanded, keeping debt ratios within reasonable bounds. More recently, economic growth in SSA has slowed. In 2016, for example, real GDP growth was less than 2% for all SSA countries and in particularly negative territory for oil-exporting states, like Angola and Nigeria, due to low and declining commodity prices for oil-exporting states. Many African countries continued to borrow even though declining growth threatened their ability to repay, which has led to rising debt ratios. At the end of 2017, average public debt in SSA was 57% of its GDP, an increase of 20 percentage points in just five years. The International Monetary Fund (IMF) reported in May 2018 that 15 of Africa’s 35 low-income countries are either in debt distress, meaning they cannot service their debts, or at high risk of debt distress. Due to the outbreak of the COVID-19 pandemic, growth in SSA for 2020 was projected at –1.6%, the lowest level on record.

Some Factors to Consider
In particular, it is important to look at the changing composition of African debt, the capacity of governments to service their debt, and the role of China as an increasing lender to SSA. Rising concerns about debt sustainability did not slow debt accumulation in many of the poorer countries in SSA. The combined external debt stock of the 30 SSA countries that benefitted from debt relief under the Heavily Indebted Poor Country (HIPC) and Multilateral Debt Relief (MDRI) initiatives rose 11% in 2017, compared to 7% in 2016. The external debt stock of these countries has doubled since 2010 (see figure above).

A letter to President Joe Biden, initiated by the Jubilee USA Network and signed by over 260 organizations, calls for expanded debt relief and some cancellation.

The rise in external debt stocks has also outpaced economic growth in much of the region. The ratio of external debt-to-Gross National Income (GNI) averaged 34.2% at the end of 2017, which was over 50 percent higher than in 2010. The GNI of SSA countries in U.S. dollars rose on average 23% between 2010 and 2017, while the combined external debt stock rose 90 percent over the same period. This is illustrated in the figure below.

The combination of higher levels of outstanding external debt and a hardening of overall lending terms due to the rising share of external debt owed to private creditors has been reflected in increased debt servicing costs. By the end 2017, one third of countries in the region had a debt service-to-export ratio above 10%, and in several SSA countries, including Cote d’Ivoire, Ethiopia, Gambia, Kenya and Zambia that ratio surpassed 15%.

A distinctive feature of the ongoing rising debt problem in SSA is the composition of debt. Countries are moving away from official multilateral creditors who come with stringent conditions and toward non-concessional debt with relatively higher interest rates and lower maturities. This trend raises concerns around debt sustainability given the possibility of higher refinancing risks—particularly for commodity-backed loans in the event of a commodity price shock—and foreign exchange risks. This debt is increasingly held not by governments but by a large number of private creditors, and interest rates are at market levels. Negotiating debt relief would no longer be a government-to-government affair.

Taking on debt is a strategy for securing revenue to pay for things and government borrowing to finance public investments is an essential part of any country’s macroeconomic toolkit. Over the last two decades, countries in SSA have used this option often, which has led to significant improvements in human development outcomes. For example, between 1990 and 2015, average life expectancy increased, infant mortality rates were halved, secondary school enrollment soared, and infrastructure gaps narrowed. These and other gains would have been impossible without pragmatic spending of borrowed resources. Africa’s increasing public-debt burden, however, means higher interest costs, which divert resources from education, health care, and infrastructure to increasingly pay for the servicing of that debt.

COVID-19’s Impact
While developed nations are using the full-range of macroeconomic tools to mitigate the impact of the pandemic, developing countries in SSA have little monetary or fiscal space to cushion the blow of the systemic shocks cause by COVID-19. Export revenues are falling and access to external finance is drying up, while domestic responses to the health threat will negatively affect tax revenues, which are already insufficient. In the face of a major and truly exogenous shock, governments in many low and middle-income countries must contend with soaring spending needs, declining revenues, and insufficient resources to borrow from to fill this gap. As a result, their ability to meet their existing debt commitments is in serious jeopardy, as can be seen in the figure below.

Calls for debt cancellation, restructuring, and payment moratoriums are growing. A letter to President Joe Biden, initiated by the Jubilee USA Network and signed by over 260 organizations, calls for expanded debt relief and some cancellation. Even traditional skeptics of the efficacy of foreign aid, like economist Dambisa Moyo, have shifted their positions in light of the COVID-19 pandemic. Moyo has called for a modern day “Marshall Plan” for Africa in response to COVID-19. Modelled after the big aid package that the U.S. provided to European countries after World War II, this plan would provide an opportunity to expand Western influence in the region, especially at a time when China has staked out a position as the “pre-eminent geopolitical force in Africa.” This could be an opportunity for the U.S. to re-engage with SSA and gain an ideological and commercial edge over China, mirroring how the U.S. was motivated to create the original Marshall Plan to prevent Europe from aligning with the Soviet Union. In the spirit of the stimulus approach, used in places like the U.S. and Hong Kong, Moyo advocates that donor countries should consider direct cash payments to African households. “The beauty of a direct-transfer approach is that it mitigates the risk of funds being illicitly diverted,” Moyo explains, “as billions in aid have been before, despite all the ‘conditionalities’ that are regularly imposed to prevent this.” This approach could leverage the robust, existing payment infrastructure that makes peer-to-peer cash transfers via mobile phones so popular in SSA, such as with M-PESA in Kenya.

The author is the Deputy Director for Global Operations at AMP Health, a public-private partnership which supports governments in sub-Saharan Africa to build visionary and effective public sector teams, and is hosted by the Aspen Institute. He is also pursuing a Master of Science degree in Development Management at American University’s School of International Service.