J. Brian Atwood: 'Too good to fail'
- Article by: J. BRIAN ATWOOD
- March 31, 2009 - 7:17 PM
Questionable financial practices. Poorly managed banks. A severe credit crunch that stifles small business. A poor investment climate. No, I don't mean Wall Street. These are the chronic challenges that plague most of the developing nations of Africa.
Yet Africa is not hopelessly mired in failure. Some African states have shown incredible resilience, rising from the ashes of civil conflict to provide a reasonable life for long-suffering people. One such nation is Liberia, whose uniquely well-qualified president, Ellen Johnson Sirleaf, will visit the Twin Cities on April 10 to deliver the Distinguished Carlson Lecture at the University of Minnesota.
Sirleaf has served as finance minister of her country, as a bank executive and as director of the U.N. Development Program's Africa bureau. She also was a political prisoner. Elected with a strong 59 percent of the vote in Liberia, she is the first woman to take charge of an African nation. She understands the need for well-functioning and transparent microeconomic systems in her poor nation, and she has led Liberia out of the wilderness to the brink of development success.
Now she faces the biggest challenge of her presidency. The global financial crisis is freezing the little credit available to Africa, stifling commodity exports, drying up remittances from the Liberian diaspora and discouraging investment. The expectations of fellow Liberians generated by the election of an internationally respected development expert have been sky-high. High expectations are a factor in most new democracies beset with poverty, but this is even more of a problem in a nation that is led by a dynamic woman and was created by the United States of America. Many Liberians are waiting for miracles.
Yet Liberia and other poor countries are now facing the perfect storm: a financial crisis combined with an energy crisis and a food crisis. The poor are paying an ever-increasing proportion of their paltry annual incomes for vital nourishment. It is every government's responsibility to tend to basic human needs, a challenge that is becoming increasingly problematic in Liberia.
When a nation like Liberia is doing all the right things to create functioning democratic institutions and financial systems that will help create private wealth, it deserves our support. This week, the richest 20 nations -- the G-20 -- will meet in London to address the nations of the bottom tier, those whose per capita incomes hover around $300 a year. There is talk of a trillion-dollar rescue package tied to a continued commitment to economic and political reform. This is an essential part of holding our fragile world together as we proceed to fix our own broken financial-services sector.
If democratically elected governments with impressive leaders like Sirleaf are allowed to fail because of a global problem we helped create, we can expect a strong backlash from their less responsible successors. Several of the giants of the financial services industry were deemed "too big to fail." In my view, democratic governments in the developing world like that of Sirleaf's Liberia are "too good to fail." Representing almost half the world's population, these nations are more important to our future than is commonly acknowledged.
J. Brian Atwood is the dean of the Humphrey Institute of Public Affairs at the University of Minnesota, and the host of the Distinguished Carlson Lecture Series.
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