The Standard, Hong Kong : Thursday, December 08, 2005
The gory details of famine in Niger are making headlines again, with pictures of old and young scavenging for food. This second poorest country in the world suffers not only from drought and locusts but from heavy state intervention; half its income comes from international aid. But instead of finding solutions to the production shortage, many in the aid industry attribute the famine to the government's half- hearted market reforms.
Niger is a victim of its own government, which repeatedly denied the situation in the face of mounting evidence. Early this year, the government refused to heed warnings that a food crisis was imminent. When the crisis arrived, it denied there was mass starvation and claimed the harvest had in fact produced a surplus. The government later proceeded to accuse the World Food Programme of exaggerating fears that Niger could face another famine within months.
A few months later, now, at least 2.5 million people are short of food. In many respects Niger is still a command economy, as many African countries are or have been: it is up to the rulers in Niamey to decide prices. But economic sense dictates that when producers, particularly farmers, can sell to willing buyers at an agreed price, it gives them an incentive to produce more. This then enables producers to afford basic necessities instead of waiting for government handouts.
In a command economy, growth remains elusive. Take for instance the great famines of the 20th Century: in China (25 to 40 million deaths), Soviet Ukraine (seven to 10 million deaths), North Korea (two to three million deaths) and Ethiopia (nearly one million), it was food requisitioning and economic control by communist governments that destroyed incentives to produce. When countries free their markets, they cut down undernourishment and abolish famine, as in East and South Asia , and even China .
But Niger 's agricultural sector is still government-run and still involves mainly subsistence farming. This does not encourage quick responses to changing conditions or bad harvests. The locusts in power are well-fed so there is a tendency to pretend that all is well without bothering about the starvation their policies cause.
The food crisis is further compounded by regional trade barriers. World Bank figures show that African nations slam tariffs as high as 33.6 percent on agricultural commodities from their neighbors.
Some groups have blamed Niger 's famine on its alleged free market policies. Oxfam claimed in September that: "Over the last twenty years, Niger has fully complied with economic reforms supported by Structural Adjustment loans and advice from the IMF. However, this process of liberalization has failed to help Niger increase its wealth."
In fact, Niger has one of the least free economies in the world, ranking 107th out of 123 countries in the Fraser Institutes 2004 Economic Freedom of the World report.
A few government-owned companies have been privatized and some financial services liberalized but these have had barely any impact on the majority of Nigeriens. Most importantly, farmers lack secure rights to the land they till, which means they have little incentive or ability to improve productivity.
Meanwhile, entrepreneurs face government regulations and restrictions at every turn: for example, the cost of setting up a company is equivalent to about four years' average income - and this in a country where banks are owned by the state and are not trusted. These problems are compounded by inflexible labor laws, which discourage people taking on employees and so prevent the development of larger scale businesses.
No wonder there is so much poverty.
People are starving in Niger -and in Zambia , Zimbabwe , Ethiopia and elsewhere in Africa - but not because of free markets. Rather, they are starving because of the lack of markets and their underlying institutions property rights, the rule of law and limited government.
More aid will not solve these problems - so far it has perpetuated poverty, corrupt politicians and malign policies. But next week, ministers from around the world will meet in Hong Kong to discuss trade reform: there, rich countries should lead by example - committing themselves to liberalizing trade and reducing subsidies ... then maybe political leaders in Africa will follow suit.
*Thompson Ayodele is director of the Institute of Public Policy Analysis in Lagos , Nigeria , a think-tank promoting the institutions of the free society