developing economy

A New Threat to Afghanistan

Afghanistan is facing a dangerous new threat, but it does not involve suicide bombers or roadside explosives.

As the Washington Post reports, government corruption is threatening to topple Afghanistan’s fledgling democracy in the wake of a presidential election plagued by delayed vote tallies and reports of voter intimidation. The Wall Street Journal explains that corruption in Afghanistan is so pervasive that the United States and its allies are reconsidering their strategy in dealing with President Hamid Karzai. Allegations of misconduct are so prevalent that the U.S. has begun to view Karzai not as an ally, but as a liability in their effort to reconstruct the war-torn nation.

USAID recently released a report that said roughly two-thirds of Afghans had been victimized by a corrupt government official — the highest level ever recorded. In a country where the average person makes $700 a year, it takes a $400 bribe to be connected to the electrical grid.

If it's allowed to continue unchecked, the report says, corruption will make it impossible for Afghanistan to develop an economy capable of attracting foreign investment and aid.

Despite the obstacles to eliminating corruption, one organization has begun to make headway. The Christian Science Monitor reports how a multinational relief effort called the Aga Khan Development Network has begun to train Afghan villagers in basic accounting techniques. The villagers — who are now able to audit their community’s financial records — are better able to prevent embezzlement and theft. While the organization's efforts have so far met with success, they're only one soldier in the fight against a serious problem.

Mexico's North-South Divide

Topics: Economic Development
Countries: Mexico
Mexico City.  Photo: <a href="http://www.flickr.com/photos/yetto/856126769/">Yetto (flickr)</a>
Mexico City. Photo: Yetto (flickr)

Are the southern states of Mexico – Chiapas, Guerrero and Oaxaca – getting left out of Mexico's economic growth?

An April 24 article in the Economist suggests that there is a growing socio-economic gap between these three southern states and the rest of Mexico. In 2000, Mexico’s GDP per capita was $7,495, compared to a combined average of $3,634 for Chiapas, Guerrero and Oaxaca, according to a World Bank report. Furthermore, the percentage of people living in extreme poverty – less than $1 a day – was 54-56 percent in the south, compared to 23-25 percent nationwide.

Recently, the government has proposed using large-scale infrastructure projects to address this economic disparity.

In 2001, then-President Vicente Fox released his Plan Puebla Panamá, a project to link southern Mexico and Central America with northern Mexico. It primarily provides funding for building highways and new air and sea ports.

More recently, current President Felipe Calderón announced plans for a six-year, $28.7-billion road investment project. A significant part of the plan focuses on southern coastal regions.

Critics argue that investing in infrastructure isn’t enough to promote economic growth in the south. José Antonio Aguilar, a government official from the state of Puebla (another southern state), tells The Economist that they have experienced “a total transformation” in state infrastructure "but we haven’t been able to turn this into growth in income." Likewise, Miguel Pickard for CorpWatch.org worries that these top-down approaches tend to overlook Mexico’s poor.

To what extent will these ambitious infrastructure projects close Mexico's north-south poverty gap?

From the Archives

The Future of the WTO

Previously filed under: North America, Trade
The recent failure at the Doha Agreement trade negotiations requires the causes be indentified and key objectives addressed when talks resume.

Stories We're Watching

For India’s Newly Rich Farmers, Limos Won’t Do

International Herald Tribune - Fri, 03/19/2010 - 00:48
Land acquisition for expanding cities and industry has created pockets of instant wealth, creating a new economic caste in India: nouveau riche farmers.

Africa Could Join High-Speed Science Network

All Africa - Thu, 03/18/2010 - 12:45
African science ministers are hoping to extend a high-speed fiber optic network — currently linking Egypt to the northern hemisphere — to other countries in Africa.

Vision for Africa

Daily Nation - Thu, 03/18/2010 - 12:30
Africa’s economic future and the challenge of uniting people and nations drew eminent politicians and scholars into a historic public debate in Nairobi on Thursday.

'Quiet Corruption' Hurting Africa's Poor

San Francisco Chronicle - Mon, 03/15/2010 - 09:22
A World Bank report says teachers and other public servants who don't show up for work are fueling "quiet corruption" throughout Africa that is disproportionately hurting the continent's poor.

Industrial Output Up; Hopes For Factories Grow

NPR - Mon, 03/15/2010 - 08:45
Industrial production edged up 0.1 percent in February, beating expectations and marking the eighth straight monthly increase.

Recent comments

  • "Esther, Wow! Thank you for commenting. One of the best things (among many) about applying these controlled random..."
    by Jill Scantlan
    on A 'Rising Star' in Economics
  • "Thanks for this article. One small correction though. What the post refers to as "my best known work" (the work on..."
    by Esther Duflo
    on A 'Rising Star' in Economics
  • "This is so sad, and at the same time so true. We talk so much about terrrorism on news that we forget about poverty and..."
  • "Microfinance is amazing. Allowing millions to send their children to university in order to "break the chain" and give..."
  • "UPDATE: Following an investigative report on BBC NewsNight, British Parliament has now passed a bill that will..."

Countries

An initiative of Mercy Corps
“You must be the change
you wish to see in the world”
Mahatma Gandhi
Learn more about Mercy Corps >

Efficiency

Over the last five years, more than 89% of Mercy Corps' resources have been allocated directly to programs

Excellence

America's premier charity evaluator gives Mercy Corps four stars in organizational efficiency. Click here to learn more.

High Value

Every dollar you donate to Mercy Corps helps us secure $11.16 in donated food and other critical supplies.

Mercy Corps — Dept. W — 45 SW Ankeny — Portland, OR 97204
All original content Copyright © 2009 Mercy Corps. Quoted and linked content is property of the creator(s). Mercy Corps will not sell, rent or trade your personal information.