Sunday, July 12, 2009

Dear Mr. Obama: What Africa Needs is a New Kind of Digital Marshall Plan

Forget charity. Forget cash. What Africa needs is a way to unleash its own entrepreneurship.

Its already doing that thanks to cell phones. There are now over 50 million on them on the continent.

So here's how to do it. Convert these to smartphones, create a secure online currency a la Paypal and let individual Africans participate on the world market.

It is really that simple. Once businesses and non-profits can go directly to individuals and vice versa then thieving government officials and billion-dollar banknotes like Zimbabwe become irrelevant.

Why send a bag of rice when you can give a village a way to earn rice credits that they can cash in at a store?

Why send a mosquito net when you can finance a local mosquito net factory.

You get the idea - we can leapfrog the old barriers of post-colonial Africa just by tapping into the wireless economy. Instead of giving people things we enable them to jumpstart their own economies. Cell phones offer a way to bypass the traditional gatekeepers who are generally forced to become corrupt by the system itself.

In fact, cell phones themselves are an example of this new approach. Look at it this way - in 15 years Africa grew from a legacy of just 5 million phone lines - almost all government controlled - to 50 million cell phones - mostly privately controlled.

Old thinking is to give conscience money to the poor while buying up resources cheaply. This isn't grand collusion although it might as well be - Bono raises money and give it away to poor villages while the corporations funding him look for ways to sell baby formula or extract minerals for less. Unfortunately, the Chinese are beat us at this game because they skipped the conscience money part and increased the direct payments to the governments and top officials to get the resources even more cheaply. Example 1 - Darfur (in case you wondered who paid for the oil pipeline that financed the janjaweed).

Plus the Chinese don't place moral conditions on anyone. Example 2 - sending weapons to Mugabe in Zimbabwe so that he increase military pressure when his rigged elections were being contested.

Smartphones and the wireless economy tied to small manufacturing infrastructure is the new success model for Africa. It requires two things: underwriting the distribution of phones and the guarantee of a new "Marshall" Protection Plan. Hands off the little guys - if you steal from the world wireless economy we can find you and we'll get you, so don't do it.

Once people are engaged they buy or borrow what they need to grow their own food, information on how to do it and access to markets that will buy it. They will know what to make or grow and who to trade with.

This will extend to medicine and medical knowledge.

It will tend to redistribute wealth and power among the harder working and women.

This concept will require on-the-ground guarantors and vigilance against a new kind techie kleptocrat, but it is still much, much better than anything we have done in the the past. And it is inevitable.

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