African Economic Growth Tied To Governance Issues

Africa’s Future Lies In Its Ability To Cope With Old Demons
The allure of investing in Africa is growing as European economies continue to stumble and the US appears hamstrung by political incompetency. However, as attractive as Africa is to investors and foreign companies, the continent’s future will lie in its ability to overcome its history of corruption, governance and instability.

While the African Development Bank is forecasting the doubling of African consumer spending in the next decade, Dianna Games, CEO of the South African consulting company Africa@Work says the positive news “clouds a lot of issues” and may conceal “shaky pillars.”

“There is so much that still needs to be done, policywise,’ she says.

End Of Fiscal Cliff Drama Will Bring In Period Of Austerity
As Washington departed for the Christmas holidays without a deal, many remain confident that Republicans and Democrats have a firm enough grip on reality that they will reach a deal before 2013. Whatever deal is reached, some believe it will mark a period of austerity not yet seen in the US.

“While there is evidence that the cliff has slowed business investment, it is far fetched to believe that a deal will be so transformative. The problem with the imagery of the fiscal cliff is that it tempts one to think in binary terms: there is either an awful outcome or a great one. The sobering truth is that however Washington avoids the cliff over the next fortnight or so, a deal will see the US embark on austerity at a national level properly for the first time since the crisis,” writes Richard Blackden in The [London] Telegraph.

Quick Hits

Global Markets React To Fiscal Cliff Stalemate European markets declined at the end of Friday as investors’ concerns about the fiscal cliff and signs of further weakening in Europe weighed heavily.

Italy’s Prime Minister Resigns
Italian Prime Minister Mario Monti announced his resignation a year after the was appointed – not elected – to office. Monti has not reached a decision on whether he will run for a second term.

Is India A Prodemocracy Democracy?
India might be one of the world’s newest democracies but its actions have not necessarily been prodemocratic says Joshua Kurlantzick of the Council on Foreign Relations.

“The big emerging democracies have not only failed to step up as global advocates of democratization but have, in many cases, moved in the other direction, propping up some of the world’s most authoritarian governments—helping preserve the same kind of repressive regimes they themselves often had escaped, reinforcing divides, and often siding with autocrats against Western democracies,” contends Kurlantzick.

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