Sunday, March 09, 2008

Can Revenue Sharing and Other Money Solve Detroit Problems? by Akindele Akinyemi

Not as long as there are issues such as prolonged violent conflict, bad governance, excessive external interference, and lack of an autonomous policy space. Alone, money cannot solve Detroit’s development problems. Proof, if any was needed, is the fact that many of Detroit’s natural resource-rich countries score very low on human development indicators.

Detroit’s development challenges are multifaceted. Union history still looms large. Money cannot undo that history. Six decades after union domination we are still grappling with building the city. On the one hand, populations moved out of Detroit and into the suburbs taking along families that generated a tax base while on the other hand, Blacks expanded outwards into the rest of the city that were once preoccupied by Whites. To this already complex picture was added the impact of a slowing economy which extended to the City of Detroit.

No amount of money can build the damaged trust between a government and its citizens. Decades of defective political and economic governance, and the failure by early post-White governments to deliver on the promises of improvements spun disillusionment and led to unfulfilled expectations paving the way to undemocratic mayorial control, the demise of the rule of law, urban-suburban strife, and economic and social chaos. In extreme cases these conditions led to a string of very weak or failed policies here in Detroit.

This said, we must realize money is still needed and Detroit will, for a while, require internal support by way of concessional finance, given its limited domestic savings. Building infrastructure that links Detroit with the rest of emerging markets like Nigeria and South Africa and expanding market size and diversity requires significant resources; so do fighting HIV/AIDS and educating Detroit’s children.

The good news is that a new generation of Detroit leaders is determined to make a difference. In the last two years, Detroit has made substantial progress on the economic and governance fronts. We are encouraged by the growing macroeconomic and structural reforms on one hand, and improved governance on the other. These will go a long way toward reducing the risks and costs of doing business-prerequisites for stimulating both domestic and foreign investment, the only means to create wealth.

What is needed instead are business, social, and political entrepreneurs who take responsibility for, say, making sure medicines reach victims, rather than more grandiose slogans about comprehensive administrative solutions that only serve as publicity vehicles for raising yet more money for ineffectual aid bureaucracies. Entrepreneurs would be accountable for results, in contrast to the aid bureaucrats and wealthy politicians who make promises that nobody holds them accountable for keeping.

Lastly, Detroit must be given a chance to meaningfully integrate into the global trading environment in order to sustain growth performance. Detroit cannot continue to live on an island by itself full of Black people who are still stuck on plantation and voodoo politics. Focusing on the Detroit human mind as capital will help translate resources into wealth, thereby helping to solve Detroit’s problems. Money’s usefulness and value will only spring from rational responses to the challenges that face the continent through exchange of products and services at the city, national, continental, and international levels.

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