False Economy - Alan Beattie [100]
Such a benign, supportive environment for trade was often the exception rather than the rule in ancient and medieval times, and in Africa that too often remains the case today. Just as political interference can prevent comparative advantage in trade operating, so can the inability to get exports from source to destination. Basic cheap manufactured goods made in China and shipped across two oceans and around the world to ports in Spain can massively undercut the same products made just across the Mediterranean in Africa.
Similarly, contrary to some of the views of globalization's discontents, business often does not go where land is cheapest and wages lowest. Coffee beans grown in Africa for European markets are almost always taken to Europe before being roasted and ground for sale; cocaine, much of which is smuggled into Europe through transhipment points in West Africa, is grown and processed thousands of miles away in Latin America and then taken across the Atlantic.
Why? Because it is difficult in Africa to overcome the technical and logistical difficulties of processing coffee and to achieve the rapid and reliable transport needed to get it to market before it goes stale. Simple cost advantage is often wiped out by much greater efficiency in making goods and getting them to market—and in particular in creating a surging torrent of commerce that sweeps new products along efficiently, reliably, and inexpensively toward their destination. We all know the Chinese proverb about teaching a man to fish rather than giving him a fish. But to make him even better off, it will help if he can get that fish to market.
Advances in transport and telecommunications have enormously increased the opportunities on offer to developing countries to sell into a world market. But it would be a mistake to imagine that the inevitable result of this is to effect the "death of distance" or to make the world flat. One of the more unexpected aspects of global trade over the past couple of decades is the resolute failure of distance to die. Economists have long been puzzling over the fact that, on average, the effect of distance on reducing trade has remained high. There is still relatively little trade between far-flung regions compared with that between close neighbors. There is also surprisingly little trade between rich and poor countries. Most trade today is in fact in fairly similar products and services between fairly similar countries, not between very different economies exploiting big innate advantages over their trading partners.
Advances in technology can help forge, extend, and thicken supply chains. But human ingenuity beyond that of the inventor is also required. It takes entrepreneurs to seize the opportunities that technology offers, and it takes governments to encourage, support, and facilitate them, and, when appropriate, as it often is, to get the hell out of their way.
How is it that these webs of production and commerce have been woven densely and firmly in some continents, like Europe, and yet remain sparse and frail in Africa?
It has not always been so. As we have seen, trade in Europe received a severe blow with the collapse of the Roman empire, after which a coherent trading system was replaced with a politically fractured and shifting mosaic of city-states and kingdoms. These local realms were neither large nor stable enough to secure trade routes. Since governments were not able to fulfill those functions, private clubs came in to take up the slack. When regional trade within Europe in grain, furs, timber, and so on revived and grew in the Middle Ages,