I am thrilled to feature this guest post from , author of the newsletter (which I highly recommend!). Her new book, The Heart of a Cheetah, outlines how Africa can overcome poverty and get on the path to human flourishing. I hope you enjoy her analysis of Wakanda, the African techtopia featured in the film Black Panther.
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In one sense, Wakanda is a wonderful utopia for Africans.
As an African, I’m acutely aware that almost all Western representations of Africa focus on poverty, disease, civil war, or, at best, charming tribal primitivism (Go National Geographic!). In essence, we are degraded even by the “pity porn” that most well-intentioned NGOs use to raise funds for African-focused charities. Every time I walk through an airport and see a huge larger-than-life image of a starving African child with an inflated belly and flies in his eyes, I’m reminded of how the world sees us.
In this context, the utopia of Wakanda as portrayed in Black Panther was an amazing gift to the pride and dignity both of Africans and black people everywhere. We were portrayed as prosperous innovators with cutting-edge technology. There was no foreign aid, no NGOs, no barbaric Africans, no starving Africans, no white saviors in sight. Indeed, the primary white people were the bad guys whom the African good guys defeated. Africans were strong, beautiful, confident, noble—it was as if we were the real heroes of our own story! Imagine that!
This is one of the reasons why Black Panther was a hit movie—globally there was a longing on behalf of Africans, black people, and I suspect many non-white people to see a heroic story centered on Africans. Moreover, although there were white villains, the film was not gratuitously anti-white. It was a humane film with a real sense of human heart.
So why not simply celebrate Wakanda as an African utopia?
There are two related reasons why I can’t celebrate Wakanda as an African utopia:
1. Wakanda’s wealth is the result of magical thinking
Not only is Vibranium, the source of Wakanda’s wealth, not real, but worse, the entire economic model it represents is dangerously misleading.
Real nations become prosperous by gradually producing more valuable goods and services. They provide their citizens with secure and transferable property rights within a judicial system that respects the rule of law. Then entrepreneurs create businesses that successfully transform inputs, including local labor, into valuable outputs that earn revenue through sales. It is not a glamorous story.
Indeed, often the details can be ugly. There is often a mass migration from rural areas to urban areas as people hope to get jobs. Often the early-stage manufacturing jobs are brutal (they are often legitimately described as “sweatshops”). Cities are often crowded, polluted, and filled with slums.
In the best of circumstances, it can take decades before incomes increase significantly. Over time, as workforces become more experienced and highly skilled, and as companies invest more capital, manufacturing goes up the value chain. Often nations start with garments because sewing t-shirts is not terribly capital-intensive.
It is only in a business environment in which companies are confident that they won’t have assets stolen from them by governments that they will invest in more capital-intensive industries. Populist or Marxist governments which are eager to appropriate factories are shooting themselves in the foot as no sane business will invest serious capital in such a country after such appropriations. An automobile plant may represent billions in capital investment—a corporation needs to be confident that its investment will be safe for decades. The government of a nation needs to be trustworthy over long time frames for this to be possible.
Eventually, as a workforce matures and becomes more educated, countries can move up the value chain from capital-intensive manufacturing to high-end services. But finance, software development, health care, and research and development typically require specialized human capital that most low-income countries just don’t have. Software is a partial exception, but entry-level outsourced software can’t compare with first-world software corporations which pay 10x-100x what outsourced software pays. While I’m confident that Africa can get here, and is there in very small pockets today, it will take decades before Africa achieves first-world status.
There are certainly better and worse paths across this trajectory, some faster, some slower, some with greater human costs, some less, some with greater environmental costs, some with less. Without getting bogged into the particular debates around these issues, the important point is that some version of the sequence above is roughly universal on the road to economic development. And Wakanda short-circuits this by pointing to a magical substance that results in prosperity as a “deus ex machina.”
2. Wakanda perpetuates the myth of natural resources
Relatedly, and non-trivially, one of the leading obsessions among Africans is “We’re poor because they are stealing our natural resources.” Is it true that trillions of dollars of value in natural resources have been stolen from African nations? Absolutely. Many books have documented such crimes again and again and again.
At the same time, our obsession with this issue will not make us more prosperous. To begin with, in development economics there is a well-known “natural resources curse.” The name refers to the fact that having abundant natural resources can actually hinder economic development. There are several ways this takes place:
A) Natural resource wealth lends itself to corruption/rent-seeking. It is common for leaders and their cronies to siphon off a portion of the wealth. Leaders of oil-producing nations in Africa often leave office with hundreds of millions, and sometimes billions of dollars, in personal wealth. So, yes, foreign governments and corporations often steal our natural resource wealth—and our leaders and elites do so as well, at immense scale.
B) Relatedly, having natural resource wealth often prevents nations from developing better economic policies. Not only do the leaders pay themselves, but they often also bribe the people with, say, low fuel prices or subsidized food or other benefits. If the people aren’t too miserable, they won’t put as much pressure on the government to create jobs and lasting prosperity. The leaders continue to enjoy their luxury cars and shopping trips to Paris and Dubai, the people get tiny scraps, and no policy improvements take place. The nation limps along with a terrible business environment.
In some cases, as in Venezuela, once the oil price dipped the results were devastating with people starving, electricity shortages constant, and the health care infrastructure collapsing. Thus natural resource wealth can act as a misleading mask making a nation appear as if it is more economically successful than it actually is.
Conversely, it is not an accident that the most successful jurisdictions in the world had no natural resources. Hong Kong and Singapore both went from African-level poverty in 1960 to greater prosperity than the UK today (on a per capita basis), and both had no natural resources. Dubai’s rapid growth began largely after they realized they were running out of oil—their brilliant special economic zone strategy was deliberately developed as an economic development pathway so that they wouldn’t collapse after their oil ran out. Mauritius, the most economically successful African nation, now approaching the prosperity of the poorer European nations, is a small island with no natural resources. The Bahamas and Cayman Islands began to compete without having natural resources, and so forth. For all of these jurisdictions, it has been a blessing NOT to have natural resources because it drove them to develop some of the best business environments in the world.
C) The other problem with the eternal “they stole our resources from us” narrative is that it obscures real win-win opportunities in natural resource development. The most successful African nation on the continent (Mauritius is an island), Botswana, became prosperous by means of a partnership with the DeBeers diamond company. They did not threaten to expropriate. They were not hostile to their corporate partners. They developed a successful win-win strategy that led both to growth for Botswana and profits for DeBeers. Could Botswana have done better than it did? No doubt we can envision alternative pathways that would have gone even better. But Botswana has outperformed other diamond-rich and oil-rich nations by cooperating with its multinational mining partner rather than by hostility and attacks.
Again, none of this is glamorous. People love the glamour of Che fighting for the justice of the people. In Africa, Sankara has the romance of a Che to this day. The founders of African independence such as Kwame Nkrumah and Julius Nyerere were passionate advocates of socialism—and ran their countries into the ground. Meanwhile, almost no one knows about Seretse Khama, who actually put Botswana on the path to prosperity rather than giving impassioned speeches about justice. How can we get excited about partnering successfully with DeBeers?
So while I love Black Panther and the beauty and glamour of Wakanda, I see it as perpetuating economic prejudices that Africans need to transcend. I’m personally working to create new Startup Cities in Africa that will accelerate prosperity. I’m working with Prospera, Inc. to bring an improved business environment to selected city-scale projects within several African nations. We see the success of models such as Hong Kong and Singapore and want to bring them to Africa. While we will do so with a more humane and environmentally responsible approach, if we want to create jobs, we will have to include some low-end manufacturing jobs to start with. Personally, I’m especially passionate about leapfrogging to bring higher-end service jobs ASAP. But I would be unrealistic if I claimed we would never have garment factories.
So even though my dream is, in fact, to create Wakanda levels of prosperity and dignity for Africa in real life, I’m ambivalent about Wakanda because it involves too much fantasy and economic ignorance.
My request for those who would write the script for the next inspiring utopian vision for Africa is that, rather than having it float in a fantasy world, let’s create a real-life road map. Let’s create an inspiring vision of Africans building factories and jobs, houses and restaurants, music and entertainment and sports, robotics, rockets, and flying cars and beyond, and embrace the entire scope of economic development!
Let’s create a new and better vision for African utopia—and let’s get started creating it today!
Also, and I apologize for nit-picking, I did want to comment on this paragraph:
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Conversely, it is not an accident that the most successful jurisdictions in the world had no natural resources. Hong Kong and Singapore both went from African-level poverty in 1960 to greater prosperity than the UK today (on a per caita basis), and both had no natural resources. Dubai’s rapid growth began largely after they realized they were running out of oil—their brilliant special economic zone strategy was deliberately developed as an economic development pathway so that they wouldn’t collapse after their oil ran out. Mauritius, the most economically successful African nation, now approaching the prosperity of the poorer European nations, is a small island with no natural resources. The Bahamas and Cayman Islands began to compete without having natural resources, and so forth. For all of these jurisdictions, it has been a blessing NOT to have natural resources because it drove them to develop some of the best business environments in the world.
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There is a bit of a question of how well that model scales. The total population of the countries mentioned is 17.8M (of which Hong Kong is almost half of that number). The total population of Africa is 1.2 billion, so a very different size.
In the case of Mauritius, I am not at all an expert, but part of their development has been serving as a tax haven for India. This article notes that, in some cases, taxes on dividend income is 88% lower if taxed as being paid in Mauritius rather than India which lead to: https://www.cnbctv18.com/views/how-the-misuse-of-indias-treaty-with-mauritius-is-leading-to-tax-revenue-loss-5344541.htm
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The ‘Mauritius route’ was famed as a channel used by foreign investments into India. Capital gains accruing to foreign investments coming through Mauritius were exempt in India due to the India-Mauritius DTAA. As a result, many foreign investors used to incorporate conduit companies in Mauritius and bring their money into India through the conduits. Between 2004 and 2014, about 39 percent of total Foreign Direct Investment into India was from Mauritius.
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This says much of that money was coming from India and was being transferred through Mauritius purely as a tax dodge: https://taxjustice.net/2023/02/01/tax-haven-mauritius/
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So you take your money out of India to another country, in this case Mauritius, then you bring it back into India and now it’s suddenly dressed up as foreign money, foreign investment. What’s the point of this disguise? Well, many countries try to attract foreign investment by providing all sorts of special incentives, tax breaks, tax holidays, and these aren’t offered to local investors. So domestic investors get away with dodging tax and exploiting rules that are not meant for them. And eventually this ends up harming the very government systems and public infrastructure that they are relying on to make their money and do business. And of course, another reason for the disguise is the good old fashioned money laundering, trying to clean dirty money.”
Whistleblower: “All these structures, or all these investments that were flowing into India through the Mauritius route were actually structured by Nishith Desai associates. Almost like, you know, I would say 99% of these investments were structured by Mr Nishith Desai and his firm Nishith Desai Associates.”
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None of that is to deny that Mauritius has made good decisions in terms of development, and the reason I describe this as nit-picking is that you have to start somewhere, and it may turn out that Startup Cities are a good way to start. HOWEVER, it's also worth being clear that if we are looking to Mauritius as a model, it would be a good idea to NOT copy the strategy of drawing in capital by offering favorable tax treatment, which ends up creating a subsidy on the part of taxpayers from the larger country who pay more because they can not collect taxes on that money.
Edit: I mis-typed the difference in dividend tax rates between India and Mauritius, it should have been a max of 88% not 78%.
I also realized that another way to think about the question of scale is to imagine if London were a separate country from the rest of the UK -- in that case it would also look like a rich, small country (larger than Hong Kong and almost 3 times the population of Dubai) which was wealthy based on cultivating a business-friendly environment. But with London not being a separate country we can see that there is a natural concentration of, in this case, financial business, and even though the rest of the UK has the same laws and regulations, money remains concentrated.
I appreciate the call to look forward in a way that is more realistic than a comic book vision.
I'm curious; I have not been following news about Prospera closely, but it appears to be a deeply controversial project. Are you aware of plans for models of startup cities that avoid some of the political concerns (in particular, this article makes it sound like there's been a move away from the current model for investor-state dispute settlement (ISDS)): https://foreignpolicy.com/2024/01/24/honduras-zedes-us-prospera-world-bank-biden-castro/