Paca questions

Paca has asked me a couple of very different questions recently. I'll post my replies here.

First, he asked for more details on the database design. "What DB backend will they be using, and what sort of front-end. Are these web services of some sort, or are you talking about building something in Access?"

We will be designing both the structure and the interface using an Access-like product called "My SQL". Mike has used it before and recommends it, so that's what we are going with. Web service would be nice, but it probably won't happen. We are going less complicated than that. The interviewers will use pen and paper; once a week or once a month these will be returned to a central office where someone will physically input the data into the database. While I have dreams of creating a PDA interface that can then download via an internet connection to our server, the reality is that 1) that's beyond my ability to code, 2) most of Bangladesh doesn't even have internet access, and 3) they have specifically requested the simpler method.

As to the second question... you asked earlier about my take on the G8 debt cancellation for a few heavily idebted poor countries. Well...

Poverty in the developing world is a very complex issue that nobody really understands. There's been years of attempts to get at the problem, and so far there has been far too many failures and not enough successes. But it is pretty safe to say that there are both external and internal causes of poverty in these countries. External factors include barriers to trade with the West, the draining of money from the local economy by multi-national corporations, and, of course, the huge debt burden's these countries carry. In some cases debt service may consume up to 60 or 70% of a country's annual budget. It's hard to feed your citizens or create investment incentives or even provide basic security when so much of your revenue is already committed to debt service. Also remember that the money servicing the debt is leaving the country... so not only is it not being used for development, it's not benefitting the local country in any way at all. That's where the drive for debt relief comes from... if we can eliminate that money drain, then perhaps those countries can use the money that was going to debt repayment to instead go to development activities.

But just cancelling their debt will not work. The main reason for doubt is because of the internal reasons for poverty... most notably, corruption. If by cancelling the debt these countries then use their newly freed resources to invest in development, then there's no problem. If these countries though start rewarding favorable contracts to friends and family of those in power; building unneeded projects that benefit the wealthy elite of the nation and not the working poor; or even just flat out taking a big chunk of the taxes for themeselves, then the extra money does not help development at all. Remember, these are some of the poorest countries in the world; they didn't get like that by chance. All of them have suffered from severe government corruption at different times in their past. And once corruption is entrenched, it is very, very difficult to remove. Just look at the Philippines - that is one of Asias oldest democracies, rich with natural resources, with strong ties to the West. And yet they lag far behind other SE Asian nations such as Thailand, Singapore, and even Malaysia (not too mention Korea and Hong Kong). Why? Because of the culture of corruption and class entitlement. They are struggling to get through it... but 20 years after the fall of Marcos and we again have a case today where the President is accused of buying the election. Not coincidentally, the Philippines also has the largest external debt of all southeast asian nations (with the possible exception of Indonesia).

All of the countries that the G8 is eliminating debt from are ones that have demonstrated "good governance". That is, they have behaved in a way that the West deems relatively uncorrupt... usually this is just a nice way of saying that they have a relatively open free-market economy which welcomes foreign investors. If their politicians truly are unselfish and looking to develop the country, then cancelling this debt is a good idea. But it could just turn out to be another opportunity for a few wealthy and powerful individuals to add another few million dollars worth of import cars to their collection.

There are other problems, as well. First, cancelling debt means that their credit rating will fall, making it harder for them to get new loans in the future, and the loans they do get will be at a higher rate. Second, the G8 can only cancel their official development aid loans that come from teh government, which is a relatively small portion of the debt these countries carry (most of it is in private bank loans). Third, cancelling debt while the west still maintains huge agriculture subsidies and other barriers to trade means that the country will still be unable to find an export market for their goods, guaranteeing continued poverty. I don't have the data, but many people believe that the single best thing the West could do to help these countries is to simply cease their agriculture subsidies. Of course that would never fly in the U.S. farm belt... but the subsides we and the Europeans give to our farmers keep food prices artificially low, making it virtually impossible for poor countries to compete.

Like I said, it's complex. Cancelling debt is a nice gesture, but it will not, by itself, do much to eliminate the poverty in these countries.

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