The Shackled Continent

by Robert Guest

  Those who would restrict trade with poor countries often argue that the way poor countries compete – by paying workers less – is unfair. This argument is emotionally appealing. Many Westerners would choke on their cornflakes if they thought that the corn was grown with child labor. Even if the corn-planters were adults, many people in rich countries would not like to think of them being exploited, and a typical African farm-worker’s wage of a couple of dollars a day sounds horribly exploitative to most Americans or Swedes.

  This kind of thinking is behind moves by labor unions in rich countries to block imports from countries that do not adhere to rich-country labor standards. But it does the poor no favors. For most Africans, the alternative to long hours at low wages is long hours at no wages – unemployment. By preventing Africans from trading, well-meaning Westerners make them poorer.

  Trade allows specialization. A plumber, for example, specializes in fixing water pipes. He gets good at it, so he can fix lots of water pipes in a day. He trades his services for money, which he can then spend on everything he needs. If he had to grow all his own food, weave his own clothes, and build his own house, he would be unlikely to do any of these things well. He would probably end up as poor as Nashon Zimba, the Malawian subsistence farmer I mentioned earlier. Poorer, in fact – Zimba trades his surplus corn for soap and T-shirts.

  On a larger scale, countries prosper through the specialization that trade allows. British people are quite capable of growing wheat; they’ve been doing it for millennia. But South Africans can do it more cheaply, so it makes sense for Britain to sell South Africans insurance and buy their wheat.

  Trade benefits both parties even when one party is better at more or less everything. This surprising observation was first made by David Ricardo, a British economist, who called it the law of “comparative advantage.” Ricardo said that if you can make A better than B, and your neighbor can make B better than A, but he can make both A and B better than you can, it does not follow that your neighbor should do both jobs. Both of you would profit more if each concentrates on what he does best. So would society as a whole.

  The most digestible illustration of this I’ve heard was concocted by P. J. O’Rourke, an American humorist who likes to grapple with serious subjects. Let us decide, he writes,

  that one legal thriller is equal to one pop song as a Benefit to Society. (One thriller or one song = 1 unit of BS.) John Grisham is a better writer than Courtney Love. John Grisham is also (assuming he plays the comb and wax paper or something) a better musician than Courtney Love. Say John Grisham is 100 times the writer Courtney Love is, and say he’s 10 times the musician. Then say that John Grisham can either write 100 legal thrillers in a year (I’ll bet he can) or compose 50 songs. This would mean that Courtney Love could write either 1 thriller or compose 5 songs in the same period.

  If John Grisham spends 50 percent of his time scribbling predictable plots and 50 percent of his time blowing into a kazoo, the result will be 50 thrillers and 25 songs for a total of 75 BS units. If Courtney Love spends 50 percent of her time annoying a word processor and 50 percent of her time making noise in a recording studio, the result will be 1 half-completed thriller and 2.5 songs for a total of 3 BS. The grand total benefit to society will be 78 units.

  If John Grisham spends 100 percent of his time inventing dumb adventures for two-dimensional characters and Courtney Love spends 100 percent of her time calling cats, the result will be 100 thrillers and 5 songs for a total of 105 BS.

  Applying this principle to foreign trade, O’Rourke notes that “the Japanese make better CD players than [Americans] do, and they may be able to make better pop music, but we both profit by buying our CDs from Sony and letting Courtney Love tour Japan.”33

  Joking aside, this works in practice, too. The Cato Institute, a libertarian think tank in Washington, has taken the trouble to rank ninety-one countries by their openness to trade between 1980 and 1998. The trade openness index (TOI) takes account of tariff rates; the severity of exchange controls, as measured by the difference between the black market exchange rate and the official one; restrictions on capital movements; and the actual volume of trade, compared to an expected volume calculated by looking at a country’s size, population, proximity to big markets, and so on.34

  Cato’s researchers then tried to assess whether free trade made countries richer. The results were striking. The twelve most open economies had a GDP per head in 1998 of $23,387 – seven times the figure for the twelve least open. Average incomes in the most open countries grew by 2.5 percent annually over those nineteen years, leaving them on average 1.6 times richer at the end. In the twelve least open countries, average incomes grew by a pathetic 0.3 percent per year over the period, leaving them on average only 6 percent better off at the end. (The countries in the middle showed middling income and middling growth.) The bottom twelve contained five African countries; the top twelve none. Half of the countries in Africa were not ranked, mainly for lack of data.

  The relationship between openness and growth remained similar when the study looked only at poor countries. If anything, poor countries appeared to benefit more from openness to trade. And when the researchers tried to allow for other factors that may be correlated with openness, such as country size, inflation, and security of property rights, they still found that trade openness boosts growth. Other economists agree. Using somewhat different measures, two Harvard economists found that developing countries with open economies grew by an average of 4.5 percent per year in the 1970s and 80s, while those with closed economies grew by only 0.7 percent.35

  The good news for Africans is that their borders are opening. After several disastrous attempts at self-sufficiency in the 1960s and 70s, trade barriers started to fall in the 1980s and 90s. On the Cato scale of one to ten, seven out of twenty-two African countries improved by more than one point between 1980 and 1998, while only one African country (Sierra Leone) regressed.

  The bad news is that Africa still has towering informal trade barriers: muddy roads, bad ports, crooked customs officials, and policemen who specialize in highway robbery – as I found out when I rode in the cab of a Cameroonian beer truck.

  7. OF POTHOLES AND GRASPING GENDARMES

  The risks and rewards of investing in Africa

  Douala, Cameroon’s muggy commercial capital, is one of the busiest ports in Africa, so the city’s rotten infrastructure is a bit of a problem. The roads are resurfaced from time to time, but the soil is soft and the foundations often too shallow, so small cracks yawn quickly into great potholes. Street boys fill them with sand or rubble and hold out their palms for tips from the motorists who roll slowly by, but their amateur repair work rarely survives the first downpour.

  In the middle of the day, the streets are horribly gridlocked, as I could see quite clearly from up in the cab of a sixty-ton beer truck. I was riding with Martin, a mild and amiable truck driver, and Hippolyte, his young, handsome, and green-hatted assistant. We were at the entrance of a Guinness factory, where Martin had just picked up 30,000 bottles of black velvety stout and other refreshing brews. We were trying to leave but couldn’t. The road we wanted to join was narrow and packed with stationary cars, none of whose drivers wanted to let us pull out in front of them.

  Martin, however, knew his stuff. He inched the eighteen-wheeled beast forward with skill and calculated aggression and gradually barged his way into the fast lane, where he immediately had to stop again. Far into the distance, motionless traffic blocked the way. With no cooling breeze coming through the windows, it was monstrously humid. After five minutes in the cab, I was sweating like a pig in a plastic jogging suit.

  When we eventually got moving again, we had to dodge both the potholes and the wrecks of cars that had crashed. Under Cameroonian law these may not be moved until the police, who are in no hurry, have arrived. It took us half an hour to reach the first gas station and another half an hour to fill up, owing to arguments about paperwork. Another hour and two
police road blocks later, we finally left the city. That was the end of the easy part of the journey.

  Visitors from rich countries rarely experience the true ghastliness of Third-World infrastructure. They use the smooth roads between airports and hotels and fly any distance longer than a hike to the curio market. But the people who live or work in countries with lousy infrastructure have to cope with the consequences every day. These are as profound as they are malign.

  I had hitched a ride in Martin’s truck in the hope of following a bottle of Guinness from the brewery in Douala to a bar in the rainforest where some thirsty Cameroonian might drink it. The trip did not go entirely according to plan but it was educational. I saw, at first hand, just how difficult it is working in a country with wretched roads. I also saw how smart and persistent businesspeople can make good money in the most unpromising places.

  Guinness Cameroon, the local arm of the global beverage giant, was very helpful. The managing director, Brian Johnson, asked one of the trucking companies that deliver his products to let me ride with them, and the head of logistics, a personable Scot named Ross Paterson, gave me a schedule that turned out to be as realistic as a James Bond movie.

  At 2 p.m. on a Thursday in October 2002, I was to join 1,600 crates of stout on board a big truck bound for Bertoua, a small town in Cameroon’s south-eastern jungle. As the crow flies, this is about 500 kilometers – as far as from London to Edinburgh, or New York to Pittsburgh. The journey was supposed to take eighteen hours, including an overnight rest stop. It took four days, and when the truck arrived it was carrying only two thirds of its original load.

  Along the way, the scenery was staggering. Thickly forested hills stretched into the distance like a stormy green sea, punctuated with explosions of red and yellow blossoms. Beside the road were piles of cocoa beans laid out to dry in the sun, and hawkers selling engine oil, tangerines, and twelve-foot pythons for the pot. I was able to survey it all at leisure, not least because we were stopped at road blocks forty-seven times.

  These usually consisted of a pile of tires or a couple of oil drums in the middle of the road, plus a plank with upturned nails sticking out which could be pulled aside when the policemen on duty were satisfied that the truck had broken no laws and should be allowed to pass. Sometimes they merely stared into the cab or glanced at Martin’s papers for a few seconds before waving him on. But the more aggressive ones detained us somewhat longer.

  Some asked for beer, which they couldn’t have because it was in a locked cage on the back of the truck and Martin had no key. Some complained that they were hungry, often rubbing their huge stomachs for emphasis. One asked for pills, lamenting that he had indigestion. But most wanted money and figured that the best way to get it was to harass motorists until bribed to lay off.

  At every other road block, they carried out “safety checks.” Typically, Hippolyte had to climb down and show the truck’s fire extinguisher to a gendarme relaxing in the shade of a palm tree, who would inspect it minutely and pore over the instructions on the side. Similar scrutiny was lavished on tail-lights, axles, side-view mirrors, and tires. Strangely, no one asked about seat belts, which Cameroonians wear about as often as fur coats.

  At some road blocks, the police went through our papers word by word, in the hope of finding an error. Some found fault with me, although I tried to avoid confrontation by pretending not to speak French. One frowning thug declared that my Cameroonian visa was on the wrong page of my passport; another insisted that I was obliged to carry my yellow fever vaccination certificate at all times, which was not true. Most of the demands for bribes, however, were directed at Martin. Because trucks have to abide by so many more regulations than passenger vehicles, truckers are easier to catch out breaking some trivial rule or another, and the Cameroonian police persecute them accordingly.

  In the town of Mbandjok the police decided that Martin lacked a particular permit and offered to sell him a new one for twice the usual price. When he asked for a receipt, they kept us waiting for three and a half hours. A gaggle of policemen joined the argument. The total number of work-hours wasted (assuming an average of seven policemen involved, plus three people in the truck) was thirty-five – call it one French working week. And all for a requested bribe of 8,000 CFA francs (about $12).

  The pithiest explanation of why Cameroonians have to put up with all this came from the policeman at road block no. 31, who had invented a new law about carrying passengers in trucks, found Martin guilty of breaking it, and confiscated his driving license. When it was put to him that the law he was citing did not, in fact, exist, he patted his holster and replied: “Do you have a gun? No. I have a gun, so I know the rules.”

  Cameroon’s robber-cops are worse than the African norm. But even without their attentions, the journey would have been a slog. Most Cameroonian roads are unpaved: long stretches of rutty red laterite soil with sheer ditches on either side. Dirt roads are fine as long as it doesn’t rain, but Cameroon is largely rainforest, where it rains often and hard. Our road was made impassable by rain three times, causing delays of up to four hours.

  The Cameroonian government has tried to grapple with the problem of rain eroding roads by erecting a series of barriers with small gaps in the middle that allow light vehicles through but stop heavy trucks from passing while it is pouring. The barriers, which are locked to prevent truckers from lifting them when no one is looking, are supposed to be unlocked when the road has had a chance to dry. Unfortunately, the officials whose job it is to unlock them are not wholly reliable. Early on the second evening, not long after our stand-off with the police in Mbandjok, we met a rain barrier in the middle of the forest. It was dark, and the man with the key was not there. Asking around nearby villages yielded no clue as to his whereabouts. We curled up in the mosquito-filled cab and waited for him to return, which he did shortly before midnight.

  The hold-up was irritating but in the end made no difference. Early the next morning a driver coming in the opposite direction told us that the bridge ahead had collapsed, so we had to turn back.

  Six hours, eleven road blocks, and three toothsome sardine sandwiches later, we arrived in Yaoundé, the political capital, where Guinness has a depot. The alternative route to Bertoua meant passing a weighing station, where vehicles weighing more than fifty tons faced steep tolls. Since we were ten tons overweight, Martin needed permission to offload 600 crates. But it was a Saturday, the man in charge was reportedly at lunch, and we did not get permission until the next morning. It then took all morning to unload the extra crates, despite the fact that the depot was equipped with forklifts. Finally, after twenty-five hours without moving, we hit the road again and met no road blocks for a whole fifteen minutes.

  For much of the rest of the journey, which took another seventeen hours, I was struck by how terrifying Cameroonian roads are. Piles of rusting wrecks clogged the grassy verges on the way out of Yaoundé. We saw several freshly crashed cars and a couple of lorries and buses languishing in ditches. None of the bridges we crossed seemed well maintained. And when we arrived in Bertoua we heard that two people had been crushed to death on a nearby road the previous day, when a logging truck lost its load onto their heads.

  Coping with chaos

  Cameroon’s roads have wasted away. In 1980, there were 7.2 kilometers of roads per 1,000 people; by 1995, this had shrunk to only 2.6 kilometers per 1,000. By one estimate, less than a tenth are paved, and most of these are in poor condition. In recent years, however, aided by a splurge of World Bank money, things have improved a bit. The roads around Douala have been substantially rehabilitated. A more streamlined government helps: it used to take three years for officials to approve plans for new roads.

  But there is much still to be done, and firms still have to find ways to cope with dire highways. Guinness used to buy secondhand army trucks, which was a false economy because they kept breaking down. Now, it buys its trucks new from Toyota, with which it has a long-term agreement to ensure t
hat it will always be able to get hold of mechanics and genuine spare parts (as opposed to fake or stolen ones, which are popular in Cameroon, but of variable quality). The firm is also making more use of owner-drivers, who have a greater incentive to drive carefully.

  “Just-in-time” delivery is, for obvious reasons, impossible. Whereas its factories in Europe can turn some raw materials into beer within hours of delivery, Guinness Cameroon has to keep forty days of inventory in the factory: crates and drums of malt, hops, and bottle tops. Wholesalers out in the bush have to carry as much as five months’ stock during the rainy season, when roads are at their swampiest. Since they tend to have shallow pockets, Guinness has to offer them credit on exceptionally easy terms.

  Out in the forest, the firm does whatever it takes to get beer into bars and liquor stores. It is an exercise in creative management. At the depot in Bertoua, crates are unloaded from big trucks and packed into pick-up trucks, which rush them to wholesalers in small towns. The wholesalers then sell to retailers and to small distributors, who carry crates to villages in hand-pushed carts, on heads, and even by canoe.