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Many of the mentors and engineers involved in this organization are products of a different time. A time of change, of civil rights movements and the kind of idealism espoused by John F Kennedy... and a time when most African countries were shaking off the bonds of colonization.

Many of us were a part of the process which could be called perhaps the "third phase" of the industrial revolution. The period between the 1930s and the 1970s, which was also perhaps the last engineering "managed" phase. Some of us were trained by engineers who had learnt their craft during the tail end of the earlier "second phase" of industrial development over the first part of the 20th Century. The two phases effectively separated by the "Great Depression" and the second war. The war being a time when the demands on, and developments within, industrial production changed forever the nature of industry and by the 1970s led to a situation where "managers and economists" could finally replace engineers. Effectively an end to a "Feud" as old as the process of industrialization itself, though not without its downside - BP discovered what can happen the hard way. There perhaps the engineers understood the 'bottom line' rather better than the management, but were not in a position to prevent irresponsible profit driven decisions being made which ignored their advice!

The 1970's also saw what could be called a social/financial upheaval - a time when the post war Keynesian welfare statist model lost credibility as the developed world entered a period of "stagflation" - a situation when both the inflation rate and the unemployment rate are persistently high. It is a difficult economic condition for a country, when inflation and economic stagnation are occurring simultaneously it becomes a policy dilemma for any state managed economy. The simplest explanation offered for the cause of the global stagflation of the 1970s is that it began with a huge rise in oil prices, but then continued as central banks used excessively stimulative monetary policy to counteract the resulting recession, causing a runaway wage-price spiral.

Various other explanations are offered - getting rid of the Bretton Woods monetary system in 1971 could be seen as a contribution to the inflationary component. We won't however attempt to analyse or explain too much - we're engineers and only see the obvious - and economists rarely agree with each other and engineers rarely agree with either economists or managers. Relevant to us is only what followed when we entered a period of laissez faire capitalism, which seems to be ending - or at least changing - about now. (I'm sure someone can explain why almost the entire industrial and economic growth of the developed world can be broken down into 50 year cycles but it is not for us now to attempt that).

One noticeable, but rarely mentioned, result of liberal capitalism and at least one"emerging economy" is an overproduction of almost everything. Since most economic theory was based on the scarcity of production - one wonders just how much this contributes to the present non functioning of economies and economic theories. It has certainly produced some negative responses to our Foundations efforts - those who "know" are aghast that we would be considering production in Africa of something that could be bought cheaply from China or somewhere. Usually those who also believe that liberal capitalism models will solve Africa's problems with foreign direct investment etc. and usually supported with arguments from those who see the needs for new markets for that overproduction - without necessarily understanding why they need new markets or caring where the money to purchase these products comes from.

We live in a world of unprecedented opulence that could not have been imagined a century ago - but it is also a world of deprivation, destitution and oppression. Poverty, hunger, disease, violations of basic political freedoms as well as of basic liberties, threats to our environment and the sustainability of economic development all add to the grim picture. Although these deprivations can be observed in rich as well as poor countries in Asia, Europe and the Americas, the situation seems even more grim for Africa countries.

Why Africa lags behind in economic development is the subject of endless debates. We add our take on this, simply because it is useful to understand the cause of a problem before attempting to fix it.

Almost all attempts to generate economic development in the African continent have coincided with the time of liberal capitalism in the west. As a result the economic strategies pursued by nearly all post-colonial African nations south of the Sahara in this era have largely been influenced by, and largely modeled on, these presently accepted principles of liberal capitalism.

As engineers who have seen a substantial part of the economic growth leading to our present level of opulence, we do not question the contribution of a free market model to this growth - and we mostly support the need for its continuation. Two things we do question though are first the extent - or form - it should take in the future, although that we will leave to others better qualified to comment - the second is the almost complete failure of economists to understand how and why it happened and why they simply cannot transplant such a model into the African experience.

Where does the ignorance come from that assumes all can be done just with capital - sure little can be done without capital however, capital alone is not enough. A look at the trillion odd dollars poured at Africa over the last 50 years, and what happened to it, should open some eyes to the possibility there is something more involved - and largesse on this scale just may be counterproductive.

The failure of early post colonial social market experiments, led many African nations south of the Sahara, especially under-performing ones, to quickly embrace free market policies and fierce recovery strategies, such as privatization and Structural Adjustment programs (SAPs), primarily in the hope of attracting loans and capital for development from the World Bank and International Monetary Fund,

Two important institutions of our time, the International Monetary Fund and International Bank for the Reconstruction and Development (World Bank) were founded in the period following World War II under the Bretton Woods Agreement to monitor and establish the parity or value of the currencies of the first world nations, advise these countries on policies affecting monetary systems; and very important for Europe and the US, they provided loans for current accounts deficits as well as capital for post war reconstruction purposes.

Short of their own funds, developing countries too, turned to these funds in the form of bank loans. In fact, in the first five years, half of the World Bank loan lending went to European reconstruction and development; the other half was extended to developing countries on stiff terms. Indeed, in the 1950s and 1960s financial/technical aid emerged as a new form of economic interaction. According to economic analysis of the time, the growth of less-developed countries was truncated primarily by insufficient capital investment and external financial assistance was thought to be only viable solution.

While aid thus ushered in a new form of international relations, beneficial to the countries of the South, it did not and has not since, been able to change the balance of economic power between the North and South. In fact, it has dismally fallen short of being a springboard for sustainable development. Instead, what has emerged among others is the problem of unserviceable debt. The figures are revealing:

Total external debt in underdeveloped countries accumulated to frightening heights. Between 1980 and 1991, it climbed from $79 billion to $178 billion. In the meantime however, economic growth in real terms in these countries has shown no improvement. Interest arrears on these loans meanwhile rocketed from a mere US$1.25 billion in 1982 to $12.89 billion in 1991. The total debt of African countries rose from $6 billion in 1970 to $210 billion in 1994, representing 82.8% of Africa's GDP and 254% of its export earnings.

The implication of this is grave and surpasses by far mere figures. More affected by debt burden are the poor, the vulnerable, and the politically and economically disenfranchised. The heavy interest on debt not only means the government can not invest in productive development activities, but also there is not much left to invest into the basic infrastructure, particularly in health and in education.

That obviously didn't work terribly well - so now we are confident that a new "laissez faire" version of this free market policy will? One where the market alone in the form of multinational businesses and foreign direct investment will lead to an economic growth that improves the lot of the deprived, the destitute and the oppressed?

Proponents of liberal market economy argue that foreign investment has a positive effect on economic development. Such investments fill resource gaps in developing countries and improve the quality of production. Liberal market policies attract direct foreign investors who bring into the underdeveloped countries otherwise unavailable financial resources through companies own capital and their access to international capital markets. They also contribute crucial foreign exchange earnings to the developing world through their trade effects. The marketing skills and knowledge of foreign markets of foreign investors and their competitive products, it is argued, generate exports and thus increase the foreign exchange earnings of the host countries.

A second important gap filled by foreign investors is technology. Foreign investors allow nations to profit from the research and development carried out by their corporations and make available technology that would be out of reach of developing countries. Foreign firms also contributed significantly in the training and development of local staff, stimulating local technological activities, and transfer of technology throughout the local economy and improving productive efficiency of host African nations.

Third, argue proponents, foreign investment has helped improve the quality of labor in Africa. It provides needed managerial skills that improve production, creating more jobs.The creation of jobs, the provision of new and better products, and programs to improve education for local employees and communities have been evoked as a case for multinational companies activities in developing countries in general and the advantage of liberal capitalism over socialism.

There is however an asymmetry between these assumptions of liberal policies on the economic development in Africa nation building - and the actual experience on the ground. It would easily be possible to write a tome around the glaring examples of this however we have neither the time nor the space. The point that most seem to miss is much more simple and to explain it we can go back to Adam Smith - he didn't write a "formula" for creating something leading to economic growth and no economist or commentator has before or since. At best it could be said they wrote varying analysis of something that was happening anyway and proposed various policies on how best to let it happen and warned of some dangers involved.

As engineers we actually like the laissez faire approach - but perhaps from the idea that things best grow from the chaos of an unfettered environment rather than the thought it allows maximized profits and growth. In more than 50 years of watching innovation develop to industry I have never seen anything that didn't develop from chaos - be it the simple example of the innovators untidy desk or workshop or the larger example of the chaotic situation surrounding war or a social upheaval. My personal favorite is the chaos surrounding the development of a single innovation to an industry - the conflict between the innovators and the money men - between those who focus on the bottom line at the expense of everything else and those who merely accept the bottom line as just one of the factors required to make something work. Sure capital and good management make things grow - but neither actually create anything. Everything industrial and economically enriching for a nation grew from innovation and chaos.

Why Africa is missing the innovation component needed for economic growth has perhaps as much to do with the adoption of first the post colonial command economies and then the free market policies espoused by the economic gurus holding sway at the time, as anything else. Both approaches actually marginalized the role of the African artisan by considering them irrelevant - yet the local artisan is the source group of the innovator who generates local industry.

Until that local innovator - local entrepreneur component is replaced or nurtured - then no meaningful industrial development can take place. The claims that multinational corporations will spin-off technical and production "know how" able to foster home grown industry is just plain naive - no management in any profit driven Corporation would so risk his company's own future and profitability by nurturing future competition for itself. (A few of their ex-engineers and innovators will though).

"Business men are primarily interested in acquisition rather than in production, in making money rather than in making goods." (Thorstein Veblen)

The first sentences of Adam Smiths "Wealth of Nations" sums it all up pretty well:

The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniencies of life which it annually consumes, and which consist always either in the immediate produce of that labour, or in what is purchased with that produce from other nations.

According therefore, as this produce, or what is purchased with it, bears a greater or smaller proportion to the number of those who are to consume it, the nation will be better or worse supplied with all the necessaries and conveniencies for which it has occasion.

But this proportion must in every nation be regulated by two different circumstances; first by the skill, dexterity, and judgment with which its labour is generally applied; and, secondly, by the proportion between the number of those who are employed in useful labour, and that of those who are not so employed. Whatever be the soil, climate, or extent of territory of any particular nation, the abundance or scantiness of its annual supply must, in that particular situation, depend upon those two circumstances.

Thus far - all the aid and foreign direct investment in Africa has done no more than create a class of people in Africa who are not employed in useful labour. Aid alone seems also to have done no more than create a "western industry" employing an army of people who are also not usefully employed, if one uses the production from labour as a measure of its usefulness.

"I wish someone would give me one shred of neutral evidence that financial innovation has led to economic growth - one shred of evidence." Paul Volcker, former head of the Federal Reserve.

This page borrows heavily from the paper "Economic Development & Nation-building in Africa: In Search of A New Paradigm" Presented by Dr. Peter John Opio, Dean of Business Administration and Management- Uganda Martyrs University at the African Nation- Builders Workshop- Minnesota 2000