A freelance career

Tuesday, 28 February, 2012 17:17 Written by Peter

I asked you about ethics and freelancing earlier, wanting to know if you think that consulting and freelance journalism are compatible. The answer was resounding “no” – not only of those of you who reacted on my blog post, but also of those familiar with the NGO and media business I spoke to offline.

photo by Flickr user besfo, CC by-nc-nd

Some people agreed with me that the barriers between publishing and consulting actually do not make a lot of sense, because you can’t be objective, even if you never receive money from the NGO you are reporting on. But everybody agreed that the harsh reality of publishing dictates that journalists who run a consulting sidebusiness are looked down upon by editors and that NGOs do not hire people who report critically on their operations. All very disillusioning.

So I will have to reassess my original plan on how to earn money as a freelancer. The options: concentrate either on journalism or on communications consulting.

After a prolonged phase of procrastination, I have decided to continue trying my hand at journalism. In the end, my desire to tell stories that I think are important kind of trumped the allure of teaching people how to communicate their organisation’s message (though I still think that this is important and interesting). Also, I am by now quite sure that I will be able to actually sell some articles (like this one about Senegal).

Nonetheless, my big concern remains money; I know that I won’t be needing much, but I will also probably not earn much by almost any standart, even if I “make it” as a journalist. For now this may be ok, as Burkina Faso is not the most expensive country around, but at some point my girlfriend will probably want that I chip in for the holiday fund as well.

Luckily, I had a great business idea, which is compatible with (or even supportive of) my profession as a freelance journalist. I’m currently still at step one (1. random business idea, 2. ???, 3. Profit), so I can’t go into much detail, but I will let you know about further developments. If you like it or not

Are you a freelance journalist/consultant? How has the whole earning-your-own-money thing worked out for you?

Microcredits revisited

Monday, 20 February, 2012 13:41 Written by Peter

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In 2008 I entered the microcredit business.That year I discovered the peer-to-peer lending platform MyC4, which lets you lend money to entrepreneurs in various African countries. My initial views on the platform were published in the German weekly “Der Freitag” but for those who don’t speak German or don’t like klicking links, here is a short round-up on MyC4:

Open loans on MyC4

As “investor”* you can open an account with MyC4. The platform then let’s you choose from a number of open loans, which have been vetted by local partner organizations, the so-called “providers”. The lending itself is competitive - it uses the “Dutch” auction system. You can place a bid (say 20 € at 15%) on an open loan. Once the total loan amount has been funded, new bids need to be better than the existing ones. The worst bid of a loan will be kicked out if another investor makes a better offer, thereby reducing the average interest on the loan. Once the interest passes a predetermined threshold (usually between 10 and 15%) the provider can close the loan, but most loans end up several percentage points below the asked interest. This system is supposed to ensure that investors with varying doing good/making profit expectations can participate in the platform.

Over the years, I dedicated a total of 1000 € from my savings to MyC4. My objective was to make a modest profit, which would render my investment sustainable. Sometimes during the last year I realized that my approach was not working out and I stopped reinvesting. Now almost all my loans are either paid back or defaulted and I can try to draw a conclusion.

The good

As of today, I have invested a total of 2070.12 € through the platform. This is double the amount of money I actually put into it. This is possible, as MyC4 loans are repaid on a monthly schedule, thereby opening the door for rapid reinvestments. From a social perspective, I think this is far better than donating money, as this way I can give again and again and again, all while leaving a maximum of responsibility with the borrower, who after all knows best what he needs the money for.

The bad

While the social aspect of the experiment certainly worked out, the idea of making a profit sure didn’t. 17 of the 97 loans I participated in defaulted (an unacceptable 20% default rate), which resulted in a total loss of ca. 200 €. Worse, even the 73 loans that were fully repaid only barely broke even, because of massive currency deprecation.**

This criticism has to be qualified though. First of all, 73 hard-working entrepreneurs honored their contracts and repaid loans that asked for interest rates far higher than those common in the EU or USA. They deserve applause. Of those who didn’t repay in full (the average defaulted loan resulted in a 50% loss of the invested capital) we don’t know the stories and it may well be that some of them are not personally responsible for what happened.

Also, a part of these losses is due to beginner mistakes made by myself. Especially in the beginning, I did not spread the investments over enough borrowers, providers, countries and industries. I also didn’t calculate currency risk correctly, which resulted in the bad result for the repaid loans.

Most importantly though, a huge part of the losses is due to a Ponzi Scheme run by one of the providers, which gave rise to huge criticism on how MyC4 was run:

The ugly

I don’t want to examine the whole story, but fact is that one of MyC4′s Kenyan providers put up fake loans on the platform, raked in the money of the lenders and subsequently made off with it. MyC4 itself did not participate in this criminal behavior, but they certainly neglected their duty to check on their business partners and ensure compliance to transparency standarts.

I guess at least half of my losses are due to this racket. As far as I know, there are still court proceedings going on in Kenya relating to this case, but I doubt that I will see any of the money I lost again.

MyC4 has made several changes to its procedures as a consequence, but I doubt that anything safe of a total makeover of the legal framework in the respective countries could fully mitigate the risk of such a thing happening again.

The long and the short of it

Investing in MyC4 has been a mixed experience. While it was certainly more effective than simply buying a goat through a donation to a large NGO in terms of “helping”, the promised profits have not materialized. As I said, I have transfered practically all of my remaining investment as a consequence of this.

But I will return! I am still convinced that micro-lending is a great way to combine supporting entrepreneurs in the developing world and making a small profit. While MyC4 had to fight many problems over the last few years, the changes they have made seem to result in a much more stable platform which reduces (though not eliminates) the risk of defaults and outright theft. Also, countries like Uganda and Ghana will join the ranks of oil-exporting nations this year, which will likely reduce the volatility of their currencies.

My new investment in MyC4 will reflect my experiences. I will adhere religiously to a doctrine of spreading my loans over various countries, providers and industries. I will limit the value of a single investment to a maximum of 20 €. And I will be more rigorous in calculating my asked interest rate to make sure that I ideally realize a profit around 3%.

Are you investing in microloans, either thorugh MyC4, kiva or other organizations? Which experiences have you made?

* While competing platforms like kiva focus on the “giving” aspect of microcredits, the approach of MyC4 focusses on “profit” for both the borrower and the lender.

** The main culprit for this one was the weakness of the East Africa Shilling currencies over the last years. This seems to be normalizing now.

Waging Nonviolence: Senegalese protest to prevent a dynasty

Thursday, 16 February, 2012 15:14 Written by Peter

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Protest against Abdoulaye Wade in Paris, September, 2011. Photo by Flickr user Gwenael Piaser, CC BY-NC-SA

On February 26, the voters of Senegal will elect their next president. The country has long been the stalwart of democracy and stability in West Africa. But this changed dramatically several years ago when incumbent President Abdoulaye Wade—85 years old and in power since 2000—decided to stand for another term to pave the way for a family dynasty by installing his son, Karim Wade, as his successor.

Many members of the opposition had hoped that Wade would leave office voluntarily. After all, he himself oversaw the introduction of presidential term limits, which were added to the constitution in 2008, and pledged to stay out of this year’s race.

These expectations turned into anger when Wade backtracked on his promise with the words “Ma waxoon waxeet” (“I said it, I can take it back” in Wolof) in 2009. The Senegalese supreme court—whose members are appointed by the president—supported Wade’s interpretation that the amendment could not be enacted retroactively and that he should hence be entitled to stand for two more seven-year terms in office. On January 27 the court officially greenlightedWade’s candidacy, while blocking several other candidates—among them the internationally famous singer Youssou N’Dour—from running. Obviously in anticipation of this ruling, protests were banned in the days around the court hearing. […]

Read the rest on Waging Nonviolence.

Arms deals in Africa

Sunday, 12 February, 2012 16:53 Written by Peter

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Update: This article was just picked up and republished by A Peace of Conflict. You can find the (largely identical version) here, but be sure to check out the excellent “this week in conflict” reports on their page as well!

SIPRI just published a new report on arms deals and weapons flows in sub-saharan Africa (SSA). The report offers little news for those who are familiar with the weapons market in SSA, but this actually makes it only more important. I don’t want to summarize the whole report here (it has a good two page summary included), but discuss some issues in more detail that I think are crucial to the arms transfers debate in Africa.

A Ugandan soldier trains with his foreign supplied assault rifle. Photo by Flickr user US Army Africa, CC-BY

Transparency of arms transfers

This is a main point of the report and with good reason. The SIPRI is considered the best source on arms transfers and deals which is accessible to the public, but even they can only estimate the amount and types of weapons which flow into SSA each year. The reason for this is simple: neither the delivering countries, nor the recipients have a great interest in making their transfers public.

While the report stresses that some arms transfers are legitimate and actually have the potential to improve the security situation, I think it is safe to say that most arms flows in SSA are ambiguous at best and outright dangerous at worst. The report confirms that it is common for African countries to meddle in each others affairs by delivering arms to the government or rebel groups. Western and Eastern nations frequently use preferential arms deals as a means to gain political favors. And while the total value of the African arms market is little (only 1.5% of the global market), it remains a lucrative business to deliver arms to those places where they are actually used: the 20 or so African states that experienced conflict over the last five years.

The lack of information about arms transfers is also contributing to a lack of knowledge on how exactly fresh arms influence security in volatile regions. This makes targeted political actions close to impossible, if one tries to influence conflicts through providing or limiting arms supply. So from a policy perspective, the most important step would be to have the principle exporters (China, Russia and Ukraine) and ideally the African states sign up to a weapons transfer database. But as even the EU has difficulties providing timely data on arms deals, I have little hope that we will see progress in this quarter soon.

Effectiveness of arms control regimes

Sometimes, the UN security council actually gets its act together and issues an arms embargo against a state or individuals. This is great in theory, but these embargoes (and other arms control regimes) are often beset with so many problems, that one has to ask oneself if they are worth the paper they are written on.

Take the arms embargo against the region of Darfur for example. The SIPRI report details that it had little practical effect, as the government in Khartoum was still allowed to receive arms transfers as long as it guaranteed the sender that these arms would not be used in Darfur. I imagine this looks something like this:

Chinese/Russian/Ukrainian arms dealer: Thanks very much for your order Mr. Bashir. We will be happy to provide you with the AK-74s/MIG bombers/tanks you requested. Just one last formality; We will need some form of guarantee that you won’t be using these weapons in Darfur.

Mr. Bashir: Oh no problem. I’ll give you my word that we will only use these shiny new killing machines when parading around in our baracks and in case Egypt tries to invade us!

Arms dealer: Great! That’s settled then.

The deadliest of all good-will gifts

While a huge motivation for arms transfers is still monetary gain, the SIPRI report also points out to the frequent practice of using preferential arms deals as political gifts. This is common for the main arms exporters (think China’s interest in Sudanese oil) as well as for African states (who frequently support one party of a conflict for ideological/political reasons).

Western powers are not above using arms as a political tool as well. This is showcased by the recent support of the (former) rebels in Libya (though not SSA), as well as by the acceptance of western allies Ethiopia and Kenya arming militias in Somalia in their fight against islamists.

This aspect is probably one of the most worrying issues. The current situation in Syria shows that political patronage (in this case by Russia) can have disastrous effects on the possibility to resolve conflicts. African countries are no strangers to political maneuvering by foreign powers and African elites have repeatedly shown that staying in power through the use of guns is an option they will gladly consider, if it is made available to them.

Conclusion

Especially when it comes to small arms and light weapons (SALW, like AK-74s), decades-old thinking needs to be revised. We finally need a political push – probably on UN level – for a comprehensive treaty on transparency in arms transfers. This would be the first step towards more effective arms control regimes, which could reign in the use of weapons as political gifts.

For this to succeed, western nations would have to push this topic onto the international agenda. It remains to be seen if the recent experiences of the Arab Spring (where western sourced weapons were used to fire on peaceful demonstrators) provide sufficient reason for policy makers to rethink stance on arms exports. Only if the West manages to agree on ethical standarts and tight control of their arms exports, getting others to sign up to such rules will be realistic. For Africa, it would be a good development.

For those of you who want to dive deeper into the details of arms deals in Africa, you can find the main report here and various other reports, detailing the role of South Africa, Ukraine, Israel, Somalia and Zimbabwe here. If you can read German, you can find an interesting article on the German weapons company Heckler&Koch and its shady business here.

Well done everybody! Al Shabaab is now part of al Qaida

Thursday, 09 February, 2012 22:47 Written by Peter

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Al Shabaab fighters. Photo by Christian Science Monitor.

So the Somali islamist movement al Shabaab has now sworn allegiance to al Qaida. Several officials in the United States, Ethiopia, Kenya and in the Transitional Federal Government (TFG) in Somalia will have silently thanked their deity at this news, as it makes it much easier to justify the ongoing invasion of Somalia and the frequent targeted assassinations against radicals on Somali soil.

But this view is short sighted. It disregards the direct responsibility of U.S. anti-terrorism strategy for the ever-increasing radicalisation of fighters in Somalia. In a way Somalia and al Shabaab is the best example how the mantra of a militarized anti-terrorism campaign has been successful at nothing, except at creating its own enemies.

It may be hard to remember (it happened over five years ago), but al Shabaab was once part of the Islamic Courts Union (ICU) – it’s youth movement to be precise. While the ICU was certainly no progressive, freedom-loving organisation, it was the first institution to return something resembling order and a functioning (albeit archaic) legal framework to large parts of Somalia, after years of often chaotic inter-tribal and militia fighting.

This of course ended abruptly when Ethiopia decided to invade Somalia in 2006. The Ethiopian government was suspicious of the islamist rhetoric of the ICU and was supported in this stance by the U.S. government, who saw every “islamic” movement as a potential safe haven for al Qaida terrorists (no matter that at this point no evidence suggested a link between the two groups).

The ICU proved to be unable to resist the technologically advanced Ethiopian army. After suffering a series of defeats, the ICU officially switched sides and today its former leader, Sheik Sharif Ahmed, is the President of the TFG.

But the grievances that gave rise to the ICU did not go away when the Ethiopian army invaded. So the most hard-core part of the ICU – al Shabaab – decided to keep fighting, but with a change of tactics. Suicide bombings against Ethiopian and TFG troops became frequent. I spoke to many people on my recent visit to Ethiopia who said that in these times you could here the cries of mourning of family members every day, when they received the news of the death of their son, brother or husband via SMS (!) from the army.

The new way of fighting proved to be successful and in 2009, Ethiopian troops began to withdraw from Somalia without adequate alternative troops being in place. The result was simple: soon, al Shabaab was in possession of much of the territory of southern Somalia, exactly the area that was ruled by the ICU before the Ethiopian intervention. Of course the laws and regulations enforced by al Shabaab reflected their fundamentalist interpretation of Islam and it is safe to say that many Somalis and also the neighboring states preferred the ICU in hindsight.

Not so the military strategists. They just saw al Shabaab as a new and even greater threat to “security and stability” and reacted in the usual way: targeted assassinations through U.S. drones, warplanes, special forces and even bombardment by U.S. Destroyers instead of negotiation.

This “strategy” culminated in 2011 with a renewed invasion of Somalia – this time Kenya made the start and Ethiopia joined after some deliberation (or persuasion by the U.S.?). History repeats itself as the troops of various African nations with U.S. support manage to use their technological superiority to achieve military victories (though so far this has not translated into territorial dominance yet).

With enough time, money and life spend, this campaign may defeat al Shabaab as we know it today. But it will not make anybody more “secure” – not the average Somali, nor Kenyans, Ethiopians or Westerners. Al Shabaab may cease to exist, but the proclaimed merger between the group and al Qaida points to the inevitable consequence: the most motivated and radical elements of al Shabaab will keep on fighting, one campaign richer in experience and many lost comrades less likely to ever consider a peaceful solution for their grievances.

peter dörrie

| journalist |

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Archive for February, 2012

A freelance career

Microcredits revisited

The good

The bad

The ugly

The long and the short of it

Waging Nonviolence: Senegalese protest to prevent a dynasty

Arms deals in Africa

Transparency of arms transfers

Effectiveness of arms control regimes

The deadliest of all good-will gifts

Conclusion

Well done everybody! Al Shabaab is now part of al Qaida

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