Bob Geldorf Goes PEU

September 5, 2011 9:39 AM

There are plenty of fund managers who want to be rock stars. Now, there is a rock star who fancies himself as a fund manager. Bob Geldof, the singer and campaigner for aid to Africa, is seeking to raise $1bn from institutional investors for a private equity venture on the continent. The pitch he is making represents a remarkable shift into African business for a man more often associated with his relentless advocacy for debt relief and aid to Africa. (Text Via FT) Till date he has raised $200m. Some are confused. Others are snarking. The Guardian's interview by an Ethiopian born writer with

His longer answer is a typical mix of blithe assumption that the story of Africa to some extent tracks his involvement in it, an oblique reply to the charge that Africans should be treated as equals rather than just recipients of charity, and a display of his still hugely impressive commitment – vision, even. "So, in the 80s you dealt with the symptoms of a single, empirical financial problem, called poverty. The symptoms are hunger, lack of health, lack of education. The structures are, as ever, political and economic. That took 20 years, from Live Aid to Live 8. And then you move on – you have to try as hard as you can to get Gleneagles implemented – the debt issue was carried in the first eight months, and the G8 has done maybe 60%, maybe less, of what was promised. We're still chasing it. Meanwhile, there's another Africa opening up that's entirely part of the new world, and we'd better fucking get hip to it. And the best way I can do it is to illustrate what I mean, and that's by funnelling huge amounts of money into investing in dignity and lives and jobs so that they can construct their own countries, you know? So that's the next and possibly last step that I can contribute to."

Previously on rock stars, africa and aid.

posted by infini (34 comments total)

From the "others are snarking" link: Like Bono, Geldorf was the lead singer for the Boomtown Rats.

Uh...?
posted by scody at 10:02 AM on September 5, 2011 [1 favorite]

The "others are snarking" link also consistently misspells his name, which kind of cuts the ground out from any interest I might have in reading it.

BTW, is it significant that this post takes its title from that article, including the misspelling?
posted by George_Spiggott at 10:10 AM on September 5, 2011

Yeah, that "snarking" link is kind of like some kind of marijuana stream-of-consciousness bit of nonsense. "And did you ever notice... that your HANDS have veins... and GOLD is found in veins in the earth... Wow, there's gold in our hands, man!"

And yeah, the title of this post being the same as the snarking link... Feels like an agenda there.

Not to mention that the above-the-fold portion ends with
posted by hippybear at 10:19 AM on September 5, 2011 [5 favorites]

BTW, is it significant that this post takes its title from that article, including the misspelling?

Nah, just bad cut and paste because I'm terrible at coming up with clever titles for posts and I've already used "insert clever title here"
posted by infini at 10:21 AM on September 5, 2011

Something always rubbed me the wrong way about Geldof and Live Aid / Live 8. I attended the Berlin Live 8 event. It had little to do with Africa.

Besides: Does anyone else feel like the issue of Africa is possibly a bit more complex than what people like Bob Geldof and Bono espouse? My intuition on the issue is that it's not money, exactly, that's the issue. The problem in many of those countries seems more to be due to corrupt political fabric and money rushing into the hands of a small few and bypassing the population that needs it. I do not think a private equity fund would have any incentive to change that. In fact, they might make matters worse.
posted by chasing at 10:22 AM on September 5, 2011

Shall I ask the mods to remove that link so we can focus on the rest of the news? My bad, mea culpa for a lazy link that looked interesting early on...I was trying to find something on this private equity aspect
posted by infini at 10:23 AM on September 5, 2011

And yeah, the title of this post being the same as the snarking link... Feels like an agenda there.

This I'm curious about... an agenda other than sloppy linking?
posted by infini at 10:25 AM on September 5, 2011

I have no idea why this is a bad thing:

The fund, called 8 Miles (the distance between the southern tip of Europe and northern Africa) will make investments in financial services and telecommunications, but will nurture a bias for agribusiness and manufacturing, as Geldof told Reuters:

“Currently 80 per cent of exports from Africa are unprocessed raw materials. There’s your opportunity: they need manufacturing.”

If Geldof can do it, good for him. The only reservations I have are the private nature of the funding vehicle, and the fees that may nor may not be charged for managing it. But overall, Africa needs strategic investment like this.
posted by KokuRyu at 10:31 AM on September 5, 2011

Well, there's not a lot of detail here, but on the face of it he's right: an extraction economy offers little or no lasting benefit to the indigenous population and in the long term leaves them worse off than before. Development that involves value-added labor, design and manufacturing would seem to be what's called for, and for that you need investment from somehwhere. It's not going to come from China; they have their own vast labor pool that they want to keep employed, and what they want is materials.
posted by George_Spiggott at 10:35 AM on September 5, 2011

My intuition on the issue is that it's not money, exactly, that's the issue.

Well, at its base, it is money, but there are layers and layers on top of that.

It's corrupt governments at all levels, local up through national.

It's lack of infrastructure, at its most basic roads and utilities.

It's decades if not centuries of various intensities of colonial rule and the legacy of both the colonial years and the aftermath once it ended.

It's malaria and AIDS and other illnesses which cripple populations.

So yeah, it is money, but there is a lot more going on. Can private equity help with this? Hard to say. There's a lot of theory that says if the cornerstones of an economy can be laid (that is, income-generating industry), then many of the other problems will solve themselves as the economy develops, building on those cornerstones. But exactly how to do that in the context of African nations and resources where it ends of springing naturally and doesn't end up being imposed from outside and illogical to the actual situation the populations live in daily... That seems to be the stumbling block all around.

So many people have had so many excellent visions for helping out the people on that continent, with such oddly mixed results.

I'm thinking specifically of the "dig a well and equip it with a merry-go-round playground toy for kids so water will be pumped while they play" PlayPump project which was introduced in southern Africa. It hasn't really solved that basic need problem nearly as much as the project promised when it was invisioned.

It's a very complex and difficult number of problems scattered about a very complex and huge continent which each demand very complex and intensive solutions. Whether private money is what will bring solutions when so many other attempts have failed... remains to be seen.
posted by hippybear at 10:35 AM on September 5, 2011 [1 favorite]

This I'm curious about... an agenda other than sloppy linking?

If it's just sloppy linking, that's fine.

But it could easily be interpreted that this post is a subtle hurf-durf look-at-the-privileged-white-guy-who-still-is-concerned-but-can't-make-headway link slamming Geldof for his actions. Especially given the two pull-quotes which contain a lot of backhanded language about what he's trying to do. And then there's the context of the previously links you've chosen...

I'll give you the benefit of the doubt since you claim it was just laziness on your part. But it feels kind of editorial when I add it all up.

FWIW, clever titles aren't required. They often create confusion or provide misleading context, as is the case with this.
posted by hippybear at 10:41 AM on September 5, 2011

Ah, that agenda - its in every article. People can't get over Geldof's shift in focus from aid to profit.

Well, there's not a lot of detail here, but on the face of it he's right: an extraction economy offers little or no lasting benefit to the indigenous population and in the long term leaves them worse off than before. Development that involves value-added labor, design and manufacturing would seem to be what's called for, and for that you need investment from somehwhere.

This is an interview with George Ayittey, a Ghanaian economist on many of these aspects.


It's not going to come from China; they have their own vast labor pool that they want to keep employed, and what they want is materials.

I also found http://www.chinaafricarealstory.com/2011/08/china-in-africa-what-can-western-donors.html">this Norwegian report on what China is actually doing in Africa, including investments in manufacturing.

[sorry, was searching for stuff for a post when I came across the Geldof news]
posted by infini at 10:49 AM on September 5, 2011

previously links you've chosen

chosen by searching for bob geldof and africa and aid?

All these concerns should perhaps result in a flagged post for deletion or FIAMO
posted by infini at 10:51 AM on September 5, 2011

I am also contributing to the thread as you claim to have intended it, and am not harping on the framing beyond the clarification YOU asked for. Don't ask for things you don't want to hear.
posted by hippybear at 10:53 AM on September 5, 2011

Yay! because being a successful but worn out singer uniquely qualifies you to solve the worlds poverty adn economic woes in the undeveloped 3rd world. All those silly world leaders, NGO's, educated Africans, public policy grads, etc. have no idea how to fix the problem ... what all their plans are missing is musicians.

'cause if all the rich westerners just join hands and sing, we can truly make this world a better place ... just by singing!
posted by jannw at 10:54 AM on September 5, 2011

Just in case we needed someone to make the obvious snark, there it is.
posted by George_Spiggott at 11:01 AM on September 5, 2011 [2 favorites]

So jannw, I assume you've read the articles or have an understanding of this issue from some other source that no musician could match. So can I ask your opinion on the proposition as broken down in the comment above by KokoRyu, and myself just below it? Specifically, it'd be instructive if you could explain specifically how Geldof being a musician increases or decreases the validity of the approach.
posted by George_Spiggott at 11:10 AM on September 5, 2011 [1 favorite]

(er, make that KokuRyu. Serves me right for going on about misspelling.)
posted by George_Spiggott at 11:12 AM on September 5, 2011 [1 favorite]

Arrgh ... can't help it, the obvious snark.

'cause when you have an immensely complex series of intertwining systems, upon which vulnerable peoples lives depend, what you really need is an amateur and their pop-logic to interfere and "fix stuff".
posted by jannw at 11:22 AM on September 5, 2011

Yes, thanks for that analysis. From the article:

Geldof said he agreed to help raise money for the fund late last year after discussions with Phillip Pritchard, Chief Executive of CLSA, an Asian brokerage and investment company arm formerly called Credit Lyonnais Securities Asia.

posted by George_Spiggott at 11:29 AM on September 5, 2011

You can bank on this fact: there won't be snow in Africa this Christmastime.
posted by rikschell at 11:38 AM on September 5, 2011 [1 favorite]

You can bank on this fact: there won't be snow in Africa this Christmastime.

Oh, I dunno. Maybe if you support that whole "Christmas In July" thing... (article from July 26)
posted by hippybear at 11:43 AM on September 5, 2011

I'm really not doing too well with these links and typing am I today?

here is the norwegian report
posted by infini at 12:07 PM on September 5, 2011

I liked Geldorf on Golf.
posted by dhartung at 12:30 PM on September 5, 2011

'cause when you have an immensely complex series of intertwining systems, upon which vulnerable peoples lives depend, what you really need is an amateur and their pop-logic to interfere and "fix stuff".

MeTaFilter pro-tip: read the articles first before shitting in the thread.
posted by KokuRyu at 12:37 PM on September 5, 2011

Celebrity rock stars like Bono and Geldof who use their charity work to promote their dead careers (especially Geldof), but keep their own money in offshore tax havens to keep it out of the hands of the taxman they so assiduously lobby for more donations, and piss billions of dollars of aid away on nothing, do more harm than good. Aid in Africa is a disgrace; Bono's and Geldof's money have been used repeatedly to kill millions of people. Look at the aid that was given in Goma, DRC, where the perpetrators of the Rwanda genocide were given food and weapons while the poor were given nothing. Look at the history in Ethiopia and other places of using food aid as a mechanism for moving whole populations out so that governmentally favored groups could be moved in. Look at the obscenity of people in Sierra Leone maiming their own people because they know it's the only way to get the attention of Geldof and Co., then taking the resulting aid for themselves. Look at the aid groups that have discos every night in their generator-run compounds, and drive around in their Land Rovers all day, earning salaries that no Africans could ever dream of, while outside the compound the people are ready to drop everything and run into the bush when the next wave of soldiers comes through looking for that sweet, sweet aid money. Look at the millions upon millions of local African farmers and business people who have had their livelihoods destroyed by aid, because no farmer can compete with "free".

Geldof and Bono are lionized by a know-nothing celebrity culture but the non-celebrities who actually know what's going on in Africa, and the massive harm that indiscriminate aid dumping has done. Geldof and Co. have converted a continent of people into permanent beggars. Now he's dropping the pretense and turning it into a financial venture for his own benefit. It's certainly paid him better than his pop career; his last record of interest came out, what, twenty-five years ago? Thirty?

Bob Geldof is scum.
posted by Fnarf at 1:15 PM on September 5, 2011 [2 favorites]

I should have included some references. Virtually every decent book in the past ten years on the subject of African aid will confirm what I'm saying, but you might look at

Linda Polman: "The Crisis Caravan: What's Wrong With Humanitarian Aid?"

William Easterley, "The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good"

Dambisa Moyo, "Dead Aid: Why Aid is Not Working and How There Is A Better Way For Africa"
posted by Fnarf at 1:20 PM on September 5, 2011 [3 favorites]

I'm watching a talk by Dambisa Moyo at the University of Waterloo on YouTube and she's extraordinary, so thanks for that, at least. In the absence of links providing something googlable is at least somewhat helpful. In any event, it seems unlikely that, as a percentage of comments at least, this thread will be about the particular proposal. It's ironic, really, because after her fascinating breakdown of the failures of aid, most prominent among her solutions and positive developments is -- guess what -- foreign investment.
posted by George_Spiggott at 2:59 PM on September 5, 2011

A friend of mine who worked for years on building wheelchairs in Africa has this great line developed in response to the experience:
Give a man a fish and he'll eat today, but if you teach him to fish, he'll eat for a lifetime. Unless there's no fucking river.

Essentially, successful manufacturing needs a huge network of goods and services, ranging from easy access to international transport (sorry to Uganda and all the other landlocked African countries), decent internal infrastructure, access to replacement parts when things break, knowledge that your business will be viable should the next president be from a different tribal region, and so on and so on... It's pretty obvious that manufacturing or _something_ needs to happen for things to turn around for a lot of these countries, but it still isn't as easy as just building some factories. As someone said above, there's a host of interlocking problems that keep things from getting better.

But there are advances, and things are changing very quickly.

My own work in Kenya is focused on creating people with first-rate mathematical and statistical skills and first hand organizational experience. The best projects are locally produced; we want to produce people with the combination of modern problem solving tools and the local knowledge and connections to create solutions that work. To do this, we're trying things at all levels of the education system, though it seems like some of the most effective work thus far has been with graduate students, some of whom have really taken the tools we've offered and run with them. We're also looking to improve undergraduate education in order to produce more viable graduate students and expand the country's technical base.

Consistently, thanks to the aid dumping, it seems like finding people is more of a bottle-neck than money. In fact, too much money attracts people who are more interested in money or influence than in getting things done. There are extremely natural reasons that corruption is as it is in Africa, and high unemployment is actually a major contributor to corruption: the few people that have lucrative jobs support whole networks of people, which gives a very strong incentive to rent-seek. These people become simultaneously socially powerful, which creates a whole range of obligations and expectations within the community that can take away from the ability to do a job effectively. And, indeed, can lead to nepotism in hiring, as well.

What we're up against is a massive shortage of math educators, since anyone with skills can get a much better-paying job than an academic post, and without the endless hassle that academia entails. Basically, you end up with a few minimally-qualified teachers who are often in academia because they couldn't get other work teaching a couple-few classes of 300 students. Research is something to be dreamt of in between marathon grading sessions... Which in turn makes it hard to properly mentor grad students, who are meant to be learning to do research, but often end up with multiple teaching assignments to pay their own way.

Interestingly, we're seeing a push for electronic teaching methods, which, if successful, could teach more people with greater success than the present system. It's a very different situation from, say, the US where there are a lot of out-of-work math phd's wandering around; there's a real need for electronic tools to bridge the labour and skills shortages.

ok, can talk about this stuff forever... But that's pretty much what I'm working on.
posted by kaibutsu at 4:07 PM on September 5, 2011 [12 favorites]

This reminds me of Lenny Dykstra....
posted by caddis at 5:37 PM on September 5, 2011

There are extremely natural reasons that corruption is as it is in Africa, and high unemployment is actually a major contributor to corruption: the few people that have lucrative jobs support whole networks of people, which gives a very strong incentive to rent-seek. These people become simultaneously socially powerful, which creates a whole range of obligations and expectations within the community that can take away from the ability to do a job effectively. And, indeed, can lead to nepotism in hiring, as well.

The Big Man Syndrome (not so good wiki link)

and used in context in news articles
posted by infini at 8:53 PM on September 5, 2011

Bono's and Geldof's money have been used repeatedly to kill millions of people...

Look at the aid groups that have discos every night in their generator-run compounds, and drive around in their Land Rovers all day...

Geldof and Co. have converted a continent of people into permanent beggars...

Bob Geldof is scum...

posted by Fnarf at 1:20 PM on September 5

While your post is obvious troll bait, please reflect on the fact that ANYTHING evil Bob Geldof and his aid group minions have ever done for Africa, is infinitely more than what you are achieving from behind your keyboard.
posted by Rei Toei at 1:34 AM on September 6, 2011

Rei Toei: The "Well it's more than you're doing" retort doesn't work when the argument is that he is actively making things worse.

Here's a summary of the issue from the Granuiad.
posted by Grimgrin at 3:55 PM on September 6, 2011

This is an observation that I've made - that brands with disproportionate influence to everyone else involved in a particular activity, regardless of the quality of their work, tend to have a negative impact simply because they draw all attention, usually away from those actively trying to do something meaningful.
posted by infini at 11:18 PM on September 6, 2011