Chris Bishop: You believe that US foreign policy is becoming more isolationist. What does that mean for Africa?
Steve Forbes: In terms of the US turning its back on the world, it’s not good for Africa. Turning outward to the world means more trade, greater sense of security which means more investment. Africa has enormous opportunities, even beyond a commodities boom and a lot of entrepreneurship there. What you need is more and more of an environment, structures where entrepreneurship can build real assets. That’s where things like the World Banks’ survey of doing business is helpful, structural changes that you need to make… people don’t realize that there are hundreds and hundreds of millions of people in Africa – that’s a big place.
Bishop: What about the visit of President Barack Obama to East Africa?
Forbes: He was going to get applause, and he got some, but I don’t think he fully recognizes what you need to do to get an economy growing. And Africa is up for it. Take Kenya, who would have thought that a place like Kenya would be at the forefront of electronic banking, or world banking, but they are.
Bishop: What would be your advice for foreign policy towards Africa?
Forbes: Well, certainly in the north, you’ve got to have more sense of security and the sense that the bad guys are not going to have the sway in places like Nigeria. Then urge people to put in reforms. What you don’t do is let the IMF give the advice, they still give mostly bad advice, economic malpractice.
Bishop: What about the entrepreneurs of Africa?
Forbes: Without entrepreneurs you don’t flourish, you don’t get the breakthroughs and there’s no lack of energy in Africa.
Bishop: If you were the president of a country in Africa, would you say flat tax from tomorrow?
Forbes: Yes I would. I’d ask the IMF what to do and do the opposite. Putting in a flat tax, tying the currency to the euro, which many African countries have already done. So even though the euro is not the best currency, people trust that more than they do a local currency. So you can say, ‘don’t worry about our central bank, we’re with the euro or the dollar’, so we’ll invest with the sense of security that you’re not going to have a hyper-inflation like it hit Zimbabwe. Then you do that and you put in ease of starting a business. Start practicing real property rights, then you’re going to start to see, rapidly, an emergence of a middle class.
Bishop: And how likely do you think that is, reading the situation from this side?
Forbes: I think that people recognize that foreign aid was a disaster for Africa. That the Africans are quite capable, in an economic environment, of prospering? I think they’ve already demonstrated that.
Bishop: You haven’t missed a column for 43 years. As a fellow journalist I’d like to say that’s quite something. What sort of legacy do you want to leave in the world of business journalism?
Forbes: I think simply carrying out my grandfather’s vision when he said: “The purpose of business is to produce happiness, not pile up money.” So whether it’s books, or anything else, laying out how we can create that environment where entrepreneurs can flourish, because when they flourish we flourish.