The talk of economic empowerment, economic liberation or the rise and emancipation of a dilapidated Africa is one that is more often than not, met with drooping shoulders and heavy sighs. The prospect itself is gratifying but growing up with an inexplicable vision of 23 million people dying a day from starvation and 47% of the continent’s population living under poverty, we simply exclaim at how wondrous that all would be. Cases of corruption that is so severe that it stashes away almost 0.77% of the continent’s GDP annually leave us disheveled and disillusioned. Economists, with their glorious terms and upward sloping graphical predictions seem to speak of intangible hope that can not be realised… Or can it?
One song that is mouthed continuously though is the comparison of Africa to East Asia. Even lay men know that once upon a time, East Asia and Africa were almost at the same economic footing. At some point in time, both were dilapidated, reeking of poverty, disease and death. However, the countries of East Asia speak of a transformation now. With approximately staggering rates of almost 6% GDP growth annually for the past thirty years in the region, their peoples are enjoying the fruits of their labour. African streets still reek of poverty disease and death and their peoples, walk them, with hunched backs, bearing the weight of accumulated and enslaving foreign debt. In many ways, Asia and Africa gained independence, but Africa, long mentally colonised, still suffers the plight and indignation of economic slavery.
This would hence explain how we have gradually accumulated solutions to these innumerable problems that we face. Before our faces, the ideas of capitalistic ideas, democracy, a free market among others have been flaunted. Most of these though remain theoretical unvisualised ideals in the African mind. Despite our lack of knowledge of them, we hold onto them dearly. They translate to the only refuge we know to liberate ourselves. The price is ransom for our continent.
Hence, we swallow whole some of these concepts tossed around by educated men and women in three piece suits, sited in four walled air conditioned rooms, in a metropolis somewhere. If indeed, democracy and capitalism are the foundational basis to economic growth, what would explain the almost mysterious way in which East Asia rose? Despite the popular cry that the cities are filled with “determined-to-the-point-of-suicide” fellows, examining the policy that shaped one of the world’s regional powers would not only debunk some propagated myths, but also, contextualise a rise to greatness that is most often than not, shrouded in an elusive mystery.
Most of these countries began their monumental rise at the time after the second world war, after the start of the cold war. “The Iron curtain has descended Winston Churchill time…” The world was divided on the lines of capitalistic countries and communist or socialist countries and the major players fought hard to gain as much traffic on their side as possible. At that time, it meant pouring as much money in devastated countries as possible. This explains the Marshall plan of the US, the rebuilding of Europe and the resurrection of an ailing East Asia. Copious amounts were poured into East Asia. Impressive figures of almost 1.48 billion dollars (an impressive sum then and now,) were poured into Taiwan in successive instalments between the periods of 1951 to 1968 as noted from Taiwan’s Ministry of Finance. South Korea and Taiwan received loans on very generous terms with very little of their capital coming from FDI ( foreign direct investment) with FDI being 1% in total percentage to the capital flow of S. Korea and 8% of Taiwan’s, between the periods of 1951 and 1967. All this happened under the watchful eyes of authoritarian regimes and an economy infested by monopolies such as chaebols in S.Korea and the guanxiqiyes in Taiwan.
Contrary to the view held by the World Bank regarding the rise of these countries, free trade was a concept that remained intolerable. There is proof of heavy subsidisation of industries while protecting them with heavy tariffs and other barriers. They also carefully controlled investment. Funny enough, western countries opened up their markets to these countries’ goods while at the same time, not making it mandatory to have these countries open up their markets to their goods. There also seems to have been deliberate undervaluation of East Asian countries’ currency an example being under the Bretton-Woods regime where, 360 yen went for a dollar at that time. The reason was that this in turn creates an export driven need and lessens the import drive, creating a vacuum, that leads to increased industrialisation, manufacturing the import needed. Indeed, this shaped Japan’s industry. The lack of a proper functioning system of democracy was also deliberate, to ensure that an authoritarian hand would structure the functioning of the workers in such a way that a disciplined force would create the machinations for an economic leap. Recently, these countries liberalised trade and investment but this was a case of development first, then, liberalisation rather than the propagated model of development through liberalisation promoted by neoliberal economists.
As a result, one seeing the deliberate moves by the West, especially the US in ensuring a stronghold for capitalism in the East would question the praises of the World Bank, of free trade and investment to African ears attending the G8 in Camp David. It would be wise to learn from the Asians, though not to copy them blindly. African policy makers need to restructure how they view the rise of an economy, and rethink the concepts of free trade and a strong currency taught brazenly in schools. Furthermore, policies that are entrenched in culture would succeed more than they would fail. Exploring policy that encourages domestic saving and the rise of pension schemes as they have in Nigeria would be beneficial. Infrastructure in Nigeria is set to be financed by proceeds coming from pension schemes in the next decade or so. Aggressive policies that remove the thorn of corruption ailing so many of us would also serve a mighty purpose if entrenched as they were in countries like Seychelles. A powerful regional force would sufficiently serve as a market for its own goods, while toughening tariffs and investment opportunities would not only encourage consumption of our own produce but also innovation and industrialisation. The world is not as it seems and Africa needs to open its eyes and its mind in the making of sound policy as regards to its economy if it is to manuever its rise to the top, where it belongs.