We can borrow ideas to build our economies

By Newsday | Aug. 16, 2021 | 4 Min read

By Tapiwa Gomo

MOST economies that emerged from poverty in the last seven decades did so by learning, strategic planning and effective implementation of their ideas.

They borrowed ideas and not so much money from other countries or international financial institutions. They also did not allow their development framework to be dictated by foreign monopolies even though they played roles in shaping economic strategies. They built their economies around their people not based on foreign investments even though these too had roles to play.

So, we learnt that countries develop by learning, doing and investing in their people. In the last two instalments, I covered two topics. First is how the South African economy can be reconfigured to enable employment creation while bringing its people to the centre of the economy which may help neutralise the power and control of the white capital monopoly.

Second and linked to the first, I also discussed how the growth and maturity of the Chinese economy is opening up opportunities for African countries to assume the “world’s factory role”. Again, I mentioned how South Africa, just like any other African countries, can grab this opportunity. It is good for both political stability, democracy and economic growth.

There are several lessons that can be learnt from these. Let us look at the South African situation and how things looked right at independence when in fact they masked everything wrong. Before independence, the African National Congress (ANC) allowed white capital monopoly to define and draft their way forward. That is the script that is controlling the state of affairs in South Africa today.

Their constitution and their social economic policies including other pro-black policies such as the black economic empowerment (BEE) were drafted by the white capital monopoly before independence. On paper, all these read like they have good intentions when in fact they were hiding their retention and maintenance of the economic status quo.

While reconciliation and protecting the goose that lay the golden egg — in short the economy — seemed to be the main priority informing these policies, allowing a former oppressor to author the future blueprint of a historically oppressed and marginalised group was a huge mistake whose effects may tear apart the rainbow nation.

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Taking the lead in defining one’s destiny begins by taking leadership in drafting the plan of action and this is not the case in South Africa.

The black majority and their leadership are today just mere actors in a script they did not author and one which they now have to uphold without questioning. Delinquency cannot longer be accepted against a constitutional democracy that is described as among the best in the world. Such is the unfairness when one allows power to author, define and present such concepts at the expense of the poor.

The second lesson that can be drawn by South Africa and other African countries is that over the past seven decades, most countries that experienced rapid economic growth and ushered the majority of their people out of poverty, did so by supporting locally-based production.

These efforts targeted both domestic and export markets. They started from the ground with agriculture and then included labour intensive manufacturing such as producing, in abundance, clothes, fabric, shoes, children’s toys, bicycles, dressers, table lamps and others.

We see this trend in Japan starting from 1960s to 1970s when their economy started taking off at the back of what were described as adversarial trade policies and powerful industrial but local cartels who became the pillars of the economy.

A similar trend would spread across some Asian countries which later became known as the Four Asian Tigers.

These were the high-growth economies of Hong Kong, Singapore, South Korea and Taiwan which were fuelled by exports and rapid industrialisation and have achieved high levels of economic growth from the 1960s. And then came China in the late 1970s. We learn from these examples that it is okay to borrow ideas but it is more effective and sustainable to ensure that local people take the lead in whatever format in running the economy.

The Chinese model, for example, demonstrates how doing so brings more benefits and global economic power to the country than when a large part of the economy is in the hands of foreign ownership like in South Africa. It is one of the reasons, Zimbabwe’s economy was easy to bring down during the height of the chaotic land reform.

For the last three decades, China’s presence in the world’s factory arena has not made it easy for other countries both in Asia and in the West. The reason for this is simple. They enticed global economies with a well-defined and specific purpose of building their economy by retaining what global economies had ceded to them. As China’s labour force becomes more educated and wages adjusted to international standards, the consumer base also attractively increased trapping the global corporates to high returns and high profits Chines domestic market offers today.

Business is about money and profits and China continues to offer that as the economy has gradually shifted to local hands. Effective politics is about managing and controlling the economy.

Leadership can only dictate itself if it has a say in the economy, the markets and the means of production. China became a global political giant because it grew its economy tapping from a global opportunity. Even if, China sheds off the global manufacturing role, its economy will remain strong and locally owned.