BY Eddie Cross Recently, the ambassador of Singapore met me in Harare and gave me a copy of the biography of Prime minister Lee. Just finished reading the book which concludes when Singapore became an independent State in 1966. At the time, the income per capita of this tiny island State was lower than incomes in this country, when we had just unilaterally declared independence from the United Kingdom.
Across in China, that vast country was in the throes of the “Red Revolution” under Mao Tse-Tung. Hundreds of millions were experiencing extreme hunger and poverty. The Americans were bogged down in the war in Vietnam and the collateral impact on regional States was holding back progress and keeping the majority in abject poverty.
Today, Singapore has one of the highest incomes per capita in the world, an Island of prosperity and modernity. China has the second largest economy in the world after the USA and the “Asian Tigers” are all growing rapidly. More than a billion people have been lifted out of poverty to middle income status and although there are still large populations of relatively poor people, they are able to live with dignity. How did they do it in less than 60 years? What are the lessons for Africa?
The first lesson is the need to be connected and integrated with the global economy. The past half century has seen the policies of globalisation pursued by the major economies with the result that international trade has expanded exponentially as a proportion of global economic activity. In essence, this has allowed the Asian Tiger economies to become the industrial hub and the main source of growth internationally. To support this process, these countries have invested massively in ports, railways and shipping. It costs one third of the cost of moving a container from Harare to Durban, to move a similar container from Shanghai to Chicago.
The second lesson is that you need to borrow money for all this development in large quantities, from those who have surpluses. The old economies of the world in Europe and the US have about US$100 trillion in accumulated savings. Finding a secure home for this vast sum of money is a major preoccupation in those countries. The Asian Tigers took their example from the Japanese who rebuilt Japan after the Second World War by harnessing their emerging industrial giant corporations with their banks. At the same time, the Japanese government imposed strict rules on their banking system. They earned a reputation for servicing their debt on time and if any bank got into trouble, the State sorted out the problem and maintained their credit worthiness.
The Chinese Communist State after 1977 imposed similar rules on their financial system and tied their banks to the State corporations that led China into the new world order. By servicing their debts on time and in full, the Asian Tigers were able to borrow staggering sums of cheap capital and could use this flow of hard currency to do whatever they needed to do, to grow and compete. So today the Tiger economies are the most indebted in the world and carry national liabilities that exceed the indebtedness of the Western States by a factor of two to three times.
The third lesson was to learn from others. If a new product emerges from Western factories and finds its way onto market shelves, in days, similar if not better versions of the same thing emerges from the East. We can all remember the days when large groups of Chinese visited our factories with cameras and recorders, questioning managers and engineers closely for the details. If a leading technician from the West visits China, the meetings resemble rock concerts — halls packed with people eager to learn from anyone how they might do something better.
Perhaps a fourth lesson was to educate their children. There are more students learning English in China than English-speaking people in the rest of the world. Education standards in the East are legendary and outstanding students find themselves fast-tracked into top positions. The countries may not be democracies, but they promote on merit and to become a leader in China depends almost solely on how you performed in the jobs and tasks assigned to you. Universities and research establishments hold their own with similar institutions in the rest of the world.
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Perhaps the last main lesson was national discipline. Perhaps the best example of this was Lee in Singapore, but all the States involved in this rush to development followed strict guidelines in so far as discipline was involved. Corruption was not tolerated in any form, often with extreme forms of punishment — the Chinese have executed more than a quarter of a million people for corruption. I can recall a senior member of the Chinese politburo being arrested in a politburo meeting in front of all his colleagues and marched out to face a firing squad four days later.
How does Africa compare to these lessons from the East?
We were, almost all of us, in a better position than these countries when they started their dash for development. While they worked on their infrastructure, we have allowed our own to rust and decay. Just look at the railway network in this part of the world. Developed at the start of the 20th century, they opened up the continent and carried millions of tonnes of cargo each year. Today they are in a poor state, covered in grass and weeds, twisted steel in the hot sun and subject to speed restrictions that make rail slower than you can ride a bicycle.
In the early days of our Independence, the West poured billions into our countries, building schools, hospitals and other infrastructure.
However, when it came to pay the interest and to start repaying the loans, we simply defaulted. When we did that we were surprised when the largesse stopped coming. When we got aid, we stole half of it.
A delegation from Kuwait came to Zimbabwe in the early days of our independence. At a reception, the delegation leader asked me: “If we give the government a loan, how much will be spent on the road?”
When our civil servants and business executives stole money from their companies or the State, we lauded their lifestyles and never took action to stop them or even to punish them. We discovered diamonds at Marange and in six years extracted $23 billion worth of the gems without one cent finding its way into State coffers or local development except what was directly required to loot the largesse. Corruption has cost this country perhaps $2 billion a year since independence — double the total inflow of aid and nearly 40% of the State budget.
It’s no wonder that after achieving so much in the early days of independence in 1980, that our State school system today is almost completely broken, producing students who cannot read or write or add up a column of figures. This in a country which, in 1990 boasted the highest rate of literacy in Africa.
Do we have anything to learn from others, for sure and the sooner we get started the sooner we will be able to deliver a better quality of life to our people.Eddie Cross is an economist and former Bulawayo South legislator. He writes here in his personal capacity.