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It is no news now that China, once just another poor communist nation in the eyes of its critics, has developed to be the second wealthiest country in the world. However, what would have astounded most people, especially some economists, is that another once dust bowl of the world economic order, Brazil, has overtaken the mighty trading nation of Great Britain for the first time in history to become the world’s sixth largest economy.
According to the Centre of Economic and Business Research, Brazil made the historical leap in this years annual global economic league tables because of its vast reserves of natural resources and its growing cash rich middle class who are spending as Europeans and Americans tighten their belts as a result of the global financial crisis. There is much for African leaders to learn from a country that was once just like theirs in every imaginable way.
Not all African nations have vast reserves of mineral wealth but most can be economically self sufficient if there was fair trade, good governance and a commitment to developing society from the bottom up. To suggest that Brazil’s development was a luck of geography and all reliant on its mineral resources is absolutely misleading and anyone who believes this needs to read their history again. Alongside the mineral resources, arguably the most successful Brazilian president in history, Luiz Inacio Lula da Silva, initiated and implemented social reforms that lifted over 30 million of his people out of poverty.
Among these reforms were an increase in the minimum wage of Brazilian employees and direct State provision of public services and financial assistance which was discouraged in the past by the international financial organisations that provided loans to Brazil. In direct contrast to the minimal State intervention prescription forced on his predecessors, Lula’s government was able to benefit from globalisation by selling their national resources on their terms and then using these financial and inevitably political gains to redistribute wealth across society and further advance the interest of their citizens.
This process of State led capitalism shattered the myth of the powerless state in an age of global governance and instead of standing by like victims of an uncontrollable global virus, Lula’s administration ensured that its people and their communities were at the centre of their national development strategy.
The result? Well it speaks for itself. Brazil has a rapid growing middle class, greater foreign direct investment and it had the courage and confidence recently to issue millions of dollars worth of fines to the Oil drilling giant Chevron for a spill in their sea and the subsequent poor handling of the clear up operations. The new president, Dilma Rousseff, has continued on the path of her visionary predecessor by further committing to its young citizens by investing heavily in their education through the extension of the scholarship scheme that takes them to the worlds finest institutions to study the crucial subjects such as science, IT and agriculture, that will ensure their individual development and nations continual growth.
Unlike the poor simple shoe shine boy who worked his way through the trade union movement into the highest political office in Brazil, most African leaders regularly boast of their education in some of the world’s finest institutions. In many African countries today it is almost impossible to find a Minister without a PhD. What is the point of all this knowledge amassed over years of study when it cannot be implemented as a result of division, poor vision and corruption? If anything was to be learnt from all this education it should have been that these various governments of differing formations owe a duty to their citizens to fulfil their basic human needs and only by doing this will development in Africa ever occur.
Africa is represented poorly in the media but it is slowly improving. There is new found hope but old enemies remain. The Economist magazine that once labelled Africa as “the hopeless continent” has a decade later announced that it regretted this as Africa was finally growing economically as a result of greater political stability, global commodity boom, advances in technology and a younger more educated population.
Many resource rich African nations like South Africa, Botswana and Ghana are now asking foreign investors for a larger slice of the profits and genuine commitment to knowledge transfer for their citizens with the threat that they will revoke lucrative contracts and put them to tender to those corporations that are more compliant with their wishes. More bravely, some of these have even suggested that if they have the expertise and skills in country and they do not get their way they will nationalise key resources totally.
While public private partnerships are beneficial, for too long African governments have been losing out but this realisation, albeit slightly late, has finally arrived and like in Brazil, China and India it will pay dividend if the fair proceeds are collected and used for the purposes of human and infrastructural development. The simple threat of nationalisation of South African mines shows how African nations are now linking economic growth with the need for human development and putting this responsibility on themselves rather than individual companies.
Democracy is coming to life in Africa and this is clearly one of the reasons investment interest is growing in the continent. The Arab Spring that inspired the world showed those African despots and their play boy children that, regardless of their allies of convenience in powerful western nations, young Africans will not stand by and watch their opportunities at development squandered through greed, corruption and terror. It also forced one of the most autocratic African leaders, King Mohammed of Morocco, to unveil a new constitution which has since transferred many real powers to the newly elected Justice and Development Party (PJD).
There are some elections where the majority party wins 95% of all seats (Equatorial Guinea) and there are those who refuse to go when defeated openly and fairly at the ballot box without a fight. However, as witnessed in this year’s Presidential election in Senegal, they have started to go peacefully and even call their victorious opponents to wish them well rather than imprison them like in the past.
Democracy, as China has proven, is not needed for development. But what it does is that it gives governments a real mandate and genuine legitimacy. Even more importantly it provides the public with the reassurance and confidence that if they are not happy with an administration they can get rid of them in the future. The advantage of democracy is that the government does not have to always feel that in order to stay in power all it has to do is deliver growth like in China but like in India, it has to actively listen to the people and act on their policy priorities or lose political clout and voice. More importantly, dictatorships in Africa have been a continual recipe for disaster and it is one of the key roadblocks to reform, growth and happiness in the continent.
Africa is no longer a hopeless continent. It is a continent of great beauty which is finally stirring to the need for real development. The drivers of social change are young, dynamic, educated and demand more from their leaders. They are no longer happy to watch others get rich through their ill gotten gains. Fear has been replaced by hope. Old dictators still lurk around like a deadly bad smell but they themselves know that their days are numbered if they do not embark on real reforms quickly.
Even the best PR firms and managers employed by them to gloss over their image for the global audience cannot compete with the many new communication technology that they are unable to censor that has brought their fellow dictators in Egypt, Libya and Tunisia crashing down in disgrace through better communal knowledge sharing about their abhorrent, self indulging and murderous activities.
Can the tide of young, educated Africans leaving the continent be reversed? Can the brain drain become a national gain rather than dependency creating remittances from better governed nations? The indications are that this is possible as China, despite having good infrastructure, sophisticated supply chains and mass manpower, is becoming too expensive for manufacturers.
Workers who have woken up to the real sale price of the products they make so cheaply are demanding a fair wage and this coupled with the American accusations of persistent Intellectual Property theft by Chinese companies, may give Africans the break they need for foreign investment in manufacturing, call centres and low level services to begin with.
The fact that most African nations also speak English and French as natural second languages gives them an advantage over China and even India where English is the second common language. Most African leaders rightfully speak at length about trade barriers and the Washington consensus. But like China, India and Brazil, free trade restrictions can be mitigated through price competition and the creation of investment incentives such as an educated workforce and better infrastructure.
After independence African leaders such as Milton Obote of Uganda and Siad Barre of Somalia either wore military uniforms weighed down heavily by medals (earned or not) or Western tailored three piece suits that made them look like a choking, walking Marks and Spencer’s advert both at home and abroad. However, now many modern African leaders such as Good Luck Jonathan and the World Bank presidential candidate and the Nigerian finance minister, Ngozi Okonjo-Iweala, are very comfortable parading their beautiful, loud and colourful national dresses on the world stage. This new found confidence and pride in their traditions and values is what will ensure African leaders are heard in the global arena in the future if they couple it with State led development.
The African continents status and importance to global trade and security may be elevated by the newly discovered vast reserves of oil in the Horn of Africa nations such as Kenya, Uganda and Somalia as well as its traditional oil producers like as Nigeria and Equatorial Guinea. This is because it will create competition by loosening if not totally breaking, the Arab Nations grip on oil production and offer insurance and security against Arab political volatility which heavily impacts on global oil prices and consumer spending. This however, is still a distant dream as African leaders need to convince investors that they are reliable and that their investment is safe through the creation of peace, law and order as well as an industrial policy that benefits both parties.
Brazil’s success came as a result of a State led development policy underpinned by respect for citizens and Human Rights. This was coupled with strong government intervention in the markets with regulation and taxation policies which ensured that the most vulnerable in society did not starve to death while waiting for the benefits of Brazils new found wealth to trickle down to them. The State took it as its duty to redistribute the wealth of the nation so that over 44 million citizens could escape poverty.
This is an amazing achievement that can be repeated in Africa if the governments are willing to take responsibility for development and are able to capitalise and turn into social action the new found optimism in the continent and its people. No nation, China or otherwise, holds Africa’s future in its hands. Africans do and they are starting to realise this. This is the real step in the right direction that was needed from independence. The difference between then and now is that African leaders do not have to reinvent the wheel as they have role models in other developing continents. All they have to do is catch up.
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