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PEOPLE AND POLITICS BY MOHAMMED HARUNA
Economic Reform: The Chinese Option
Last Friday saw the first ever Sino-African summit in Beijing, the Chinese capital. The historic summit attracted not less than 50 African heads of state and governments, including of course, our own President Olusegun Obasanjo who has never been one to miss an opportunity to strut his stuff on the international stage.
The Sino-African summit grabbed the headlines of the global media for obvious reasons; the West, especially America, which dominates the global media, is concerned that China, with its roaring economy and 1.2 billion people, may soon overtake it (i.e. the West) as a model of economic development for Africa and the rest of the developing world. The West is also concerned that China, along with India, may soon become a more attractive destination for Africa’s raw materials and primary products and, in general, supercede the West as the continent’s biggest trading partner.
The end of the Sino-African summit provides as good an opportunity as any for a re-examination of the claims by the champions of President Obasanjo’s economic reform that it has been the best thing ever to happen to Nigeria.
When President Obasanjo first returned to power in 1999, there were fears in business circles that his economic nationalism as military ruler in the ‘70s may predispose him to reject the so-called Washington Consensus – this is the economic neo-liberalism of the unholy trinity of the World Bank, the IMF and the American Treasury Department, all three based in Washington, DC, the American capital - in whatever form. Policy, an economic and business newsmagazine, for example, said in its edition of April 5, 1999 that President-elect Obasanjo was likely to bring his “1970 command mindset to bear on the peoples’ concern for freedom and self improvement.
Over seven years later, it is now as clear as daylight that the magazine couldn’t have been more wrong in its fears and prediction. Today the loudest chorus of the Obasanjo propaganda machine is that of economic reform, economic reform and more economic reform. The president himself and his Amen choir never tire to remind Nigerians that his economic reform is, despite all evidence to the contrary, on its way to transforming Nigeria into an El Dorado.
If for nothing else, we are told, the reforms are reason enough to allow the president to remain in office beyond his second and final term next May so as to consolidate those reforms. At the least, we are told, we should allow him to pick his own successor so as to guarantee the continuity of those glorious reforms.
A short while ago, I said Policy newsmagazine couldn’t have been more wrong in its fears and predictions about President Obasanjo’s economic policies. On second thoughts may be the magazine was not so wrong after all. It was certainly wrong in predicting that Obasanjo may reject the Washington Consensus. But the magazine scored the bull’s eye in its prediction that he will bring his “command mind-set” to bear on his economic policies.
As Malam Abba Kyari, former managing director of the United Bank of Africa, said in a long and well thought out article about the president’s economic policies in the Daily Trust of October 13, “Our reforms of the last seven years and their implementation might as well have been dictated by the politburo of a communist state.”
As Malam Abba implied, Obasanjo’s economic reform was like a spitting image of the late President Boris Yeltsin’s economic reform in Russia. That reform, with its very narrow socio-political base, is well documented in the book, Sale of the Century: The Inside Story of the Second Russian Revolution by Chrystia Freeland, a former correspondent of the London Financial Times. In Russia, as in Nigeria, the authorities tried to build its capitalism not through fostering creativity and entrepreneurship but by facilitating the capture of state assets by a well-connected select few.
Given the characteristics of President Obasanjo’s economic reforms – the chronic cronyism of its privatization of public assets, its widespread disregard of its own laws and of court injunctions, the mass retrenchment in the public sector, the weakness of the country’s civil society and its infrastructure, etc - Ms Freeland might as well have been talking about Nigeria’s economic reform.
So enamored of business is this administration that it even contemplated privatizing education as arguably the most social of all goods. “Mr. President,” the new Minister of Education, Dr. Obiageli Ezekwesili, said in a leaked memo dated September 1 and published in Thisday of October 21,
Ezekwesili has since denied that she had any intentions of privatizing the schools. What she had planned to do, she said rather disingenuously, was to create a public/private partnership (PPP) for running the schools. She defined this PPP “as a wide range of arrangements where an entity outside government enters into ownership/management or purely management of a public own entity.” A classic case of gobbledygook, if ever there was one, for, what is the simple meaning of all this tape-worm English if not privatization?
Given the collapse of Soviet communism in the late eighties and given also the liberalization of the Chinese economy as the rival communist model, a strong case can be made for the supremacy of capitalism as a mode of production. Even then, the kind of capitalism we have seen in Nigeria in the last seven years, just like that of Russia, is one that lacks not just a human face. Worse, it is one that wears the face of a hideous beast.
It is a capitalism that is pro-business- and pro- just a few select businessmen for that matter – rather than pro-market. And as The Economist, that bastion of free market, said on the cover of its edition of June 28, 2003 titled Radical Thoughts on our 160th birthday: A survey of capitalism and democracy, “Close ties between business and government are detrimental to democracy and to public trust in democratic government”.
Such ties may be inevitable but governments, the magazine said quite rightly, must be wary of doing the biddings of Big Business for the simple reason that what is good for business is not necessarily always good for society.
This is precisely why a re-think of Obasanjo’s economy reform is a must for any government that succeeds his administration next year if it wants to bring about the greatest good for the greatest number of Nigerians.
It seems the way the Chinese have pursued their own economic reform presents a far better alternative to Obasanjo’s which, as I have said, resembles that of the Russians. One undisputable evidence of the superiority of the Chinese model over Russia’s is that whereas the Chinese economy has had an average annual growth of 10% in the last decade, the Russian economy has shrunk, in spite of its huge oil and gas revenue.
Whereas Russia, like Nigeria, opted for the so-called shock therapy of instant privatization and deregulation, the Chinese took a gradualist approach in which job creation went hand-in-hand with restructuring. As Professor Joseph Stiglitz, former Chief Economist of the World Bank and the 2001 Economics Nobel laureate, pointed out in his book Globalization and Its Discontents, the Chinese thought it was necessary to create the institutional infrastructure for a market economy first before plunging into market reform.
China, he said,
As a result, China, he said, put creating competition, new enterprises and jobs before privatization and restructuring existing enterprises.
Thanks to our own approach to economic reform, the country has suffered an unspeakable rise in unemployment which in turn has bred a frightening level of insecurity and instability in the country. Our headlong plunge into market reform has also led to the kind of corner cutting in, for example, our air industry with the very tragic consequences of the air disasters we have witnessed in the last three years. Whatever the propagandists of the Obasanjo administration may say, the fact is that his reforms have brought Nigerians more grief than joy. It is therefore absurd for anyone to talk about consolidating, let alone extending, something which has inflicted the greatest pain on the greatest number of Nigerians since the country became independent fourty six years ago.
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