PEOPLE AND POLITICS BY MOHAMMED HARUNA

 

The Road to 20:2020

ndajika@yahoo.com

 

 

Of all the six papers billed for delivery at last week’s 5th All Nigerian Editors Conference in Kaduna, perhaps the most topical, considering the theme of the conference – “Vision 2020, Economic Growth and the Nigerian Editor” – was the second paper whose topic was “What It Takes to Be among the 20 Most Developed Economies in the World.” I don’t know about the paper’s three discussants that included this reporter, but the Guild couldn’t have picked a more appropriate gentleman than the Governor of the Central Bank of Nigeria (CBN) to deliver the paper, if only because the business of finance has been widely regarded as the chief villain in the unfolding drama of the crash of the world’s highly integrated economy.

 

Alas the session with Professor Chukwuma Charles Soludo turned into a no show because he could not come and, according to the organizers, he did not want to send any one to present the paper on his behalf. And so it was that the conference missed what would have been a somewhat perfect economic complement to the opening remarks by the chairman of the opening session, Chief Segun Osoba, former governor of Ogun State, who spoke at some length on how to end the election rigging that has bedeviled our politics since Independence in 1960 and which, in turn, has made the transparency in governance necessary for economic development impossible.

 

As I said on these pages last week, any talk of Nigeria being counted among the world’s top 20 economics 11 years hence is nothing but a pipe dream, given the enormity of the work that has to be done coupled with the serious deficit in the commitment and competence of those to lead us to the Promised Land.

 

Even then we can head in the right direction if only we can give priority to four sectors, namely, education, energy, security of life and property, and agriculture, but, even more importantly, if our public policies and conduct will be guided by transparency and equity.

 

President Umaru Yar’adua’s much-touted Seven Point Agenda contain these sectors, except perhaps education, but any one with even half an eye can see that, as with virtually all previous regimes, Yar’adua’s has talked more about the virtues of transparency and equity than practiced them.

 

Worse, all too often, it has preached one thing and done the exact opposite. One obvious example of this mismatch between talk and action was contained in his address to the Guild conference read on his behalf by his Minister of State for Information and Communication, Alhaji Ikra Aliyu Bilbis. “My abiding guiding philosophy,” he said, “is that government should stay focused on service delivery and refrain from propaganda knowing that what counts at the end of the day is what the people see and not what they are told”.

 

Yet this same government recently embarked on a re-branding campaign aimed at telling Nigerians why they should feel good about themselves and their country in spite of the fact that, all these decades, government after government have raised their expectations only to shatter them.

 

If the damage the absence of transparency in public policy and conduct has done to this country is glaringly obvious, the same can hardly be said of the absence of equity in the land. And the introduction of the so-called “Washington consensus” – the one-pill-cures-all economic prescription of the IMF, the World Bank and the American Treasury all based in Washington DC – more than two decades ago, has brought nothing but inequity among the country’s population.

 

The Structural Adjustment Programme of this consensus in its many disguises has been promoted as the only cure for our economic problems. Instead it has merely succeded in creating a huge disparity in income between the privileged and wealthy few in the country and the vast impoverished masses. The most obvious manifestation of this disparity, though by no means the worst, is the way our elected politicians have voted mindboggling salaries and allowances for themselves and also budgeted hefty sums for so-called “Constituency Projects” in which legislators, as the Nigerian Tribune (April 7) pointed out, are “the initiators, the executioners, the supervisors and the certifiers.” This is  at a time workers or what is left of them after their decimation by SAP are being told that raising the country’s minimum wage can only make matters worse.

 

Among the most important features of SAP is its advocacy of privatization and deregulation of the economy. These two sides of a coin are said to be necessary to attract foreign investment which, in turn, is also said to be necessary for the development of poor countries like Nigeria. The most frequently touted proof of this connection between foreign investment and development has been the so-called Marshall Plan for Europe’s recovery after World War II.

 

In truth, the role of the Marshall Plan in Europe’s recovery has been grossly exaggerated, to say the least. And there is no better proof of this than the words of Mr. Alan Greenspan, the longest serving and arguably the most influential governor of America’s central bank, the American Reserve Bank.

 

“Conventional wisdom” he said, in his 2007 auto-biography, The Age of Turbulence, “credits the Marshall Plan for Europe’s recovery. I do not doubt that the Marshall Plan helped, but it was too small to account for the remarkable dynamics of the postwar recovery. I would regard the freeing of the product and financial markets in 1948 by West German economics director Ludwing Erhard as by far the more important spur to the postwar recovery of Western Europe”.

 

What Greenspan failed to add was that in freeing West Germany’s economy from government diktat the Germans pursued a policy that discouraged the kind of inequality that the neo-conservative economic policies of President Ronald Reagan inflicted on America, and eventually on the rest of the world, beginning from 1980. Today’s global economic meltdown can be traced to those policies.

 

Equity, it has been shown by many of the World’s leading economists including Nobel laureates Joseph Stiglitz and Paul Krugman, is not merely ethics but sound economics. In his 2005 critic of Greenspan, titled Greenspans Fraud: How two Decades of His Policies Have Undermined the Global Economy, the economist Ravi Batra, demonstrated how historically the American economy - and indeed the Japanese and German economies - grew during those periods when the wage-gap was narrow and shrank anytime the gap widened.

 

This, he argued, is because wages are the main source of demand while productivity is the main source of supply and if wages and productivity grew hand in hand, the macro-economy was guaranteed to grow without consumer or public borrowing.

 

“A rising wage gap,” he said, “creates exponential growth in debt which in turn generates exponential rise in profits leading to the share price bubble. Inevitably growth slows so that the demand-supply gap rises to the surface; profits plummet and stock markets collapse”.

 

Clearly this is what is now happening to the world’s economy including ours. True, our own economy may differ from the developed ones in that it suffers from low productivity but this had come about less from any inadequacies in the labour force than from the decay of our critical infrastructure like electricity, water supply and transportation.

 

What all this means is that we must re-exermine our acceptance of Structural Adjustment Programme in all its disquises. Contrary to what the apostles of free-markets tell us, the problem really has never been the size of government but on whose behalf it intervenes in the economy. Big or small, the government that intervenes to make the rich richer and the poor poorer, as those that subscribed to the Washington Consensus have done, is a government that is incapable of creating the greatest good for the greatest number of its subjects – and this, i.e. the greatest good for the greatest number, is much more important than merely growing into one of the world’s 20 leading economies eleven years hence.