By Elly Twineyo Kamugisha,

I have been observing, listening, and watching interesting discussions in the USA, Europe, Asia, and Africa regarding what will cause rapid growth and later development post-covid-19 pandemic.

People in developed countries think that their countries were always developed. People in developing countries think that their countries will never develop if they don’t now embrace the current state of democracy and development in the West. We need to look at how developing countries in Africa can achieve growth and enjoy prosperity. Let us also state that prosperity is a choice and an accident. 

A lot has been said about how the West grew. By West we include developed Europe and north America. Depending on who is writing and where they are from (the West or other places), there are differing views. Those people from West indicate that it was hard work, free-market orientation, institutions with property rights, and democracy that did it. This has to be analysed critically because no country starts from democracy and growth at the same time. Democracy evolves and in tow with the culture of the society that is advancing towards democracy. Growth and prosperity may cause democracy. When people have ample means of livelihood, they will seek good leaders and democracy will ultimately ensue. 

A quick survey of developed countries in the West and advanced and advancing countries in Asia reveals that democracy is a process not an act. It is the ultimate good state of a society. For some countries, including USA and UK among others, we can ably say that democracy (with all its forms including right to vote for women, blacks, and other minorities) was fully realized recently during the 19th century (if not 20th century). 

There are those views that are even harsh about how the West grew. Some assert that migrants from Europe found and destroyed communities in the Americas (North, Central, and south America). The same is being said about Australia. That these foreigners got factors of production (land including minerals and farmland; and labour including slave labour) vital for business success and economic growth for free. That having destroyed the culture of the natives in these lands, these original people and owners the wealth in the land and animals became homeless and propertyless and were forced to provide free services without their cultural leaders to give direction and guidance as it was in the past. Some data from economic history shows that during this period of colonisation and property grabbing, some European countries, for example Spain, grew rich via minerals got from current Latin America. 

Another claim by writers, except those mainly from the West, is that the foreigners used different methods and mostly crude ones to subjugate people and use them to achieve economy growth.

Having employed their advanced technology of water travel to reach these lands, they used technology of superior war tools of guns to take communities property and make them keep quiet. They used religion and education (education was mostly related to religion) to subjugate them. They came with foreign diseases for which native communities had no immunity. 

There are other arguments that have been advanced from all sides: geography; culture of civilized people working hard; less or no ethnic fractionalisation; among others. Other than the issues of mosquitoes, and therefore malaria, that finished whites in West Africa during colonisation, there is no meaningful explanation of why people in tropics don’t develop yet those in temperate lands with winter and a lot of snow develop. Are people in the tropics lazy because the weather is good? Not necessarily. A discussion for another time. 

There is the argument about landlocked countries under the geography factors that have been variously presented. Several papers have been written justifying why the landlocked countries are disadvantaged: that they lack access to the international waters/the sea. Is the problem being landlocked? Why is Switzerland, a small country, more developed yet it is landlocked? The problem here is not the geography of landlocked countries but of leadership. Access to markets is vital and leaders have a role to play. It is not the geography of being landlocked but a leadership question: make your neighbours your market or friends. 

We will have ample space to discuss ethnic fractionalisation and culture with regard to economics and politics in this newspaper another day. We have examples of small countries, in Africa, Europe, and Asia, with thin lines of ethnicity which have experienced bitter damages to lives, communities, and economy. Again, this will be a leadership question. Good leaders unite people in their diversity of race, ethnicity or community, gender, and religion, among others.

There are also several arguments about how rich and advanced countries in Asia achieved and sustained their economic growth. We read a lot about these. There are factors including access to markets for Japanese, or Korean, products in USA. Market access is important in this world crammed with several tax and non-tax barriers. Evidence at the World Trade Organisation (WTO) shows that developed countries usually impose higher tariffs on imports from other countries. They protect their domestic economies from imports allowing their local industries to grow and supply both domestic and external markets. 

Improved technology-supported quality and quantity of these Asian countries' manufactured goods that entered the USA and other markets. Foreign investment from the West, including USA, entered these Asian markets and boosted their economies.
 
Furthermore, and this is important for African economies post-Covid, Asian economies from Japan, Korea, Taiwan, to China undertook an industrial policy that supported their firms to produce and export. An industrial policy is a deliberate Government policy (either import substitution or export promotion or both combined in different weights) to support the growth of the private sector manufacturing. The objectives of the Government is, among others, to produce quality and quantity for exports to obtain foreign currency, expand the domestic economy, reduce reliance on imported goods, create domestic jobs, and widen the tax base.

While some countries in Asia began with import substitution strategies, as part of their industrial policy, they later promote export-oriented strategies. The latter changed the fortunes of most of these successful economies.

Export-oriented strategies include the role of the state in supporting and facilitating exports through development finance, directly funding some strategic enterprises, supporting R&D, finding foreign markets, and export promotion via an Export Promotion Agency, among others.

It should be noted that during their path to growth and development, as evidence shows, the West pursued similar policies. In recent times, USA and UK have supported companies that were thought to be “too big to fail” during the global crisis and recession of 2008 and later. These two developed countries also supported R&D for covid drugs research recently.  

Leadership has been found to matter for prosperity both in the pre-industrial and post-industrial age. Good leaders have also supported and boosted their economies.

Leadership is a subject that is now widely accepted as a contributor to the success of companies and economies. Individual leaders have also been found to matter to the growth and development of businesses and firms. During their rapid growth, Japan had Prime Minister Yoshida (with the Yoshida Doctrine) at one time; Korea had Park Chung-he (credited with sustaining the Miracle of the Han River which shaped and modernized Korean economy), and Singapore had Lee Kwan Yew. 

There is also some talk of a strong culture of hard work, unity, and listening to their leaders. While part of this could have influenced the fortunes of these Asian economies, not all of it did. Don’t we have some well-behaved communities elsewhere in Asia, Latin America, and Africa that have not realised such economic growth? We need other factors. 

Some people from the West actually assert that these economies had no diversity of ethnicities. This is of course not close to the truth. Most of these have some form of community diversity. If not by tribe or community, others refer to regions, such as easterners, westerners, northerners, southerners. Or those with the light colour and those with the darker colour. I am not talking about African people. I am now talking about Asians. 

The success of African countries within the framework of economic growth and international affairs is important for the African countries themselves (for jobs for the majority youth; incomes for households; and international trade) and the entire world.

Time has come, and the Covid-19 pandemic has shown that indeed we live on one planet – the earth. What happens in China, USA, India, Spain, Monaco, Peru, or Uganda may eventually determine how the entire planet lives or survives. This will not stop and there are potential future challenges, as big or small as Covid-19 pandemic, for the world that may pose a global threat in the near future including another disease pandemic; climate disasters; and even war. 

Now, what can countries in Africa do to set themselves on the right pass post-Covid 19 pandemic?

Please Africa post-Covid don’t copy either the West or Asia. It will not look good. Please learn from both and quickly implement own strategies and develop ultimately.  
You will need to do the following:

Governments will require to look at key sectors of the economy and work with the sector captains to design strategies for investment and business competitiveness including finding markets and penetrating them. Rethink the need for an industrial policy (export promotion or import substitution?), and industrialization strategies, that will boost the domestic economy and enhance exporting. Let us remember that we don’t only need industries with smokestacks.

We can also have industries without smokestacks. With regard to import substitution, most economies begin with these industrial strategies and once they have grown domestic manufacturing or industries, they engage in export promotion strategies to boost the economy’s exports and realise more foreign exchange receipts. Don’t forget that tourism, with its related sub-sectors, is an industry.

Access to markets will be pertinent to the growth of most countries in Africa whether landlocked or not. Regional integration efforts under EAC, COMESA, ECOWAS, and others, and recently African Continental Free Trade Area (AfCFTA) are timely and important. Trading amongst African countries will boost quality, quantity, economic and political relations on the continent. Business partners usually do business not fights.  

Beyond the regional integration efforts, there are markets in EU, UK, Middle East, China, and USA that require bilateral negotiations and relations. Governments have to support their private sector by seeking duty-free and quota-free market access. 
The role of the state will not be limited to just creating an enabling environment and taxation which some of our countries have been doing. Further, development financing will be a key aspect of support from the Government in key sectors that push rapid economic growth.

In the current state of most African countries, there is a need for some direct but targeted investments in form of joint ventures to address the slow speed of sectors growth due to the effects of the Covid 19 pandemic. This will address what in economics we refer to a market failure where the State should only intervene when the forces of demand and supply (under the invisible hand of Adam Smith, 1776) have failed to allocate required resources and ensure there are no inefficiencies. The private sector and Government players can identify these areas that require such interventions.

But there is also coordination failure before and after the covid 19 pandemic. While all efforts should be put in place by Government to coordinate and support efforts for rapid economic growth, the private sector should be at the centre of what should be coordinated. What a government does for the private sector without involving the said private sector in the planning phase will be literally against the same private sector. 

The government may require investing or supporting R&D efforts. As aforementioned, we can learn from the West during the period of the Covid 19 pandemic where a lot of investment was put into companies that were looking for the vaccines and cure of the Covid-19. 

Skills development will be pertinent to the growth of most economies. African Governments need to support skilling the youth for the modern economy of value addition and manufacturing, ICT, and other services sectors. 

Penultimately, leadership unites regardless of the level of economic growth and democracy. Democracy evolves and doesn’t drop from heaven. It is a process, not an act. 

Ultimately, the people for whom the Government is doing all this have to know what is being done for them. Lack of communication by the Government in African countries has been a disadvantage to the Government itself. In this era where everyone with a smartphone and access to the internet has become “a journalist, political and social influencer, and expert on everything”, effective Government communications about what progress is happening (and where) using all platforms ranging from mainstream to social media is timely and relevant. 

The writer is an economist, author, and Executive Director, Uganda Export Promotion Board