GHANA IN SEARCH OF A DEVELOPMENT PARADIGM? (Final Part)
3/1/2010 12:07:21 AM -
Possible Ways out of Ghana's Development Challenges
This three-series analyses has sought to contribute to current debates on whether Ghana should wean herself of the Bretton Woods financial institutions' (the IMF and the World Bank) conditions-tied policy directions, which the country first submitted to in 1966. The first part of the series examined the origins and dynamics of the institutions. The second part discussed the relationship between the institutions and Ghana since the 1960s to date. The third part analysed current debates on whether Ghana should wean herself of the institutions' conditions-tied policy directions. All the three parts were published by ModernGhana.com (20th, 24th and 25th of February 2010) while Myjoyonline.com and GhanaWeb published the third part on 25th and 26th February 2010 respectively. More grease to their elbows for providing platforms for discussions towards finding solutions to our nation's development challenges. This concluding part of analyses examines and contributes to debates on possible ways out country's development challenges. This part is rather long because it is the nerve of the analyses. Hope you would have the time to read, as it is exciting as it is thought provoking.
For over effectively two decades (1983-2006), Ghana has relied on the Bretton Woods financial institutions for policy directions through their conditions-tied financial assistance to tackle the country's development challenges. While we might have chalked some intermittent successes regarding macroeconomic stability, the balance sheet indicates that we are still at the mercy of internal and external economic shocks and dislocations as was the case before the Bretton Woods policy prescriptions were first introduced. Thus, while the policies have not been able to tackle adequately the macroeconomic instability for which reason they were adopted, the country's microeconomic situation also appears to be almost as it was at the when the policies were introduced. For instance, Ghana is still largely dependent on receipts from the export of primary commodity for socioeconomic development and that is why external shocks easily throw our development plans out of gear and stifle whatever efforts we are making to tackle our development challenges over the years.
The country also remains a net importer for domestic consumption and H. E. President Atta-Mills alluded to this in his State of the Nation's address to Parliament on the 25th of February 2010. The continuous dependence on imports for local consumption is because (as discussed in the earlier parts of the analyses) the Bretton Woods-led policies failed to develop the agricultural and manufacturing industries to produce for at least local consumption. Infrastructural development such as road networks, energy and portable water are still a serious challenge. Our education system still produces unemployable graduates at all levels of education because of lack of technical and vocational skills. A critical look at our educational reforms over the years (from 1961 to 2007) will reveal, that this aspect of our education system has always been highlighted as the key reason for the reforms, yet implementation always remains a serious challenge. Thanks to the National Health Insurance Scheme, our health system may be one of the sectors we can take consolation. It is hopeful that the scheme will be efficiently managed to spare it of the usual managerial challenges we are grappling with in other sectors.
The biggest question is whether there can be any possible way out of this state of affair, as the Bretton Woods-led policy directions on which we have relied for all these years appear not to be delivering the needed results. Obviously, there can hardly be an easy or single answer to this question as development is a complex phenomenon. Answering the question will therefore require a multifaceted approach.
The most often touted peers of Ghana such as some of the East and Southeast Asian nations, employed multifaceted approaches in the realisation of their current state of development. Among other things, they were said to have taken advantage of disciplined elite, patriotic citizenry and a good sense of thriftiness. This enabled them to, as one analyst puts it, take advantage of globalisation without globalisation taking advantage of them. This is because, while they could export to advanced industrialised countries such as the U.S., Western Europe and elsewhere, they restricted imports. It was for this reason that a U.S. Trade Representative described their aggressive mercantilist tact as 'Tigers' in the jungle and that by the rules of the jungle, they were endangered species. This comment was made at a time when the dramatic transformations of those countries' economies were becoming a threat to the U.S. global economic interests. Analysts contend that the ability of the Tigers to export while restricting imports was due to the U.S. and its allies' attempt to contain Communism in the region. Therefore, apart from allowing the countries access to their markets, the U.S. and its allies also exported cheap technology to those countries. These and other factors have often been cited as reasons for the successful economic transformations of the Tigers.
Most of the emerging economies in Latin America also took advantage of their proximity to the U.S. to develop. As indicated in the first part of these analyses, the region benefited from over 70% of the lending from the U.S. private banks that contributed to the debt crisis in the 1980s leading to the introduction of the structural adjustment programmes (SAPs) in the region. While the debt crisis might have negative consequences for country's development process, the inflows definitely helped in their economic transformations. Some of the countries such as Mexico also befitted from the North American Free Trade Area (NAFTA) programme, although it had its own backlash as the U.S. farmers became hostile towards Mexican agricultural exports. Some of the Eastern European countries that emerged out of Communism also took advantage of the European Union to develop their economies. Some analysts have therefore attributed the lack of such opportunities to sub-Saharan Africa as a contributory factor to the regions' current state of underdevelopment. While the region could not harness much benefit from sub-regional and continental trade and other integrational opportunities, the reliance on the Bretton Woods institutions has not helped much. Hence, the current development quagmire in which countries like Ghana has found herself.
As a way forward, some think that the region needs a change in policy direction regarding foreign direct investment and global trade. Such people suggest the forging of new relationships especially with emerging economies such as China, India, Brazil, Russia, South Africa as well as East and Southeast Asia since these countries share some development experiences with the countries of the region. It is for this reason that some welcome China's current investment strides in the region. The contention is also that these countries especially, China, do not lend with austere conditionalities, if there are any at all, unlike Western creditors. Some of the countries, particularly China, could be criticised for appalling human rights records and the possibility of colonising the region in the end. China is also being criticised for investment practices that do not seem to transfer technology so it is not clear whether the intention here is for exploitation rather than contributing to development. However, forging new relationships does not mean abandoning existing ones especially with Western Europe and North America. However, there is a need for change in tact in dealing with these old relationships as old ways of doing things have not helped much over the years. In particular, there is the need for the sub-region to sharpen its negotiation skills to effectively engage partners in trade and various economic agreements. Forging new relationships can also persuade the old relations to relax their old ways of doing things. Forging new relations is also important given that our old relations are burdened with the current global economic meltdown. Most of Europe and America are burdened with bulging budget deficits and unemployment challenges that reduce remittances. The Bretton Woods are not only battling with credibility crises due to failed policy prescriptions especially in developing countries as discussed, they also lack the much-needed credit on which their policies thrive as their key sponsor, the U.S., is grappling with financial crises.
Whichever direction we decide to turn in the final analysis, some of us think we owe it to ourselves to take our destiny into our hands. As the good old adage has it that one can only carry a cripple if the cripple allows himself to be carried. It is also said that God helps those who help themselves. In other words, when you blame the mouse for steal your dawadawa, you must also blame dawadawa its scent attracts the mouse. So we need to share the blame for our underdevelopment. Of course, it is our jaw that is swollen and our development partners can only help to the best of their ability though our relationship with them means much more than that. Therefore, we and only we know and understand our problems and can be better placed to find the antidote to them. This is not to say that we should discount external support when it is necessary as the most developed countries still seek external support. What we are suggesting is that external support should not be our first option and our own ingenuity last: it needs to be the other way round. Of course, this is easier said than done but it can be done if we believe in it because my little knowledge of Ghana's development history as enumerated in these analyses indicates that we have done it before. For instance, with the reserves that the Nkrumah administration inherited from our former colonial authorities coupled with external funding, it was able to lay a solid foundation for our countries' socioeconomic development without having to overly rely on external policy direction. With domestic mobilisation and good weather conditions, the Acheampong administration also achieved quite a lot in its early years without external policy direction. Similarly, with HIPC relief, the GPRS, the GPRF and the MDBS processes that supposedly gave the country some autonomy in deciding its development policy priorities, the Kufuor administration managed the economy and put it on a sound footing to warrant it being wean of IMF conditions-tied borrowing in 2006. Finally, with the liberation from the IMF policy prescriptions, the country was able to attain a dramatic growth rate of over 7% GDP in 2008 albeit the unfavourable internal and external economic challenges that led to the unprecedented deficit of over 14% GDP.
That has been our track record as a nation being left to determine its fate. Most of the setbacks associated with these efforts could be described as externally engendered couple with what I will refer to as internal indiscipline. The Nkrumah administration faced external challenges such as falling world market commodity prices, stagnated external credit inflow and external pressure for economic liberalisation. Largely hikes in crude oil prices also challenged the Acheampong regime. As indicated already, the Kufuor administration in 2008 had to battle with unprecedented hikes in crude oil and food prices, internal energy crisis, election year spending, the hosting of international events such as Can2008 and the global economic meltdown.
However, while these external challenges could have been beyond our control, there were cases of indiscipline that contributed to the setbacks and perhaps could have been avoided in one way or the other. For instance, it appears that while the economy was challenged, the Nkrumah administration was burnt on carrying on with its developmentalist agenda. Perhaps, if the administration had exercised some restrain given the challenges of the time, it would have been able to weather the storm. But, it appeared, that the administration wanted to transform the country's fortunes by all means. It is often argued that the Acheampong administration was the worst culprit of indiscipline because of the prevalence of rent seeking in echelons of power or what is popularly referred to as official corruption. Therefore, notwithstanding the economic challenges at the time, the administration boosted demand for non-existent commodities by issuing new currencies, which created inflationary and hoarding problems leading to economic and social insecurity. Similarly, the Kufuor administration has been accused of over spending in 2008. The construction of the presidential palace and the attempt to procure two military aircrafts vividly come to mind in this regard. It is important to note that indiscipline in this respect is a discretionary and, therefore, debatable issue as some projects that might be perceived as waste at the time of their execution, become purposeful as time goes on. My contention in this regard is that there is the need for proper forecasting to prioritise or delay certain expenditures in times of dire economic challenges.
Proper forecasting may not be possible without fiscal discipline. Over spending in most cases is politically motivated. The desire to fulfil manifesto promises and more, lead to the incumbent embarking on over spending. In so doing, the nation's coffers are often depleted in election years leaving us with post elections economic austerities. It happened in 1992 when salaries were astronomically increased, which created inflationary problems. It also happened in 2000. It was only in 2004 that it appeared not to have been very visible. The situation in 2008 is still fresh in our minds. Of course, in all these situations, external challenges played some role in over spending as explained already.
Can we not curtail this as a possible solution to these cyclical problems? This is possible with unity of purpose. First, the incumbent needs to be transparent both in times of boom and bust. It appears that it is usually the incumbent that knows the actual situation of the nation's coffers and so needs to let the rest of us know when times are good and to distribute the national cake appropriately. Some should be asked to tighten their belts all the time while others loosen theirs all the time. Transparency will prevent speculation about what is there and what is not in order to put pressure on the incumbent not to want to act in ways that are detrimental to all of us. It can also make the populace to sympathise with government in times of challenges. As mentioned already, analysts indicate that the Asian miracle was made possible by a discipline leadership and patriotic citizenship. There are narratives about how the locals in some of the countries lined up their jewellery for the state to melt and replete her reserves to enable her settle external debts. Perhaps, citizens everywhere will do this if they are confident that their leadership will not divert state resources for private purposes or if they actually believe that times are hard given their knowledge of the scheme of affairs and that leadership is not just playing tricks with them.
The need for a patriotic citizenship brings me to my second suggestion. Thus, strong and transparent leadership alone is not enough without a patriotic citizenry. While it is true that power could corrupt leaders, leaders are a replica of the society; in fact, society makes its leaders. Of course, there are good and bad citizens and in an autocratic dispensation, a bad citizen could become a leader and maybe out of control by the populace. However, in a democratic dispensation as we have it now, it could be argued that leadership represents our collective will since we have the opportunity to choose them. Besides, it is ordinary citizens who become leaders and the big question is whether the ordinary Ghanaian has cultivated good habits necessary for leadership. As ordinary citizens, we lambast our leaders especially for corrupt practices, which in my opinion is the right thing to do since it is necessary to put them on their toes especially given the belief that power corrupts. The big question, however, is whether as ordinary citizens, we will behave differently given the opportunity to lead. In my opinion, the answer is a 'Big No' because over the years, we have been changing the leadership of our country but we do not seem to be getting the type of leadership that we need. There is therefore an urgent need for change of attitudes of all of us since it appears we are complicit to the situation.
In addition, leadership does not operate in isolation but supported by ordinary citizens in the day-to-day running of the nation. Do our public servants have the right attitudes to support the political leadership? While leadership is often being lambasted for the failings of the nation, the real managers of our nation, civil servants (because their positions are permanent and they tend to know and understand the country's development challenges better than the transient politician), are left on the hook. Given their knowledge of the state of affairs, they are able do and undo politicians. It is, therefore, important that while it is necessary to keep the politician in check, we do the same to the civil servant. I believe that our failure in that regard contributes to the rot we have in our system. Of course, given the way we revere our politicians, they tend to wield so much influence over the civil servants. However, there should be mechanisms in place, if there is none, to ensure that everyone is responsible for their stewardships. We must also change the way we revere our public servants including politicians. We choose and provide them with all that they need to serve us, why then do we turn around to serve them instead of them serving us? In my opinion, the only way they should be revered is when they do what is expected of them: provide the necessary leadership to transform our nation's fortunes.
In the final analysis, what we all need is honesty and sincerity to the state. We can institute the best legal systems to try to check deviant behaviour but it will take moral citizens to abide by them. As my good friend, Gausu Mohammed, once argued in an article published on GhanaWeb, laws are made not because of the law abiding but social deviants. What happened to our traditional socialisation that inculcated morality in us when we were growing up? For instance, we were told when were growing up that if one stole food to eat their mouths would bend towards the side of their jaws. Though there was hardly any evidence to prove this, it put some fear in us. Professor Addae-Mensah once indicated at a public lecture that formerly in traditional society, a farmer could leave his farm produce by the roadside for a couple of days and came back to meet them just as he left them. However, formal education has enabled us to learn how to steal and cover up our theft with the pen. This does not mean that there was no theft in the traditional society, but morality somehow checked its excesses and scale as we see it now. There is, therefore, the need for us to revisit moral education to ensure that younger generations imbibe them as they grow up to prevent future mismanagement of our dear nation. We can use current innovations such as television and radio programming to do this instead of the former process of story telling since our daily schedules does not allow us to spend enough time with our kids. Our television stations transmit such programmes but within foreign cultural contexts that appears not to have helped our situation all this while.
Ghana today appears to have a burden of a population that has a mentality to want to get things done overnight and do not want to sacrifice present comfort for greater good in future. This could be a result of lost of confidence in leadership though. I have been finding it difficult to understand something since I came to the U.K. Life appears to be much more difficult here compared to home. Thus, there appears to be numerous prospects back home than here. Meanwhile, most of our leadership, both past and present, have had this experience. The question is why they are unable to exploit the abundant opportunities when they go back home and take the mantle of leadership. A good friend of mine, Abukari Yakubu, (a Social Commentator and a product of Staffordshire University, UK) with whom I have been having heated debates regarding the socio-economic position of African countries on the global landscape, once cracked a joke that the lack of leadership in all black countries across the world could be linked to a genetic default for which we are not aware of. While others also may argue that the problem is due to several years of external interference, my friend's contention is that the very question of external interference substantiates our inability to manage our affairs and, therefore, tend to succumb to external pressure. However, I believe that it is an attitudinal problem that can be overcome.
Our current democratic dispensation offers opportunity for this. We need to enlighten our electorate on their civic and political rights to enable them make responsible political decisions. That will also help them to demand accountability from their political and other representatives. That way, public and civil servants in all walks of life will be put on their toes to ensure efficient management of state resources.
For me, our major handicap as a nation is lack of unity of purpose, which is manifesting itself in insincerity and dishonesty to the state leading to the mismanagement of our resources. Since our fore-bearers, the architects of independent Ghana or the Big Six, if you like, disagreed on the way forward for our nation's development effort; we have not been able to forge a collective national development strategy. The disagreement was responsible for the numerous military takeovers that this country experienced for so long as one section of Ghanaians sought to revenge the excesses of one regime or the other. In all these cases, one development plan or the other was thrown overboard to the extent that current administrations still find difficult to continue with their predecessors' development programmes even in a democratic dispensation. For instance, while Chapter six of the 1992 Republican Constitution has outlined a framework for the nation's development, politicians tend to interpret the provisions to suit their parochial partisan agenda. It is high time we realised that our failure to forge collective development strategy has not helped us as a nation. In fact, it has been the contributory factor for our inability to engage our development partners, the Bretton Woods in particular, effectively hence our current predicament. This is because in the absence of a national strategic plan, we tend to accept what they give us.
In conclusion, I wish to suggest that we marshal all our human resources both within and without the country to forge a non-partisan national development agenda to guard our development efforts. Ghana is replete with human resources who are scattered all over the world. Let us reach out to them wherever they are. Let us put behind us whatever bitterness we might have harboured against one another due to past mistakes. While others would have done that already, I wish to use this opportunity to call on my fellow compatriots outside the country to see the need to return home. Those back home should also whole-heartedly welcome them as and when they do return. It is my conviction that when we become organized, we may not need to look outside too much for solutions to our development challenges.
I hope these debates will be sustained until we find possible ways to tackle our development challenges. I hope they will not fizzle out like earlier ones. I entreat organisations such as JoyFM and other FM stations, IMANI Ghana and others as well as individuals like Dr. Papa Kwesi Nduom to keep the flames burning in this regard.
Many thanks; I appreciate the time you have spared to read this. I believe strongly that together we can find lasting solutions to our country's development challenges.
S. A. Achanso
Social Policy Research
University of Lincoln