04.09.2002 Feature Article

Logical Illogicalities

Logical Illogicalities
Listen to article

Many a reader, viewer or listener must have chanced upon the oft repeated statement that "Ghana achieved independence about the same time as South Korea, Malaysia and the Asian Tigers and yet Ghana lags far behind in terms of economic development." Much as this is factually accurate, one must hasten to put the reality in perspective and to find the underlying factors behind Ghana’s failure to make it into the realms of semi-peripheral countries. It must be noted that political economists are agreed on the fact that the so-called Asian Tigers made it largely through a combination of sheer determination and favourable conditions that underpinned their economic advancement. Determination because at the dawn of their independence, those states were resolute in their resolutions to enhance the socio-economic well being of their peoples by making the requisite choices and following through with them. One must concede that it must have been difficult to formulate a development programme in largely "uncharted territory" although they had the experience of late industrializers like France, Germany and Spain to emulate. Having resolved to use the experiences of the aforementioned as organizing principles upon which their efforts would be based, what remained to propel them into the limelight as far as development was concerned was favourable conditions which by stroke of luck and dint of the prevailing world poli! tical order availed itself for the new states. Cold war rivalry reared its head in the Korean Peninsula when the forces of Kim IL Sung crossed the 38th Parallel and invaded the Southern part of the state. In order to prevent the spread of Communism and to halt the so-called domino effect from having free rein, the US and its allies, acting under the now famous ‘Uniting for Peace’ mandate of the UN marched into Korea and the rest, as they say is history. The favourable conditions manifested when in order to keep the non-communist states in its sphere of influence, the West deliberately created unbelievable conditions for economic advancement for these states, a feat which would be untenable under the present world trade order and in fact which was a clear violation of the Bretton-Woods order that the west established after WW II. Specifically, South Korea, Taiwan and the like were given the opportunity to protect their infant industries and simultaneously impose tariffs on imports while enjoying little or no charges for their exports. Taking a cue from the opportunity offered, FDIs flowed into the region, insofar as the US market was open without restriction to these client states so that both expertise and capital did not pose a problem to these states. The beauty of it all lay in the fact that the labour unions of the time were integrated into the society so much so that their fortunes were tied to the general progress ! of industry and by extension, the countries which made them desist from unnecessary and avoidable agitation that marked the opening stage of industrial stagnation elsewhere. This was however achieved through massive repression to bring the entire labour front in line, ironically by the self-appointed messiahs of freedom. What we can deduce from this scenario is the freedom to export without restriction to the US market, the collaboration of labour and government to promote economic advancement and the tranquility of the region, stemming from the protective cover provided by the US at no extra cost to the governments of these states. Even the stranglehold of the landlords and former ruling classes was broken and replaced with quick reintegration into the system by offering other conduits for going into business such as banking, thereby preventing capital flight and at the same time providing a source of capital to medium and small scale industries for expansion. But one must hasten to add that the protection that these industries enjoyed especially in the export free zones that grew out of their programme did not stall growth in anyway because internally, competition was promoted vigorously and because they chose to use export oriented industries, they could not, even if they chose to, rem! ain ensconced in protectionism forever, given that prices of their exports would have to be competitive enough on the world market so as to sustain their production levels and to promote the upliftment of their peoples. It is to the liberal democratic inclination of the leaders of these states that one must attribute the success of their individual programmes which collectively begun to pose a challenge for the west itself within a period of twenty years. So what happened to Ghana? True it is that we did assert ourselves on 6th March 1957 with a chosen path of socialism as our organizing principle. True it is also that it worked for a while so far as the world market was favourable to our exports and we still had the largesse left behind by the British to spend on the provision of both social and economic infrastructure needed for the development of our industries that would in turn produce goods for the world market and thus provide the wealth needed for further development. Unfortunately, our resort to import substitution meant that our industries wallowed too long in the protection that goes commensurate with ISIs and coupled with our constant agitations on the labour front, how could it have been possible for us to match what was happening in the lands of our contemporaries? Even when we realized the folly of some of our programmes, our inability to calculate the risks involved in the borrowing sprees of the! 1970’s thrust us firmly into the labyrinths of debt thereby forcing us to chorus along with the G77 group and hoping against hope for debt rescheduling and ultimately cancellation. It must be noted that even countries within the orbit of the west, or better still the client states of the west such as Turkey also found themselves in this debt imbroglio. But Ghana had a worse problem because unlike Turkey, which has also experienced three coups, the military in Ghana loved to stay in power longer than the meaning of the word ‘provisional’. This has been our bane. This has been our tragedy. This has been the very core of our pathetic state insofar as malcontents in uniform and reputed guttersnipes of the lowest order seized the reins of government in the dead of the night and imposed their anomalous brand of organizing principles on a rather pliant people albeit with a modicum of opposition. The meaning of this is not so difficult to fathom: those with the s! kill and know how immediately enplane for other places where stability and tranquility prevail over the pandemonium that is constantly unleashed in our part of the world. Another result of this is that the émigrés who land in these countries contribute their quotas to development there at the expense of their own native lands. The least spoken about the path to be chosen by scarce FDIs available, the better. Not even the staunchest of risk-takers would pour in his investment in such states. Is it then any wonder that even today, the highest amounts of FDIs are still flowing in the direction of the industrialized states? Today the competition is even fiercer. That is why no serving president of an African country can afford to stay at home and hope through wishful thinking that investment would flow from abroad into his domain. To give a few examples, Turkey that spends a third of its GDP on military acquisitions from the US has gone bankrupt, notwithstanding its favourable status with the west so that today, it receives less than five hundred million dollars per anum as compared to Poland which is nicely receiving around sixteen billion dollars. Does this tell us anything about the consequences of political instability given that the President and the Prime Minister of that Republic enjoyed throwing the 1982 constitution at each other during a national security council meeting in February 2001 while Kwasniewski’s government in Poland was vigorously implementing reforms and canvassing for investment by moving off their backsides and embarking on the requisite tours?

Those who think that Ghana belongs to them only and therefore make pronouncements that are better confined to the garbage cans of the AMA should take note, after all, they are the ones who started the investment drive only to sabotage it by waging a campaign against their own native entrepreneurs and capped it with hefty punches to constitutionally elected Vice Presidents. Investment needed for economic development with all due respect does not flow into such nations. If Ghana is still not receiving copious amounts of FDIs after having put in place all the needed inputs for a smooth take-off, then it is about time we critically examined what went wrong with us as dispassionately as possible. Wailing about and pointing to the success chalked by the Asian Tigers without taking into consideration their peculiar circumstances cannot be our starting point. At best, that can only be a guide and nothing more.

Calus Von Brazi Ghana Cyber Group Washington DC

ModernGhana Links