25.11.2008 Feature Article

Voice from Afar: How meaningful are the political promises?

Voice from Afar: How meaningful are the political promises?
25.11.2008 LISTEN

What the various political parties would do if they come to power is commendable. Education and health facilities, social and economic development and essential services will all be enhanced.

They have been questioned about the means or resources to fulfil their promises and the answers given are not all-convincing. But an important question which does not appear to have been adequately considered is the effect of the current global financial crisis and the recession in the economies of the major economies.

Dr Nii Kwaku Sowa, Director-General of the Ghana Securities and Exchange Commission, writes in Graphic Business that• "apart from the knock-on effects on expert demand and bilateral aid, Africa may be shielded from the global crisis, because of its financial insignificance".

Now, for Ghana, the knock-on effects on export demand is important. We live by exporting commodities whose demand will fall when people are less prosperous.

Cocoa prices are likely to fall and so will the demand for our mineral and other inputs required for the dwindling manufactures of the industrialised world. This simply means that we shall earn less from our exports.

Even now, our export earnings are not sufficient to keep body and soul of the people together and to support development projects. The "knock-on effects" on bilateral and multilateral aid to which Dr Sowa refers is, therefore, for Ghana a major consequence of the global crisis that should receive the most urgent attention of the present arid future governments.

We should be suspicious of any party which paints a rosy picture of the future when the party is in power. We should question its sincerity.

We should trust the party which paints a realistic picture of the possible effects of the global crisis and ask the people to gird their loins and work hard for a better future, while the government supports their efforts with thoughtful measures.

Such measures should include a curb on non-essential imports, while local production is assisted. For example, imported rice should attract appropriate duty or tax which would be channelled to assist production of local rice, maize and other local foodstuffs.

We make a laughing stock of ourselves when we use the limited foreign exchange we have to import perfumed or long-grain rice while many are malnourished.

We betray our immaturity when we promote the importation of imported fatty chicken, while our chicken industry collapses. We should dismiss the protestations of ignorant educated men and women who tell us that we are bound by World Trade and other international commitments to destroy our infant industries, so that we may starve and beg for aid.

We cannot act nonchalantly as the Americans and Europeans do, because we are a minor nation. But this is the time to take bold and long-term measures, which even die-hard capitalist ideologious dare not strongly oppose.

When the industrialised world lends massive government support to banks and considers bailing out major car and other manufacturing industries, no one dares question our right to save our folk from starvation by appropriate government intervention.

In the days of bitter arguments between socialism and capitalism or market forces, it was argued that state industries and services led to inefficiency, while capitalism freed people to work for themselves and the public good.

Today, we know that inefficiency is not restricted to state enterprises, and that greed and irresponsibility under the free market system can lead to the collapse of the entire financial and economic set up of the global village.

It is not being argued that Ghana should go in for unbridled state enterprises. We have such private enterprises as Darko Farms, which have served the country well and should be assisted to continue to serve the nation.

Mankoadze Fisheries served the country well and we should find out how government policies and measures contributed to its collapse. We should find out why successful private enterprises collapse in Ghana and what can be done to assist those which contribute to national development.

Meanwhile, the administration should not hesitate to invoke state intervention or establish state enterprises when it is in the country's interest so to do. We are wedded to the ideologies of yesteryear at our own peril.

So far, as the world financial crisis is concerned, we should learn from it. Those in charge or responsible for our financial institutions should either understand what is going on or quit.

As Dr Sowa wrote, "part of the blame for this financial crisis stemmed from the fact that regulators washed their hands off regulating certain instruments, because they actually do not understand how it works!" As an expert remarked, "the best and brightest of our top investment banks have expended great energy designing ludicrously complex financial instruments, which you need a Nobel Prize in physics to understand".

We should not be part of the pantomime of the "King's new clothes". We should say it giving reasons that we do not understand and be bold to disagree even with the gurus of the World Bank, IMF and our financial benefactors. It is reassuring that the Securities and Exchange Commission is considering the necessary regulations and controls. As Dr Sowa writes, “we have been entrusted with the hard-earned assets of the public" and risks should be minimised.

In the larger financial sphere, recent rapid developments such as increase in the number of foreign banks in Ghana deserve attention.

Fortunately, we have a Governor of the Bank of Ghana who quietly but effectively goes about his work with confidence and competence. I am sure he knows that increasing the capital base of banks is only one of the measures which should be taken to ensure that savings are safe and contribute to real development.

Winning election is not a life-or-death matter. But vain promises, which lull the nation into deep sleep at a most difficult time can kill many. This is the time to demand robust thinking and meaningful strategies of our leaders.

Credit: K B Asante, Daily Graphic