Last week we sought to make the case for the developmental state paradigm. Today we conclude by looking at the broad framework required to rebuild our country as a developmental state.
From the onset, let’s get it clear that a developmental state is not just any state that happens to achieve some measure of economic prosperity, like the Middle Eastern state of Qatar, with no record of intellectual-scientific achievement or technological innovation. A developmental state is one that drives accelerated growth based on a healthy mix between government and the private sector through effective leadership, technological innovation and a diversified economic base. The logic of state intervention in developing economies is premised on the need to address market imperfections, information asymmetries and institutional-structural bottlenecks which are prevalent in developing countries. It also helps to articulate strategic trade policy while building niche markets and expanding international networks for valorising the value chain for a country’s its products in world markets.
In Africa, the developmental state has been more of a rarity than the norm. Mauritius and Botswana stand out from the crowd. To a lesser extent, we could also say that Tunisia under President Zine Abidine Ben Ali could be regarded as a developmental state, albeit with a stern authoritarian streak. More recently, the East African nation of Rwanda is making giant strides as a developmental state. I am aware that the decision by Paul Kagame to revise the constitution to allow him a third term is a rather controversial one. The moody brood of Hutu exiles whom I have met in Brussels have rather strong views about the regime in Rwanda. And yet I believe that Paul Kagame is an extraordinarily gifted leader. He has exercised power with courage and singular vision. Rwanda is well on its way to becoming a flourishing middle-income digital lion in Africa.
Why haven’t we had more developmental states on the continent? Several factors have been at play.
There is the fact that the vision and capacity of leaderships in our continent have been rather weak. The Chinese have a rigorous system for selecting their leaders. So do the Japanese and the Singaporeans. Same goes for much of Europe, particularly Germany, France and Britain. In those countries, nobody just wakes up one day and accidentally imagines himself as the occupant of the High Magistracy. They must have education, character and pedigree and they must be tested and proven. Not only must leaders be intellectually equipped; they must possess charisma and must earn the trust of their citizenry. Vision also matters – the vision they have for their societies and nations and the technical capacity to translate those visions into reality.
But we must also concede that leaderships do not operate in isolation; they are linked to a coalition of elites who may or may not believe in development or democracy. Some of the elites who have captured power expect to benefit materially from the spoils of office. Development remains the last thing on their minds and they are likely to frustrate the efforts of any leader who wants to undermine the spoils system that they are thriving on.
Linked to this is the pattern of distributional politics in most African countries. Given the divided character of African societies, competitive ethnicity can sometimes prevent the necessary consensus that is needed to build a developmentally-minded coalition. The nature of domestic political challenges in Africa is sometimes so dire that most power elites are preoccupied with how to survive rather than thinking about how to promote economic development and progress. Security and survival become issues of the most paramount importance while development takes a back seat.
There is also the question of state capacity. Many of our public institutions are weak. Many of the bureaucracies have not been changed since colonial times – most have in fact deteriorated since those times. Unlike in Malaysia, Singapore, Korea and India where merit-based civil service systems operate, most of those in Africa are Byzantine behemoths where recruitment and promotion are based on ‘who you know rather than what you know’.
A developmental state requires that there is indeed a demand for ‘developmental performance’. Followerships must be prepared to judge their leaders by outcomes and performance. Given the disconnect that has traditionally existed between leaders and followers in African political systems, there are in many cases, limited incentives for leaders to develop the economies of their nations.
There are also obstacles deriving from the absence of regional or intraregional demonstration effects. In the case of the Asia Pacific region, Japan offered a historic example of how nations in the Asian neighbourhood could achieve accelerated growth. Not only was it willing to be a trading as well as development partner, it agreed to share its technology and provide capital for growth and development.
In concluding these reflections, let us consider some of the requirements for re-imagining Nigeria as a developmental state.
First, it is crucial that we revisit the structure of our national politics. Since independence we have operated a political structure anchored on a tripod of the three ethnic majors. The British political theorist Dame Margery Perham once opined that a tripod, by definition, is an unstable structure. Competitive ethnicity remains the sad reality of our national politics. Linked to this is a political economy anchored on the monthly distribution of oil rent among the 36 states and 774 local governments. It is a totally unsustainable approach to national development. Most of the moneys so distributed end up in the pockets of the elites, with little or nothing left for ‘development’.
Secondly, we would need to restructure our federation into viable economic regions. States that cannot finance their existence have no business remaining as states. Restructuring our governmental structure is therefore imperative. We also need a parsimonious approach to public finance throughout our federation.
Thirdly, we need to forge a new national consensus on development strategy anchored on a healthy dose of economic nationalism. We are all Nigerians and Nigeria’s destiny should be what worries us the most. The forging of a broad consensus among the nationalist elites in Asia during the period immediately after independence was the decisive turning point for the development trajectory of those nations. A good example of this is the island state of Singapore, where Lee Kuan Yew mobilised a coalition of highly committed nationalist elites for the development of the country transcending ethno-sectarian divides among the Indians, Malays and Chinese majority.
Fourthly, we must improve our party system to make it serve as a veritable machine for identifying, mentoring and appointing future leaders. A huge amount of political work is needed at the party level to drive the process of political development and social mobilisation.
Fifthly, the education system must be reformed to ensure dominance of maths, sciences, engineering and technology over and above the humanities. The Asian economies had superior educational advantages as compared to other developing countries and sustained these advantages through explicit policies of investment in basic education. Public spending concentrated on primary and secondary education as a large share of education spending was put to basic education while pride of place was given to engineering and applied sciences.
Sixth, we need a strategic approach to economic openness. We should be open to FDI, new technologies, and fair competition. It would not do to be so inward-looking that we miss opportunities to build networks of trade and business with the rest of the world.
Seventh, we need to build strong development finance institutions that are not just lenders but are also co-investors in the business sector. We need creative ways of tapping the savings that remain unproductive in our villages, homesteads and towns. The pension funds are currently in excess of 2 trillion naira, all of it lying idle while huge funding gaps exist in the infrastructure sector.
Eighth, we need to infuse our political economy with a new spirit of solidarity. African societies are innately communitarian by nature. Africans knew all about communitarian living before the sociologist Amitai Etzioni invented the term. A society without compassion is alien to the African temperament. Remarkably, East Asian leaders supported the principle of shared growth, promising and delivering uniform growth to the populace. Policy reforms like land reform, agricultural price policies, housing and wealth sharing, incentive for small and medium size enterprises were adopted to ensure that the benefit of growth is equally distributed.
Ninth, civil service reform is vital. In the 1960s the Nigerian civil service was probably the best in the Commonwealth. I have this on the authority of none other than the eminent American economist Wolfgang Stolper, who was one of the architects of our first national development plan 1959-1962. The civil service was not only attracted the best and most talented, the civil servants of the first generation had a deep sense of patriotism, national purpose and destiny. We need to revive that tradition and also insulate the civil servants from undue political pressure. Perhaps the most critical element in the Asian model is that the state assumed the character of an ‘autonomous umpire’, with the power elites fairly well insulated from contradictory societal pressures and demands. Clearly, without such insulation, they could not deal decisively with inevitable resistance in such critical areas as land reforms and foregoing immediate consumption through savings and investments for long-term growth.
Tenth, we need pilot agencies that will drive the process of national transformation. For Japan, the key agency was the Ministry for International Trade and Investments (MITI). In Nigeria, I would imagine that the Planning Commission, the Ministry of Finance and the CBN should be key pilots driving the process of national transformation. We need a robust economic administration manned by the most talented economists we can get. And we should empower them to advise the rulers, pool together creative ideas, and receive political backing to implement those policies with rigour and professionalism. The ultimate target must be manufacturing and mass agriculture-based industrialisation, without which we will have no economic future to speak of.
Obadiah Mailafia
