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Growth can only come from within

Jul 17, 2005 Strategy, Sunday Nation

Many of us are busy picking through the litter of the recent G8 conference held in Scotland. What did the rich countries offer Africa? What does it mean? How much do we get? Can we “make poverty history” now?

I’d prefer to put some distance between us and Scotland and take you to the other side of the world, to an island called Taiwan. Let’s take a brief tour. Taiwan is an island off China, no more than 150 km in width. It packs 23 million people into an area just 6 per cent that of Kenya. It is not rich in natural resources, and is constantly under the threat of invasion from mainland China (China is believed to have 500 missiles perpetually pointed at Taiwan). A few decades ago, Taiwan was a poor agrarian economy. Illiteracy was at 42 per cent.

Today, Taiwan is the world’s 17th largest economy – ahead of the likes of Switzerland and Sweden. In the thirty-year period between the 1950s and the 1980s, Taiwan grew its national product by more than 10 times (in real terms). It pursued a vigorous export promotion policy, selling machinery and electrical equipment, clothing, plastics – and lately, even aircraft and ships. Today, it routinely achieves 5, 6 or 7 per cent annual GDP growth. Andrew Mueller, a journalist with Britain’s Independent on Sunday, wrote an in-depth article on the Taiwan story recently. He told us that the “tiny island boasts six domestic airlines, trains you could set your watch by, and, in Taipei 101, the world’s tallest building.” And Taiwan’s wealth is not in the hands of a privileged few – it has just 1 per cent of its population below the poverty line.

What’s going on, folks? How do these people do it, while we sit around wondering which begging bowl to use to collect scraps from the rich people’s table? Some more clues are needed. Here are some. Taiwan is ranked second in the world in the Innovation Index – which measures human resource skills, market incentive structures and interaction between the business and scientific sectors in a country. It is 10th in the world in the information and communications technology usage index. It is 4th in terms of patents granted to residents. It spends 2.2 per cent of its GDP on research and development – a whopping US$ 6.2 billion (or close to half a trillion shillings).

Mueller tells us that the Taiwanese are “diligent and dogged” and that they are “almost comically polite”. He concludes that these “23 million hard-working, educated, courteous people who’ve built an economic colossus from nothing, with little help from anyone” would be an asset to any country. In other words, that they would repeat their success wherever in the world they found themselves. So much for geography and resource constraints.

There’s no getting away from it. All the world’s success stories come from productive, resilient and enterprising people. The Asians who were kicked out of Uganda in the early 1970s went on to become one of Britain’s richest groups within one generation. What did geography matter to them? They had something bigger and better than gold with them when they arrived in a dark and dank Britain that didn’t want them. They had willpower, determination and a hunger to get ahead.

Historians and economists agree, by and large. Harvard professor David Landes, in his seminal work “The Wealth and Poverty of Nations” concludes that culture makes all the difference. Only culture can explain the resolve with which the Europeans and Japanese rebuilt their shattered economies after World War Two. Only culture can explain the success of immigrant populations in so many parts of the world. Culture tells us something about why Botswana stands alone in Sub-Saharan Africa.

Needless to say, economic development is a complex process and we would be foolish to pin our flag to just one mast. Free markets matter. Personal and national incentive mechanisms matter. Access to capital matters. Well thought-out plans matter. But you can have all those things and still stagnate. At the end of the day, the dedication and enterprise of the people of a country is the driving engine. All the other things are facilitators. The Taiwanese people did not need to lobby for trade changes or increased aid; they produced goods needed by the world at unbeatable price-quality combinations. They moved from a military dictatorship to pluralist democracy all by themselves, because they knew what was good for them. And they certainly did not need westerners to hold concerts to organise a quick “harambee” for them.

Humourist P. J. O’Rourke is more entertaining than most in “Eat the Rich”, his own survey of wealth: “…the prosaic, depressing, and somewhat shameful fact is that the secret to getting ahead is just what my parents told me it was.” Hard work, education, responsibility, respect for the law and property rights – that’s what it’s all about. And that’s what we fail to see every time we turn up at international conferences to plead for favours; every time we turn ourselves into a “special case”; every time we belabour the story of how we were stripped of our wealth in the past; every time we think the world owes us something. O’Rourke takes us back to the Tenth Commandment: thou shalt not covet what is thy neighbour’s. He reminds us how important to the well-being of any community this decree is: “If you want a donkey, if you want a pot roast, if you want a cleaning lady, don’t bitch about what the people across the street have. Go get your own”!

Foreign aid is only important as a stop-gap, as a bridge to take us away from disease burdens and inadequate educational facilities. It can help in the short run, but more often than not it hurts in the long run. Landes tells us that it can discourage effort and plant a crippling sense of incapacity. He quotes an African proverb: “The hand that receives is always under the hand that gives.” At bottom, he concludes, no empowerment is as powerful as self-empowerment.

All of this is really so self-evident that it can be dismissed as a set of cliches. But why should we dismiss wisdom? The strange thing is our propensity in Africa to accept the precise opposite: that we always need a helping hand (today, tomorrow, forever); that we must mimic the lifestyles of others; that we must always borrow our techniques from far-off lands. Who shall we blame for this state of mind: our leaders, our teachers, our universities?

Culture boils down to values – not abstractions, not noble statements, but values that are lived every day, that are apparent in the activities of the populace. And who creates those values? We are all given one power: to lead our own lives according to a set of principles. If we do this, we will undoubtedly transmit something positive, no matter how small, to the people around us. It is from these seeds that a vibrant culture grows, and from this culture that meaningful development ensues. So it’s in your hands and mine. Let’s shut out the noise and just get on with it.

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