The People's Republic of China and the Federal Republic of Nigeria signed an oil agreement worth at least $23 Billion. The shift in oil policy in the West African state has created friction with Western-based oil firms that have dominated since 1956.
Originally uploaded by Pan-African News Wire File Photos
Tolling Bells By Bisi Ojediran. Email & Tel, bisiojediran@thisdayonline.com, 08079861689(Sms only),
09.06.2010
Last week’s piece on the arrival of the Chinese has sparked an interesting debate. If for three decades an economy has grown at a yearly rate of over 10 per cent; if it has pulled over 400 million people out of grinding poverty; if it supports African countries to the tune of billions of dollars; if the economy owns some $2.5 trillion investment, including treasury bills in the US; and if it has become the world’s second largest economy, could its model be prescribed for Nigeria?
Is the Nigerian system (no known model yet) suitable for economic growth?
One of the responses I received last week warned of undue optimism for China. Let me quote it: “China is a success story but I wish you will have the opportunity to visit China so you can do a fairer analysis. The bitter kola is not as sweet as it sounds when chewed.”
I did state my reservations about China’s growth. But while China may not be all rosy, its development in the last 30 years is commendable. It even impresses a Nobel laureate in economics, Joseph Stiglitz.
He wrote about his visit to China. “I recently visited a remote Dong village in the mountains of Quizho, one of China’s poorest provinces, miles away from the nearest paved road; yet it had electricity, and with electricity had come not just television, but the Internet. While some rising incomes came from remittances from family members who had migrated to coastal cities, the farmers, too, were better off, with new crops and better seeds; the government was selling, on credit, high-grade seeds with a guaranteed rate of germination.”
I don’t know where the teacher who poisoned my mind about China is right now. I would have asked him a few questions. He made me hate rice at some point because he said it was the favourite food of the “poor Chinese”, and I dislike Chinese products because they were “inferior or fake.” So strong was his impression on me that I found it difficult to understand the craze of Nigerians for Chinese restaurants – now a status symbol.
Compared to China, I now wonder why, our system, with all the freedom it offers, tends to perpetuate poverty; enrich politicians, public officers and legislators at the expense of the ruled; and wallows in stunted economic growth. I wonder why the system favours consumption rather than savings and investment, and corruption rather than selfless service.
Last week, a reader shared my worry. “China’s meteoric economic development has redefined ‘human rights’. Of what use is political freedom, human rights and free speech when there is widespread poverty as in Nigeria?”
That is all part of the on-going debate.
So is China’s defence of its style, which may not wash in a human rights environment, but it is difficult to ignore because today people also demand socio-economic rights. I take the Chinese government’s argument in the Wikipedia in full today. “….the notion of human rights should take into account a country's present level of economic development, and focus more on the people's rights to subsistence and development in poorer countries. The rise in the standard of living, literacy, and life expectancy for the average Chinese in the last three decades is seen by the government as tangible progress made in human rights.”
It is interesting situating this in the articles of my colleague, Simon Kolawole, on democracy and development. I called him up and the following is what he had to say. “There is no trade-off between the two. Both can go hand-in-hand. But depending on which system is applicable to a nation, it is the quality of the leadership that counts…”
I also spoke with Kayode Komolafe, noted for his love for socialism. I asked him if he would recommend the Chinese model to Nigeria. “It is not that simple. It depends on variables in which to grow the model; it depends on the common belief of the people that bond them together; and above all, the leadership.”
As journalists they shouldn’t be seen to be joking with freedom!
Curiously, the Chinese themselves do not flaunt their model and are not enthusiastic about exporting it to other nations. They simply say it is "with Chinese characteristics."
But certainly, modesty does not erase the lessons developing economies can draw from China’s success. The elements of that economic model are universal in character.
Stiglitz understands what they mean by “Chinese characteristics.” He notes that “China’s success since it began its transition to a market economy has been based on adaptable strategies and policies: as each set of problems are solved, new problems arise, for which new policies and strategies must be devised. This process includes social innovation. China recognised that it could not simply transfer economic institutions that had worked in other countries; at the least, what succeeded elsewhere had to be adapted to the unique problems confronting China”.
They don’t do that in Nigeria!
In fact, during the sweeping economic reforms of the late 1970s, the Communist Party Leader, Deng Xiaoping, did not support capitalism ideologically, but sought pragmatic solutions to China’s poverty and woeful economy.
Unlike the ten-year Cultural Revolution, which spun China into a colossal economic upheaval and severe rural poverty, Deng believed China could improve its economy and reduce poverty by participating in the market system and by increasing trade with the West.
He faced a dilemma though: to modernise China and introduce Western markets, while aiming to maintain political stability of the Communist Party. In the end, Deng believed he had achieved socialism with Chinese characteristics. The reforms proved very attractive to foreign investors from the West, but they found blockers in China’s extensive bureaucratic processes, inflexible labour laws, and fixed salaries. The country soon relaxed these policies to suit Western models, and its cheap labour attracted a flood of investors.
This boosted the country’s open door policy of massive local investment and export-led growth. The strategy supported technology transfer, helping to close the knowledge gap and rapidly improving the quality of manufactured goods. Export-led growth meant that China could produce without worrying about developing the domestic market.
No doubt, the model has been a success, achieving about 10 per cent annual growth for 30 years, lifting hundreds of millions of Chinese out of poverty, and now making the economy world’s number two.
However, in spite of all the noise about privatisation, the Chinese economic model is essentially bifurcated. Critics say it is a state-dominated economy with a mercantilist, rather than free-trade, orientation. Indeed, the government has maintained its strong hold on sectors considered strategically vital to the country. They included finance and banking, defence, energy, telecommunications, railroads and ports. (This is one area Nigeria has failed. All state enterprises have been run down).
As was demonstrated by China’s early recovery from the global economic crisis, they believe state controls enable them steer growth faster by ensuring that the fundamentals, such as infrastructure and funding, are functional. They argue that the socialist system’s advantages enable them to make decisions efficiently, organise effectively and concentrate resources to accomplish large undertakings.
The Chinese know what is good for them. They don’t import development models blindly, but adapt them to the so-called Chinese characteristics. But perhaps the key success factor of their system is the enormous burden it places on its leaders to commit to selflessness, and decisions that foster economic growth and better living conditions. I agree with KK and Simon that it is all in the quality of leadership and not the model type. Democracy and political freedom work in countries with selfless, responsible and visionary leadership.
Kola Jamodu’s Humility
One feature of the manufacturing sector I am trying to understand is why its successful and key figures are humble people. Maybe the harness of the business environment humbles them, I don’t know.
One of the sector’s icons, who was recently announced by the Manufacturers Association of Nigeria (MAN) as its president is Chief Kola Jamodu. I will add to his numerous titles a BDK (Been there, Done it, Know it). Prior to his election, he had served MAN in various capacities at different times in more than 20 years.
For a man who is vastly experienced in both the public and private sectors, he is, no doubt, a good choice as MAN President. I tell you, understanding how government works in Nigeria (Abuja could be like one huge maze) is a major advantage.
I had a close encounter with Chief years back, during which he accorded me so much respect that I almost felt embarrassed. Although a reserved and respectable person, he has splendid social skills and he networks effectively.
A hardworking man, he has a number of firsts under his belt: He joined PZ in 1975 and during his stay, he became the first Nigerian Finance Director, the first Nigerian Managing Director of a trading subsidiary of PZ, and the first Nigerian Chairman and Chief Executive Officer of PZ. He held the latter post for ten years before retiring in 1999. Humility has allowed him to perhaps be the first former minister to head MAN. In Chief Jamodu, MAN has found a good man!
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