- “Running affairs of the state is serious business.’’ – Bakili Muluzi, Malawi’s Head of State from 1994 -2004
Her Excellency the President, let me begin by bringing your attention to the fact that throughout civilization, people have vested their trust in the state as a provider of their needs. This is because state has the capacity to generate a mass of resources (human and material) enough to alleviate their suffering. State intervention has therefore been at the core of wealth creation and economic success throughout history. This started with Britain and Europe in the late 15th century, USA in the 19th century, Japan, Taiwan, Singapore and South Korea in the 20th century and now China and India in the 21st century. These countries madam President attained their economic success through the same economic policies. If we are serious about transforming this country, which I believe we are, then let us seriously think about and perhaps emulate them just as they all did.
Africa including Malawi, is being told to open up to foreign direct investment (FDI), jump to free trade with the developed economies and liberalize their economies because that is supposedly the only way to grow their (our) economies. If we go back their history Her Excellency, the developed economies i.e. Britain and USA, opposed the very economic policies that their forgetful descendants are telling us to do today.
All today’s developed countries used nationalistic policies (export led growth, subsidies, mechanization, tariffs, restrictions on foreign investment, distribution of monopoly rights) to protect and promote their infant industries. Not all that the IMF or World Bank tell us to do is true neither is the loan they have given let us celebrate all the way to the bank. These are the very factors that are keeping Africa “artificially” poor. What Malawi needs right now madam president is a strategic rather than unconditional, integration with t he global economy based on a nationalistic vision.
Let me provide an example to illustrate my point. Venice and the Dutch Republic became wealthy economic powerhouses in the 13th in the then poverty-stricken Europe due to a flourishing industrial sector that manufactured woolen cloth. Guess where they got their raw materials from? England!! Madam President this meant that England was exporting employment and its other advantages i.e. creation of knowledge, technology, division of labour, increasing returns and most importantly employment.
England was thus exporting raw materials and remaining poor! Take note that this is exactly what we did and continue to do right now. It was until 1485 when King Henry VII ascended to throne that the English realized that they were in wrong business. King Henry VII therefore made policies that made England into an exporter of finished woolen cloth and not raw cotton! He also used protectionism, subsidies, distribution of monopoly rights, government sponsored industrial espionage also known as reverse engineering where a foreign product was stripped down and copied.
Madam, he even introduced export duties which ensured that foreign textile producers who imported raw materials, had to process more expensive raw materials than their English counterparts. These initiatives made England the richest country on earth, a country envied and imitated by others including USA! Interestingly Madam President, USA later in the 19th century emulated the same economic policies that Britain had employed. Again they also gained economic mileage and became the world’s richest country attaining position of world super power in the process!! Now China and India are using the same economic policies of state intervention and the results you know them madam.
LEARSONS FROM YOUR PREDECESSOR
Madam President, the ascension to power of the late Professor Bingu wa Mutharika in 2004, his soul rest in peace, can equally be likened to that of King Henry VII. In him, was a man who had vested interest in the development of his country. Whether we like it or not, this is a fact. Just as King Henry VII, Professor Mutharika emulated and encouraged all Malawians to be actors not listeners. He encouraged that Malawi should move from being a pre-dominantly importing nation to a pre-dominantly exporting one. The results are clear to us all!
For the first time Malawi’s economy grew at unprecedented rate second to Qatar! Secondly, the former Head of State introduced subsidies whose results again are out there where again for the first time Malawi exported and donated maize to other countries. Then he began the big one!!! Nsanje World Inland Port. Madam President this was not just a dream, it was dreaming in colour. Doing what the Americans and the British did not what they are telling to do.
Nsanje World Inland Port is one of Malawi’s economic doors to success! Professor Bingu wa Mutharika did not leave anything to chance neither did he wait for God to do it for us or wait for World Bank or IMF. He downplayed the spirit of begging, waiting for donations or dependence. He realized that dependency can not lead this country to economic independence! In fact no country has ever developed under dependency conditions. They only experience their greatest economic development when they take their development agenda in their own hands. What am I saying madam president? I am saying let us understand what caused economic prosperity of the now developed countries and emulate. This is what Professor Mutharika did!
To this far madam president, I believe that you are a woman of distinct and rare abilities. I trust that you will move this to a better economic position than you found it. Let me conclude by quoting what Mr. Jay Naidoo, Chairman of Global Alliance for Improved Nutrition said at Brand Africa Forum 2010; “we are naïve to think that the people that come into our country, even the ones who are here to help us (donors), have no agenda. Everyone has an agenda” What is your agenda for Malawi madam president?!