The world economic order is changing in many unprecedented ways. While the economist still fancifully pursues a demand and supply trade off, the critical issues of the day are structural evolution and sound thinking on regulatory dispensation. Many continue to talk of mobilising capital and revenue streams when the ground action is in the domain of drawing talent and working on it with the mission of making the talent feel committed.
The environment of perennial, “loose cannon”—transience, attrition and movement is good for no one, certainly not the individual, nor the organisations and the firms. It encourages tendency to hoard cash and to hedge. The emphasis has to be on investment and boosting income to create a higher level of meaningful activity. The tendency to cut down on public spending in the name of economy is as dangerous as over expenditure.
At the national level, the question of keeping a balance between public and private investees requires recognition, design and operation of two distinct approaches to enable growth. Few governments have been able to even recognise this, let alone work on it. The fiscal which needs to be designed for this requires an insight into domain, which begins only where economics end. In the meanwhile, the exploration of the need to widen sources of investment has given way to incorporating new players in the economic equation.
At no point of time in history have minerals, metals and natural resource been as significant as they have become today. At no point in history has Africa displayed such a huge economical potential as it is showing today. The script of international collaboration and relationship is giving way at the boundaries and is being rewritten.
In the fading global order of the day, the concept of the empire and international hegemony was based on enlarging your list of protectorates, irrespective of the cost that it will entail. All that is changing. Today, the expectation is you must foot the bill for being protected. Or else cede a part of your sovereignty for economic development.
In this rewriting of the script, there are partnerships which till a few decades ago were not a part of the international economic order. Illustratively, the creation of a port in Mombasa in Kenya by Japan would not have been envisioned in 1980. The Chinese have today come to own Chibuluma mines for copper in Zambia. The Bembele manganese mines in northern Gabon periodically becomes the pace setter. New business opportunities are no longer knocking at the doors, but pushing the door. This is a critical differentiator.
There was a time when Napoleon had enunciated the theory of career open to talent and the old feudal order in Europe collapsed. Then people talked of the need for opportunities. The above two postulates still engage attention. But something more has emerged. It is opportunities pulling in talent.
Witness the rise of the Africa Courier Express in Konga, Jumia in Nigeria. The rise of Hei-Julor, Ghana, offering cell phone based security systems in the event of break-in, is a brilliant breakthrough. Tanzania is experimenting with off grid electric system, which provides solar electricity to poor communities through rent-to-own, pay-as-you-go schemes. The examples are endless, both in potential and reality.
It is up to Asia, the current rising continent, to set the global pace and help the aspiration-class of different parts of the world to reach their level of expectation.
The Chinese are doing a brilliant job of this in Zambia. Mei Mei Dola Hill wholesale city has a huge Chinese run shopping centre. Like the shelves of some stores in Indian townships (where during Diwali you find hordes Chinese made Parvati and Ganesha images; crackers and lights), in this Zambian town are shelves filled with Chinese goods. Rubber sandals, frying pans, rice cookers, flat panel TVs—these are being peddled by a China-man with a western hat. Where is the Indian presence in these territories or for that matter where is the response of Indian stores in China, in kind, with Indian goods? Indeed, similar shops to the one in Zambia are available in Lado Sarai in Delhi.
The message is simple: the books of economics and what is being taught in classrooms need a fundamental review.
When this is aided by the fact that non-governmental organisations like China House are working diligently to improve the image of Chinese companies it then becomes a national effort. The heart beats for the country of birth. The message needs no elaboration.
The definition of growth, the direction of growth and the sharing of the bounties, which it bestows, will be defined by those who can work in tandem with economic headwinds. The rest is verbiage.
Vinayshil Gautam, PhD, FRAS (London), is Senior Adviser, KPMG & Hon. Dean KPMG Academy, and Chairman, DK International Foundation.