Upcountry insight: Will primary production alleviate poverty?

There is always a question posed why some countries are more effective than others in delivering economic transformation and rural development.

There is always a question posed why some countries are more effective than others in delivering economic transformation and rural development.

 A comparative approach to evaluate their institutional and political experiences is necessary in order to assess why certain things have failed to move as planned
Countries like the East-Asian tigers,and here in Africa Botswana and Mauritius, can be used as a yardstick to understand why others like Somalia, Rwanda, Tanzania and Uganda are still lagging behind.


A good example is comparing Taiwan and Rwanda in terms of recovery especially after independence, as former colonies of Japan and Belgium respectively; they emerged out of colonialism with agricultural economies which were structured to supply food for the former colonies.
However, the two currently have substantial economic differences such as Taiwan is a high-tech manufacturer of computers, electronics and other products, while Rwanda is still a commodity economy, with the dominance of agricultural sector (over 80 per cent of Rwandese labor force is employed in Agriculture either directly or indirectly).


For Botswana, the country struggled for securing a living from the barren land; a former colony of Britain, her traditional economic activity - cattle rearing was still dominant by the time the country got its independence in 1966. She inherited problems such as being a landlocked country, 80 percent of its land is a desert (part of Kalahari Desert) and therefore uninhabited; it had no economic endowments like minerals.


Evidently at the time of independence, Botswana was the third poorest country in the world.

The situation was worsened by the ineffective British colonialism.


 At the time of independence the country had only twelve km of paved road, two secondary schools, only 100 Batswana had completed secondary school and 22 bachelor’s degree holders, and it was a desert and a primary producer of cattle.


Today, Botswana’s GDP is said be at a high rate, the level of infrastructural development is high. Roads and railways are highly developed.

 It has one of the world’s foreign exchange reserves, and at time when other African countries have debt burden, Botswana’s foreign debt is only 14 percent of her GNP. The country has no internal debt and it is a net exporter of capital.

RWANDA

By independence time, Rwanda’s economy nearly reached a depression levels in 1994. All institutions had virtually collapsed following the war, and then it embarked on recovery programs as well as development.


Like Botswana, Rwanda is a landlocked country, with no economic endowments. Her agricultural activities largely depend on nature.

Despite all the problems, the economy has substantially changed, and structurally transformed; partly because of security, local government reforms, strong doses of nationalism and use of pilot agencies like Strategic Plan for Agricultural transformation (PSTA), Quality Control Standards Agency (QCAS) and the strong emphasis of ICT.
As a result, coffee and tea exports increased to 58 percent of total goods exported; mining and quarrying activities expanded at about 55 percent in 2004 and industrial growth reached 7 percent.


According to Poverty Reduction Strategy annual progress Report 2005, Exports have tremendously increased. What is evident is that agriculture is still dominant; efforts to industrialize and promote ICT has not yet yielded much nor fundamentally transformed the economy.


Differing factors such as ‘environment determinism’ where emphasis is placed on the role of geography and natural endowments as the major  ingredients in economic growth.
Jeffrey Sachs (2001) alleges that climate, geography, proximity to the coast and the distance moved from the equator are significant in development.


According to this analysis, coastal countries like Kenya, Mozambique, and Tanzania should be better-off than Botswana and Switzerland.


However, Diamond (1970) articulates a modified version of environment determinism.


He argues that climate and geography mattered long ago, and that countries in the tropics face insurmountable obstacles to progress.


Their wet and humid climate favors a multiplicity of pests and diseases; while the favorable temperatures are a disincentive to hard work; that is, nature is too kind to people in the tropics because they don’t need to think hard for them to survive.


By contrast, temperate nations have to innovate, and survive harsh environmental challenges like winter since necessity is the mother of innovation.

Indeed, conflict avoidance, regime stability,  high quality bureaucrats, adoption of fovourable policies, attraction of foreign direct policies(FDI); use of foreign aid, for a short time, and allowing the IMF and World Bank to play an advisory role, rather than a leading role or planning role; these were central to Botswana and Taiwan’s economic progress.

However, where do good policies come from? And how good should the good policies be? This is because IMF and World Bank define good policies to narrowly mean privatisation, deregulation, and cost sharing, globalisation, retrenchment, and demobilisation, public bad and private good.


But from developing nations, good policies should come from domestic institutions because development is done by the people, not to people.

This means that good and development policies should not be imported from IMF, WB, WTO, they should instead be home grown.

As development-seeking states, the top priority of the state action is structural economic transformation characterised by a shift from primary production to higher value added industrial and information outcomes.


The state routinely intervenes in the economy; this means that it is always watchful.

The aim is not to kick the private sector out of the economy, but to govern the market, babysit infant industries aimed at delivering durable growth. This doesn’t mean socialism, but to create an enabling environment for the private and productive forces.


The ‘developmental state’ forges close and consultative relations with the business sector, for example in Japan, and South Korea, technocrats use deliberation councils to enable private sector participation in decision making.
In the rural community therefore, to change the status quo, there must be a shift from the current way of primary production to modern farming with use of modern tools in order to change the system from traditional to a more productive system.


This should be supported by new seedlings which are environmentally fitting and biologically modified.

Ends

 

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