Saving Swapo from the Tenderpreneurs

Saving SWAPO- learning from Nkandla

In the last presidential elections in 2014 President Geingob got some  87 % of the vote in an election that  wasfree and fair,and so how could one say that SWAPO is endangered?The party is at the height of its political power and popularity. But, like all liberation movements, having liberated Namibia from the scourge of colonialism and apartheid the question is what does the party do – how does it rebrand itself in a credible manner given its historic successes and its current popularity?  The development and transformation of Namibia into prosperous  anda fair and just society are clearly the party’s current objectives. But like other ruling parties in Africa like the ANC in South Africa, CCM in Tanzania the party often  develops at least two wings. Some are the old liberations struggle veterans  that went through long years of struggle to free the country and remain true believers. Others as well as newer membership sees the ruling party as a means of assuring tenders and rising in society’s  ranks. With time the old struggle veterans thin with aging and those  are often younger  ‘tenderpreneurs’ will  naturally cometo dominate. It is this development that in the end undermines the political foundations of  any ruling party and for those thinking that  SWAPO’s political position is unassailable it  is worth remembering that on the few occasions that President Kaunda permitted freely contested elections in Zambia,his now defunct UNIP party also got 80% of the vote. 

So how does the party protect itself from the rise of this more entrepreneurial tendency which ultimately alienates itself from the people and those who supported it during the struggle. This political core of the party will, with time, become more cynical about politics and all politicians. Such a tendency has already occurred in South Africa with the decline of the support of the ANC to 53% of the popular vote at the last municipal elections this month. The ANC still has the majority support of the people of South Africa and it may well recover its previously unassailable position once President Zuma finally stands aside. 

It is the rise of the tenderepreneurs inside the ANC and  the corruption and abuse of power in  dealing with contracts, both infrastructural and recurrent, that  has lead to the decline of the ANC’s popularity but clearly it was the involvement of President Zuma in an infrastructure project that directly benefited him i.e. the Nkandla affair that most tarnished his and the party’s reputation.

Paradoxically it is the fact of Nkandla and the ANC’s response to the Constitutional court’s ruling on the Public Protectorthat has assured its survival, at least for a while. If one can summarize the politics of the current situation. President Zuma is in effect  historyand will shortly  retire to Nkandla that will remind him daily of his demise.  And his replacement is widely expected to be  CyrilRamaphosa  a genuine hero of the anti-apartheid struggle but more recently  known as  ‘Comrade Billionaire’( in rand) . Whether Ramaphosaeventually comes to power and takes the ANC further down the tenderpreneurial route is to be seen and if he does then in a few years 53% support received in the municipal election will look pretty good rather than a demonstration of  the ANC’s weakness.

This raises one question of how should SWAPO save itself from a similar fate. The only way to do this is to weaken the tenderpreneurial wing of the party by decreasing the ability to introduce expensive, absurd and utterly unnecessary infrastructure projects. The World Bank has estimated that $92 billion per year is needed in infrastructure spending throughout Africa to bring infrastructure up to an acceptable level. This will be a great boon for those seek to prosper from their involvement with these projects and yet the World Bank, which will also benefit greatly from the massively loans that will be needed has been completely silent on how to manage the corruption that will surely follow.

The Nkandla affair is something that we will see  a great deal more of in future, an infrastructure projects that benefist specific individuals. Had it not been for the Constitutional  position of  ‘Public Protector’ and a Constitutional Court that upheld her authority Mr Zuma would not be forced to repay the non-security parts of the public expenditure on his retirement home. Had this not occurred then the ANC would have faced an even more frustrated electorate. Of course no-one should underestimate the personal qualities of Ms Mandosela herself who had the guts to tell the truth to those in power.

The management of public expenditure on infrastructure is probably Namibia’s greatest economic challengein the coming years. How do we stop folly such as $2 billion for the construction of a new parliament without young people having to go to the street each time?.Namibia needs new institutions that will keep infrastructure and other expenditure sane and in check. The first institution is an ‘Independent budget office’ which should review such infrastructure independently and make public pronouncements through parliament as is done by the Congress in the  USA. Second, the creation of a constitutional office equivalent to the Public Protector in South Africa will ultimately provide a defense of the public against abuse those who would use the state for their personal ends. 

President Geingob would set himself apart from all those who preceded him if he were to go to the people of Namibia and ask for a constitutional amendment that would weaken the power of the tenderpreneurs and bring more checks and balances into Namibia’s economy. Such an amendment to the constitution that would protect the people and decrease the President’s  poweras well as  those around him. But it would guarantee President Geingob’s  place in Namibia’s history as a wise leader who would do what was needed to protect Namibia against the plunder and folly that will otherwise go unchecked in the age of tenderpreneur.

These are the views of Professor Roman Grynberg and not necessarily those of  UNAM where he is employed.

Advertising Globalisation in Africa

Advertising Globalization

In Africa as you turn on Sky News an advertisement by DHL, the global courier company extols, unsurprisingly, the virtues of open trade. Bored,you turn to CNN and suddenly there is a very similar sounding advertisement from Samsung extoling the virtues of borderless trade. This is a new and very sudden change in advertising strategy from these great transnational companies that normally targets competitors like Apple or UPS. Now they are selling ideas as they have come to understand that their profitability is  now more seriously threatened by the ideological shift against globalization that is occurring throughout the world than by what any competitor can produce in direct competition with their own products.

What has happened that suddenly large transnationals feel so threatened that they need to devote considerable resources to ‘educate the public’ about the virtues of globalization. For an entire generation from the election of Presidents Reagan and Margret Thatcher in the UK in 1979/80 there has been a global consensus that that open global trade was in everyone’s interests along with low taxes on the rich, small government and an elimination of regulations was a free market formula that was unassailable part of the successful Anglo-Saxon model of economic management.

But suddenly thisfree market consensus looks like it is about to dissolve with the rise of Donald Trump in the US,Marine Le Pen in France, UKIP and  theBrexit vote in the UK along with a host of other minor right wing parties throughout Europe and Asia the consensus of the free market economists that free trade was in everyone’s interestis no longer a consensus. It is the right and not the left of the political spectrum that has more correctly gauged the mood of the electorate and is, at least in rhetoric the greatest single threat to the globalization consensus. This is what makes the transnationals so jittery. The Republican party, the UK conservatives and even the extreme right in Europe could in the past assure their patrons in these companies that come what may the global economy would remain open for business. And yet now these allies now  appear to be the greatest threat to their prosperity

 The last four decades has seen the change in the distribution of income in developed and developing countries towards those that are rich. Elites in developing countries in Africa have been enriched by their place in the global value chain but Africa still, despite empty rhetoric from capitals produces nothing but raw materials and imports consumer goods from the developed world and the BRICs.

In all fairness to the free trade economists, none, not even its most ardent supporters have ever argued that there would not be losers from free trade. They only argued as long as the winners could compensate the losers then free trade was apositive development. But the operative word was ‘could’ and not ‘should’. For many western workers, who are the bulwark of the new right wing anti-globalization consensus, globalization and rapid technological change caused by the ICT revolution have been a personal disaster. They have moved from income security in the 1970s’ and 1980’s to feeling increasingly vulnerable with the rise of China, paid technological change and global trade now. Workers in the developed world were not compensated for the impact of globalization. Globalization gave them cheap goods at Walmart and that was widely seen by policy makers as being enough. Importantly the last 30 years saw the return of China to its rightful place in human history as the world’s largest economy and this process alleviated the poverty of hundreds of millions of its people.

This was of course cold solace to the European and American working man who has seen growth and their standard of living slowly ebb away over time. But there was one other important beneficiary of these global changesand that was those who owned, traded and financed the Asian companies that increasingly produce everything that the world now consumes. Aided by tax laws in Europe and North America these elites have used the system of tax havens in in North America (e.g.  Delaware) and the EU (e.g. Luxemburg, Switzerland and the City of London) as well those in developing countries to avoid or evade their tax obligations which would enable governments to pay compensation to those who have lost out.

In time the transnationals will get better at trying to sell the message of ‘globalization good, economic nationalism, bad’.But right now their advertisements on Sky and CNN look utterly absurd, like they are preaching to the converted, speaking to those who can afford cable TV and are the beneficiaries of globalization rather than speaking to the ‘peasants’ directly. But it is not the message that needs to change but an understanding that the game is up, and those who have not benefited from the dramatic economic changes of the last generation have metaphorically, ‘gone home to get their pitch-forks’. Without serious policy change that better distributes the opportunities and benefits of global trade and technological change we will see a repetition of the closure of this second age of globalization. The first age- at the beginning of the 20^th century came to a crashing and disastrous end a century ago with the beginning of World War I.

These are the views of Professor Roman Grynberg and not necessarily those of UNAM where he is employed.

 

Happy Birthday Botswana - What lessons from Namibia ?

Happy Birthday Botswana– what lessons for Namibia?

Last Friday Botswana turned 50 and celebrated its independence from Britain with a justifiable and giant party throughout the country. Botswana, Namibia’s closest neighbor, at least economically and politically has much to teach the rest of Africa and we have much to learn from both the positive and negative experiences of   that country. The country is hyped as the least corrupt country in Africa and based on observation of countries in the region, this may well be the case but it does not mean that Botswana does not have a gradually worsening corruption problem. Botswana has much to be proud of from its record as a country in what was at independence in 1966, in a turbulent and  war torn region.

Botswana went from being amongst the world’s poorest countries at independence with a GDP/capita amongst the lowest in the world ( about $70/capita in the late 1960’s) to an upper middle income country with a GDP/capita in 2015 of USD7,080. The cynics quip that if any country of two million people had 20 million carats of diamonds to export every year for 30 years they would also be rich.It is true that Botswana was  blessed by nature.  It not only found the huge Orapa diamond mine in 1967 but this was followed by the fabulously rich Jwaneng mine, much touted as the richest piece of  real estate on earth. This was in 1972 and is today the richest mine on earth where 10c of operating costs will earn. Botswana is uniquely blessed with not one but two of the richest mines in the world.

But the diamonds themselves are not enough to explain the huge rates of economic growth experienced by Botswana since independence.  Would any other country have managed that much diamond wealth as well as Botswana had?  One need merely compare other very resource rich countries in Africa and the record has been very poor. In oil rich Nigeria  40 years of  huge oil exports has resulted in a country where the vast majority of the people live below the poverty  and are getting poorer. It is estimated that almost 100 million people living on less than a $1 a day, despite economic growth, statistics have shown. The Nigerian National Bureau of Statistics said 60.9% of Nigerians in 2010 were living in "absolute poverty" - this figure had risen from 54.7% in 2004. Poverty rates in other very resource rich countries like Angola and DRC remain much higher than in Botswana.

What makes Botswana truly unique is the quality of the early political elite which remained wedded to ideas of good government, peace, economic stability and the development of its population. Where Botswana was truly blessed was not in its diamonds but that it had one of Africa’s true giants as its founding father of the nation. Sir SeretseKhama was a towering figure committed to high standards of good government not found in other parts of Africa. There was no Mobutu, Mugabe or Dos Santos family which used and exploited the nation’s wealth for their personal benefit and that of their supporters. Sir SertseKhama, while certainly no angel, was a far superior political leader to almost all his African contemporaries. Huge amounts of diamond revenue were invested in developing infrastructure, educating the population and providing good health. Botswana had an exemplary record for public health.  Moreover, while Botswana is far from any understanding of a Jeffersonian democracy and never was, there was always political stability. The army stayed in the barracks and over 50 years there has been no illegal transfer of power. Importantly there was one dominant ethnic group, the Batswana which make up 80% of the population.

But recently not all has gone Botswana’s way. The last decade has seen economic growth rates stagnate as well as the complete failure of government to escape from total diamond dependence. Indeed it can be argued that Sir SeretseKhama’s job was the easy part of its history. He took the nation’s diamond wealth and invested heavily in the human and physical infrastructure that was needed for transformation from an impoverished to a rich country. It was what followed, the period from the founding father’s death in 1979 to 2000 under the leadership of his deputy  SirKetumileMasire that was a watershed in the nation’s history. During this time, President Masireintroduced the Financial Assistance Policy (FAP) which tried in vain to diversify the economy away from its total diamond dependence by providing massive subsidies to new industries in much the same way as Namibia did with Ramatex. As long as the subsidies continued, the industry continued to operate and provide jobs,but when the government finally abandoned the policy in 2000 under the leadership of Festus Mogae, predictably the subsidized industries collapsed one after another. Unfortunately Festus Mogae and his successor, SertseKhama Ian Khama, son of the founding father, had no idea of how to replace the FAP and how to put Botswana on a path to industrial development. They replaced the FAP with a policy of providing small hand-outs to local business which was equally ineffective. They neither had the will nor the vision of leaders such as Rwanda’s Paul Kagame or Ethiopia’s late Prime Minister Meles to impose the discipline needed to achieve real international competitiveness.

But as Batswana wakes this week with a giant  case of ‘bableass’ (hangover) from the party they have just had, a future of jobless economic growth lies ahead of them. Students graduating from the University of Botswana, like their Namibian counterparts are facing prospects of ever longer periods of joblessness and many wonder why their governments bothered investing in their future. The old growth model that was the basis of the prosperity of Botswana and Namibia where the government had the revenue from the diamond mines to continue to employ legions of university graduates has come to an end. If they are unable to get real growth and diversification in the private sector the stability that was their foundation of the current prosperity will evaporate as was the case the with Tunisia. 

The key lesson, if there is one is that peace, order and good government are vital to prosperity but they are certainly not enough. The road to transformation must be defined by each country and needs to be defined by the people and those who lead. The key is to recognize that the government can no longer be the main provider of jobs and prosperity in future as it was in the past. But the aggressive policies pursued with such vigor in Ethiopia and Rwanda and needed to make Botswana and by extension Namibia competitive economies are not being pursued by government. It is politically easier to address short term issues with small band aids of money but only sound policy aimed at ensuring that investors want to invest in the country and create a dynamic private sector will get results. That involves government actually listening to the views of the private sector and taking them on board when formulating policy. This is less and less the case in both Botswana and Namibia.

These are the views of Professor Roman Grynberg and not necessarily those of his employer the University of Namibia.