I like to tell people that one of the things that Robert Mugabe never fully understood is what zero actually meant. He is supposed to have at least six degrees. Yet for some strange reason it took him a few years to understand that zero means nothing if not supported by some external value. He used to write a lot of zeros behind a digit and think that it resolved his money problems. Of course, this never worked and he had to start using other people’s currencies.
One should not be too quick to laugh at Mugabe, for it seems to me that supposedly well informed Western countries are also displaying an inability to grasp what zero means. They have lowered their interest rates to zero and are now busy printing money supposedly to resolve their economic troubles. I think institutions like the IMF and the World Bank know that zero means nothing, and that is why some countries like South Africa have been told to make donations to the IMF fund.
It seems to me that countries like Botswana and other developing countries have to grasp that Europe, China and the USA find themselves in a situation where they have pretended for too long that zero has some value. In Europe they print money not backed by any goods and services whilst in China they finance USA consumption in order to keep their people employed. All these actions and relationships are based on the failure to appreciate that zero has to be backed by something of value that can be consumed for a certain price.
Africa unfortunately seems to think it should be part and parcel of this misunderstanding of zero. We supply raw materials to China for China to produce goods consumed by a USA that has to be loaned money by China to keep Chinese employed and China stable. Africa being the only contributor of real value in this equation is effectively underwriting the West and China’s pretence that zero has some value independent of an external source of value.
Nothing illustrates that zero has to be backed up by an external value than the fact that Africa has to sell raw materials that generate goods of greater value than what Africa ultimately gets in return. I know that people sometimes talk of value addition. This must however be placed in proper context. Supposing Africa was to refuse to supply raw materials to China, what value addition would take place? What would be the use of Western technical knowhow if the same was not applied to African raw materials?
What I am suggesting is that the value of Africa’s raw materials is not necessarily equal to the value of Western technical knowledge and Chinese labour. There is an assumption that the value of Africa’s raw materials is actually increased by application of Western technology and Chinese labour. Why can we not say Africa’s raw materials unlock the value of Western technology and Chinese labour? Why should we assume in a world of scarce raw materials it is the value addition to raw materials that is taking place rather than raw materials adding value to labour and technology?
In a world of 20% unemployment and where unemployed young people pose security threats there is a need to start treating Africa’s raw materials differently. The raw materials unlock the value of labour and technology that would otherwise not be productive. If you have factories supposedly operating at less than optimum capacity because of low demand for goods, why must we assume that the redundant capacity does not need raw materials?
Africans have been made to believe that the excess capacity of factories does not need Africa’s raw materials. I submit that things can be looked at in a different light. The excess capacity needs Africa’s raw materials. After all most of these factories obtained bank loans to purchase the equipment and need to be productive to raise revenue to pay off the loans. The banks largely owned by Westerners cannot afford to have a lot of defaults. Who will they sell the equipment to?
Africa is effectively finding itself in a situation where it has leverage both on the financial side and on the employment side. The banks need Africa’s raw materials to keep the factories productive whilst the countries providing labour need Africa’s raw materials to keep unemployment levels low. Africa must therefore start to see the fuller picture of her centrality to the world economy.
In Botswana our government has largely given up on its ability to leap frog the thinking of institutions like the IMF and the World Bank. Our president has lost the confidence to ask why the Ministry of Finance is unable to generate alternative revenue earning streams. We are still dependent on diamonds and SACU revenues and in fact are now seeking to get more from our people. Our government on the other hand is in control of most of the resources that should otherwise be in private hands. This has largely been achieved through laws and regulations.
I have heard it mentioned that there is a committee that is charged with looking at regulations that make doing business difficult. This is a noble idea but is not enough. We need government to take positive steps to free assets or rights that it holds but fails to use to generate revenue. An example is the 15% that government can claim or contribute in any new mining venture. Our government should cede such right to private citizens if it does not have the capital to contribute to any new venture.
I am glad to note that there has been removal of restrictions in regard to certain business activities being carried out in residential areas. Unfortunately the removal of these restrictions again fails to see that unemployment will continue to be a problem if government remains the key consumer of goods and services. We need to have senior civil servants being pushed into the private sector to become consumer of goods and services. There is no need to have people who have passed their sell by dates continue to dictate thinking within government. They have to take their thinking to the private arena.
We also need to look at the role of DIS in our economic thinking. The impression one gets is that DIS is about security of people and property in the physical sense. In a world such as we find ourselves in, bodies like BIDPA cannot alone generate ideas on the economic policy front. Focus of DIS on physical security of person and property when it has close contact with a president distorts the message that the president should be hearing. I have in the past suggested that even though we sent people to Singapore we missed the emergence of China completely. What makes us think we are not again missing a shift in the world economic power relationships?
I have observed that even though Rre Khama is powerful he has surrounded himself with people who largely consume his power, but do not themselves add value or help regenerate that which they have consumed. As we all know there is nothing that can continue to be subtracted from without at some point becoming finished. In a little less than six years people are going to be positioning themselves for the new administration. Rre Khama will find himself isolated because he will not have as much power as he currently has.
It is all very well to have loyal people around you but they also have to look out for themselves. If they can only consume your power when you are at your most powerful what reason would they have to add to you when in a short while you will have no power? What I am getting at is that even though Rre Khama is powerful there is a significant portion of our population that is discounting him, that has given up on him being of any value to their lives. This section will soon be joined by some of his closest people who will see it in their best interest to go with the flow.
Rre Khama should therefore change gears, forget about loyalty and think about legacy and having added value to a significant portion of our people. A person occupying the office of president has a very rare opportunity to actually make a difference. In order to make a difference the person must be brave. He must take risks. He must be prepared to abandon friends and make new ones. He must have back channels to tap into ideas of people he positively dislikes. He must seek those who will serve him for no fee, and those who will assist him for a fee. There are plenty Batswana who only need Rre Khama to call and give an assignment, and they will gladly oblige. They are not necessarily better people than those who demand a few, but they are there to be used.