A few years ago, Lee Kuan Yew — the man who almost single-handedly transformed his small, resource-poor island state of Singapore from Third World status to First World — visited Pakistan. A reporter asked him if there was a bit of advice he could offer Pakistan to get their moribund economy going. Lee Kuan Yew replied pithily: “Just make sure you don’t have electricity breakdowns.”
The Asian Tiger countries do not stand for blackouts in their economies. But, of course, Lee Kuan Yew’s advice went way beyond the generation of reliable electricity.
He was offering, in a nutshell, his hard-earned perspective that unless a poor, developing country took care of the concrete basics in the real economy, which fuel growth, all talk about “taking off” is just wishful thinking.
Even though Oxford-trained, Lee Kuan Yew never focused on abstractions such as the so-called “economic fundamentals” but rather identified the concrete constraints and opportunities facing his country, then removed the former while exploiting the latter.
“Good” economic data are the by-products of successful project implementation; not the goal of economic activity. The proof of the pudding is in the eating.
It took the United States, 50 years to double its GDP; Japan, 25, while China took only a decade. The Asian Tigers all turned around their economies within a few decades.
All this means is that no country is doomed to remain stuck in economic stagnation forever – and that the technology for changing their economic fortunes is “out there”.
We just have to start somewhere. Why don’t we start with the very item Lee Kuan Yew offered in his seemingly off-hand comment – the generation of an uninterrupted electrical power supply?
Can anyone seriously believe that we can jump start our agricultural, agro-processing, industrial and commercial sectors without reliable power? President Jagdeo has rightfully identified the Amaila Falls Hydroelectric project as a top priority for our country – he has to maintain focus to ensure that this or a similar project becomes a reality within an identified time-line.
Factories that have to down tools for hours on end because of blackouts are inevitably underutilising their capabilities and producing at higher than optimum costs.
Not only are they forced to operate at a loss (raising prices are not an option in the modern competitive globalised world) but they end up delivering their orders late. This is a no-no.
Quality control also goes through the window within factories with irregular power supplies and fluctuating voltage. More loss of orders – and then lost customers and finally a closed-down company ensues.
In what direction will the GDP head under such a scenario?
Some talk glibly about IT technology transforming Guyana into an Asian Tiger: this is unrealistic. To reach that stage we have to expand our investment at the primary levels into specialised higher education – not just churning out graduates in sociology.
The unfolding fiasco at GuySuCo should remind us of how badly we need well trained managers. Higher education should address the needs of the real economy.
Agriculture is our area of comparative advantage and the aggressive Minister must be supported by appropriate policies in the financial sector to facilitate the consolidation and diversification of the sector (including agro-processing).
We also need an industrial policy to ensure that we diversify the range of manufactured goods upwards from just soft drinks and biscuits as our so-called industrialists would have it. Who is the Minister of Industry?
These elements have to be tied together within a coherent, cohesive economic and social structure that is tied together by a state guided by an overarching pragmatic ideology of development.
The latter term has become discredited by those who ironically forced down our throats the now discredited ideology of neo-liberalism. We have to eschew the ad-hocism that has characterised our economic policies over the last two decades and craft guiding principles appropriate to our reality.
Waiting for the IMF to discover and push the next great panacea will not do. We also need to keep in mind that no country has ever borrowed its way to prosperity, and it is quite improbable that we will be the sole exception.
Self-reliance must become our watchword: Lee Kuan Yew, Singapore and the Asian Tigers showed us it can be done.