In one of the installments of this column I decried a lack of ambitious and visionary leadership in the country. The country’s dramatic rise from being among five of the world’s poorest countries to a middle income economy has indeed been one of the most notable success stories of the post-colonial era Sub Saharan Africa. The exceptional leadership, selflessness and vision of Botswana’s founding fathers and mothers are credited with this success.
The money made from diamonds, beef, and other commodities, and the prudent management of the economy led to this success. In that installment, my contention was that Botswana’s continued dramatic success has either stalled or was waning. One may wonder, but the country’s performance in terms of indicators which have all along defined its success has not necessarily deteriorated? Well, compared to other nations with similar natural resource and leadership endowment, we are not at the same place.
The Emirate of Dubai in the United Arab Emirates (UAE) has a lot of similarities with us but, frankly, we cannot be said to be equals in economic development terms. They transformed their economy from fishing and trading to tourism, mass communications, shipping, and finance. Dubai has created for itself an image synonymous with luxury, multi –billion dollar real-estate ventures, and millions upon millions of tourists annually. The transformation was driven both by trading and oil revenue and this transformation was motivated by fear that, unlike other Emirates, they had limited oil and gas reserves. So, they had to build the Dubai economy to survive the end of the oil boom.
Through the state owned Jumeirah Group, Dubai invested in hotels, resorts and shopping malls to make Dubai a tourist destination of choice.
The current ruler, Sheikh Mohammed Al Maktoum, building upon the strong foundation built by his predecessors; that of establishing Dubai as a hub of trade by sea and a centre of tourism and business travel by air, embarked on an ambitious strategy to transform Dubai further. He attracted the world’s top companies to transform Dubai into a knowledge based economy. By the end of 2006, a quarter of the world’s top 500 companies had presence in Dubai. Through the state owned Jumeirah Group, Dubai invested in hotels, resorts and shopping malls to make Dubai a tourist destination of choice. One can safely say this vision has been realised. In 2005, Dubai contributed more than 29% of UAE GDP and Dubai’s GDP recorded a nominal growth of 27%. Only 5.4% of Dubai’s GDP came from the oil sector, with the dominant sector being trade and repair at 22.8%.
This is just one example. Singapore is another. It has the world’s seventh largest GDP per capita and more than one in six households have US$1 million in cash savings. In the past decade alone, the number of Singaporeans running their own business has doubled, giving the city-state the world’s second most entrepreneurs-per-capita, behind only the United States. While the Singaporeans had been lucky that the British set the foundation for their economic development, after independence in 1959, led by the 35 year old Lee Kuan Yew, the newly elected People’s Action Party (PAP) embraced an aggressive development strategy.
The strategy which economic historian W.G.Huff observes in The Economic Development of Singapore “paired a hands-off approach to regulation with a hands-on approach to recruiting foreign corporations. The Singaporean model carries the lesson that an extensive role for the government can be combined with free trade.” It is the leadership of Yew and his successors that has built the glittering Singapore that we know today.
With the Economic Stimulus Package being drafted, it offers an opportunity to roll out an ambitious and extraordinary plan to project the country to where it really is supposed to be; the sky.
This is one opportunity we have to get out of our 50 year slumber, and really get to work. Details we have about the stimulus program is that it will run for three years, and not much detail is available yet regarding amounts to be used and how specifically the chosen sectors of infrastructure development, agriculture, manufacturing , and tourism are going to be stimulated. Once the plan is finalized, I hope it will be presented to parliament for perusal and discussion. It just has to be ambitious, stop gap plans will not take us anywhere.