“Countries don’t create economies. It is entrepreneurs and companies that create and revitalise economies. The role of the Governments should be to create a nourishing environment for entrepreneurs and companies to flourish, not to get in the way of economic development.” – John Naisbitt
It might not be that difficult for the Governments of developing countries to convince their citizens that economic hardships they are facing at the moment are mainly due to global economic problems created by the Covid-19 pandemic. Since almost all countries, including the best economies in the world, have experienced significant retardations during this period, people in developing and poor countries will not hesitate to tighten their belts and support their Governments in riding the tide.
Unfortunately, people’s willingness to accept the hardships, as a part of the natural process during pandemics like this, is not going to be enough to turn things around this time, especially in developing countries like Sri Lanka. Because there is more to the story than most of the people are led to believe.
The World Health Organization (WHO) and other medical experts around the world were able to study the spreading patterns and immediate effects of Covid-19 at very early stages of the pandemic and issue warnings which certainly helped to minimise the death toll.
One of the most important such warnings was that:there is a very high chance that people with pre-existing conditions such as diabetes, hypertension and/or weak immune systems due to any other health conditions will experience much more severe respiratory problems than others.
Most Covid related deaths will also be among such people and elderly whose ability to fight the disease is low due to natural process of aging.
Though health experts do not usually comment about the health of the economies of countries, they very well could have issued the same warnings for that too.That is: there is a very high chance that economies with pre-existing conditions such as high debt burden, large refinancing needs, week external buffers, currency depreciation, food shortages, corrupt administrators and officials, Governments consisting of selfish and/or ignorant politicians and their advisers who are immune to the suffering of the rest of the people, will experience much more severe problems than others.
Deaths
Most Covid related economic deaths will also be among such countries and societies whose ability to fight the hardships is low mainly due to deterioration of their value systems.
People in developing countries like ours would certainly be better-off if they make an effort to understand the depth of the hole their economy is in at present and also to look back at their past to identify the pre-existing conditions, if anything, that may have contributed to the process of digging that hole.
People may also have to be careful in the process of gathering such information since most of the Governments of such countries usually try to paint the rosiest picture possible about the economy using so-called ‘experts’and biased media organisations who are always readyto wear the painter’s hat for their ownbenefits.
Selfish
That may be a symptom of one or more of those pre-existing conditions, such as: “corrupt administrators and officials, governments consisting of selfish and/or ignorant politicians and their advisers who are immune to the suffering of the rest of the people”.
Reiterating the validity of what John Naisbitt has said in 1982, “The role of the Governments should be to create a nourishing environment for entrepreneurs and companies to flourish, not to get in the way of economic development”, Hans Timmer, World Bank Chief Economist for the South Asia Region has said, in last October, that: “Countries in South Asia have a strong comparative advantage in exporting services, particularly business processes and tourism, whereas they have struggled to break into manufacturing export markets.
To realise the potential of the service-led development, the region needs to rethink regulations and establish new institutions to support innovation and competitiveness.” If the decision makers in developing countries could see the wisdom in such experts and the importance in focusing on developing human capital, which is the key factor in the service sector, then it wouldn’t be difficult for them to connect the dots between that and the ideologies of other experts such as Peter Drucker and Joseph Stiglitz. Drucker, a world-renowned management guru said “The ultimate resource in economic development is people. It is people, not capital or raw materials that develop an economy” which was supported by statements such as: “Development is about transforming the lives of people, not just transforming economies” made by Stiglitz, who won the Nobel Prize for Economics in 2001.
Therefore, not only the cost-benefit analysis in the economic sense but also the social, cultural, ethical, and moral values should be considered when making decisions about human lives, irrespective of the selfish ambitions of the policy makers to be in power after the pandemic and/or after the next election.
If the decision is to safeguard the economy, then who benefits the most by that decision? Would that decision make more poor people lose their lives while the rich make more money? If the policy secures the wealth over health of the nation, then is it the public or the private wealth that is being safeguarded?
Management
Does party politics and/or family politics have anything to do with the decision? These are some of the questions the public should seek the answers to before they make any judgements about these decisions and the policy makers who are responsible for such decisions.
The country that is able to provide the most professional and efficient services at a lower cost will, of course, be able to sell their services more than their competitors. If the policy makers think about the short-lived popularity and their chances of being re-elected to be in power, then they have to factor in the consensus of the people and analyse how the majority of their constituents prioritise between health and wealth. When Governments reported the daily death tolls, they always showed the breakdown to indicate that the majority who died were over 60 years of age and some others had pre-existing conditions such as diabetes and hypertension.
Such strategies were used to indicate that those deaths were unavoidable irrespective of what the Government did. However, these same Governments did not seem to have any idea about the pre-existing conditions of their sinking economies, some of which may have been created by their own wrongdoings well before the pandemic.
Conditions
If these countries are to revive their economies by exporting services, they certainly will have to compete against each other in the global market. Paul Krugman, another Nobel Prize winning economist, said: “The raw fact is that every successful example of economic development this past century has taken place via globalisation.”
One doesn’t have to be an economist to see that the country that can place improving its citizens knowledge and opportunities to use that knowledge in increasing their productivity at the top of its priorities will minimise the suffering of all of its people, not just one family or one political party. That’s perhaps why Abdul Kalam once said: “When learning is purposeful, creativity blossoms. When creativity blossoms, thinking emanates. When thinking emanates, knowledge is fully lit. When knowledge is lit, economy flourishes.”
The writer has served in the higher education sector as an academic over twenty years in the USA and fourteen years in Sri Lanka and he can be contacted at [email protected]