Low Applied Intelligence Is Cause Of Nigeria/Africa Non-Progress
Posted to NVS
I am voting for LOW APPLIED INTELLIGENCE. I think the IQ is same as the rest of the world, but, as I have had occasions to ask on NVS, "what is the point of intelligence if it is not being used intelligently".. All the other factors mentioned in the questionaire, and more besides,can be resolved by a people who are thinking properly.
[B]The people of the country, and the broader Afrikan community, are in a state of intense spiritual, psychological and/or intellectual shock[/B]. The people are in an infantile and fatalistic neurosis, And everyday, they are told the answers (applied intelligence) is with some "leader", "diaspora", "foreigner", "God", anyone but themselves. It seems to be obvious that the systems in place were designed to [U]not[/U] meet the needs or wants of the community, yet time and time again, the people reach out to deter any changing of the system. It is as if [B]there is addiction to a mental childishness that just does not recognise the need to take responsibility[/B], to stop wistfulness (e go better, God dey, I am going to heaven) and get stuck into organising, making and building things.
Some of [B]this is due to cultural and personality dissonance[/B]. Every African person worldwide lives, today, in societies in which they are commercially and mentally in a dominant and hostile external cultural context yet feel that they are historically and socially of a different culture that has strengths of its own.
Two examples in Nigeria. The president is a Mooslim Hausa/Fulani/Kanuri/"Northerner" who must operate his office in English language, feels compelled to wear (occasionally) European suits (symbolic skin), operate his convert religion in Arabic (the language of the Koran) and maintain his ethnic identity in Hausa with the historical culture of its associate world-view. The CBN governor is a Christain, ibo/igbo/"Easterner" who must operate his office and convert in English language, feels very natural in European suits (symbolic skin), and operates his home in Ibo with the historical culture of its associated worldview. How many personalities are these people projecting at any one time? How many personalities and which one is the person talking or trying to do business with them dealing with? AND both of them are trying to apply solutions that other people developed to benefit other societies to resolve the complexities in Nigeria. This is not a personal attack on either. They are highly intelligent and capable people. [B]They just cannot "help it", it is what they were brought up to do[/B].
To my knowledge, the Nigerian/African socio-cultural space (no system is apparent) does not deal with the deep-seated historical and ongoing scars suffered by the collective African psyche from atrocities like Arab or European slavery; European direct and indirect mass murders to establish and maintain colonial influence, from religions and multimedia that spiritually rape and erase the cultural memory in order to externalise the good and godly, from the insecurity of family poverty and disease.
The Jesuits are accredited with a statement to wit: [I]"Give me the child and I will give you the man."[/I] [b]The education system does not meet the unique needs of the African child or society.[/b] The curriculum does appear to consider child psychology in general, and the specific developmental needs of children growing up to live in mutually-antagonistic (and hence inherently self-destructive) multi-national and multi-religious countries. Nigerians/Africans currently [U]exist[/U] in conditions where their adulthood is programmed into a state of perpetual child-like intellectual dependence. We have not consciously applied our intellect to challenge and manage our own realities. All the other factors impact thereafter.
[B]At this point in history, the spirit is broken[/B]. It is as a slave plantation writ large, Kunta Kinte has been flogged by the boss Nigger to say "Toby" when his enemy asks "what is your name?". In caricature of the historical antebellum slavery, people became so neurotic in their self-abasement that they sent their children into breeding by their enemies. Now all the children are minded to be Toby, in speech, in dress, in belief, in front of the mirror, in public, because their mothers and fathers have imprinted Kunta's scars on their memory and because no one feels bold enough, adult and responsible enough, to talk about how or why the scars got there or what to do about the scars, the floggers and the enemies. [B]Children, however, are born curious.[/B]
Showing posts with label organisation. Show all posts
Showing posts with label organisation. Show all posts
Thursday, May 29, 2008
Tuesday, May 27, 2008
Mekunu ati Ofin
Poverty and the rule of law
So one rich farmer invited 5 of his workers for a meal. Thereafter, they felt dizzy and fell asleep, only to wake in great pain and distress. The five returned to the farm, glad that they still have a job to do because they have families to feed. One of the men is unmarried and without child. He will never father any of his own. Cradling his shotgun, the farmer says "There has been an investigation. The case is now closed".
Few social critics, economic analysts, and policy wonks consider the reinforcing effect that the rule of law has on the prevalence of poverty, disease and ignorance around the world. In India, forcibly castrated people cannot get justice from the state because their castrator is powerful enough to rise above the rule of law. The rule of law can oppress nations just as severely as persons. Next door to India, countries are invaded because an invading set of countries are powerful enough to rise above international law.
Perhaps, it is high time that poverty, disease and ignorance are classified as weapons of mass destruction. They certainly destroy the masses of the people even more effectively than even the bullets and bombs of the countless wars. It is estimated there are some 30,000 poverty-related infant deaths daily in Africa. Many children and women die yearly Africa from preventable diseases. Many women and children will live their lives in painful ignorance of basic hygiene, energy production or food preparation techniques. Yet, even as they scratch out such as squalid living within the constraints of the law, the poor must wonder how the hell of their lives can exist alongside the heavenly plenty of their compatriots.
"Surely it is one law for us and another for them" goes the muttering. Disenfranchised people and deficient countries express this same feeling, the basis of which lies in the structure in which their daily affairs are governed. Had the rich Indian not been protected by the governing law in Uttar Predash, he would been properly "dealt with" by the retributive justice of his victims. Their poverty and ignorance prevented their ability to marshal the rule of law to their cause. Totalitarianism, feudalism, unrepresentative democracy and communism are forms of top-down government that accentuate the ability of the powerful to place suppressive binds on their people. The binds are drafted as the rules of law. Not to be disobeyed by the people. At pain of punishment by the ruler of law. In this manner, it becomes a crime to steal even if working your fingers to the bone does not yield sufficient income to feed your family. It becomes treason if you criticise an incompetent, corrupt and akotileta government.
The shotgun quells mutinious ideas in farms across Northern India, just as the bullwhip silenced dissent in slave fields across the New World centuries ago, and structural adjustment policies dampen queries in many struggling households across the "developing" world. The rule of law made it lawful to use the shotgun, the bullwhip and the poverty-policies, and thereby permitted rulers to kill or cripple the prospects of those whose actions produce the wealth of their tormentors. In Africa, people are now becoming immune to destructive laws: it may be time for a severe dose of civil disobedience.
Uttar Pradesh is the largest and most populous state in India. This year, this very poor corner of this most racially bigotted country in the world has been given USD360million by USAid , an aid agency, to implement a population control policy that calls for the sterilisation of 930,000 people. The poverty has been a high level of crimes against humanity and a strong siege mentality among the rich. The government of Uttar has some interesting ideas on how to meet its target of sterilising the poor while parlaying the insecurty of the rich: Anybody who wants a handgun should submit 3 people for sterilisation; 5 people for a shotgun.
So one rich farmer invited 5 of his workers for a meal. Thereafter, they felt dizzy and fell asleep, only to wake in great pain and distress. The five returned to the farm, glad that they still have a job to do because they have families to feed. One of the men is unmarried and without child. He will never father any of his own. Cradling his shotgun, the farmer says "There has been an investigation. The case is now closed".
Few social critics, economic analysts, and policy wonks consider the reinforcing effect that the rule of law has on the prevalence of poverty, disease and ignorance around the world. In India, forcibly castrated people cannot get justice from the state because their castrator is powerful enough to rise above the rule of law. The rule of law can oppress nations just as severely as persons. Next door to India, countries are invaded because an invading set of countries are powerful enough to rise above international law.
Perhaps, it is high time that poverty, disease and ignorance are classified as weapons of mass destruction. They certainly destroy the masses of the people even more effectively than even the bullets and bombs of the countless wars. It is estimated there are some 30,000 poverty-related infant deaths daily in Africa. Many children and women die yearly Africa from preventable diseases. Many women and children will live their lives in painful ignorance of basic hygiene, energy production or food preparation techniques. Yet, even as they scratch out such as squalid living within the constraints of the law, the poor must wonder how the hell of their lives can exist alongside the heavenly plenty of their compatriots.
"Surely it is one law for us and another for them" goes the muttering. Disenfranchised people and deficient countries express this same feeling, the basis of which lies in the structure in which their daily affairs are governed. Had the rich Indian not been protected by the governing law in Uttar Predash, he would been properly "dealt with" by the retributive justice of his victims. Their poverty and ignorance prevented their ability to marshal the rule of law to their cause. Totalitarianism, feudalism, unrepresentative democracy and communism are forms of top-down government that accentuate the ability of the powerful to place suppressive binds on their people. The binds are drafted as the rules of law. Not to be disobeyed by the people. At pain of punishment by the ruler of law. In this manner, it becomes a crime to steal even if working your fingers to the bone does not yield sufficient income to feed your family. It becomes treason if you criticise an incompetent, corrupt and akotileta government.
The shotgun quells mutinious ideas in farms across Northern India, just as the bullwhip silenced dissent in slave fields across the New World centuries ago, and structural adjustment policies dampen queries in many struggling households across the "developing" world. The rule of law made it lawful to use the shotgun, the bullwhip and the poverty-policies, and thereby permitted rulers to kill or cripple the prospects of those whose actions produce the wealth of their tormentors. In Africa, people are now becoming immune to destructive laws: it may be time for a severe dose of civil disobedience.
Surviving the Political Economics of “Akotileta” Governance
first published 8-November-2004
It will be beneficial to the general population of an oil-producing country, if the oil revenues are applied to improve the socio-economic lives of the people.
Many citizens of oil-producing countries expect responsible governments to ensure that this IS what actually happens. Responsible governments use the monies received to create a domestic enterprise-enabling community. The empowered community raises domestic productivity, creates employment, and pays tax revenues back to the government.
Popular economics is based on the theory that demand for produce and supply of produce determines the equilibrium market price of produce. This theory is falsifying because it is incomplete. It ignores the effect of demand for money and supply of money on the prices of goods.
Money is a commodity, just like bread, suya, palmwine, rice or crude oil. Like any commodiy, money is used as a medium of exchange as well as a store of value. What makes money unique is the fact that it can be created by "fiat", an order enabling the creation of money, nowadays executed in most countries by a central bank.
Most central bank actions are conducted as part of a government's monetary policy (decisions to control the demand of and/or supply of money). Responsible governments attempt to regulate the productivity of their economies via monetary policy and fiscal policy (decisions to control the production of and consumption of goods).
The supplier of produce has a demand for money. The buyer of produce is a supplier of money. In any market transaction, these negotiations attempt to attain two equilibrum prices: one for produce and one for money. Two commodities are exchanged - produce and money - at the equating equilibrum price level.
= Suppliers of money and produce are not created equal =
Usually the supplier of produce sets the desired asking price that a buyer must meet. For example, Mr. Agbee may want Money1000 for his 1000kg of corn. If Mrs. Bureedi only has supply of Money600, some negotiations must begin or she walks, empty handed.
However the total quantity he can offer for sale remains 1000kg: this reality represents the tangible bounds of physical commodities. Economists will say that if Mrs. Bureedi has higher wages, she may be able to afford money supply of Money800 or Money900.
Economists will say the increase in Mrs. Bureedi's wages will usually cause Mr.Agbee to increase his prices (lead to inflation in market prices), and that inflation is a bad thing. If he expects market prices will go up, Mr Agbee will aim to supply more grain to the market next time. In an enterprise-enabling community, he goes to a bank to obtain the funds necessary to increase production. However, if Mr Agbee expects market prices to go down, he must still sell his product or watch it waste into rot. So, if the market is about to close for the day, Mr Agbee may despairingly drop the asking price to within Mrs. Bureedi's money supply.
quantity
of produce ^
|.......\..../ supply of produce (Sp)
|........\../
|.........\/ * Equilibrium market price at intersection *
|........./|......../..|......./....\ demand of produce (Dp)
|_______________>
prices of produce (market prices)
=Money is different from other commodities =
There are no physical bounds restricting the suppliers of money, previously identified as the central bank acting, presumably, on behalf of a responsible government. Banks will happlily make new loans (supply more quantities of money) if they expect higher interest rates. Making such loans is a matter only of entering records in a computerised ledger in this days of fiat currency. In the very olden days when physical commodities were used as money, "merchant-bankers" were at greater pains to "under-write" a loan.
A responsible government can strongly regulate money supply in a local currency market. However, governments lose control of money supply in a "free" market with minimum capital controls. When uncontrolled money combines with weak domestic productivity, money supply then depends largely on the manipulations of the banks.
Severe capital value devaluation in a highly consumptive political economy that has low physical productivity; high external debts denominated in foreign currency; and money markets with little capital controls. The government's own demand for foreign currency with which to repay the foreign-denominated external debt is matched by increased government supply of the local currency into the money markets. This will cause the value of local currency to fall with respect to foreign currency, resulting in a weaker exchange rate.
Falling local currency values also mean lower interest rates. Borrowing is more affordable at lower interest rates for producers like Mr Agbee or consumers like Mrs Bureedi. Their demand for demand for money increases.
Unfortunately, responsible banks will want to supply less money at the lower interest rates. Fiat currency money cannot rot and with weak capital controls in place, banks have no reality check that forces them to supply their money commodity even at low interest rates. So they try not to. Governments occasionally force banks to release money by conducting "mopping up" operations at the central banks.
quantity
of money ^
|.......\..../ supply of money (Sm)
|........\../
|.........\/ * Equilibrium interest rate at intersection *
|........./|......../..|......./....\ demand of money Dm)
|_______________>
prices of money (interest rates)
= The role of a responsible government =
A responsible government can do a number of things to stimulate DOMESTIC ENTERPRISES and to boost DOMESTIC PRODUCTIVITY.
# Domestic businesses are stimulated, jobs are created, and longer term productivity is attained if government increases demand for domestically produced goods and services e.g by using domestic producers in construction of roads, housing, stadia, furniture, etc. Purchasing locally made goods and services by governments will cause the demand of produce (Dp line) to shift rightwards (along the Sp line) and cause market prices to rise.
Eventually, increased domestic production (shift up the Sp line) and a higher equilibrum market price is achieved. Responsible government intervention MAY result in higher costs of living.
# Likewise, domestic productivity is stimulated if a responsible government uses its fiat to make borrowing AFFORDABLE for domestic businesses. Two actions are possible:
## A naive government may demand more money from banks (e.g increased reserve levels), consumers (e.g increased minimum fuel prices), or businesses (e.g. as taxes or licenses). Interest rates will fall. But such an action will eventually bankrupt the community. This is because consumers, businesses and banks (!) must supply such money from earnings on sale of commodities, and neither have infinite source of those commodities.
## On the other hand, a responsible government may inject more money into the community e.g by lowering reserve levels for banks, lowering fuel prices, or lowering business taxes and other statutory costs. Interest rates will rise EVEN IF the increased government spending (shift up along the Sm line) IS NOT MATCHED by a increased DOMESTIC DEMAND (rightwards shift of the Dm line) to yield a higher equilibrum interest rate.
The ensuring LEVEL OF INFLATION (rate of increase in interest rates) depends (in simplified terms, adjusting for complexities of elasticity in demand and supply) on the origin of rhe additional money supply and the purpose to which it is utilised.
Inflation is MORE manageable IF the increased money supply originates from domestic consumers and enables domestic producers to produce more goods and services. Inflation is extremely damaging IF the increased money supply originates from consumption of foreign produce (which is what foreign direct investment is) or does not increase domestic productivity in goods and services.
What then is the NET effect on domestic productivity and enterprise-capacity in a community when a government that does the following:
# Increases the supply of domestic money through a combination of devaluation e.g selling domestic currency to purchase of foreign currency (= rightward shift along Sm line and increase in local interest rates)
# Places high demands for money on domestic consumers, businesses and banks (= shifting the Dm line rigtwards and increase in interest rates).
# Increases demand for foreign produce that are cheaper than equivalent local goods. This reduces demand for and supply of domestic produced goods. Lack of sufficient foreign produced goods or domestic prodced goods results in persistent high market prices.
This situation is exacerbated by actions that impede market activity: persistent consumption of foreign produce by governments or the people; produce hoarding by businesses; and money hoarding by banks.
The observed effect is a definate strangulation of domestic production (especially manufacturing) capacity, rampant unemployment, intense economic emigration, and a market concentration of domestic businesses into "non-tradable services" such as hotels, restaurants, schools, transportation, haircuts, unfulfilled contracs etc.
= Surviving an irresponsible government =
All governments have three core responsibilities to the general population they govern:
# Create an enabling environment for domestic enterprises to grow and prosper;
# Provide community services that to assist the needy;
# Vigorously defend the property, territory and well being of the general population they govern.
Only a bad government fails in ANY of these three responsibilities. Bad governments do not deserve to govern and should not be in office. By these measures, most modern governments do not deserve the people they govern. Yet, a general population deserves its government, whether strong or weak; good or bad. This is because no government exists in a vacumn. All are drawn from the general population. By implication, a weak government reflects the weakness of its people. A corrupt government arises from a corrupt mandate.
A responsible government facilitates the enfranchisement of its people by performing its core responsibilities diligently. To enfranchise is to take control of the rule of law and of the markets in which one operates. The rule of law underlines the political system, which includes and defines the economic system of markets and payments. A bad government fails in these responsibilities. An akotileta government is not only bad, it goes further to actively impoverise, impede or attack the people it effects to govern. A government that disenfranchises its people can continue in governance only if the people have no self-conviction. The "values" of the population under bad government need to be restructured. Only when revalued, can the population restructures the government.
The only way to survive a akotileta government is to recreate the failed responsibilities at the community level. This has the added benefit of decentralising and localising both the rule of law and economic markets.
Observation indicates that people derive maximum socio-economic benefit from community-based policies and markets.
Working examples range from large countries such as China and Germany (prior to the unifications), to the Scandivanian nation-states, to self-referencing tribal-states confined withing in larger country borders. The keys to these communities are strong domestic production efficiency and an effectively local currency.
# Small, homogenous, and productive communities may have increased access to an export-oriented strategy but they often lack the population mass to sustain an effective local currency.
# Larger countries can sustain a strong internal market for both local currencies and import-subsititution goods, provided they are not handicapped by foreign debt repayment obligations.
# Those with large foreign currency repayment obligations need to implement strategies that protect the internal market, convert foreign debt obligations into the local currency, and induce the opening of foreign markets for domestically produced goods and services. Interestingly, these "beggar-thy-neighbour" policies are most often associated with contries that manifest a robust military strength.
When enduring an irresponsible government, communities need also to protect themselves against attempts by such government to impoverise its own communities!
An "akotileta" government has the particulary nasty property of focusing so much on meeting demands of foreign producers that it ends up suffocating domestic producers.
=Self-help enterprises are essential=
Communities need to be resourceful in order to control bad fiscal or monetary policy imposed by akotileta governments that are bent on destroying local productivity. These policies have historically included bans on organised labour, decentralised provision of infrastructure services, operation of local currencies or exhorbitant minimum prices in essential commodities.
Businesses in such communities should consider associative or cooperative operating or organisational strategies. Rather than rules of law formulated by such governments, trading may organised by informal code of conduct which is enforced at community level. Rather than bank-based money transfers, market transactions are conducted via barter exchange or by interest-free local currencies.
The essential glue of community-level businesses is communal trust. Crime and corruption are less likely when the family of potential culpits face the option of becoming ostracized from the community and subsequent difficulty in joining another. Even thefts are not so damaging in local currency economies as the stolen money must be spent within the same community.
Best of all, community-level enterprises result in bottom-up prosperity and in enhancement of living standards at the local level. As the communities grow and prosper, businesses can expand to link across regions and nations. Such networks of businesseses retain loyalty to their roots and are more likely to engage in complementing (or conducting) the normal responsibilities of responsible governments.
It will be beneficial to the general population of an oil-producing country, if the oil revenues are applied to improve the socio-economic lives of the people.
Many citizens of oil-producing countries expect responsible governments to ensure that this IS what actually happens. Responsible governments use the monies received to create a domestic enterprise-enabling community. The empowered community raises domestic productivity, creates employment, and pays tax revenues back to the government.
Popular economics is based on the theory that demand for produce and supply of produce determines the equilibrium market price of produce. This theory is falsifying because it is incomplete. It ignores the effect of demand for money and supply of money on the prices of goods.
Money is a commodity, just like bread, suya, palmwine, rice or crude oil. Like any commodiy, money is used as a medium of exchange as well as a store of value. What makes money unique is the fact that it can be created by "fiat", an order enabling the creation of money, nowadays executed in most countries by a central bank.
Most central bank actions are conducted as part of a government's monetary policy (decisions to control the demand of and/or supply of money). Responsible governments attempt to regulate the productivity of their economies via monetary policy and fiscal policy (decisions to control the production of and consumption of goods).
The supplier of produce has a demand for money. The buyer of produce is a supplier of money. In any market transaction, these negotiations attempt to attain two equilibrum prices: one for produce and one for money. Two commodities are exchanged - produce and money - at the equating equilibrum price level.
= Suppliers of money and produce are not created equal =
Usually the supplier of produce sets the desired asking price that a buyer must meet. For example, Mr. Agbee may want Money1000 for his 1000kg of corn. If Mrs. Bureedi only has supply of Money600, some negotiations must begin or she walks, empty handed.
However the total quantity he can offer for sale remains 1000kg: this reality represents the tangible bounds of physical commodities. Economists will say that if Mrs. Bureedi has higher wages, she may be able to afford money supply of Money800 or Money900.
Economists will say the increase in Mrs. Bureedi's wages will usually cause Mr.Agbee to increase his prices (lead to inflation in market prices), and that inflation is a bad thing. If he expects market prices will go up, Mr Agbee will aim to supply more grain to the market next time. In an enterprise-enabling community, he goes to a bank to obtain the funds necessary to increase production. However, if Mr Agbee expects market prices to go down, he must still sell his product or watch it waste into rot. So, if the market is about to close for the day, Mr Agbee may despairingly drop the asking price to within Mrs. Bureedi's money supply.
quantity
of produce ^
|.......\..../ supply of produce (Sp)
|........\../
|.........\/ * Equilibrium market price at intersection *
|........./|......../..|......./....\ demand of produce (Dp)
|_______________>
prices of produce (market prices)
=Money is different from other commodities =
There are no physical bounds restricting the suppliers of money, previously identified as the central bank acting, presumably, on behalf of a responsible government. Banks will happlily make new loans (supply more quantities of money) if they expect higher interest rates. Making such loans is a matter only of entering records in a computerised ledger in this days of fiat currency. In the very olden days when physical commodities were used as money, "merchant-bankers" were at greater pains to "under-write" a loan.
A responsible government can strongly regulate money supply in a local currency market. However, governments lose control of money supply in a "free" market with minimum capital controls. When uncontrolled money combines with weak domestic productivity, money supply then depends largely on the manipulations of the banks.
Severe capital value devaluation in a highly consumptive political economy that has low physical productivity; high external debts denominated in foreign currency; and money markets with little capital controls. The government's own demand for foreign currency with which to repay the foreign-denominated external debt is matched by increased government supply of the local currency into the money markets. This will cause the value of local currency to fall with respect to foreign currency, resulting in a weaker exchange rate.
Falling local currency values also mean lower interest rates. Borrowing is more affordable at lower interest rates for producers like Mr Agbee or consumers like Mrs Bureedi. Their demand for demand for money increases.
Unfortunately, responsible banks will want to supply less money at the lower interest rates. Fiat currency money cannot rot and with weak capital controls in place, banks have no reality check that forces them to supply their money commodity even at low interest rates. So they try not to. Governments occasionally force banks to release money by conducting "mopping up" operations at the central banks.
quantity
of money ^
|.......\..../ supply of money (Sm)
|........\../
|.........\/ * Equilibrium interest rate at intersection *
|........./|......../..|......./....\ demand of money Dm)
|_______________>
prices of money (interest rates)
= The role of a responsible government =
A responsible government can do a number of things to stimulate DOMESTIC ENTERPRISES and to boost DOMESTIC PRODUCTIVITY.
# Domestic businesses are stimulated, jobs are created, and longer term productivity is attained if government increases demand for domestically produced goods and services e.g by using domestic producers in construction of roads, housing, stadia, furniture, etc. Purchasing locally made goods and services by governments will cause the demand of produce (Dp line) to shift rightwards (along the Sp line) and cause market prices to rise.
Eventually, increased domestic production (shift up the Sp line) and a higher equilibrum market price is achieved. Responsible government intervention MAY result in higher costs of living.
# Likewise, domestic productivity is stimulated if a responsible government uses its fiat to make borrowing AFFORDABLE for domestic businesses. Two actions are possible:
## A naive government may demand more money from banks (e.g increased reserve levels), consumers (e.g increased minimum fuel prices), or businesses (e.g. as taxes or licenses). Interest rates will fall. But such an action will eventually bankrupt the community. This is because consumers, businesses and banks (!) must supply such money from earnings on sale of commodities, and neither have infinite source of those commodities.
## On the other hand, a responsible government may inject more money into the community e.g by lowering reserve levels for banks, lowering fuel prices, or lowering business taxes and other statutory costs. Interest rates will rise EVEN IF the increased government spending (shift up along the Sm line) IS NOT MATCHED by a increased DOMESTIC DEMAND (rightwards shift of the Dm line) to yield a higher equilibrum interest rate.
The ensuring LEVEL OF INFLATION (rate of increase in interest rates) depends (in simplified terms, adjusting for complexities of elasticity in demand and supply) on the origin of rhe additional money supply and the purpose to which it is utilised.
Inflation is MORE manageable IF the increased money supply originates from domestic consumers and enables domestic producers to produce more goods and services. Inflation is extremely damaging IF the increased money supply originates from consumption of foreign produce (which is what foreign direct investment is) or does not increase domestic productivity in goods and services.
What then is the NET effect on domestic productivity and enterprise-capacity in a community when a government that does the following:
# Increases the supply of domestic money through a combination of devaluation e.g selling domestic currency to purchase of foreign currency (= rightward shift along Sm line and increase in local interest rates)
# Places high demands for money on domestic consumers, businesses and banks (= shifting the Dm line rigtwards and increase in interest rates).
# Increases demand for foreign produce that are cheaper than equivalent local goods. This reduces demand for and supply of domestic produced goods. Lack of sufficient foreign produced goods or domestic prodced goods results in persistent high market prices.
This situation is exacerbated by actions that impede market activity: persistent consumption of foreign produce by governments or the people; produce hoarding by businesses; and money hoarding by banks.
The observed effect is a definate strangulation of domestic production (especially manufacturing) capacity, rampant unemployment, intense economic emigration, and a market concentration of domestic businesses into "non-tradable services" such as hotels, restaurants, schools, transportation, haircuts, unfulfilled contracs etc.
= Surviving an irresponsible government =
All governments have three core responsibilities to the general population they govern:
# Create an enabling environment for domestic enterprises to grow and prosper;
# Provide community services that to assist the needy;
# Vigorously defend the property, territory and well being of the general population they govern.
Only a bad government fails in ANY of these three responsibilities. Bad governments do not deserve to govern and should not be in office. By these measures, most modern governments do not deserve the people they govern. Yet, a general population deserves its government, whether strong or weak; good or bad. This is because no government exists in a vacumn. All are drawn from the general population. By implication, a weak government reflects the weakness of its people. A corrupt government arises from a corrupt mandate.
A responsible government facilitates the enfranchisement of its people by performing its core responsibilities diligently. To enfranchise is to take control of the rule of law and of the markets in which one operates. The rule of law underlines the political system, which includes and defines the economic system of markets and payments. A bad government fails in these responsibilities. An akotileta government is not only bad, it goes further to actively impoverise, impede or attack the people it effects to govern. A government that disenfranchises its people can continue in governance only if the people have no self-conviction. The "values" of the population under bad government need to be restructured. Only when revalued, can the population restructures the government.
The only way to survive a akotileta government is to recreate the failed responsibilities at the community level. This has the added benefit of decentralising and localising both the rule of law and economic markets.
Observation indicates that people derive maximum socio-economic benefit from community-based policies and markets.
Working examples range from large countries such as China and Germany (prior to the unifications), to the Scandivanian nation-states, to self-referencing tribal-states confined withing in larger country borders. The keys to these communities are strong domestic production efficiency and an effectively local currency.
# Small, homogenous, and productive communities may have increased access to an export-oriented strategy but they often lack the population mass to sustain an effective local currency.
# Larger countries can sustain a strong internal market for both local currencies and import-subsititution goods, provided they are not handicapped by foreign debt repayment obligations.
# Those with large foreign currency repayment obligations need to implement strategies that protect the internal market, convert foreign debt obligations into the local currency, and induce the opening of foreign markets for domestically produced goods and services. Interestingly, these "beggar-thy-neighbour" policies are most often associated with contries that manifest a robust military strength.
When enduring an irresponsible government, communities need also to protect themselves against attempts by such government to impoverise its own communities!
An "akotileta" government has the particulary nasty property of focusing so much on meeting demands of foreign producers that it ends up suffocating domestic producers.
=Self-help enterprises are essential=
Communities need to be resourceful in order to control bad fiscal or monetary policy imposed by akotileta governments that are bent on destroying local productivity. These policies have historically included bans on organised labour, decentralised provision of infrastructure services, operation of local currencies or exhorbitant minimum prices in essential commodities.
Businesses in such communities should consider associative or cooperative operating or organisational strategies. Rather than rules of law formulated by such governments, trading may organised by informal code of conduct which is enforced at community level. Rather than bank-based money transfers, market transactions are conducted via barter exchange or by interest-free local currencies.
The essential glue of community-level businesses is communal trust. Crime and corruption are less likely when the family of potential culpits face the option of becoming ostracized from the community and subsequent difficulty in joining another. Even thefts are not so damaging in local currency economies as the stolen money must be spent within the same community.
Best of all, community-level enterprises result in bottom-up prosperity and in enhancement of living standards at the local level. As the communities grow and prosper, businesses can expand to link across regions and nations. Such networks of businesseses retain loyalty to their roots and are more likely to engage in complementing (or conducting) the normal responsibilities of responsible governments.
Nigeria: governance, politics and oil revenues.
first published 12-November-2004
________________________________This an excerpt from a letter to my cousin.
Just focus your "findings" on estimates of revenues and expenditure since 1961 or whenever oil was discovered in Niger Delta. Let us assume some USD250BILLION been earned over the past 40 years. Then compare Nigeria's progress over that period with that of:
a) South Korea, which was roughly at the same "development" stage 40 years ago. Adjust for the fact that SK does not have significant crude oil resources, has had military governance, is in a hyper-competitive region, is the leading information technology power.
b) Brazil, which was roughly at the same "development" stage 40 years ago. Adjust for the fact that Brazil, while majority of African descent, has a small but socio-economically dominant "European" population.
c) China or India, which have undergone similar experiences with colonisation and imperialistic trade, yet have largely retained their cultural heritage even as they grafted on hyper-competitive economics.
d) Malaysia or Indonesia, which have significant crude oil or palm oil resources, multi-ethnic strife, rampant corruption, military dictatorships, and yet have largely retained a healhty socio-economic competitiveness.
e) Somalia. Somalia? Yes, Somalia. A north-central African country next door to Kenya and Ethopia. Has had NO CENTRAL GOVERNMENT FOR AT LEAST 13 YEARS while torn apart by multi-ethnic strife. Suffered greatly from international sanctions after its people defeated US special forces sent in to help impose governments similar to those the rest of Africa had EVER had. Somalia is now Africa's most EVENLY developed country.Why? The warlords had to live as far from each other as possible, yet communicate with their troops in the various war-fronts. Effectively, powerful warlords set up feudal governance in their bases of power. Fighters had to be paid so local enterprise was left encouraged and "taxed" to fund the war efforts. Warlords who did not pay their way were usurped. Meanwhile SOMALIAN technicians built transport and telecommunications infrastructure to enable travel and communications across the country and across the borders into Kenya, Ethiopia, etc where the warlords kept their "investments". Today, Somalia has one government. They are entirely self-reliant in technology adaptation. They are wary of the interests serviced by "international aid" or "foreign direct investment", and most importantly, they have self-conviction in their ability to chart their own progress, irrespective of what the "international community" thinks.
Influence on Governance:
Nigeria became heavily centralised under two influences:
a) The discovery of oil caused dissolution of the varying development agendas being pursued in the then-3 regions: Western, Eastern and Northern. Arguments about how to share the "national cake" still divide the country. The divisions have been physical (there are now 30+1 states, and ethnically.
b) The resurgent military with their innumerable coups. The military destroyed the decentralised, and competitive, governments of the 3 regions and imposed a rigidly centralised "command and control" structure. The country is still under this structure. The 30+1 state structure has only put layers of bureaucracy and plenty of opportunities for corruption into the system. The state governments have very limited statutory powers, and are heavily dependent on the centre for funding, resource control or protection.
Influence on Politics:
Oil production is predominantly in the southern Niger Delta region. Some oil-yielding tar sands have been discovered in the northern Lake Chad region, but there are few reports on commercial production in this area. Nigeria used to be a British colony. There is evidence that Britain had advance seismic studies indicating large oil deposits in Southern Nigeria from 1950 onwards. The Westerners led by Obafemi Awolowo and the Eastern region, whose most vocal proponent was Nnamdi Azikwe, were strongly progressive and indicated the need for political and economic independence. Initially, the agitation was for separate nation-states but diplomatic discourse ensured complicity with one Nigerian country. The British made sure that political administration of the newly independent Nigeria was vested in the Northern region.
The first coup was by military officers from the former Eastern region. They were protesting marginalisation of that region from national (read: oil) revenues by the Northern-dominated civilian regime of Ahmadu Bello.
Riots erupted in the former Northern region in protest at killing of Bello and senior Northern military officers. The rioters targeted settlers from the Eastern Region. These events led parts of the Eastern Region to declare the independent nation-state called Biafra. Civil war. The Yoruba people of Western Nigeria were drawn into this war when they were attacked by Biafran forces.
Post civil war, the Northern region has used dominance in national politics to ensure that region has disproportionate access to oil revenues. Their efforts led to the national capital being moved from Lagos in the former Western Region to Abuja, within easy access of the Northern power base. Significant oil revenues have been spent on building Abuja from near-virgin forest to a "federal capital city".
Under the guise of "national quotas" (a form of proportional representation), the over-centralisation of government has also ensured that Northerners gain control of the national budget (70pc of which is funded by oil revenues), government spending (mainly by award of contracts), the civil service (the largest employer in Nigeria), and the military forces.
Political strategies in Nigeria now focus almost entirely on "sharing the national cake" among the powerful scions of Hausa/Fulani (Northern), Igbo/Ibo (Biafra) and Yoruba (Western) regions. Elected politicians do not govern to empower their electorate. There is no need to. Rather, elected politicians govern to appease the powerful members or sponsors of their political parties. This is to ensure that access to government contracts continues on leaving office.
See, USA-style democracy works in Nigeria ;-)!
Hint: Me just keeps current on socio-economic issues and investment opportunities.
Hint 2: By all means, enjoy your holidays. But Do Not Visit Nigeria With Any Intention Of Gathering "Statistics" Or Of Working With Government.
Hint 3: IMF, EU, WB, etc, etc do not have accurate figures. They get most of their information from official figures released by Nigerian government. The many reports are usually guesstimates. But the Nigerian government cannot even ascertain how many Nigerians there are. Why? Consider that the current president will not confirm how many children he has, to Britain's BBC (he does not talk to "lowly" Nigerian journalists) because it is "bad omen to count one's children". This attitude is prevalent in Nigeria and prevents accurate census or other statistical information being gathered. Nonetheless, successive official "census" figures reveal demographics that are globally unique to Nigeria: that the semi-arid North is more densely populated than the tropical South. The political mathematics? Higher population = more National Quota = more allocation of oil revenues. To give such official figures some credibility, government usually quotes the IMF, WB . .
Kagbon Sefa, Teknologi, Ewerin ati Iwosan
Institute of Science, Technology, Engineering and Medicine
To all who read this message,
I, Remi-Niyi Alaran, am sufficiently concerned about the future competitiveness of our people across Africa, to propose the following:
To set up a privately funded institute for research and development of products that directly address the educational and economic needs of the masses of our people. The focus is to be on science, technology, engineering and medicine (STEM).
The focus on STEM is intentional. This institute will aim to become an internationally competitive centre of excellence in the four research areas. To survive economically, the institute will aggressively aim to develop commercial enterprises based on its work.
Your contributions can help make this a world-standard research institute. This will assist in giving our youth a target at which to aim their ambitions for academic and enterprise progress. Hopefully, its excellence will help pull talented youth through the tattered education systems we currently witness across the continent.
A small plot of land in Western Nigeria has been donated to the institute: solutions must arise from the context of the problems we face, not from abroad. Also, a website is in progress. The Internet offers us a worldwide online forum for collaboration on the issues faced. It will be a medium for news and course content to be widely broadcast and received at relatively low cost.
This will be my life's work. As the poet Fela Anikulapo-Kuti once said: "Condition don reach make I act". Please email to iyaalata@netscape.net to establish contact if you have the expertise or experience in:
# STEM research or enterprise
# Fabrication or manufacturing of machinery
# Chemical engineering and process industries
# Linux/network computer systems administration
We can and must make this work.
Africans need to be internationally competitive in STEM research and in the enterprises based on STEM research. Our future as a people depends on our ability and willingness to shape that future through investment in ourselves and our community.
Contribute what you can, and be proud of your heritage.
Remi-Niyi Alaran
To all who read this message,
I, Remi-Niyi Alaran, am sufficiently concerned about the future competitiveness of our people across Africa, to propose the following:
To set up a privately funded institute for research and development of products that directly address the educational and economic needs of the masses of our people. The focus is to be on science, technology, engineering and medicine (STEM).
The focus on STEM is intentional. This institute will aim to become an internationally competitive centre of excellence in the four research areas. To survive economically, the institute will aggressively aim to develop commercial enterprises based on its work.
Your contributions can help make this a world-standard research institute. This will assist in giving our youth a target at which to aim their ambitions for academic and enterprise progress. Hopefully, its excellence will help pull talented youth through the tattered education systems we currently witness across the continent.
A small plot of land in Western Nigeria has been donated to the institute: solutions must arise from the context of the problems we face, not from abroad. Also, a website is in progress. The Internet offers us a worldwide online forum for collaboration on the issues faced. It will be a medium for news and course content to be widely broadcast and received at relatively low cost.
This will be my life's work. As the poet Fela Anikulapo-Kuti once said: "Condition don reach make I act". Please email to iyaalata@netscape.net to establish contact if you have the expertise or experience in:
# STEM research or enterprise
# Fabrication or manufacturing of machinery
# Chemical engineering and process industries
# Linux/network computer systems administration
We can and must make this work.
Africans need to be internationally competitive in STEM research and in the enterprises based on STEM research. Our future as a people depends on our ability and willingness to shape that future through investment in ourselves and our community.
Contribute what you can, and be proud of your heritage.
Remi-Niyi Alaran
Bi Eshe Le Hu Kanga
How to build a water well.
The next time any African introduces themselves to you as Engineer this or Engineer that, tell the wastrel to go dig a borehole for a village or fetch water with a bucket. Are you tired of fetching water with a bucket? The Enterprising Communities series shows you how to harvest rainwater...
Africa's home grown engineers are just not worth their professional title. That is what the Nigerian government thnks when it gives estimated 94pc of all engineering works to foreign consulting firms. From bridges to stadiums, from multi-storey buildings to GSM masts, from roads to wells, no local engineering firm is deemed sufficiently capable by national or state governments. These so-called engineers should redeem themselves.
There is talk of Chinese engineers building 598 water wells in eighteen Nigerian (18, meejoola) states - including Ogun, Oyo, Akwa Ibom and Abuja. Chinese Engineers digging boreholes in Nigeria?! Whatever happened to the yearly thousands of civil, mechanical, electrical, chemical B.Eng and M.Eng produced by higher institutions in these states? WATER WELLS, haba. People in the village have been building kaanga (water well) and shalanga (pit latrine) for aeons, without importing Chinese, Irish or Gabonese to provide "technical assistance".
This is a very serious matter. There is an oncoming GLOBAL shortage of clean water. In fact, scientists are predicting that future wars over water supplies will be more intense than current conflicts over crude oil supplies! Those who live in places where drinking water appears, from a centralised waterworks, wherever you open a tap will notice that their water bills are annually increasing at above-inflation rates. So everybody can benefit from knowing how to harvest water locally, cheaply, cleanly and efficiently.
Whether you live in the city or in the village, in the rain-soaked swamp or in the drought-stricken areas can still benefit from rainwater harvesting and from runoff water harvesting.
RAINWATER HARVESTING
Requirements: corrugated roofing sheets, a filter made from a 50-litre plastic keg (optional), collector pipe (plastic), distribution pipe (plastic), and water butt The water butt can be above ground tank with a tap attached to it. Alternatively it may be below ground tank with a small handpump attached to it. Above-ground butts are easier to clean while below ground butts are better supported. Below ground butt may also be dug out tank with walls, bottom and top covered with cement/concrete.
1. Build your house with a sloping (A-style) roof design.
2, Cover the roof with strips of corrugated sheets. Make sure the bottom edge of sheets near the top cover the upper edge of the next lower sheet. Let the bottommost sheet overlap the edge of the roof.
3. Collector pipe: Cut off a section from some of your pipe so that the 0-shape becomes U-shape. Put the collector pipe along the length of your roof with the roof overhang inside the bowl of the U-shape.
4. Filter/Connector keg: Turn the keg upside down. Cut a hole in the side farthest from the sprout for insertion of the collector pipe. You may fold some clothing several times and tie to the collector pipe at its insertion point. This acts as a filter to prevent debris from the roof from entry your rainwater harvesting system. (lace curtains are excellent for this purpose). Attach the keg firmly to the side of your house. Place the bottom (capped) end of the keg over the entrance of the direction pipe. Remove the cap from the keg.
5. Direction pipe: Place one end over the end of the connector keg and place the other end OVER (not into) the top of he water butt.
6. When rain falls, let the initial rainfall flow away before inserting the directon pipe into the top of the water butt. In the heavy rainfall conditions experienced across most of sub-saharan region of Africa, you may find that a family of six can more-than-satisfy their domestic water needs from rainfall collected in this manner.
7. Rainwater is relatively pure compared to groundwater. If you regularly keep your roof and the collector pipe clear of debris, you may safely use this rainwater for washing clothes, flushing, body cleaning and other non-injested usages. It is recommended that the water be heated, and allowed to for some minutes, before drinking or cooking. Boiling kills pathogens that may be too small for you to see and yet they live in the water.
8. If an underground water butt is used, take care to ensure there are no pit latrines or sewage tanks in its vicinity. If in doubt, put the water butt on the opposite end of the house from any sewage facilities.
COMMENT: Anyone who has lived with a leaking roof will bear witness to the volumes of rainwater that can efficiently be collected with this system!
RUNOFF WATER HARVESTING
Farmers need lots of water for irrigation and animal husbandry. People in drought-stricken areas may need to walk several miles to find a water hole. Many Nigerians/Africans do not have tap-borne water in their homes. In all these cases, women and children are often tasked to walk miles in search of drinking water. They regularly carry loads of 3kg (mudu meeta) on their heads two to three times a day. Yet they live in places where rain falls heavily and runs off into gullies thereby causing severe erosion and loss of topsoil. This runoff rainwater can be harvested easily in rural areas or combined with the rainwater harvesting method discussed above.
Requirements: Cement/concrete; an open space about 2000 sq metres; water pump; wire gauze
1. Clear an area of 500sg metres in a corner of your space. Inside the clearing, dig a CIRCULAR-shape underground tank of radius 5 meters. Make it as deep as you like.
2. Cover the sides and bottom with cement blocks or concrete. The bottom should be covered. This is not a well that taps underground water. You don't want the water that you collect to drain away!
3.Make an indentation near the lip of the underground tank. This indentation may be 1.5 metres wide and about 0.5 metres below-ground-level at the inlet of the tank. So, the indentation is deepest at the inlet of the tank and becomes shallower until it reaches ground level. It will look like the pouring end of a jug. Now make 5 cement/concrete mini-slopes between the tank inlet and the "pouring" end. Each slope has a vertical face that is about 0.1 metres high. This face points away trom the tank. Cover the sides of the tanks and the indentation with cement/concrete so that it extends about 0.2metres above ground level. Now the indentation looks like the pouring end of a jug with teeth! Cover the indentation with wire gauze to prevent animals or debris from entering the tank.
4. Gradually slope the rest of the 1500sq metres towards the indentation of the tank. This is the collector funnel. Plant grass in this area, if you want to.
5. Security: Erect a small wooden fence around the tank and inlet area. Cover this fence with a thatch, wood, or corrugated iron roof. The fence and roof help prevent birds or roaming animals (including people) from falling into your tank. For additional security, erect another fence (no roof!) around the 2000sq metre area.
6. When rain falls, the collector funnel will direct it towards your underground tank. The grass, if any, will slow down the velocity of water so that it flows gently into the indentation. The grass will also filter small twigs, stones etc. The "teeth" of the indentation futher prevent small stones and other debris from entering the tank. Clean the teeth weekly during the rainy season.
7. Pump the water out. In places with clear skies and heavy rainfalls, sufficient water will collect here for farming purposes and for domestic use. Do not "fetch" water by dipping buckets, pails, etc into the water. This is to prevent contaminating the water. Invest in a handpump or buy a mechanical powered pump. You should charge a small fee for use of this waterworks in order to afford the cost of construction, operation and replacement pumps, etc. It's a business.
COMMENTS:
Static water is a breeding ground for mosquitoes. But do not poison the water by pouring kerosene or insecticide or any other chemicals in the tank to "kill the mosquitoes!". Instead consider putting a wooden or concrete slab directly over the rim of the tank to cut off air supply. The slab should have one to three grooves of 10cm diameter cut into it to allow overflow of the tank. Cover groove(s) with wire gauze. Get that person that calls themselves engineer to help you.
Some places suffer from chemically toxic rainfall e.g places with heavy flaring of gas or burning of waste. The method described in this document for harvesting rainwater will not be appropriate in such places.
Always boil water before drinking or cooking. Se omi kee to mu abi jeun.
Remi-Niyi Alaran writes on enterprise and social capital.
ALARAN DEVELOPMENT ENTERPRISES. Enterprising Communities.
Copyright (c) ALARAN DEVELOPMENT ENTERPRISES, 2003
You may copy, transmit, or otherwise use this document provided the copyright notice is attached.
It is the 1st (ikini) of the Enterprising Communities series to be published by ALARAN DEVELOPMENT ENTERRISES. This series aims to assist African enterpreneurs in building business enterprises based on innovations in science, technology, engineering and medicine.
HOW TO (NOT NEED TO) DIG A WATER WELL (KAANGA)
Introduction:
The next time any African introduces themselves to you as Engineer this or Engineer that, tell the wastrel to go dig a borehole for a village or fetch water with a bucket. Are you tired of fetching water with a bucket? The Enterprising Communities series shows you how to harvest rainwater...
Africa's home grown engineers are just not worth their professional title. That is what the Nigerian government thnks when it gives estimated 94pc of all engineering works to foreign consulting firms. From bridges to stadiums, from multi-storey buildings to GSM masts, from roads to wells, no local engineering firm is deemed sufficiently capable by national or state governments. These so-called engineers should redeem themselves.
There is talk of Chinese engineers building 598 water wells in eighteen Nigerian (18, meejoola) states - including Ogun, Oyo, Akwa Ibom and Abuja. Chinese Engineers digging boreholes in Nigeria?! Whatever happened to the yearly thousands of civil, mechanical, electrical, chemical B.Eng and M.Eng produced by higher institutions in these states? WATER WELLS, haba. People in the village have been building kaanga (water well) and shalanga (pit latrine) for aeons, without importing Chinese, Irish or Gabonese to provide "technical assistance".
This is a very serious matter. There is an oncoming GLOBAL shortage of clean water. In fact, scientists are predicting that future wars over water supplies will be more intense than current conflicts over crude oil supplies! Those who live in places where drinking water appears, from a centralised waterworks, wherever you open a tap will notice that their water bills are annually increasing at above-inflation rates. So everybody can benefit from knowing how to harvest water locally, cheaply, cleanly and efficiently.
Whether you live in the city or in the village, in the rain-soaked swamp or in the drought-stricken areas can still benefit from rainwater harvesting and from runoff water harvesting.
RAINWATER HARVESTING
Requirements: corrugated roofing sheets, a filter made from a 50-litre plastic keg (optional), collector pipe (plastic), distribution pipe (plastic), and water butt The water butt can be above ground tank with a tap attached to it. Alternatively it may be below ground tank with a small handpump attached to it. Above-ground butts are easier to clean while below ground butts are better supported. Below ground butt may also be dug out tank with walls, bottom and top covered with cement/concrete.
1. Build your house with a sloping (A-style) roof design.
2, Cover the roof with strips of corrugated sheets. Make sure the bottom edge of sheets near the top cover the upper edge of the next lower sheet. Let the bottommost sheet overlap the edge of the roof.
3. Collector pipe: Cut off a section from some of your pipe so that the 0-shape becomes U-shape. Put the collector pipe along the length of your roof with the roof overhang inside the bowl of the U-shape.
4. Filter/Connector keg: Turn the keg upside down. Cut a hole in the side farthest from the sprout for insertion of the collector pipe. You may fold some clothing several times and tie to the collector pipe at its insertion point. This acts as a filter to prevent debris from the roof from entry your rainwater harvesting system. (lace curtains are excellent for this purpose). Attach the keg firmly to the side of your house. Place the bottom (capped) end of the keg over the entrance of the direction pipe. Remove the cap from the keg.
5. Direction pipe: Place one end over the end of the connector keg and place the other end OVER (not into) the top of he water butt.
6. When rain falls, let the initial rainfall flow away before inserting the directon pipe into the top of the water butt. In the heavy rainfall conditions experienced across most of sub-saharan region of Africa, you may find that a family of six can more-than-satisfy their domestic water needs from rainfall collected in this manner.
7. Rainwater is relatively pure compared to groundwater. If you regularly keep your roof and the collector pipe clear of debris, you may safely use this rainwater for washing clothes, flushing, body cleaning and other non-injested usages. It is recommended that the water be heated, and allowed to for some minutes, before drinking or cooking. Boiling kills pathogens that may be too small for you to see and yet they live in the water.
8. If an underground water butt is used, take care to ensure there are no pit latrines or sewage tanks in its vicinity. If in doubt, put the water butt on the opposite end of the house from any sewage facilities.
COMMENT: Anyone who has lived with a leaking roof will bear witness to the volumes of rainwater that can efficiently be collected with this system!
RUNOFF WATER HARVESTING
Farmers need lots of water for irrigation and animal husbandry. People in drought-stricken areas may need to walk several miles to find a water hole. Many Nigerians/Africans do not have tap-borne water in their homes. In all these cases, women and children are often tasked to walk miles in search of drinking water. They regularly carry loads of 3kg (mudu meeta) on their heads two to three times a day. Yet they live in places where rain falls heavily and runs off into gullies thereby causing severe erosion and loss of topsoil. This runoff rainwater can be harvested easily in rural areas or combined with the rainwater harvesting method discussed above.
Requirements: Cement/concrete; an open space about 2000 sq metres; water pump; wire gauze
1. Clear an area of 500sg metres in a corner of your space. Inside the clearing, dig a CIRCULAR-shape underground tank of radius 5 meters. Make it as deep as you like.
2. Cover the sides and bottom with cement blocks or concrete. The bottom should be covered. This is not a well that taps underground water. You don't want the water that you collect to drain away!
3.Make an indentation near the lip of the underground tank. This indentation may be 1.5 metres wide and about 0.5 metres below-ground-level at the inlet of the tank. So, the indentation is deepest at the inlet of the tank and becomes shallower until it reaches ground level. It will look like the pouring end of a jug. Now make 5 cement/concrete mini-slopes between the tank inlet and the "pouring" end. Each slope has a vertical face that is about 0.1 metres high. This face points away trom the tank. Cover the sides of the tanks and the indentation with cement/concrete so that it extends about 0.2metres above ground level. Now the indentation looks like the pouring end of a jug with teeth! Cover the indentation with wire gauze to prevent animals or debris from entering the tank.
4. Gradually slope the rest of the 1500sq metres towards the indentation of the tank. This is the collector funnel. Plant grass in this area, if you want to.
5. Security: Erect a small wooden fence around the tank and inlet area. Cover this fence with a thatch, wood, or corrugated iron roof. The fence and roof help prevent birds or roaming animals (including people) from falling into your tank. For additional security, erect another fence (no roof!) around the 2000sq metre area.
6. When rain falls, the collector funnel will direct it towards your underground tank. The grass, if any, will slow down the velocity of water so that it flows gently into the indentation. The grass will also filter small twigs, stones etc. The "teeth" of the indentation futher prevent small stones and other debris from entering the tank. Clean the teeth weekly during the rainy season.
7. Pump the water out. In places with clear skies and heavy rainfalls, sufficient water will collect here for farming purposes and for domestic use. Do not "fetch" water by dipping buckets, pails, etc into the water. This is to prevent contaminating the water. Invest in a handpump or buy a mechanical powered pump. You should charge a small fee for use of this waterworks in order to afford the cost of construction, operation and replacement pumps, etc. It's a business.
COMMENTS:
Static water is a breeding ground for mosquitoes. But do not poison the water by pouring kerosene or insecticide or any other chemicals in the tank to "kill the mosquitoes!". Instead consider putting a wooden or concrete slab directly over the rim of the tank to cut off air supply. The slab should have one to three grooves of 10cm diameter cut into it to allow overflow of the tank. Cover groove(s) with wire gauze. Get that person that calls themselves engineer to help you.
Some places suffer from chemically toxic rainfall e.g places with heavy flaring of gas or burning of waste. The method described in this document for harvesting rainwater will not be appropriate in such places.
Always boil water before drinking or cooking. Se omi kee to mu abi jeun.
Remi-Niyi Alaran writes on enterprise and social capital.
ALARAN DEVELOPMENT ENTERPRISES. Enterprising Communities.
Copyright (c) ALARAN DEVELOPMENT ENTERPRISES, 2003
You may copy, transmit, or otherwise use this document provided the copyright notice is attached.
Ise Agbe Ile Osan Ju Owo To Ra Onji Ode
Sustainable farming by local farmers, please
Large-scale, commercial farming is a capital and labour intensive business. In the oyinbo countries in US/EU, farming is also heavily subsidised: it is estimated that the EU spends approx eight times more to subsidise each cow than it spends on aid in Africa, about Euro 300. Under the Common Agric Policy, EU farmers are paid to NOT grow food because they otherwise grow too much and further depress world prices. Even with these subsidies, a lot of their excess production is dumped in Africa or "sold" as aid to countries. The effect of this dumping is to remove market incentive of local farmers to cultivate land. One of the dump sites is Nigeria, which imports just about every foodstuff you can imagine apart from cassava and yam.
Much of the farming in US/EU is controlled by the big food processors such as Cargill and Del Monte, the Bigpharmas such as Glaxo and Roche, chemical companies such as Dow Chemical and ICI, and the seed producers such as Syngenta. The biggest 10 seed companies control some 30pc of world grain supply. They have invested in producing seeds that are pest-resistant, and require lots and lots and lots of chemical fertilizer and mechanically controlled irrigation systems, as well as expensive mechanical equipment for planting, harvesting, storage, and distribution investment. These seeds are known in the trade as "terminator seeds" because their root structures and their heavy addiction to chemical fertilizers prevent any other plants, so called weeds, from growing near them.
Terminator seeds also germinate only once. This means that farmers need to go back to the seed producers every year to get new stock. The farmers have contracts to buy seeds from seedCos; contracts to buy fertilizer from chemCos; and contracts to sell their produce to the processors who supply the likes of WalMart, KFC and McD. Needless to say, subscale farmers who do not quality for subsidies get a raw deal most of the time while large landowners are some of the richest peope in US/EU. Some smaller farmers band together to form co-operatives in order to afford seeds or processing machinery and exercise better bargaining power with customers.
What does this all have to do with Zimbabwe/SA farmers coming to Nigeria? When in southern Africa, many of these farmers were in cooperatives that have contracts to supply flowers or grapes or fresh fruit to the UK/EU market. Due to their contracts, they try not to produe any more than their processors can accommodate - hence the large tracts of "set-aside" land that created such rumpus in Zimbabwe. They did not farm the land or allow it to be farmed by the nationals. Their farming investments are not oriented to feeding their host communities. They produce few valuable jobs and retain very little capital in the local economy. The cooperatives refused to allow black farmers as members before or after apartheid in much of southern Africa.
The Akotileta in Nigeria have passed a lot of laws to attract FDI. Many of these laws impact very hard on progressive businesses and production capacity in the country. The little FDI that comes to Nigeria is now directed via the descendants of the Cecil Rhodes generation controlling MTN, Protea, AfricaOne, etc and their counterparts controlling the oil sector.
The s/elected wasters in power do not appreciate that Nigerians will have an incentive to produce their own food and drink if cheaper products are not dumped into the country. Even the farms and businesses belonging to these "leaders" are managed by asians or south Africans.
The cooperative business model is one that holds a lot of potential for progressive entrepreneurs throughout Africa. There is not-a-lot to learn from foreign farmers in the commercialised farm business because black farmers are unlikely to get supply contracts from EU buyers. Africans need to focus on food sufficiency and security within the continent. There is no need to destroy African farmland with the intensive methods described above. If you want to assist African farmers in resisting the antics of the Akotileta and their paymasters, organise cooperatives for your local farmer community. Invest in processing equipment to raise the value-added component. This will bring your community higher prices. Target the African market, and. . .
Do not allow bad seeds to set root in your ancestral land.
Remi-Niyi Alaran writes on enterprise and social capital.
ALARAN DEVELOPMENT ENTERPRISES. Enterprising Communities.
Copyright (c) ALARAN DEVELOPMENT ENTERPRISES, 2003
You may copy, transmit, or otherwise use this document provided the copyright notice is attached.
Aja ti ko ba gbo fere odee, o nfi ku shere: the (hunting) dog that does not hear the hunter's whistle plays with its death.
Interesting that migrants are being invited from all over the world to help fulfil the agriculture component of this government's wretched NEEDS programme. Thought one should cast some detail on why Zimbabwe's outcasts should not be invited by the Akotileta to farm land anywhere in Africa and especially Nigeria.
Firstly, it is important to note the significance of the assertion that, on "independence" the colonials merely handed their estates for safekeeping to its house-servants. In Asia the field-hands are resuming control of their economies. Elsewhere, the colonials are reestablising proxy control of the assets they left behind.
Secondly, there is no reasoning with the Akotileta in government throughout Africa. Progressive people really need to rise above their s/elected governments who insist in looking to foreign "investors" at the expense of home sufficiency.
On to farming...
Firstly, it is important to note the significance of the assertion that, on "independence" the colonials merely handed their estates for safekeeping to its house-servants. In Asia the field-hands are resuming control of their economies. Elsewhere, the colonials are reestablising proxy control of the assets they left behind.
Secondly, there is no reasoning with the Akotileta in government throughout Africa. Progressive people really need to rise above their s/elected governments who insist in looking to foreign "investors" at the expense of home sufficiency.
On to farming...
Large-scale, commercial farming is a capital and labour intensive business. In the oyinbo countries in US/EU, farming is also heavily subsidised: it is estimated that the EU spends approx eight times more to subsidise each cow than it spends on aid in Africa, about Euro 300. Under the Common Agric Policy, EU farmers are paid to NOT grow food because they otherwise grow too much and further depress world prices. Even with these subsidies, a lot of their excess production is dumped in Africa or "sold" as aid to countries. The effect of this dumping is to remove market incentive of local farmers to cultivate land. One of the dump sites is Nigeria, which imports just about every foodstuff you can imagine apart from cassava and yam.
Much of the farming in US/EU is controlled by the big food processors such as Cargill and Del Monte, the Bigpharmas such as Glaxo and Roche, chemical companies such as Dow Chemical and ICI, and the seed producers such as Syngenta. The biggest 10 seed companies control some 30pc of world grain supply. They have invested in producing seeds that are pest-resistant, and require lots and lots and lots of chemical fertilizer and mechanically controlled irrigation systems, as well as expensive mechanical equipment for planting, harvesting, storage, and distribution investment. These seeds are known in the trade as "terminator seeds" because their root structures and their heavy addiction to chemical fertilizers prevent any other plants, so called weeds, from growing near them.
Terminator seeds also germinate only once. This means that farmers need to go back to the seed producers every year to get new stock. The farmers have contracts to buy seeds from seedCos; contracts to buy fertilizer from chemCos; and contracts to sell their produce to the processors who supply the likes of WalMart, KFC and McD. Needless to say, subscale farmers who do not quality for subsidies get a raw deal most of the time while large landowners are some of the richest peope in US/EU. Some smaller farmers band together to form co-operatives in order to afford seeds or processing machinery and exercise better bargaining power with customers.
What does this all have to do with Zimbabwe/SA farmers coming to Nigeria? When in southern Africa, many of these farmers were in cooperatives that have contracts to supply flowers or grapes or fresh fruit to the UK/EU market. Due to their contracts, they try not to produe any more than their processors can accommodate - hence the large tracts of "set-aside" land that created such rumpus in Zimbabwe. They did not farm the land or allow it to be farmed by the nationals. Their farming investments are not oriented to feeding their host communities. They produce few valuable jobs and retain very little capital in the local economy. The cooperatives refused to allow black farmers as members before or after apartheid in much of southern Africa.
The Akotileta in Nigeria have passed a lot of laws to attract FDI. Many of these laws impact very hard on progressive businesses and production capacity in the country. The little FDI that comes to Nigeria is now directed via the descendants of the Cecil Rhodes generation controlling MTN, Protea, AfricaOne, etc and their counterparts controlling the oil sector.
The s/elected wasters in power do not appreciate that Nigerians will have an incentive to produce their own food and drink if cheaper products are not dumped into the country. Even the farms and businesses belonging to these "leaders" are managed by asians or south Africans.
The cooperative business model is one that holds a lot of potential for progressive entrepreneurs throughout Africa. There is not-a-lot to learn from foreign farmers in the commercialised farm business because black farmers are unlikely to get supply contracts from EU buyers. Africans need to focus on food sufficiency and security within the continent. There is no need to destroy African farmland with the intensive methods described above. If you want to assist African farmers in resisting the antics of the Akotileta and their paymasters, organise cooperatives for your local farmer community. Invest in processing equipment to raise the value-added component. This will bring your community higher prices. Target the African market, and. . .
Do not allow bad seeds to set root in your ancestral land.
Remi-Niyi Alaran writes on enterprise and social capital.
ALARAN DEVELOPMENT ENTERPRISES. Enterprising Communities.
Copyright (c) ALARAN DEVELOPMENT ENTERPRISES, 2003
You may copy, transmit, or otherwise use this document provided the copyright notice is attached.
How Africa NEEDS t'AGOA'bout competing in this NEPAD age.
How Africa NEEDS t'AGOA'bout competing in this NEPAD age.
Introduction:
African businesses must sometimes feel they are being led to slaugther. For many, the firm belief is that the economic policies emanating from our governments have significantly removed both government subsidies and eroded private sector purchasing power. Yet, African businesses can turn the flood of misguided policies into as source of competitive advantage, with a change in market and cultural orientation.
Article:
Are we being led to slaughter? Are those appointed to lead our flock selling us to the butchers? Do the butchers intend to take payment in our flesh and blood? Home-grown analysts of the terms under which African businesses engage in international trade, may wsll answer yes, yes and yes. We have the power. We must have the will. We must also frustrate the actions of those who assign a low-value role to our interests in international trade
Article:
Those who celebrate religions by symbolically cannibalising their orisha need not worry; this article is not about blind faith. Rather it is about misguided and downright treacherous agitations about economic progress.
The National Economic Empowermeent and Development Strategy (NEEDS) programme of the Nigerian government will not deliver either economic prosperity or social stability to the Nigerian people. The marketing is slick but this is stale wine in new packaging.
The programme is wrong because the model it is based on is unreplicable and because it is inimical to the progressive interests of Nigerians.
Let us distinguish the stakeholders in NEEDS. The proclaimed primary beneficiaries are the Nigerian people. This programme will supposedly deliver the people from economic dependence on elected government by privaising all public owned institutions. The operators of NEEDS are the government officials, mainly in the financial sector and multilateral agencies, particularly the IMF, the WB and the Clubs of moneylenders. The sponsors of NEEDS are the international community of international governments and companies who will gain trading benefits from transacting in newly liberalised markets.
NEEDS proclaims: export driven trade, full employment, transparent accountancy, etc. It does not address the cultural, military and social is built on a model with the following premises:
# All countries should industrialise along the European model, so industrial-age technology must be transferred to Nigerians;
# Domestic savings should fund acquisition and application of technology; high interest rates will encourage people to save their funds in the banks;
# The national savings rate is low, so foreign aid and foreign investment must be procured;
# Much industrial-age technology is now obsolete, so foreign technical assistance must be retained to implement technological breakthroughs and assist Nigeria to leap-frog gaps in domestic technical capability;
savings. encouraging people to build savings in order to afford labour-saving machinery, use industrial technologies in creating jobs, manufacturing and exporting goods so that Nigeria and Africa must follow an alternative route to socio-economic improvement than that mapped by the sponsors of NEEDS. The structure of economic opportunity is
State aim of needs. Proposed implementation of needs. Likely impact of implementation. Non-needs alternative
Linkshttp://www.blogger.com/img/gl.link.gif
Nigeria needs to succeed
But development isn't just a question of making markets and economic policy work better. We now know that investing in people - in their health and nutrition, and in their education and training - is an indispensable part of good economic policy. - Tony Blair, Britain leader.
Remi-Niyi Alaran writes on enterprise and social capital.
ALARAN DEVELOPMENT ENTERPRISES. Enterprising Communities.
Copyright (c) ALARAN DEVELOPMENT ENTERPRISES, 2003
You may copy, transmit, or otherwise use this document provided the copyright notice is attached.
Introduction:
African businesses must sometimes feel they are being led to slaugther. For many, the firm belief is that the economic policies emanating from our governments have significantly removed both government subsidies and eroded private sector purchasing power. Yet, African businesses can turn the flood of misguided policies into as source of competitive advantage, with a change in market and cultural orientation.
Article:
Are we being led to slaughter? Are those appointed to lead our flock selling us to the butchers? Do the butchers intend to take payment in our flesh and blood? Home-grown analysts of the terms under which African businesses engage in international trade, may wsll answer yes, yes and yes. We have the power. We must have the will. We must also frustrate the actions of those who assign a low-value role to our interests in international trade
Article:
Those who celebrate religions by symbolically cannibalising their orisha need not worry; this article is not about blind faith. Rather it is about misguided and downright treacherous agitations about economic progress.
The National Economic Empowermeent and Development Strategy (NEEDS) programme of the Nigerian government will not deliver either economic prosperity or social stability to the Nigerian people. The marketing is slick but this is stale wine in new packaging.
The programme is wrong because the model it is based on is unreplicable and because it is inimical to the progressive interests of Nigerians.
Let us distinguish the stakeholders in NEEDS. The proclaimed primary beneficiaries are the Nigerian people. This programme will supposedly deliver the people from economic dependence on elected government by privaising all public owned institutions. The operators of NEEDS are the government officials, mainly in the financial sector and multilateral agencies, particularly the IMF, the WB and the Clubs of moneylenders. The sponsors of NEEDS are the international community of international governments and companies who will gain trading benefits from transacting in newly liberalised markets.
NEEDS proclaims: export driven trade, full employment, transparent accountancy, etc. It does not address the cultural, military and social is built on a model with the following premises:
# All countries should industrialise along the European model, so industrial-age technology must be transferred to Nigerians;
# Domestic savings should fund acquisition and application of technology; high interest rates will encourage people to save their funds in the banks;
# The national savings rate is low, so foreign aid and foreign investment must be procured;
# Much industrial-age technology is now obsolete, so foreign technical assistance must be retained to implement technological breakthroughs and assist Nigeria to leap-frog gaps in domestic technical capability;
savings. encouraging people to build savings in order to afford labour-saving machinery, use industrial technologies in creating jobs, manufacturing and exporting goods so that Nigeria and Africa must follow an alternative route to socio-economic improvement than that mapped by the sponsors of NEEDS. The structure of economic opportunity is
State aim of needs. Proposed implementation of needs. Likely impact of implementation. Non-needs alternative
Linkshttp://www.blogger.com/img/gl.link.gif
Nigeria needs to succeed
But development isn't just a question of making markets and economic policy work better. We now know that investing in people - in their health and nutrition, and in their education and training - is an indispensable part of good economic policy. - Tony Blair, Britain leader.
Remi-Niyi Alaran writes on enterprise and social capital.
ALARAN DEVELOPMENT ENTERPRISES. Enterprising Communities.
Copyright (c) ALARAN DEVELOPMENT ENTERPRISES, 2003
You may copy, transmit, or otherwise use this document provided the copyright notice is attached.
Anfi Owosinu Ise kekeke
Enterprising Communities 3: Investing in Informal Sector Enterprises
Introduction:
Attempts to build stock exchanges, venture capital funds, and other 'sophisticated' investment structures are unlikely to mobilise the economies of less developed countries, until the informal business sector is empowered with professional business and financial management. An enterprise community reduces the risk of participating in informal businesses and offers a viable mechanism for funding and operating much-needed utility infrastructure.
Article:
The informal sector accounts for some 70pc – 90pc of productive capability in many national economies. Yet it can be difficult for informal sector enterprises [ISE] to access outside investment funds or management resources:
# Informality: ISE are not registered with the relevant jurispudence as limited liability companies. There is no separation between enterprise assets and personal assets. The persons who own or control an ISE are directly and jointly held responsible for its liabilities. The lack of separation between ownership and control makes it difficult for outside investors to sanction the activities of owner-managers.
# Restricted ownership: Many ISE are funded with investment participations of five or fewer persons, usually members of same family. The ability to raise investment is restricted to the financial means of family members and to internally generated revenues.
# Restricted professional management: It is difficult for ISE to source a full complement of professional management from the pool of owner-managers. Professional managers work best in enterprises with discernible career paths, meritocratic compensation systems, and support for continuous development of technical capabilities.
# Limited accountability: Many ISE lack sufficient organisational transparency. Where produced, financial records are used primarily as planning tools, rather than for control purposes. Financial accountability is mainly limited to internal stake-holders, who are unlikely to be self-censoring.
The predominance of ISE presents a problem for the provision of utility infrastructure in social economies that do are unable to support the hub fund investment model (see below). In particular, economies of many so-called 'less developing countries' may lack professional business or fund management, formal funds or enterprises, and sophisticated investors.
The Enterprise Community structure
An Enterprise Community is a structure for coordinating participation of interested persons and ISE in the business of infrastructure provision. Enterprise communities are not investment funds. Rather, an enterprise community is an association of ISE that contribute operational expertise to implementation of infrastructure projects. A technically competent enterprise sponsors an enterprise community principally as a means of subcontracting specific project activities to ISE with relevant expertise. The technical sponsor supplies professional management resources. In all other aspects, an enterprise community is organised similarly to the classic special project entity with its own revenues, liabilities and assets.
Funding
The technical sponsor owns the ordinary equity in an enterprise community. However, control of ordinary equity is exercised jointly, via holdings of one equal voting right each, by all the involved ISE, the technical sponsor, and any outside equity investors.
An enterprise community obtains funding by issue of equity or loan investment participations, and by customer prepayment financing. Participations are marketed to and held, under pre-agreed conditions, by the involved ISE, the technical sponsor, and other sophisticated persons such as financial services businesses. Participations carry no voting rights, but provide holders with distribution rights in profits or assets of the enterprise community.
The combination of voting rights and investment participation gives ISE and outside investors in enterprise communities a very high degree of public accountability, democratic control, and risk management flexibility. Depending on specifics of the enterprise community agreement, all holders of voting rights decide collectively for each proposed utility infrastructure: whether a project should be undertaken; which ISE should be involved in specific project tasks; the infrastructure usage and pricing levels; and what proportion of profits should be distributed or retained as reserves. The technical sponsor then coordinates the implementation process.
Even as they remain voting members of an enterprise community, ISE and investors have flexibility of deciding which infrastructure projects to contribute to. This is unlike HFIS that force investors to participate in any undertakings chosen by the fund manager, and force portfolio companies to accept money from any investor who happens to contribute to the managed fund.
Regulation and Compliance
An enterprise community is a wholly owned business division or subsidiary of its technical sponsor. The business of the technical sponsor is provision of infrastructure solutions, services or manufactured goods. The purpose of an enterprise community is sharing of business risks. The risks and rewards are undertaken collectively by all participants. Under pre-agreed terms, the entire enterprise community shares control of revenues, liabilities and assets. For these reasons, there is no need for external regulation of enterprise communities.
=== box begins ===
The Hub Fund Investment structure
The hub fund investment structure [HFIS] centres around a collective investment fund. The fund has a manager, and a group of highly sophisticated investors who contribute money to the fund. The investors are required to leave their money in the fund under pre-agreed conditions. They are strongly informed of risk factors that may result in loss of all their invested funds and receive no guarantee of obtaining sufficient financial returns on investment. The money from different investors are pooled into a number of discrete funds, and professional fund managers invest the funds into a number of professionally managed portfolio enterprises. Depending on its mandate, the fund invests in ownership of entire-equity (the private equity model) or medium-long term ownership of partial equity (the investment fund model) or short-term trading of securities in quoted entities (the arbitrage fund model) or in loan issuances (the debt investment fund).
Customer relationship management is the responsibility of individual enterprises in which the fund has invested. The fund, itself, has little or no direct relationship with end-user customers. Control over financial resources of funds is heavily centralised with the manager. Investors, customers and businesses have little control over the deployment of fund money, even though some investors may be appointed as non-executive officers to oversee fund activities. Conversely, the fund manager has strong impact on deployment of fund monies.
HFIS are generally regulated as financial services providers. They need to be regulated because of the many degrees in separation of ownership and control involved in this highly differentiated business model. The funds are owned by investors but controlled by professional fund managers who receive compensation in performance bonuses and in percentages of funds under management.
The portfolio companies are owned by their shareholders, including HFIS, and controlled by professional business managers, who receive compensation in performance bonuses and in salaries.
Government-oriented regulation is imposed in order to protect the interests of investors and shareholders. These providers of funds are not always business or fund managers, and may lack ability to measure the performance or technical competency of either set of professional managers.
=== box ends ===
Benefits to Informal Sector Enterprises
The enterprise community structure yields significant benefits to ISE businesses. Associating together increases the scale and scope of markets, funding, and professional skills available to each individual ISE. Increased integration and accountability that arises from project involvement also exposes ISE to the benefits of having professional management, clearly defined business models, and competitive trading practises. Syndicated funding or expertise makes larger utility infrastructure affordable close to the region where ISE are already based. In turn, affordable access to utility infrastructure can help make ISE businesses more cost-effective and competitive.
Remi-Niyi Alaran writes on enterprise and social capital.
ALARAN DEVELOPMENT ENTERPRISES. Enterprising Communities.
Copyright (c) ALARAN DEVELOPMENT ENTERPRISES, 2004
You may copy, transmit, or otherwise use this document provided the copyright notice is attached
This is the 3rd (ikeeta) of the Enterprising Communities series to be published by ALARAN DEVELOPMENT ENTERRISES. This series aims to assist African enterpreneurs in building business enterprises based on innovations in science, technology, engineering and medicine.
--------
ENTERPRISE COMMUNITY: A STRUCTURED APPROACH TO INFORMAL SECTOR INVESTMENT
ENTERPRISE COMMUNITY: A STRUCTURED APPROACH TO INFORMAL SECTOR INVESTMENT
Introduction:
Attempts to build stock exchanges, venture capital funds, and other 'sophisticated' investment structures are unlikely to mobilise the economies of less developed countries, until the informal business sector is empowered with professional business and financial management. An enterprise community reduces the risk of participating in informal businesses and offers a viable mechanism for funding and operating much-needed utility infrastructure.
Article:
The informal sector accounts for some 70pc – 90pc of productive capability in many national economies. Yet it can be difficult for informal sector enterprises [ISE] to access outside investment funds or management resources:
# Informality: ISE are not registered with the relevant jurispudence as limited liability companies. There is no separation between enterprise assets and personal assets. The persons who own or control an ISE are directly and jointly held responsible for its liabilities. The lack of separation between ownership and control makes it difficult for outside investors to sanction the activities of owner-managers.
# Restricted ownership: Many ISE are funded with investment participations of five or fewer persons, usually members of same family. The ability to raise investment is restricted to the financial means of family members and to internally generated revenues.
# Restricted professional management: It is difficult for ISE to source a full complement of professional management from the pool of owner-managers. Professional managers work best in enterprises with discernible career paths, meritocratic compensation systems, and support for continuous development of technical capabilities.
# Limited accountability: Many ISE lack sufficient organisational transparency. Where produced, financial records are used primarily as planning tools, rather than for control purposes. Financial accountability is mainly limited to internal stake-holders, who are unlikely to be self-censoring.
The predominance of ISE presents a problem for the provision of utility infrastructure in social economies that do are unable to support the hub fund investment model (see below). In particular, economies of many so-called 'less developing countries' may lack professional business or fund management, formal funds or enterprises, and sophisticated investors.
The Enterprise Community structure
An Enterprise Community is a structure for coordinating participation of interested persons and ISE in the business of infrastructure provision. Enterprise communities are not investment funds. Rather, an enterprise community is an association of ISE that contribute operational expertise to implementation of infrastructure projects. A technically competent enterprise sponsors an enterprise community principally as a means of subcontracting specific project activities to ISE with relevant expertise. The technical sponsor supplies professional management resources. In all other aspects, an enterprise community is organised similarly to the classic special project entity with its own revenues, liabilities and assets.
Funding
The technical sponsor owns the ordinary equity in an enterprise community. However, control of ordinary equity is exercised jointly, via holdings of one equal voting right each, by all the involved ISE, the technical sponsor, and any outside equity investors.
An enterprise community obtains funding by issue of equity or loan investment participations, and by customer prepayment financing. Participations are marketed to and held, under pre-agreed conditions, by the involved ISE, the technical sponsor, and other sophisticated persons such as financial services businesses. Participations carry no voting rights, but provide holders with distribution rights in profits or assets of the enterprise community.
The combination of voting rights and investment participation gives ISE and outside investors in enterprise communities a very high degree of public accountability, democratic control, and risk management flexibility. Depending on specifics of the enterprise community agreement, all holders of voting rights decide collectively for each proposed utility infrastructure: whether a project should be undertaken; which ISE should be involved in specific project tasks; the infrastructure usage and pricing levels; and what proportion of profits should be distributed or retained as reserves. The technical sponsor then coordinates the implementation process.
Even as they remain voting members of an enterprise community, ISE and investors have flexibility of deciding which infrastructure projects to contribute to. This is unlike HFIS that force investors to participate in any undertakings chosen by the fund manager, and force portfolio companies to accept money from any investor who happens to contribute to the managed fund.
Regulation and Compliance
An enterprise community is a wholly owned business division or subsidiary of its technical sponsor. The business of the technical sponsor is provision of infrastructure solutions, services or manufactured goods. The purpose of an enterprise community is sharing of business risks. The risks and rewards are undertaken collectively by all participants. Under pre-agreed terms, the entire enterprise community shares control of revenues, liabilities and assets. For these reasons, there is no need for external regulation of enterprise communities.
=== box begins ===
The Hub Fund Investment structure
The hub fund investment structure [HFIS] centres around a collective investment fund. The fund has a manager, and a group of highly sophisticated investors who contribute money to the fund. The investors are required to leave their money in the fund under pre-agreed conditions. They are strongly informed of risk factors that may result in loss of all their invested funds and receive no guarantee of obtaining sufficient financial returns on investment. The money from different investors are pooled into a number of discrete funds, and professional fund managers invest the funds into a number of professionally managed portfolio enterprises. Depending on its mandate, the fund invests in ownership of entire-equity (the private equity model) or medium-long term ownership of partial equity (the investment fund model) or short-term trading of securities in quoted entities (the arbitrage fund model) or in loan issuances (the debt investment fund).
Customer relationship management is the responsibility of individual enterprises in which the fund has invested. The fund, itself, has little or no direct relationship with end-user customers. Control over financial resources of funds is heavily centralised with the manager. Investors, customers and businesses have little control over the deployment of fund money, even though some investors may be appointed as non-executive officers to oversee fund activities. Conversely, the fund manager has strong impact on deployment of fund monies.
HFIS are generally regulated as financial services providers. They need to be regulated because of the many degrees in separation of ownership and control involved in this highly differentiated business model. The funds are owned by investors but controlled by professional fund managers who receive compensation in performance bonuses and in percentages of funds under management.
The portfolio companies are owned by their shareholders, including HFIS, and controlled by professional business managers, who receive compensation in performance bonuses and in salaries.
Government-oriented regulation is imposed in order to protect the interests of investors and shareholders. These providers of funds are not always business or fund managers, and may lack ability to measure the performance or technical competency of either set of professional managers.
=== box ends ===
Benefits to Informal Sector Enterprises
The enterprise community structure yields significant benefits to ISE businesses. Associating together increases the scale and scope of markets, funding, and professional skills available to each individual ISE. Increased integration and accountability that arises from project involvement also exposes ISE to the benefits of having professional management, clearly defined business models, and competitive trading practises. Syndicated funding or expertise makes larger utility infrastructure affordable close to the region where ISE are already based. In turn, affordable access to utility infrastructure can help make ISE businesses more cost-effective and competitive.
Remi-Niyi Alaran writes on enterprise and social capital.
ALARAN DEVELOPMENT ENTERPRISES. Enterprising Communities.
Copyright (c) ALARAN DEVELOPMENT ENTERPRISES, 2004
You may copy, transmit, or otherwise use this document provided the copyright notice is attached
Agbe Ni Arin Ilu.
This is the 4th (ikeerin) of the Enterprising Communities series to be published by ALARAN DEVELOPMENT ENTERRISES. This series aims to assist African enterpreneurs in building business enterprises based on innovations in science, technology, engineering and medicine.--------
WITH A LITTLE LATERAL THINKING, CITY DWELLERS CAN PROFIT FROM TRADING HOME
Introduction:
The population of many countries are very skewed towards residency in urban areas. Many who migrate retain some familial linkages with their rural origins. Those links can be made into profitable trade links.
Article:
Reading:
http://www.jacaranda.suite.dk/Micro-enterprises.htm
Remi-Niyi Alaran writes on enterprise and social capital.
ALARAN DEVELOPMENT ENTERPRISES. Enterprising Communities.
Copyright (c) ALARAN DEVELOPMENT ENTERPRISES, 2005
You may copy, transmit, or otherwise use this document provided the copyright notice is attached
WITH A LITTLE LATERAL THINKING, CITY DWELLERS CAN PROFIT FROM TRADING HOME
Introduction:
The population of many countries are very skewed towards residency in urban areas. Many who migrate retain some familial linkages with their rural origins. Those links can be made into profitable trade links.
Article:
Reading:
http://www.jacaranda.suite.dk/Micro-enterprises.htm
Remi-Niyi Alaran writes on enterprise and social capital.
ALARAN DEVELOPMENT ENTERPRISES. Enterprising Communities.
Copyright (c) ALARAN DEVELOPMENT ENTERPRISES, 2005
You may copy, transmit, or otherwise use this document provided the copyright notice is attached
Ajodun Yoruba 2005
Yoruba Religion: Year 2005 Schedule* of Festivals
--------------------------------------------------------------
Yoruba religion (Irunmole) is a monotheistic religion with one almighty god. It is based on reverence of African ancestors who are celebrated as a heirarchy of about 401 chief and minor dieties. OLORUN or OLODUMARE, the only Supreme Diety, is not worshipped directly. Irunmole is an instrumental set of rituals by which critical individuals may resolve existential dilemnas in consultation with a distant God. It does not define a specific moralising code or have any sacred texts. Individuals can converse directly with their orisha and can effect changes in their own destiny. Irunmole is not concerned about a compiled and interpreted system of beliefs for group worship of an omnipresent God, as are other world religions such as Islam, Christianity or Buddhism.
February 26 – 27
OLOKUN festival: Orisha of the deep sea [Nature] and protector of the African soul
March 21
ODUDUWA festival. Celebrations of the Orisha of the Earth. Onset of the Yoruba NEW YEAR (2005 is the 10,047th year of Yoruba culture?)
March 26 – 27
OSHOSI festival. Veneration of the Orisha of Adventure, patron of hunters
Also annual rites of passage for men
April 4
OGUN festival. Veneration of the Orisha of War, patron of metal crafts [Engineering / Military]
Last Saturday of April, for 5 days (April 30 – May 4)
OSHUN festival. Celebrations of the Orisha of love [Biology]. Onset of Spring and the wet season.
Last Saturday of May, for seven days (May 28 – June 4)
EGUNGUN festivals. Celebrations of the Ancestral Spirits (Life forces), including royal sacrifices
June 21
SHOPONA and OSANHIN festivals. Veneration of the Orishas of Disease and Medicine respecitvely.
June 25 – 26
YEMOJA festival. Celebrations and fertility paegents of the Matron Orisha of the Yorubas
Also annual rites of passage for woman.
July 2 – 3
ORUNMILA / IFA festival. Celebrations and recitations of the Orisha of Destiny / Divination [Science]. Also mass gathering of the Yorubas
First weekend in July, for three weeks (July 4 – 24)
OKO and ELEGBA / ESHU festivals. Celeberations of the Orisha of Farming [Agriculture] and Sex [Power / Communications], respecitvely. Also feasting on new harvests of the Yam tuber crop.
July 24 – 25
SHANGO festival. Veneration and celebrations of the 8th century Alaafin of ancient Oyo nation, who became diefied as the Orisha of Thunder and Lightening [Energy]
August 27 – 28
OBATALA festival. Celebrations of the Orisha of Heaven [Creation / Culture]
October 22 – 23
OYA festival. Celebrations of the Orisha of the Wind. Patron of flooding of the Oya river and guardian of the gateway between life and death. Onset of Autumn and the dry season.
October 31
SHIGIDI festival. Veneration of the Orisha of Nightmares and the unknown dead of the AFRICAN people. Solemn parade by candlelight for unsettled spirits and ghosts. World Slavery Day?
December 17
OBALUAIYE festival. Celebrations of the Orisha of Work [Business] and of the winter solstice.
Information adapted from various sources including: www.sacred-texts.com/afr/yor and www.oyotunjivillage.net . A current discourse of Yoruba perspectives on religions may be found at http://lucy.ukc.ac.uk/YorubaT/yt6.html .
*This information is subject to change. Actual dates of celebrations may differ from indicated in accordance with religious practises in location and family.
Remi-Niyi Alaran writes on enterprise and social capital.
Copyright (c) ALARAN DEVELOPMENT ENTERPRISES, 2005
You may copy, transmit, or otherwise use this document provided the copyright notice is attached
--------------------------------------------------------------
Yoruba religion (Irunmole) is a monotheistic religion with one almighty god. It is based on reverence of African ancestors who are celebrated as a heirarchy of about 401 chief and minor dieties. OLORUN or OLODUMARE, the only Supreme Diety, is not worshipped directly. Irunmole is an instrumental set of rituals by which critical individuals may resolve existential dilemnas in consultation with a distant God. It does not define a specific moralising code or have any sacred texts. Individuals can converse directly with their orisha and can effect changes in their own destiny. Irunmole is not concerned about a compiled and interpreted system of beliefs for group worship of an omnipresent God, as are other world religions such as Islam, Christianity or Buddhism.
February 26 – 27
OLOKUN festival: Orisha of the deep sea [Nature] and protector of the African soul
March 21
ODUDUWA festival. Celebrations of the Orisha of the Earth. Onset of the Yoruba NEW YEAR (2005 is the 10,047th year of Yoruba culture?)
March 26 – 27
OSHOSI festival. Veneration of the Orisha of Adventure, patron of hunters
Also annual rites of passage for men
April 4
OGUN festival. Veneration of the Orisha of War, patron of metal crafts [Engineering / Military]
Last Saturday of April, for 5 days (April 30 – May 4)
OSHUN festival. Celebrations of the Orisha of love [Biology]. Onset of Spring and the wet season.
Last Saturday of May, for seven days (May 28 – June 4)
EGUNGUN festivals. Celebrations of the Ancestral Spirits (Life forces), including royal sacrifices
June 21
SHOPONA and OSANHIN festivals. Veneration of the Orishas of Disease and Medicine respecitvely.
June 25 – 26
YEMOJA festival. Celebrations and fertility paegents of the Matron Orisha of the Yorubas
Also annual rites of passage for woman.
July 2 – 3
ORUNMILA / IFA festival. Celebrations and recitations of the Orisha of Destiny / Divination [Science]. Also mass gathering of the Yorubas
First weekend in July, for three weeks (July 4 – 24)
OKO and ELEGBA / ESHU festivals. Celeberations of the Orisha of Farming [Agriculture] and Sex [Power / Communications], respecitvely. Also feasting on new harvests of the Yam tuber crop.
July 24 – 25
SHANGO festival. Veneration and celebrations of the 8th century Alaafin of ancient Oyo nation, who became diefied as the Orisha of Thunder and Lightening [Energy]
August 27 – 28
OBATALA festival. Celebrations of the Orisha of Heaven [Creation / Culture]
October 22 – 23
OYA festival. Celebrations of the Orisha of the Wind. Patron of flooding of the Oya river and guardian of the gateway between life and death. Onset of Autumn and the dry season.
October 31
SHIGIDI festival. Veneration of the Orisha of Nightmares and the unknown dead of the AFRICAN people. Solemn parade by candlelight for unsettled spirits and ghosts. World Slavery Day?
December 17
OBALUAIYE festival. Celebrations of the Orisha of Work [Business] and of the winter solstice.
Information adapted from various sources including: www.sacred-texts.com/afr/yor and www.oyotunjivillage.net . A current discourse of Yoruba perspectives on religions may be found at http://lucy.ukc.ac.uk/YorubaT/yt6.html .
*This information is subject to change. Actual dates of celebrations may differ from indicated in accordance with religious practises in location and family.
Remi-Niyi Alaran writes on enterprise and social capital.
Copyright (c) ALARAN DEVELOPMENT ENTERPRISES, 2005
You may copy, transmit, or otherwise use this document provided the copyright notice is attached
O Ye Ki Afi Ilu-Pipin Sile Lati Wa Oja Fun Ra Won.
Free the states and the people to compete.
Let us decentralise security, revenues and expenditure.
Why not encourage the various states to compete among themselves for industry? Right now, they seem all to be competing ONLY for allocation of primary commodity revenues, principally crude oil, which are then consumed leaving nil for investment and economic growth.
May be the arrangement of public affairs should be changed such that the federal owns all the land in the country while each state owns the physical resources within its borders. Anambra can sell its coal/ores to metallurgists in China or in Ondo state. Lagos can sell its financial services / access to ports at commercially viable rates. The Niger Delta states can own their crude oil and trade with whoever they want. Kaduna investors can refurbish the refinery and petrochemical plant then sell refinates to Sokoto or Oyo states at market prices. If surrounding states impose toll gates (tariffs) on all roads, sea and air lanes leading to/fro Anambra, Lagos, ND or Kaduna, so be it. Hurray for private enterprise. As for Abuja FCT, it will probably develop a (commercially viable) lobbying industry as states, investors and market makers joustle to attract wealth benefits for their respective operations from federal regulators. All is well as long as such benefits improve general living standards and our competitiveness as a people. And the states that do not presently have mineral resources? Look to Lagos, Japan, Switzerland, Isreal or Somalia (without the war-mongering) for your economic models: Invest in enabling knowledge industries, assume neutrality, and you will (very likely) do well in the services sectors: discretion, logistics, leisure and communications.
The federal retains overall authority / power to enforce security, taxation or environmental controls but devolves responsibility / exercise to each state. What the federal loses in monopoly e.g on coersion by violent force, we will all gain in mutual self-interest e.g the making of each state more resistant to disgruntled elements within or without the body politic. Any state that thinks too insularly will face the consideration of its many neighbours, rather than the one federal. Same with the external aggressors who watch our current turpor, and wait.
Revenues should increase all round: [1] To the federal because all economic activity must necessarily occur through, around, over or under (federal) land. [2] To the states, who must compete to attract skilled and industrious workers as well as tax-paying and job-creating businesses, who in turn fuel their economic activity by organising private finance. [3] To the technically competent, who harvest the fossil fuel energy resources or harness the solar, wind or water energy resources so abundant in the country. [4] To the many currently listless unemployed or underemployed, who now find businesses competing for skills and knowledge, with resulting increases in living standards, choice of goods and services, and greater mobility of ideas, labour and capital. [5] To private investors, who now have an incentive to spend their gains on productive activities within the country rather indulge the 'we can always import it' economic empowerment and development strategists. The acquisitve-but-lazy cannot end up buying all the land in the country as the federal (i.e all of us) own it all. Some rent-seeking and horse-trading will occur, that's fine and fine-able.
Federal citizens can invest, work, reside or move freely across state boundaries and no state may expel any federal citizen from that state. Will the mineral-producing states export all their production across the Atlantic and import foreign manufactured produce in return? Producers can certainly grow rich, but it is not likely that they will commit economic secession. [1] For starters, the states with higher living standards will attract hordes of opportunity seekers. The federal taxes the exports, tariffs the imports, and pays close attention to minimum standards in matters of housing, wages, health, and environment. [2] Secondly, neighbouring states will try to develop processing and manufacturing facilities in order to improve their comparative advantages in regard to the producers. As quality of local manufactures improve to match or exceed import standards and new markets are created, so will demand grow. Comparative advantage is not viable in the 'classic' economic sense of "lowest cost producer". Rather, comparative advantage is in yield of highest marginal benefits (high profits, low costs, security of supply or markets, etc) to the producer. [3] Thirdly, neighbouring states will export their unemployed and disgruntled inhabitants across the porous boundaries into uncooperative rich states, who will soon realise their incentive to share the wealth.
All state and federal transactions should be denominated and conducted in the federal currency. That includes all external and internal borrowing, technical assistance, joint ventures, foreign direct investment, "monetised" foreign aid etc. The existing foreign-currency denominated external debt should remain federal responsibility. Tax-paying investors can register businesses (including banks) at state level. The businesses may operate across the nation. They pay federal taxes and pay business rates in the state of registration. Each bank can operate in at least three states (regional) or in all states (national), with appropriate levels of capitalisation. Banks pay federal taxes and pay business rates in each states of operations. So, states may compete to attract bank operations.
Land occupancy should be levied on a per sqm basis, and fallow land levied at higher rate than land that is registered as in economic use. Registered land may only be used for its registered purpose and that purpose should start within specified time frame. Registered land reverts to the state pool if it does not record investment returns within the time frames. No state may prevent squatters from occupying fallow land in that state. Squatters of five years residency should be eligible to claim occupany rights provided they can evidence economic use of such land.
All these measures may well distribute land into the control of persons with incentive to profit from its economic use. Our aim is not wealth redistribution or income growth, but rather to build on the industriousness of people willing to improve their lives. Our policies should catalyse, release and sustain the spirit of competitive enterprise and the performance-based work ethic in our people. Suitabley encouraged, they will incorporate the efficiencies of scientific thought and technological tools into their enterprises - if only they know how. If Africans are to survive the global competition we face from others, we will need to embrace, to master, and to improve on the ways of intelligent enquiry, application of knowledge, on timeliness, and on due attention to detail. There are also bad habits to lose. It is unintelligent to submit uncritically to any authority, whether celestial or temporal. It is equally unproductive to expect others to sweat, bleed or toil for our leisure. The engineer who braves the high seas or the scientist who dares breathe noxious fumes. The investor who buys our deliquent bonds or the farmer who wakes at dawn and rests after dusk. These are people taking risks so that they may earn rewards for themselves. Sharing such rewards with lazy, wasteful and high-living rent-seekers does not appeal to their sense of fair trade. Neither will our appeals to tradition, forgetfulness, observance of fatuous religions, or tardiness when the time comes to pay for their cunning, capital, goods and services. Imported technologies cannot help our understanding unless we dismantle, reassemble and improve on what we get. Likewise, to depend on foreign technicians or capital is to court permanent economic damage. Anybody will be deemed mad who helps a supine market to gain economic sovereignty.
Accordingly, the education curriculum should be restructured to emphasise general competency in the vocational application of knowledge sciences and technologies at secondary school level. This recognises the fact that many people do not proceed in formal education beyond the secondary school certification. The institutions of higher learning may exercise minds further with academics, abstractions and research aimed at acquiring, and adapting to local industry, the world's knowledge in every field of endeavour, irrespective of the ingenuity, origin, patent, or might of protector: all knowledge belongs to the world. In time, we too will contribute our innovations to the world to improve upon.
The current structure of economic opportunities is flawed. It induces paralysis in enterprise. It destroys personal initiative. It rewards corruptive behaviour. It is damaging our competiveness with other peoples of the world. We need to carefully consider the lessons African history offers from such a flawed structure. Slavery of African people continues in the world today in all aspects of our lives. It will not stop until we can compete in all aspects and then ensure it is unprofitable to continue. The proposal is to have a flexible yet robust superstructure that can extend to accomodate more or fewer states; merger or devolution of state or federal authorities; expansion or collapse of business enterprises. Competition is risky.
These unrefined words are just a few thoughts on getting African land and people back to work.
Refinements welcome. Send email to: iyaalata@netscape.net or post your comments below
Remi-Niyi Alaran writes on enterprise and social capital.
Copyright (c) ALARAN DEVELOPMENT ENTERPRISES, 2005
You may copy, transmit, or otherwise use this document provided the copyright notice is attached
Why not encourage the various states to compete among themselves for industry? Right now, they seem all to be competing ONLY for allocation of primary commodity revenues, principally crude oil, which are then consumed leaving nil for investment and economic growth.
May be the arrangement of public affairs should be changed such that the federal owns all the land in the country while each state owns the physical resources within its borders. Anambra can sell its coal/ores to metallurgists in China or in Ondo state. Lagos can sell its financial services / access to ports at commercially viable rates. The Niger Delta states can own their crude oil and trade with whoever they want. Kaduna investors can refurbish the refinery and petrochemical plant then sell refinates to Sokoto or Oyo states at market prices. If surrounding states impose toll gates (tariffs) on all roads, sea and air lanes leading to/fro Anambra, Lagos, ND or Kaduna, so be it. Hurray for private enterprise. As for Abuja FCT, it will probably develop a (commercially viable) lobbying industry as states, investors and market makers joustle to attract wealth benefits for their respective operations from federal regulators. All is well as long as such benefits improve general living standards and our competitiveness as a people. And the states that do not presently have mineral resources? Look to Lagos, Japan, Switzerland, Isreal or Somalia (without the war-mongering) for your economic models: Invest in enabling knowledge industries, assume neutrality, and you will (very likely) do well in the services sectors: discretion, logistics, leisure and communications.
The federal retains overall authority / power to enforce security, taxation or environmental controls but devolves responsibility / exercise to each state. What the federal loses in monopoly e.g on coersion by violent force, we will all gain in mutual self-interest e.g the making of each state more resistant to disgruntled elements within or without the body politic. Any state that thinks too insularly will face the consideration of its many neighbours, rather than the one federal. Same with the external aggressors who watch our current turpor, and wait.
Revenues should increase all round: [1] To the federal because all economic activity must necessarily occur through, around, over or under (federal) land. [2] To the states, who must compete to attract skilled and industrious workers as well as tax-paying and job-creating businesses, who in turn fuel their economic activity by organising private finance. [3] To the technically competent, who harvest the fossil fuel energy resources or harness the solar, wind or water energy resources so abundant in the country. [4] To the many currently listless unemployed or underemployed, who now find businesses competing for skills and knowledge, with resulting increases in living standards, choice of goods and services, and greater mobility of ideas, labour and capital. [5] To private investors, who now have an incentive to spend their gains on productive activities within the country rather indulge the 'we can always import it' economic empowerment and development strategists. The acquisitve-but-lazy cannot end up buying all the land in the country as the federal (i.e all of us) own it all. Some rent-seeking and horse-trading will occur, that's fine and fine-able.
Federal citizens can invest, work, reside or move freely across state boundaries and no state may expel any federal citizen from that state. Will the mineral-producing states export all their production across the Atlantic and import foreign manufactured produce in return? Producers can certainly grow rich, but it is not likely that they will commit economic secession. [1] For starters, the states with higher living standards will attract hordes of opportunity seekers. The federal taxes the exports, tariffs the imports, and pays close attention to minimum standards in matters of housing, wages, health, and environment. [2] Secondly, neighbouring states will try to develop processing and manufacturing facilities in order to improve their comparative advantages in regard to the producers. As quality of local manufactures improve to match or exceed import standards and new markets are created, so will demand grow. Comparative advantage is not viable in the 'classic' economic sense of "lowest cost producer". Rather, comparative advantage is in yield of highest marginal benefits (high profits, low costs, security of supply or markets, etc) to the producer. [3] Thirdly, neighbouring states will export their unemployed and disgruntled inhabitants across the porous boundaries into uncooperative rich states, who will soon realise their incentive to share the wealth.
All state and federal transactions should be denominated and conducted in the federal currency. That includes all external and internal borrowing, technical assistance, joint ventures, foreign direct investment, "monetised" foreign aid etc. The existing foreign-currency denominated external debt should remain federal responsibility. Tax-paying investors can register businesses (including banks) at state level. The businesses may operate across the nation. They pay federal taxes and pay business rates in the state of registration. Each bank can operate in at least three states (regional) or in all states (national), with appropriate levels of capitalisation. Banks pay federal taxes and pay business rates in each states of operations. So, states may compete to attract bank operations.
Land occupancy should be levied on a per sqm basis, and fallow land levied at higher rate than land that is registered as in economic use. Registered land may only be used for its registered purpose and that purpose should start within specified time frame. Registered land reverts to the state pool if it does not record investment returns within the time frames. No state may prevent squatters from occupying fallow land in that state. Squatters of five years residency should be eligible to claim occupany rights provided they can evidence economic use of such land.
All these measures may well distribute land into the control of persons with incentive to profit from its economic use. Our aim is not wealth redistribution or income growth, but rather to build on the industriousness of people willing to improve their lives. Our policies should catalyse, release and sustain the spirit of competitive enterprise and the performance-based work ethic in our people. Suitabley encouraged, they will incorporate the efficiencies of scientific thought and technological tools into their enterprises - if only they know how. If Africans are to survive the global competition we face from others, we will need to embrace, to master, and to improve on the ways of intelligent enquiry, application of knowledge, on timeliness, and on due attention to detail. There are also bad habits to lose. It is unintelligent to submit uncritically to any authority, whether celestial or temporal. It is equally unproductive to expect others to sweat, bleed or toil for our leisure. The engineer who braves the high seas or the scientist who dares breathe noxious fumes. The investor who buys our deliquent bonds or the farmer who wakes at dawn and rests after dusk. These are people taking risks so that they may earn rewards for themselves. Sharing such rewards with lazy, wasteful and high-living rent-seekers does not appeal to their sense of fair trade. Neither will our appeals to tradition, forgetfulness, observance of fatuous religions, or tardiness when the time comes to pay for their cunning, capital, goods and services. Imported technologies cannot help our understanding unless we dismantle, reassemble and improve on what we get. Likewise, to depend on foreign technicians or capital is to court permanent economic damage. Anybody will be deemed mad who helps a supine market to gain economic sovereignty.
Accordingly, the education curriculum should be restructured to emphasise general competency in the vocational application of knowledge sciences and technologies at secondary school level. This recognises the fact that many people do not proceed in formal education beyond the secondary school certification. The institutions of higher learning may exercise minds further with academics, abstractions and research aimed at acquiring, and adapting to local industry, the world's knowledge in every field of endeavour, irrespective of the ingenuity, origin, patent, or might of protector: all knowledge belongs to the world. In time, we too will contribute our innovations to the world to improve upon.
The current structure of economic opportunities is flawed. It induces paralysis in enterprise. It destroys personal initiative. It rewards corruptive behaviour. It is damaging our competiveness with other peoples of the world. We need to carefully consider the lessons African history offers from such a flawed structure. Slavery of African people continues in the world today in all aspects of our lives. It will not stop until we can compete in all aspects and then ensure it is unprofitable to continue. The proposal is to have a flexible yet robust superstructure that can extend to accomodate more or fewer states; merger or devolution of state or federal authorities; expansion or collapse of business enterprises. Competition is risky.
These unrefined words are just a few thoughts on getting African land and people back to work.
Refinements welcome. Send email to: iyaalata@netscape.net or post your comments below
Remi-Niyi Alaran writes on enterprise and social capital.
Copyright (c) ALARAN DEVELOPMENT ENTERPRISES, 2005
You may copy, transmit, or otherwise use this document provided the copyright notice is attached
Eko lati Taiwan:
Taiwan lessons: indigenising education to improve our lives.
Here is an attempt to explore the experiences of Taiwan in building its economy on progressive aspiration, general knowledge, and a strong work ethic. The subject article is about migration; nonetheless it is sufficient for discussing our concerns, which are about economic development.
= = =
Brain drain and gain: the case of Taiwan
Taiwan, like many developing countries, has seen the increasingly competitive global market for high-skilled workers channel many of its best-educated people into jobs overseas. But unlike many countries that have suffered from "brain drain," Taiwan has seen many skilled emigrants return home to boost the country's economic development.
While much of this success can be attributed to circumstances well beyond the sphere of migration policy, such as strong economic growth and relative political stability, several Taiwanese policies can also claim a share of the credit. Crucial among these have been a focus on subsidizing basic, rather than advanced, education, along with an active effort to network with the Taiwanese diaspora and promote its return.
Whether or not migration has created "net gain" for Taiwan cannot be said. What is clear, however, is that the country's experience with skilled emigration has been far more positive than that of many other developing nations. As such, Taiwan's lessons for policy makers are worth closer examination.
Classic 'Brain Drain'
Taiwan once faced a classic case of "brain drain." Despite government restrictions, a total of over 100,000 Taiwanese left to study abroad in the latter half of the 20th century. During the 1970s and 1980s, an estimated 20 perc ent of Taiwanese college graduates went abroad for advanced study, and few of them returned. At the peak of the brain drain in 1979, only eight percent of students who studied abroad returned to Taiwan upon completing their studies. This brain drain generated a great deal of political anxiety in Taiwan, but did not stop the country's economy from growing at a remarkable rate. Furthermore, the brain drain slowed and partially reversed in the 1980s and 1990s. The return rate for students has climbed to 33 percent in recent years. In total, 50,000 migrants returned from abroad between 1985 and 1990. These migrants came home with high levels of education, some of it subsidized by foreign governments and universities, and many also had significant business experience. The expertise they brought fueled a boom in the domestic high-tech sector. Taiwan remains a country of net emigration, but the brain drain is looking more and more like an economic gain.
Although a number of countries have seen slowdowns and reversals of low and/or high-skilled emigration, they have usually followed a radical change in the country's political situation or a marked turnaround in its economic outlook. In contrast, Taiwan's economy had been growing strongly and steadily for decades, and returns of migrants began to increase before the end of martial law and the beginning of democratic elections in the late 1980s. Gradually, Taiwan has evolved from a less-developed to developed country and, while still a nation of net emigration, now hosts a substantial number of guest workers and unauthorized immigrants. This makes its current immigration patterns similar to those of other developed countries.
Setting the Stage: Education Policy
Taiwan's relatively positive experience with high-skilled migration was built on education policies launched in the 1950s, when the country began to invest in public and private education at a rate that far outstripped most countries with similar resources. When considering international migration, the distribution of this investment has been as important as its size. Taiwan's public funding of education has traditionally favored basic education and vocational schools. Only recently, as Taiwan's economy has become more technically sophisticated, have colleges and universities received priority.
In 1961, primary and secondary schools received 80 percent of all public education funds. This focus continued as recently as 1990, when the majority of secondary-school students were in vocational programs. These decades of heavy government investment in basic education have created a heavily subsidized vocational program that channels young people into medium-skilled jobs in Taiwan's booming manufacturing industry. With relatively comfortable, rising wages and secure jobs, such workers have had few incentives to migrate.
However, this structure left students seeking further education with few options but to migrate. Advanced degrees have only recently become a major component of the Taiwanese educational system. In 1991, only 165 doctorate degrees were awarded in engineering, a strikingly low figure for a country where 29 percent of exports were in the high-tech sector and over 10,000 patents were being registered every year.
Students wishing to study abroad could do so only by paying out of pocket or obtaining scholarships from the destination country, and then only after completing two years of military service and passing a qualifying exam. As a result, Taiwanese migrants have usually been upper-class students who have exhausted educational opportunities in Taiwan. Had advanced education been widely available in Taiwan, many of these people most likely would have migrated anyway after completing their studies, since only during the past two decades has the Taiwanese economy offered competitive employment opportunities for the very well educated.
Tapping the Diaspora: The Government as Catalyst
The students who sought education and employment abroad have become Taiwan's interface with the global economy, managing and enhancing the solid manufacturing base promoted by the basic education policy. The involvement of this internationally acquired acumen—through both the physical return of migrants and their participation from overseas—has been promoted by the government itself through policies centered on the Taiwanese diaspora.
Taiwan's industrialization began with low-tech, labor-intensive export manufacturing. Capital and the majority of the technical expertise came from foreign investors. Gradually, as wages and skill levels rose, Taiwanese firms began using technology-intensive manufacturing processes and doing more design in Taiwan. As they did so, they used formal and informal connections to draw on the expertise and business connections of Taiwanese living overseas, and even to recruit them to work in Taiwan. Taiwan's export-oriented industrial sector made the skills of returned migrants easily transferable. These businessmen became heroes of Taiwanese industry and received the popular nickname of "astronauts" because so many "lived in the air" commuting to and from Silicon Valley. By 1987, 20 percent of the executives of large Taiwanese firms were former migrants. This reservoir of technical and managerial expertise—which owed its existence to migration—was an important factor in the Taiwanese economy's rapid development.
The Taiwanese government was quick to recognize the potential of migrants as a resource. Officials used migrant expertise in formulating government policy. The government established the National Youth Council in the early 1970s to connect Taiwanese businesses with skilled migrants. The council tracks migrants in a database, advertises jobs overseas, and provides travel subsidies and temporary job placement to potential returnees. The National Science Council and Ministry of Education have also recruited thousands of migrants as professors and visiting lecturers for the country's growing universities.
The Taiwanese government's most celebrated achievement in migration, however, has been the Hinschu Science-based Industrial Park. Although it was not exclusively aimed at migrants, inspiration for the park came from overseas: one goal was to replicate the dense concentration of creative expertise found in Silicon Valley and elsewhere. The park was started in 1980 when the government provided financial incentives and planned infrastructure for companies relocating to or forming in the area. Subsidized Western-style housing and commercial services were provided to attract Taiwanese living overseas. The government sponsored international conferences on science and technology to give workers in the park more access to the international scientific community.
The park successfully attracted both high-tech companies and returning migrants. Companies in the park employed 102,000 people and generated $28 billion in sales in 2000. Although only 4,108 returned migrants worked in the park that year, 113 of the park's 289 companies were started by US-educated Taiwanese, and 478 of the returnees hold Ph.D.'s, indicating that the returned migrants are better educated than the average worker in the park and wield influence disproportionate to their numbers. Overseas connections are still valued; 70 of the companies also have offices in Silicon Valley and many rotate their personnel between offices. The park is the center of Taiwan's rapidly expanding research and development sector and a major contributor to the country's strong economic growth.
Lessons from Taiwan
It is impossible to know with certainty what role migration has played in Taiwan's development and how public policy affected it. However, relative to many other countries' experiences with high-skilled migration, Taiwan clearly has received greater benefits and paid lesser costs. If Taiwan holds lessons for other countries dealing with "brain drain" and seeking to promote return migration, they are:
Subsidize education only up to the level actually demanded by the national economy.
In contrast to many developing countries, the Taiwanese government did not significantly subsidize advanced education, only to watch their expensively trained graduates leave for jobs abroad with great private rewards. Instead, it focused on providing strong universal basic education and vocational programs as demanded by the domestic labor market. Logic suggests that this policy reduced migration by subsidizing the kinds of education that would lead directly to attractive employment in Taiwan itself, as opposed to subsidizing advanced degree-holders who would be forced to seek jobs abroad. Moreover, this interaction with international migration is only one of many good reasons for developing countries to prioritize strong basic education.
Migration can provide a "brain reserve."
The late development of Taiwanese universities could have caused a shortage of experts as Taiwanese industry rapidly increased in sophistication. Instead, Taiwanese living overseas provided advice from afar and returned to meet the growing demand. Thus, Taiwanese industry received critical expertise, at the moment it was most needed, from people whose advanced education had not been subsidized by Taiwanese taxpayers.
Support diaspora networking and recruitment.
Taiwan began to benefit from its emigrants even before developing to the point where it could attract their return. Taiwanese migrants provided knowledge, business connections, and expertise to both the government and private sector through informal and formal networks. This was particularly powerful in an economy highly oriented toward trade and foreign investment. When Taiwan's economy reached the point where it could employ its high-skilled emigrants, those networks made the return of migrants faster and easier.
Build a critical mass of returnees.
Creative, highly skilled people work and live best when surrounded with similar people. The problem is that highly educated migrants are reluctant to return to places where such people are lacking, so no one person is willing to move first. Taiwan's solution to this coordination failure was to subsidize the formation of a community of well-educated people at the Hinschu Science-based Industrial Park. The result was a critical mass of creative, Western-educated people that attracted more returnees. However, it is critical to note that this measure succeeded only because there was already a positive political and economic outlook and real demand for the returnees' skills.
Clearly, the realities of particular countries can make them particularly well or ill-suited to apply the lessons of the Taiwanese experience. Countries suffering from severe political or economic instability, for example, have little hope of attracting the immediate return of high-skilled emigrants. They can, however, improve their future migration outcomes with well-guided education policies and by actively networking with their nationals abroad. Taiwan's example shows that a diverse range of public policies can shape a country's experience with migration.
Sources:
Chow, Peter. (2001) Social Expenditures in Taiwan. Washington: World Bank.
Luo, Yu-Ling and Wei-Jen Wang. (2002) "High-skill migration and Chinese Taipei's industrial development." In: OECD, International Mobility of the Highly Skilled. Paris, OECD.
Ranis, Gustav. ed. (1992) Taiwan: From Developing to Mature Economy. Boulder, Colo. Westview.
Wu, Kin Bing. (1993) "Science and Technology Education in Taiwan." World Bank Education and Social Policy Discussion Series Paper no. 13.
= = =
SOME LESSONS AND OBSERVATIONS
1. Taiwan is an island-nation with a largely homogenous (majority Chinese culture and people) populatiom; our nation has large settlements of heterogenous populations. Taiwan has economic policies that are coherently pro-Taiwanese people, and based on merchanisation and digitisation, state-sponsored infrastructure, and export-oriented merchantilism; we have anti-people policies that are incoherent (in all spheres), and based on mining rents and favours from primary production, as well as import-oriented consumption.
2. Crucial among these have been a focus on subsidizing basic, rather than advanced, education, along with an active effort to network with the Taiwanese diaspora and promote its return. = =
We have focused on heirarchical (advanced) education rather than on basic vocational and technical traiining. We seem to be happy if the educated ones among us migrate. While abroad, their trouble-making is powerless to influence policy back home.
3. This brain drain generated a great deal of political anxiety in Taiwan, but did not stop the country's economy from growing at a remarkable rate. = =
Our brain drain does not generate political anxiety at home because the politicians have no need for home-grown talent. By hiring foreigners, the policians get two-for-one: (a) Foreigners have the requisite knowledge. (b) Foreigners are also interested in getting "harvested" funds outside the nation, so they are discreet and do not ask "foolish" questions.
4. The expertise they brought fueled a boom in the domestic high-tech sector. = =
Many of our diasporians are NOT influential actors in the high-tech sector. Even when employed in the relevant industries, it is uncommon for them to be in core management / knowledge roles. The uplifting of foreigners in so many of our technical projects, prevents our own development of capabilities in important technologies.
5. Taiwan's industrialization began with low-tech, labor-intensive export manufacturing. Capital and the majority of the technical expertise came from foreign investors. = =
We started with this same industrialization model, but there are subtle yet significant differences. The outstanding majority of Taiwan's “foreign” investors were and remain the Chinese diaspora who found the mainland too restrictive and migrated to Taiwan, Singapore, Malaysia, Hong Kong, USA, EU, Africa, etc. Most of Taiwan's exports is via trading links established with these fellow Chinese across the world. Our nation began its industrialization by seeking to “leapfrog” the technical advancements of other nations with “import-substitution” We imported high-tech, capital-intensive factories. We imported technical advisers who then refused to transfer know-how and refused to let our technicians learn the technologies. We imported foreign capital to pay for the factories and the technicians. Even now, we continue to hear our functionally illiterate politicians promote “foreign direct investment” as the means to our economic progress.
6. ... slowdowns and reversals of low and/or high-skilled emigration, they have usually followed a radical change in the country's political situation or a marked turnaround in its economic outlook. = =
Our policial situation is derived from competitive weakness of our domestic economy. The current crop of political actors are unlikely to lead any radical changes in the economic arena. It is up to private sector businesses to engineer a marked turnaround in economic outlook - by building domestic production capacity that can win consumer favour over from imports.
7. Taiwan's relatively positive experience with high-skilled migration was built on education policies launched in the 1950s, when the country began to invest in public and private education at a rate that far outstripped most countries with similar resources. = =
Even now, much of our meagre national earnings are going toward payment of debt and interest - to the tune of 3 times education spending in (well-off?) regions such as Nigeria. Not only do we spend less per capita on education, we are spending on the wrong type of education.
8. In 1991, only 165 doctorate degrees were awarded in engineering, a strikingly low figure for a country where 29 percent of exports were in the high-tech sector and over 10,000 patents were being registered every year. = =
Avanced degrees are all the rage in our title-cracy education systems. Can't get a job with schools cert? Go to uni! Can't get a job since leaving campus? Go get a Master's! No jobs for M.Sc? Go get a D.Phil or MBA! On one hand, Nigeria is estimated to have the lowest per capital number of engineers in the world. On the other hand, hardly any of those engineers are or can apply what they have learnt. Rather than start businesses that mechanise the work done at roadsides all over our nation, our intellectually-challenged engineers prefer to migrate into overseas to where they settle for flipping burgers or end up in dead end jobs as “vice-president”, “senior consultant”, “assistant director”, etc.
9. ... the government provided financial incentives and planned infrastructure for companies = =
This is what is meant by "government creating an enabling environment" - providing incentives and infrastructure, co-ordinating private sector businesses towards coherent national goals.
10. Subsidize education only up to the level actually demanded by the national economy. = = This is the proper role of subsidies provided by a government. It stimulates and supports demand by the national economy. Our governments are expert only in supporting supply by foreign economies, thereby subsidizing education in those nations that produce the goods we consume.
11. Migration can provide a "brain reserve. Support diaspora networking and recruitment. Build a critical mass of returnees. = =
The nation is yet to efficiently organise its engagement with its economic producers, whether locally resident or in diaspora. Given the paucity of ideas from the local banks and business community, diasporians should take the initiative and push for economic reform by building the private sector and creating knowledge communities. Already, many diasporians send their children back home for a "proper" education. They bring their families home for a “proper” holiday. Why not get together to sponsor more of those "proper" schools, a "proper" health centres and then "proper" housing developments. . . ?
12. Countries suffering from severe political or economic instability, for example, have little hope of attracting the immediate return of high-skilled emigrants. = =
Skilled or not, emigrant or not, economic opportunities come with uncertainty (of risks and returns). Severe political or economic instability equals higher uncertainty, both of risks and returns. We will break this vicious circle only by tackling the twin causes of the instability: the insecurity of the haves and the powerlessness of the have-nots. What they have or have-not is power (knowledge, ability, connections, resources) to make opportunities into rewarding work. If the educated are able to kick-start the reformation process, we will all be better off.
To conclude, it is important to bear in mind that adequate education, health and housing are necessary, but not sufficient, to create a progressive community. These are useful investment instruments, but are not in themselves, productive. To attain economic progress, we need investment in wealth creation and that, for many people, means creating “proper” businesses that provide employment and living wages while meeting a customer's demands for a better life.
Luckily, there are many economic opportunities that demand investing a little capital with lots of intelligence (applied knowledge). Some opportunities will support a substitution of labour intensity for capital intensity, at least in the early stages. This is fine so long as workers receive a living wage and are trained on the job into learning and using higher skill levels. We should aim to pay well; so employees are incentivised to perform diligently. We should aim to make products that can compete with the best imports. In the community of nations, Africa will never get anywhere by following "poverty-alleviation" policies that condemn it to be a "low-cost, low value-added" nation.
Remi-Niyi Alaran writes on enterprise and social capital.
Copyright (c) ALARAN DEVELOPMENT ENTERPRISES, 2005
You may copy, transmit, or otherwise use this document provided the copyright notice is attached
Here is an attempt to explore the experiences of Taiwan in building its economy on progressive aspiration, general knowledge, and a strong work ethic. The subject article is about migration; nonetheless it is sufficient for discussing our concerns, which are about economic development.
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Brain drain and gain: the case of Taiwan
Taiwan, like many developing countries, has seen the increasingly competitive global market for high-skilled workers channel many of its best-educated people into jobs overseas. But unlike many countries that have suffered from "brain drain," Taiwan has seen many skilled emigrants return home to boost the country's economic development.
While much of this success can be attributed to circumstances well beyond the sphere of migration policy, such as strong economic growth and relative political stability, several Taiwanese policies can also claim a share of the credit. Crucial among these have been a focus on subsidizing basic, rather than advanced, education, along with an active effort to network with the Taiwanese diaspora and promote its return.
Whether or not migration has created "net gain" for Taiwan cannot be said. What is clear, however, is that the country's experience with skilled emigration has been far more positive than that of many other developing nations. As such, Taiwan's lessons for policy makers are worth closer examination.
Classic 'Brain Drain'
Taiwan once faced a classic case of "brain drain." Despite government restrictions, a total of over 100,000 Taiwanese left to study abroad in the latter half of the 20th century. During the 1970s and 1980s, an estimated 20 perc ent of Taiwanese college graduates went abroad for advanced study, and few of them returned. At the peak of the brain drain in 1979, only eight percent of students who studied abroad returned to Taiwan upon completing their studies. This brain drain generated a great deal of political anxiety in Taiwan, but did not stop the country's economy from growing at a remarkable rate. Furthermore, the brain drain slowed and partially reversed in the 1980s and 1990s. The return rate for students has climbed to 33 percent in recent years. In total, 50,000 migrants returned from abroad between 1985 and 1990. These migrants came home with high levels of education, some of it subsidized by foreign governments and universities, and many also had significant business experience. The expertise they brought fueled a boom in the domestic high-tech sector. Taiwan remains a country of net emigration, but the brain drain is looking more and more like an economic gain.
Although a number of countries have seen slowdowns and reversals of low and/or high-skilled emigration, they have usually followed a radical change in the country's political situation or a marked turnaround in its economic outlook. In contrast, Taiwan's economy had been growing strongly and steadily for decades, and returns of migrants began to increase before the end of martial law and the beginning of democratic elections in the late 1980s. Gradually, Taiwan has evolved from a less-developed to developed country and, while still a nation of net emigration, now hosts a substantial number of guest workers and unauthorized immigrants. This makes its current immigration patterns similar to those of other developed countries.
Setting the Stage: Education Policy
Taiwan's relatively positive experience with high-skilled migration was built on education policies launched in the 1950s, when the country began to invest in public and private education at a rate that far outstripped most countries with similar resources. When considering international migration, the distribution of this investment has been as important as its size. Taiwan's public funding of education has traditionally favored basic education and vocational schools. Only recently, as Taiwan's economy has become more technically sophisticated, have colleges and universities received priority.
In 1961, primary and secondary schools received 80 percent of all public education funds. This focus continued as recently as 1990, when the majority of secondary-school students were in vocational programs. These decades of heavy government investment in basic education have created a heavily subsidized vocational program that channels young people into medium-skilled jobs in Taiwan's booming manufacturing industry. With relatively comfortable, rising wages and secure jobs, such workers have had few incentives to migrate.
However, this structure left students seeking further education with few options but to migrate. Advanced degrees have only recently become a major component of the Taiwanese educational system. In 1991, only 165 doctorate degrees were awarded in engineering, a strikingly low figure for a country where 29 percent of exports were in the high-tech sector and over 10,000 patents were being registered every year.
Students wishing to study abroad could do so only by paying out of pocket or obtaining scholarships from the destination country, and then only after completing two years of military service and passing a qualifying exam. As a result, Taiwanese migrants have usually been upper-class students who have exhausted educational opportunities in Taiwan. Had advanced education been widely available in Taiwan, many of these people most likely would have migrated anyway after completing their studies, since only during the past two decades has the Taiwanese economy offered competitive employment opportunities for the very well educated.
Tapping the Diaspora: The Government as Catalyst
The students who sought education and employment abroad have become Taiwan's interface with the global economy, managing and enhancing the solid manufacturing base promoted by the basic education policy. The involvement of this internationally acquired acumen—through both the physical return of migrants and their participation from overseas—has been promoted by the government itself through policies centered on the Taiwanese diaspora.
Taiwan's industrialization began with low-tech, labor-intensive export manufacturing. Capital and the majority of the technical expertise came from foreign investors. Gradually, as wages and skill levels rose, Taiwanese firms began using technology-intensive manufacturing processes and doing more design in Taiwan. As they did so, they used formal and informal connections to draw on the expertise and business connections of Taiwanese living overseas, and even to recruit them to work in Taiwan. Taiwan's export-oriented industrial sector made the skills of returned migrants easily transferable. These businessmen became heroes of Taiwanese industry and received the popular nickname of "astronauts" because so many "lived in the air" commuting to and from Silicon Valley. By 1987, 20 percent of the executives of large Taiwanese firms were former migrants. This reservoir of technical and managerial expertise—which owed its existence to migration—was an important factor in the Taiwanese economy's rapid development.
The Taiwanese government was quick to recognize the potential of migrants as a resource. Officials used migrant expertise in formulating government policy. The government established the National Youth Council in the early 1970s to connect Taiwanese businesses with skilled migrants. The council tracks migrants in a database, advertises jobs overseas, and provides travel subsidies and temporary job placement to potential returnees. The National Science Council and Ministry of Education have also recruited thousands of migrants as professors and visiting lecturers for the country's growing universities.
The Taiwanese government's most celebrated achievement in migration, however, has been the Hinschu Science-based Industrial Park. Although it was not exclusively aimed at migrants, inspiration for the park came from overseas: one goal was to replicate the dense concentration of creative expertise found in Silicon Valley and elsewhere. The park was started in 1980 when the government provided financial incentives and planned infrastructure for companies relocating to or forming in the area. Subsidized Western-style housing and commercial services were provided to attract Taiwanese living overseas. The government sponsored international conferences on science and technology to give workers in the park more access to the international scientific community.
The park successfully attracted both high-tech companies and returning migrants. Companies in the park employed 102,000 people and generated $28 billion in sales in 2000. Although only 4,108 returned migrants worked in the park that year, 113 of the park's 289 companies were started by US-educated Taiwanese, and 478 of the returnees hold Ph.D.'s, indicating that the returned migrants are better educated than the average worker in the park and wield influence disproportionate to their numbers. Overseas connections are still valued; 70 of the companies also have offices in Silicon Valley and many rotate their personnel between offices. The park is the center of Taiwan's rapidly expanding research and development sector and a major contributor to the country's strong economic growth.
Lessons from Taiwan
It is impossible to know with certainty what role migration has played in Taiwan's development and how public policy affected it. However, relative to many other countries' experiences with high-skilled migration, Taiwan clearly has received greater benefits and paid lesser costs. If Taiwan holds lessons for other countries dealing with "brain drain" and seeking to promote return migration, they are:
Subsidize education only up to the level actually demanded by the national economy.
In contrast to many developing countries, the Taiwanese government did not significantly subsidize advanced education, only to watch their expensively trained graduates leave for jobs abroad with great private rewards. Instead, it focused on providing strong universal basic education and vocational programs as demanded by the domestic labor market. Logic suggests that this policy reduced migration by subsidizing the kinds of education that would lead directly to attractive employment in Taiwan itself, as opposed to subsidizing advanced degree-holders who would be forced to seek jobs abroad. Moreover, this interaction with international migration is only one of many good reasons for developing countries to prioritize strong basic education.
Migration can provide a "brain reserve."
The late development of Taiwanese universities could have caused a shortage of experts as Taiwanese industry rapidly increased in sophistication. Instead, Taiwanese living overseas provided advice from afar and returned to meet the growing demand. Thus, Taiwanese industry received critical expertise, at the moment it was most needed, from people whose advanced education had not been subsidized by Taiwanese taxpayers.
Support diaspora networking and recruitment.
Taiwan began to benefit from its emigrants even before developing to the point where it could attract their return. Taiwanese migrants provided knowledge, business connections, and expertise to both the government and private sector through informal and formal networks. This was particularly powerful in an economy highly oriented toward trade and foreign investment. When Taiwan's economy reached the point where it could employ its high-skilled emigrants, those networks made the return of migrants faster and easier.
Build a critical mass of returnees.
Creative, highly skilled people work and live best when surrounded with similar people. The problem is that highly educated migrants are reluctant to return to places where such people are lacking, so no one person is willing to move first. Taiwan's solution to this coordination failure was to subsidize the formation of a community of well-educated people at the Hinschu Science-based Industrial Park. The result was a critical mass of creative, Western-educated people that attracted more returnees. However, it is critical to note that this measure succeeded only because there was already a positive political and economic outlook and real demand for the returnees' skills.
Clearly, the realities of particular countries can make them particularly well or ill-suited to apply the lessons of the Taiwanese experience. Countries suffering from severe political or economic instability, for example, have little hope of attracting the immediate return of high-skilled emigrants. They can, however, improve their future migration outcomes with well-guided education policies and by actively networking with their nationals abroad. Taiwan's example shows that a diverse range of public policies can shape a country's experience with migration.
Sources:
Chow, Peter. (2001) Social Expenditures in Taiwan. Washington: World Bank.
Luo, Yu-Ling and Wei-Jen Wang. (2002) "High-skill migration and Chinese Taipei's industrial development." In: OECD, International Mobility of the Highly Skilled. Paris, OECD.
Ranis, Gustav. ed. (1992) Taiwan: From Developing to Mature Economy. Boulder, Colo. Westview.
Wu, Kin Bing. (1993) "Science and Technology Education in Taiwan." World Bank Education and Social Policy Discussion Series Paper no. 13.
= = =
SOME LESSONS AND OBSERVATIONS
1. Taiwan is an island-nation with a largely homogenous (majority Chinese culture and people) populatiom; our nation has large settlements of heterogenous populations. Taiwan has economic policies that are coherently pro-Taiwanese people, and based on merchanisation and digitisation, state-sponsored infrastructure, and export-oriented merchantilism; we have anti-people policies that are incoherent (in all spheres), and based on mining rents and favours from primary production, as well as import-oriented consumption.
2. Crucial among these have been a focus on subsidizing basic, rather than advanced, education, along with an active effort to network with the Taiwanese diaspora and promote its return. = =
We have focused on heirarchical (advanced) education rather than on basic vocational and technical traiining. We seem to be happy if the educated ones among us migrate. While abroad, their trouble-making is powerless to influence policy back home.
3. This brain drain generated a great deal of political anxiety in Taiwan, but did not stop the country's economy from growing at a remarkable rate. = =
Our brain drain does not generate political anxiety at home because the politicians have no need for home-grown talent. By hiring foreigners, the policians get two-for-one: (a) Foreigners have the requisite knowledge. (b) Foreigners are also interested in getting "harvested" funds outside the nation, so they are discreet and do not ask "foolish" questions.
4. The expertise they brought fueled a boom in the domestic high-tech sector. = =
Many of our diasporians are NOT influential actors in the high-tech sector. Even when employed in the relevant industries, it is uncommon for them to be in core management / knowledge roles. The uplifting of foreigners in so many of our technical projects, prevents our own development of capabilities in important technologies.
5. Taiwan's industrialization began with low-tech, labor-intensive export manufacturing. Capital and the majority of the technical expertise came from foreign investors. = =
We started with this same industrialization model, but there are subtle yet significant differences. The outstanding majority of Taiwan's “foreign” investors were and remain the Chinese diaspora who found the mainland too restrictive and migrated to Taiwan, Singapore, Malaysia, Hong Kong, USA, EU, Africa, etc. Most of Taiwan's exports is via trading links established with these fellow Chinese across the world. Our nation began its industrialization by seeking to “leapfrog” the technical advancements of other nations with “import-substitution” We imported high-tech, capital-intensive factories. We imported technical advisers who then refused to transfer know-how and refused to let our technicians learn the technologies. We imported foreign capital to pay for the factories and the technicians. Even now, we continue to hear our functionally illiterate politicians promote “foreign direct investment” as the means to our economic progress.
6. ... slowdowns and reversals of low and/or high-skilled emigration, they have usually followed a radical change in the country's political situation or a marked turnaround in its economic outlook. = =
Our policial situation is derived from competitive weakness of our domestic economy. The current crop of political actors are unlikely to lead any radical changes in the economic arena. It is up to private sector businesses to engineer a marked turnaround in economic outlook - by building domestic production capacity that can win consumer favour over from imports.
7. Taiwan's relatively positive experience with high-skilled migration was built on education policies launched in the 1950s, when the country began to invest in public and private education at a rate that far outstripped most countries with similar resources. = =
Even now, much of our meagre national earnings are going toward payment of debt and interest - to the tune of 3 times education spending in (well-off?) regions such as Nigeria. Not only do we spend less per capita on education, we are spending on the wrong type of education.
8. In 1991, only 165 doctorate degrees were awarded in engineering, a strikingly low figure for a country where 29 percent of exports were in the high-tech sector and over 10,000 patents were being registered every year. = =
Avanced degrees are all the rage in our title-cracy education systems. Can't get a job with schools cert? Go to uni! Can't get a job since leaving campus? Go get a Master's! No jobs for M.Sc? Go get a D.Phil or MBA! On one hand, Nigeria is estimated to have the lowest per capital number of engineers in the world. On the other hand, hardly any of those engineers are or can apply what they have learnt. Rather than start businesses that mechanise the work done at roadsides all over our nation, our intellectually-challenged engineers prefer to migrate into overseas to where they settle for flipping burgers or end up in dead end jobs as “vice-president”, “senior consultant”, “assistant director”, etc.
9. ... the government provided financial incentives and planned infrastructure for companies = =
This is what is meant by "government creating an enabling environment" - providing incentives and infrastructure, co-ordinating private sector businesses towards coherent national goals.
10. Subsidize education only up to the level actually demanded by the national economy. = = This is the proper role of subsidies provided by a government. It stimulates and supports demand by the national economy. Our governments are expert only in supporting supply by foreign economies, thereby subsidizing education in those nations that produce the goods we consume.
11. Migration can provide a "brain reserve. Support diaspora networking and recruitment. Build a critical mass of returnees. = =
The nation is yet to efficiently organise its engagement with its economic producers, whether locally resident or in diaspora. Given the paucity of ideas from the local banks and business community, diasporians should take the initiative and push for economic reform by building the private sector and creating knowledge communities. Already, many diasporians send their children back home for a "proper" education. They bring their families home for a “proper” holiday. Why not get together to sponsor more of those "proper" schools, a "proper" health centres and then "proper" housing developments. . . ?
12. Countries suffering from severe political or economic instability, for example, have little hope of attracting the immediate return of high-skilled emigrants. = =
Skilled or not, emigrant or not, economic opportunities come with uncertainty (of risks and returns). Severe political or economic instability equals higher uncertainty, both of risks and returns. We will break this vicious circle only by tackling the twin causes of the instability: the insecurity of the haves and the powerlessness of the have-nots. What they have or have-not is power (knowledge, ability, connections, resources) to make opportunities into rewarding work. If the educated are able to kick-start the reformation process, we will all be better off.
To conclude, it is important to bear in mind that adequate education, health and housing are necessary, but not sufficient, to create a progressive community. These are useful investment instruments, but are not in themselves, productive. To attain economic progress, we need investment in wealth creation and that, for many people, means creating “proper” businesses that provide employment and living wages while meeting a customer's demands for a better life.
Luckily, there are many economic opportunities that demand investing a little capital with lots of intelligence (applied knowledge). Some opportunities will support a substitution of labour intensity for capital intensity, at least in the early stages. This is fine so long as workers receive a living wage and are trained on the job into learning and using higher skill levels. We should aim to pay well; so employees are incentivised to perform diligently. We should aim to make products that can compete with the best imports. In the community of nations, Africa will never get anywhere by following "poverty-alleviation" policies that condemn it to be a "low-cost, low value-added" nation.
Remi-Niyi Alaran writes on enterprise and social capital.
Copyright (c) ALARAN DEVELOPMENT ENTERPRISES, 2005
You may copy, transmit, or otherwise use this document provided the copyright notice is attached
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