A LOT is been done to grow the Zambian economy and there is no debate that the country will have to industrialise to become a market engine of the sub-Saharan economic growth. However, the how’s need some restrategising.
At the centre of the government policy to grow the economy is to industrialise and to that end, an industrialisation policy of March 2018 has been drawn up with a number of interventions, including the restructuring of the Citizen Economic Empowerment programme to target value chains in the various natural endowments across the country.
In this industrialisation policy, eight manufacturing sub-sectors have been selected as priority drivers of industrialisation as: 1) processed foods; 2) textiles and garments; 3) engineering products; 4) wood and wood products; 5) leather and leather products; 6) mineral (metallic and non-metallic) processing and products (beneficiation); 7) pharmaceuticals; and 8) blue economy. With the blue economy being defined in this policy as the transformation of marine and coastal sectors as well as freshwater inland rivers and lakes for economic growth through the development of fisheries and aquaculture, transport and logistics including tourism.
This industrial policy seems well thought out and can if well implemented result in the target goals been achieved. However, we have several real disadvantages such as lack of modern technologies, lack of abundant skills in certain fields, lack of project management skills and lack of finance.
Indeed, it has been abundantly clear without looking at statistics, that Zambian led businesses comparatively perform worse than foreign led with lower productivity levels and growth rates. Part of the reasons for this level of performance are the aforementioned reasons.
That is why, as Zambians, we need to move beyond a central suspicion of our Chinese folks and fully engage them. In other words, a much broader emphasis should be placed on developing effective partnerships with the Chinese.
For example they could be involved in cooperatives across the country, perhaps as minority share owners. In private sector companies as co-shareholding partnerships. Perhaps this could be done through a law that enables these partnership in certain sectors of the economy but that also ensures that Zambians remain key participants in the ventures arising, in up-skilling rural communities, beyond China’s current participation in infrastructure projects.
This targeted level of engagement may be welcome if done at the government to government level especially as part of the bilateral skills support, particularly at the community level to help in boosting productivity. We can only fully take advantages from this partnership if we truly embrace the Chinese participation as partners in our businesses.
A lot can be gleaned from the four Asian tigers (Hong Kong, Singapore, Taiwan and South Korea) in terms of their economic genesis until they rose to prominent roles as global economic giants.
Hong Kong rose as an outpost of the British colonial system, but perhaps drew much of its advantages sitting as the central access to the West and as a gateway into China given its location made it a convenient central place for trade with Europe.
Added to its location, the region was very much helped by the low tax environment and market-led economy, which attracted capital looking for investments in nearby Asian economies and in the process transformed it into one of the leading financial centres, as the 35th largest economy in the world.
Little legacy advantages from the colonial system
Zambia has very little legacy advantages from the colonial system, but boast of a market-led economy and as a country surrounded in all of its borders, there are latent opportunities for supply everywhere if our industrial base blossomed.
Singapore’s rise was inspired by their strongman, Lee Kuan Yew, who aspired for a Singapore that was economically buoyant.
But to realise this dream, he had to find a way of transforming the mind-set of Singapore’s more than two million population to be more tolerant and welcoming of migrants to facilitate the importation of the skills needed in that country.
And true to that vision, at the centre of the rise of Singapore from an obscure nation that had just divorced from Malaysia in August 1965 to become a regional headquarter for global multinationals and a leading world financial trade centre, lay in the successful integration of migrant and local talent.
In Zambia, we can learn that co-opting migrating talent might be a win-win situation that will help in upskilling our people so long as we are able to manage carefully that integration, to ensure Zambians can see benefits from the association.
Taiwan’s rise started with the land reform law which removed the landlord class and enabled a number of peasantry, who with the help of the state helped to increase the nation’s agricultural output, in addition to the nation’s import substitutive industrialisation policies.
In the late 50s, the Taiwanese designed a programme of Economic and Financial Reform which led to market liberalisation, export stimulation and was strategic in the way that it attracted foreign investments and capitals.
There is more that can be gleaned from Taiwan in terms of enabling the rural communities and having a targeted import substitutive agenda. This is where the Chinese assistance can be of significant assistance.
South Korean is the 11th largest economy in the world which grew from just being a United States logistic base after the Korean War. South Korean strategic rise started with the establishment of a highly acclaimed education system which in time helped to spur the country’s technology boom and economic development to become the global leader of consumer electronics and smart phones.
It rose from a GDP of $2.7 billion in 1962 to US$1, 500 billion in 2017. Perhaps the rise may also be attributable to the significant financial assistance from the United States and the OECD countries. However, the education system helped make that possible.
The lesson for Zambia may be perhaps a focus on certain skills from a young age, particularly entrepreneurial skills, while it is acknowledged that the industrialisation policy has sufficient focus on ICT.
Can Zambia replicate the Asian turnaround and become a market engine of the sub-Saharan economic growth? Yes, but we need to move away from being suspicious of immigrants particularly the Chinese and embrace them as we implement the industrialisation policy.
There are also opportunities for improving some legal frameworks to facilitate this. There is much to learn from Singapore, Taiwan, Hong Kong and South Korea.
*About the author:
Kelvin Chungu is a Partner at Nolands Advisory (Kruz Savett Advisory became Nolands Advisory after joining Nolands International firms). He can be contacted on +260976-377484.