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The perfect storm

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The perfect storm
by System Administrator - Tuesday, 12 August 2014, 4:05 PM
Colaboradores y Partners

The perfect storm


The ongoing insurgency can be depicted as ‘the perfect storm’ at this current juncture of Nigeria’s nationhood. It has raised profound questions about the very meaning of Nigeria’s nationhood, and whether, indeed, our country can endure as a single political community.  For those who love Nigeria and seek its prosperity, it is a time for sober reflection. Most of us are agreed that the current federal structure, with a highly centralised Federal Government, 36 states and 774 local governments, is inherently programmed to gridlock and immobility. Our whole political economy is predicated on the collection and distribution of oil rent from multinational corporations. When not stolen through a frightful maze of rent-seeking and corrupt practices, most public funds go into consumption rather than long-term developmental projects.

For several decades, much of the budgets across the three tiers of government have gone overwhelmingly into recurrent spending, averaging 70 percent annually. This means that a mere 30 percent of public spending goes into capital expenditure which is essential to investing for future growth and prosperity. This is the very opposite of what obtains in a good number of emerging economies where 70 percent of public spending goes into capital expenditures and only 30 percent goes into recurrent expenditures such as salaries, social transfers and consumption.

The paradox for us in Nigeria is that the macro-economy has been growing at a steady-state in excess of 7 percent per annum for the past decade.  It used to be said of Brazil that “the economy is doing well but the people are not”. While the economy continues to grow and investors are coming in droves, Nigerians are a deeply traumatised and unhappy people. Poverty, unemployment and random violence are the lot of our people. Our youth are deeply disillusioned about the future.

Nigeria may not be a failed state, but it is manifesting the symptoms of state failure and the phenomenon that Harvard political scientist Samuel Huntington characterised as ‘political decay’. This situation arises when national institutions lack the capacity to maintain political order; when government lacks legitimacy and when the avenues for political participation are closed, as self-help, violence and chaos takes over.

The case I am making in this column today is that it cannot be business-as-usual. Our politicians are behaving like drunken sailors in a ship that is sinking. We need a grand project for reconstruction of the state, our federalism and our key institutions.

Our contemporary Westphalian state system is anchored upon the notion that states are capable of fulfilling a range of critical international and domestic responsibilities. States must have the capacity to implement key decisions for the public peace and the common good while projecting their authority across the jurisdictional territory. They must also possess a domestic resource base to meet key spending obligations while exercising legitimate monopoly on the physical means by which they can guarantee the security of their citizens.

Retreating from the precipice of state failure requires Nigeria not only to restructure its institutions but to also frontally address the imperatives of state responsibility. The key functions of the state as understood in the twenty-first century requires the following key elements: the presence of the rule of law; monopoly of the use of violence; effective administrative control; sound management of public finances; massive investment in human capital, including education, health, knowledge, training and skills; enhancement of citizenship rights through expanded opportunities for participation and ensuring reciprocal rights and obligations to all citizens; development of a competitive and forward-looking market economy.

The effective exercise of state authority in a manner that promotes economic growth while ensuring political stability requires not only high quality visionary leadership; it demands a sound and professionalized bureaucracy. Public policies must be suffused with social justice, inclusive growth and what the political philosopher John Rawls termed the idea of ‘public reason’

For a country with the size, resources and innate potentials of Nigeria, progress can only come about through the forging of a new national consensus among the ruling elites from across the country’s key constituencies. What is crucial, in my view, is commitment to the creation of a developmental state that would accelerate the process of economic growth and wealth-creation. In contemporary development economics discourse, when scholars use the term ‘the developmental state’, they are generally referring to a country where the government has assumed the driver’s seat in propelling the course of economic growth and social transformation. 

The developmental state makes ‘development’ its topmost national priority, encouraging citizens with the right mix of incentives to forego current consumption so as to maximize current consumption to achieve the goal of long-term economic performance. Much emphasis is placed on property rights, strong markets and the sanctity of contracts. 

Most developmental states have also undertaken land reforms. Beginning from President Park in South Korea in the 1950s, most Asia Pacific nations that have achieved rapid growth and structural transformation have also been those that have implemented courageous land reforms. Their leaderships have also mobilised enough support to defeat resistance by landed oligarchies. The failure of the Philippines to join the ranks of the Asian Tigers has been partly attributable from the failure of its power elites to undertake land reforms.

Developmental states have invested heavily in human capital development. They have given priority to ensuring universal compulsory education, expansion of higher education, especially in technical and engineering fields, and in the training and acquisition of industrial skills by its workers.

They also tend to insulate their technocratic elites from societal pressures by giving them the autonomy to develop and implement policies for rapid growth and structural transformation. They have done this through the reform of the civil service and the creation of a merit-based bureaucracy, with functionaries that are well-paid and possess a vision of national destiny and purpose.

This paradigm shift is an absolute necessity if we are to create a new Nigeria that is a prosperous democracy; a land of justice and equality of opportunities for all her people.


Link: http://businessdayonline.com/2014/08/the-perfect-storm-2/#.U-pkcfmSx8E

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