Atupele Austin Muluzi – President, United Democratic Front (UDF)
Atupele Austin Muluzi – President, United Democratic Front (UDF)
I have dedicated 15 years of my life in the service of my country as a party leader, cabinet minister and Member of Parliament.
My nomination by Peking University as a Dongfang scholar at China’s most prestigious university has come at a time when Malawi is reeling from a turbulent aftermath to the 2019 tripartite general election with an electoral dispute at the constitutional court, some of our most vulnerable communities being attacked and increasing divisions across the country.
I arrived at the decision to travel to China for the reason that China has within our lifetime achieved unprecedented prosperity and harmony that we candraw lessons from.
China has within 41 years developed from one of the world’s poorest countries into the world’s second largest economy.
Diversifying from an agricultural country to a manufacturing powerhouse and in the process lifting 700 million people out of poverty. China is feeding nearly 20% of the world’s population on less than 9% of the world’s arable land, whilst maintaining the political stability of a supersized country for over 70 years.
China, in their journey towards what they are today, had gone through periods of mistakes, failures and instability.
The key learning for us is on how China managed to learn from thosemistakes and ended up delivering the fastest economic transformation in human history.Malawi has its own history of successes and failures and continues to face a myriad of challenges with economic growth averaging between 4-5 % annually, a GDP per capita of approximately 400 USD as at the end of 2019, low productivity as well as a decline in international competitiveness.
We are at the dawn of a new decade and at the end of our national Vision 2020.
This is a critical moment for the country that needs us to unify rather than divide, to deliver inclusive growth that supports all regardless of gender, creed, affiliation, color or tribe, to end corruption and alleviate poverty.We have an opportunity as a nation to sharpen our focus, learn from our mistakes, and get our act together to catch up with the rest of the world and to develop our nation.
The purpose of my writing is to alert my countrymen and women of the opportunity that is before us, an opportunity that many of us may not be aware of Malawi, if we choose differently, should not continue to suffer the humiliation and indignation of being labeled one of the poorest countries in the world. The window of opportunity is here if we choose to seize it but it is also closing fast.
If we do not ready ourselves to seize the moment, Malawi may never catch up; the opportunity may be lost forever.
Global Industrial TransferChina had created opportunities for its development by deeply engaging in the global division of labor and seizing the tide of global industrial transfer in time. The first wave of industrial transfer being from western Europe to North America in the 19thcentury, the second wave in 1950’s and 1960’s with the transfer from North America to Japan, Korea and Singapore and the third wave from Japan, Korea and Singapore to China. We are now in the fourth wave of industrial transfer, the transfer from China to other developing countries, especially African countries.
African countries having the advantage of key factors and availability of land and labor and the capacity to harness the transfer of capital and technological know how.China is today the second largest economy in the world with a current GDP of US$14 trillion. Its GDP per capita of 40 years ago of around $150 has since risen to approximately $10,000 today.
This is impressive, despite that it’s GDP is still below the global average of around $12,000 and China is still classified as a developing country. China has become the largest exporter in the world, accounting for 14% of the worlds export total and its economy continues to grow with annual growth rates of GDP in the last four decades averaging 9.5%. The growth however is not as fast as in recent years with a rising GDP per capita and increasing labor costs. China’s exports in 2018 was at US$2.8 trillion, equivalent to 20% of GDP and it has one of the largest foreign exchange reserves in the world of US$3 trillion.
Developing countries under BRI are expected to benefit from the expected wave of industrial transfer from China through special economic zones and local processing.There is however a problem in that the world is very close to replacing human labor with artificial intelligence (AI) technology. When this happens it will be a major setback for developing countries.
Malawi therefore needs to ready itself now by deeply engaging in the global division of labor and seizing the current tide of global industrial transfer. 152 countries in this regard, excluding Malawi, have fully embraced China’s Belt and Road Initiative (BRI) and are seizing the opportune moment.
The Belt and Road Initiative (BRI)The Belt and Road Initiative (BRI) is a global development strategy adopted by the Chinese government involving infrastructure development and investments in 152 countries and international organizations in Asia, Europe, Africa, the Middle East, and the Americas.
President Xi Jinping originally announced the strategy during an official visit to Indonesia and Kazakhstan in 2013. “Belt” refers to the overland routes for road and rail transportation, called “the Silk Road Economic Belt”; whereas “road” refers to the sea routes, or the 21st Century Maritime Silk Road.
The BRI assists under-developed and developing nations to build infrastructure, boost their economies through trade, financial and people to people connectivity while agreeing to “win-win” partnerships. Many countries are turning to China for better trade and infrastructural developments and the BRI has offered an alternative development path to most under developed countries of the world.
The BRI is an opportunity that must be fully embraced for Malawi to attract investments in infrastructure, increase connectivity andaccess to markets and to benefit from technology transfer.
Through the BRI initiative China wants to share its opportunity with the world and enhance cooperation. China’s opening up, its move towards e-commerce, economic globalization through digitalization and big data is a move that is changing China rapidly.
The direct linkage with the final consumer of products has enabled China penetrate national and international markets with ease and has made China the world’s second largest economy within a short period of time.
This has in turn modified China’s economic model into a market driven economy.
I visited a number of big data companies such as global commerce giant Alibaba Group’s head office in Hangzhou, east of China, JUSFOUN in Beijing and the National Big Data Centre in Guiyang, in the west.
Malawi has an advantage in the region, with the recent completion of the first phase of a US$ 30 million high speed fiber optic cable constructed by Huawei of China. We also have another advantage in the region, that of stability (if we maintain it) to attract investments under the BRI especially in technology and as a big data hub.
Data management centers could provide an opportunity for Malawi to boost its economy and provide jobs for young people. Jack Ma, co-founder and Chairman of Alibaba Group is quoted recently to have said that in his opinion “today’s Africa, is the China of 20 years ago” and that “ by relying on the digital revolution, it is possible to turn Africa into a global digital hub”.
Malawi’s biometric National ID card, expanding mobile phone coverage as well as its increasing usage, is an additional opportunity to leverage digitization, for targeted poverty alleviation, better service delivery and decision-making.
The digitization process could enable Malawi leapfrog its economy with the use of modern technologies.
Searching truth from factLet me acknowledge the excellent world renowned teaching Professors at Peking University (PKU) in upgrading my thought process, deepening my understanding of China with a review of China’s economic performance in an era of reforms and opening up.
In particular Prof.
Fu Jun’s ground breaking theory in determining the four sets of causes of growth – physical, institutional, motivational, and entrepreneurial and learning to rely on scientific theory and not just sentimental argument in order to get closer to the truth and to achieve the desired objectives.
The Professor’s at PKU have an impressive ability to combine simple and elegant theories with messy location/time-specific practices by highlighting the critical role of agent, strategy, and policy. Including discussions on agricultural reforms, rural healthcare, industrialization, urbanization and poverty reduction in the context of Chinese history, political economy, the BRI andreflections on what lessons one might draw from China’s growth story in the past 40 years.
Malawi 40 Years AgoFour decades ago, Malawi’s GDP per capita was higher than China’s at $160. Within the same period China has risen peacefully, succeeding in transforming theory into strategy and policies and effectively implementing them. The question now remains, how has China succeeded where Malawi has failed? Where is Malawi getting it wrong? Why are countries different, some rich and some poor? Is it the organization of the communities? Is it the quality of the state or system of governance? Is it tribalism or countries built on a system of factions? What is it? These are the questions that we as Malawians must ask of ourselves.
I have attempted to present my thoughts in this writing using the critical building blocks that have characterized China’s incredible rise and delivered the fastest economic transformation in human history. What similarities are there between Malawi and China? What are the physical, institutional, motivational and entrepreneurial variables that distinguish Malawi and China? What factors could work for Malawi to develop from the primary industrial stage to the medium-term industrial stage? In order to give structure to phenomenon it is important to simplify China with a deeper understanding and to separate truth from fact.
Understanding ChinaFrancis Bacon once famously said ‘before knowledge we are equals’ and I hold this to be true.
Initially just like many other Malawians, I had held my own views and perhaps prejudices against China that I now know as untrue.
I had thought China to be a dictatorial communist country, with very limited space for freedom and rights of its citizens and foreigners. I had also held the view that China is a country flooded with counterfeit goods and where everything is eaten. There is even a famous saying that “the Chinese eat everything with four legs except tables and everything that flies except airplanes.” Even though I had visited China before in 2012, such impressions had been re-enforced by modern media propaganda platforms, which even claim or portray China to be a “threat” to the world with words such as “fear”, “terror”, “land grabbing”, “debt trap”.Chinese CultureChina is a very diversified nation with over 56 ethnic groups spread across 8 administrative regions. It has 9 political parties with the Communist Party of China (CPC) as China’s dominant party with over 90 million members and that fosters consensus on the basis of diversity.
People of different ethnicities, classes and interest in the country seek the shared understandings, ideals and dreams to shape the common identity of all people according to its history and culture.
American historian Professor Jonathan Spence of Yale University aptly summed it up by stating “In trying to understand China today we need to know about China in the past.”
The history and culture of the people that were formed under acommune system helped to build their unity base on their traditional ways of Confucius thoughts. Confucius philosophy of relations and respect among brother to sister, son to father, husband to wife, subject to emperor. This foundation built the virtues of respect for authority and a thinking that, “let brother be brother, father be father and Emperor be Emperor”.
Chinese philosophy is central to the Chinese social order and economic transformation.
State and society are emphasized above the individual and thereis a long history of submitting personal ambition to that of community and state through Confucianism. The degree of control and authoritarian structures are therefore more accepted in China than in most western cultures with their emphasis on individualism.Just like Africa, which was colonized by the Europeans, there were a lot of attempts to colonize China.
However since China had strong dynastic rules from the Qin, Han, Sui, Tang, Song, Yuan, Ming and Qing and having gone through close to 700 years of Imperial examinations under the Emperors, it became hard for the Europeans to colonize China. When they tried through trade, they found the Chinese had more developed capacities of civilizations that could not easily be penetrated.
The Europeans for instance had attempted to export spoons;forks and knives for eating as a way of changing the Chineseculture but to only find them resisting and using chopsticks.
They later started smuggling opium or marijuana into China to cause confusion and pain on the people. This led to the 1840 Opium war because the Chinese were resisting.This was in direct contrast to some African kings and chiefs who worked with imperialist agents to popularize western religion, food, clothing, to break down the African value system and which were later used as tools to colonize Africa.
This was not the case in China because the language, the writings and culture of the Chinese people had advanced so much that the imperialist could not distort. Some scholars hold the view that religion was used to polarize the African population to subdue them into eventual colonization as opium was used on the Chinese people but failed to colonize the Chinese because of their resistance. Emperor Taizong (599-649 AD) of the Tang Dynasty wisely said, “If you treat history as a mirror, you can learn how societies rise and fall.”
I have been amazed by the unity of the Chinese people, despite differences in ethnicity, religion or political beliefs they hold a shared understanding, ideas and dreams of where they want China to be. The Chinese are very proud of their rich culture and rich history, that binds them together. Adam Smith in The Wealth of Nations, 1776 wrote that China was “long one of the richest, that is, one of fertile, best cultivated, most industrious, and most populous countries in the world”.
The Chinese are united under their culture, a history that binds them together and this is a very important factor for the development of any nation.
As a result all categories of leaders (political leaders, civil servants, academicians/intellectuals, businesses) are united and all speak in a chorus voice towards the future of China.
I am the view that Malawi without unity will never develop.
Sadly we may be losing our traditional values of respect for each other. Malawi of today is increasingly divided along tribal lines.
What we can learn from the Chinese is that if they had not remained united, using the very best of their people, they would not have succeeded in uniting the nation along a particular vision and achieved the successes it has achieved to date.
Interestingly when I spoke to many Chinese people, they never identified themselves by their ethnicity but by being Chinese and under a common value system.
I believe that we too as Malawians have a unique value system that is arguably however presently under threat. This needs to be addressed by determining where we are now as a people.
Communism to Free market economicsChina first began moving away from a centrally planned economy towards a market-oriented system in 1978. Chairman Mao’s era from 1949-1976/78 characterized a period of internal soul searching. From cooperatives, commune system, village reforms to the great leap forward. This is the period that is famously said that China was “cleaning the house before you invite guests”.
A period of pain and suffering but that helped to unite the nation and build the spirit of socialism.
China was an agricultural based economy and during this period, farmers had mandatory quotas that they were required to produceand submit to the government, due to the collectivization policy of the time.
Resources were heavily utilized on industrialization and equipment, without a rational output in return. Private ownership of farms was not allowed.
Eventually agricultural production and output dropped drastically leading to widespread food shortages. This led to the “Big Famine” where several hundreds of thousands of people starved to death. The term “Chinese eat everything with four legs except tables—and everything that flies except airplanes” may have arisen during this period.
Human struggle for survival is natural and inevitable. This was an experiment towards developing the country faster, gone very wrong. The campaign was called the “Great Leap forward” and had been led by Chairman Mao. After the “Great Leap forward”, liberal leaders such as Deng Xiaoping within the CPC started criticizing chairman Mao for the setbacks from the campaign.
Deng Xiaoping was Mao’s successor and he sought to bring an end to China’s relative economic isolation. Deng Xiaoping’s era from 1978 came with the opening up of China to the world, embracing foreign trade, investment and establishing institutional reforms for a stable and more prosperous nation.
Lifting the “collectivization” policies and allowing private ownerships of farms for maximum production incentivized the agriculture industry.
Foreign investments were allowed and price controls lifted. Deng Xiaoping famously said that “development is the only hard truth” and that “it does not matter if the cat is black or white, a cat that catches mice is a good cat.”
China has an economic system that works for China and it is often described as “socialism with Chinese characteristics.”
Malawi clearly needs to prioritize sectors that give it a comparative advantage such as in agriculture/agro-processing, potential for big data centers and medical tourism to spur rapid economic transformation.
Although Malawi is an agricultural economy it still spreads scarce resources to areas that will not give a meaningful return on investment. Malawi needs to clearly identify a growth sector that gives it a comparative advantage in the region and beyond, build everything around that sector from tourism, to infrastructure, education and health.
Agriculture has been extremely significant in China’s poverty alleviation drive, more specifically the tea industry in west china.
There was a great depiction on my visit to Meitan, west China of soldiers moving tea during times of war, reminding us of the journey that was undertaken to develop the sector despite enormous challenges and hurdles.
Leadership and Effective Institutions China has set up a political system with Chinese characteristics with the Communist Party of China (CPC) as its dominant party with 90 million members out of a population of 1.4 billion.
There are 8 democratic political parties represented in the National Peoples Congress (NPC) where all the goals for all parties are important; to promote China’s national interests. The National Peoples Congress (NPC), and the Chinese People’s Political Consultative Conference (CPCC) are different platforms for different parties to coordinate, discuss and agree on national initiates.
China’s belief in competition has been extremely important in its development. Its system is not modeled on a western style democracy but in the belief that competition must be orderly, not chaotic and that there must be consensus, without which China would be divided.
China appears to have developed a system that regulates disorderly political conduct and competition through institutional design.
The fundamental purpose of the Chinese party system being to promote virtuous competition rather than vicious competition, to create national integration rather than national division and it has worked for China.
China has a strong and effective government because of a competent and professional civil service that follows a strict selection of cadres (Chinese-style meritocracy).
The meritocratic system in China that has evolved over time provides an opportunity for the most competent people within its society to manage its civil service.
China was the first country in the world to introduce the civil service entry examinations, a competitive process that ensures that the best of the very best are recruited to serve irrespective ofethnicity or affiliation.
The effectiveness of China’s institutions has brought about stability and good conditions for development. This has led to high levels of confidence and enabled the private sector market to develop. China’s systems ensure that irrespective of who is in power, the country always remains stable. An effective state has given root to an efficient market and in the process enabled a very powerful enterprise.
For instance the success of Jack Ma the founder of Alibaba, a leading global e-commerce giant was only made possible because China has an effective state and a market with the mechanism to support the development of innovation and enterprise.
Furthermore, the system of appointing, selecting, promoting government officials (Nomenklatura) directly & indirectly increases the effectiveness and productivity of the workforce, though the system arguably has some disadvantages as well.
Unlike most countries, Chinese officials are obliged to fulfill certain criteria and time periods in order to move up the ladder in terms of their careers in the government.
An individual for instance cannot become the top decision maker of a country without going through all the steps and before reaching certain age limits.
The system is structured like a “game with several levels”, the work force is aware of the conditions, if they are to becomesuccessful.
Short cuts are not possible within the system and as a result are competitive and motivated, contributing to the productivity of the country.As a result China as a developmental state has a government that has been willing and able to realize development. The government of China operates like an invisible hand but an invaluable hand.
It focuses on good conditions for development through hard (concrete) investments such as expressways and high-speed rail. Constructing over 143,000km of expressway and 39,000 km high speed rail, accounting to 70% of the total mileage in the world.
China has shown the world that governments can be the invisible hand that provides the necessary infrastructure to enable the private sector to develop, through the creation of the necessary environment to reassure investors such that they grow more confident to invest.
China believes in the principle of people first.
The administration effectively responds to peoples needs, anxieties and responds to their concerns. A responsive state with the main concerns of the public being addressed such as on inequality and corruption.
This has led to an anti-poverty drive, trying to solve the problem of unbalanced and inadequate development, to eradicate poverty completely by 2020. It has also led to an anti-corruption drive taking shape with strong action to ‘take out tigers’ ‘swat flies’ and ‘hunt down foxes’.
For many years all manufacturing in China was state owned and operated. This has gradually been relaxed as the economy has been restructured and now a large percentage of businesses are privately owned.
China has started to globalize economically by buying up foreign companies in North America and Europe particularly. In fact, in 2010 China invested $56bn in outward Foreign Direct Investment. With inward FDI averaging some $60bn per year, China had, by 2015, converted from a net recipient to a net investor in FDI, a marker of its economic maturity in many respects.
Through Public Private Partnerships (PPP), China has managed to attain 50 percent tax revenue from the private sector, 60 percent GDP contribution from private enterprises, and 70 percent level of local technological innovations and has created a 80 percent employment rate through advancing rapidly towards a market driven economy.
The poverty incidence in China is at 1.7% as of December 2018 and with poverty mainly concentrated in west China with a poverty incidence of around 3-6 %, representing approximately 16.3 million people living in poverty. Since the 18th CPC National Congress in 2012, the CPC Central Committee headed by President Xi Jinping included poverty alleviation into the “Five Sphere Integrated Plan” to promote coordinated economic, political, cultural, social and ecological advancement.
This also included the “Four-pronged Comprehensive Strategy’’ to finish building a moderately prosperous society in all respects, deepen reform, advance law-based governance in order to reach the first centenary goal of building a moderately prosperous nation by the centenary of the founding of the Peoples Republic of China.
Targeted poverty alleviation is a critical strategic step taken by China to eradicate poverty and to build a moderately prosperous society and there are clear lessons that Malawi can draw from China’s strategy.
Firstly what is clear from findings is the need for leadership that has clearly set out goals with well-defined time lines, whilst placing the people at the center of national development.
Malawi has managed to develop a range of very good policy instruments articulating its strategies but has failed to effectively implement them due to inconsistencies, especially when governments change at elections.
There is therefore a need for a clear plan that is ‘owned’ by all and championed by all leaders irrespective of the political party that comes to power. What is critical is national ownership and consistency in policy direction.
The second is ensuring that there is a well-defined governance system of inspection that is accountable and able to deliver public goods such as the provision of services efficiently. My visit to Xuankou Middle School in Wenchuan, an earthquake disaster site symbolized to me the patriotic spirit of the Chinese people especially amongst its officials who place duty first. That leadership is not about personal gain but national gain.
The Chinese flag still flying whilst surrounded by the ruins of the earthquake was a great reminder that ‘you can lose everything but still have your country.’ This patriotic spirit needs to be cultivated amongst all leaders in Malawi who are tasked with the delivery of public goods and services.
Foreign Policy Chinese Foreign policy does not involve “terror”, “war”, “sanctions” or any such harsh means. Despite being continuously threatened and humiliated, china chooses “Peace”, while preserving and ensuring the independence, sovereignty and territorial integrity of the People’s Republic of China. Most importantly China is neither seeking for alliances in the global power struggle, nor labeling any country as a rival or an enemy. Global peace and harmony, what China states it thrives for.
China’s future goals are to finish building a moderately prosperous society in all respects by the time the Communist Party of China celebrates its centenary in 2021.
In turn transforming China into a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious by the time the People’s Republic of China celebrates its centenary in 2049.
I have come to conclude that China has been misunderstood outside of China. A lot of fear is being spread around the globe about the debt trap that China is encouraging most underdeveloped counties into. There are media claims that the BRI projects are connecting countries to China as a way of China establishing a neo-colonial extortion route and that some countries are already surrendering their national assets to China over loans. Whether this is true or not, it has the potential of scaring many countries from dealing openly with China.
China is building a stronger community of the world with a shared future and promoting people to people exchanges in order to have a shared understanding of each other. I observed that us much as many of us do not understand China, the Chinese people also need to understand us better
Jonathan Spence is quoted as saying “there is no easy way to understand China. But the attempt is worth making, for China’s story is an astonishing one and has much to teach us.” Jim O’Neill, Chairman of Goldman Sachs Asset Management is quoted to have said, “China is the greatest story of our generation.”
China chooses its development path according to its conditions, it learns from other countries but does not copy everything and the evidence so far demonstrates that it has worked for China by delivering the fastest economic growth in human history.
We need to learn from China (but don’t have to copy everything) and fully embrace the BRI. Signing up for the BRI has enabled countries to grow at a faster pace, improve people’s lives and reap win-win outcomes. The system may not be perfect, however no system in the world is perfect.
Malawi needs to assemble its finest minds to think hard about what we can do to accelerate economic growth and transformation as well as research on where we are as a people? What makes us different or culturally unique as a people? Who are we and what does it mean to be a Malawian? We need to discuss the similarities that exist between Malawi and China and ask ourselves what we can learn from them? We need a critical self-assessment on our progress to guide us on what we do nextand how we can get there to take advantage of the fourth wave of industrial transfer, the transfer from China to other developing countries, to deliver inclusive growth that supports all regardless of gender, creed, affiliation, color or tribe, to end corruption and alleviate poverty.