Lilongwe - Malawi's Anti-Corruption Bureau (ACB) plans to prosecute former president Bakili Muluzi over $11-million (about R89-million) in donor money it says was syphoned into his private account, its director said on Monday.
"We have applied to the courts to remove an injunction he (Muluzi) obtained stopping us from questioning him because we are now ready to prosecute him on the $11-million found in his account," ACB director Alex Nampota said.
The anti-graft body briefly arrested Muluzi in 2006 on 42 counts of corruption. But all the charges, except for one involving $11-million, were dropped for lack of evidence.
Muluzi, who remains chairman of the opposition United Democratic Front (UDF) party and wants to run for president in elections in 2009, has denied wrongdoing.
Thursday, 20 March 2008
TNT and eBay hook up for on-line auction
Rome, 20 March 2008 - If Drew Barrymore is your favourite actress, here's a chance to own one of WFP's Red Cups, from the 'Fill the Cup' campaign signed by her.
In partnership with Dutch firm TNT , eBay is holding an on-line auction to raise money for WFP to feed schoolchildren in Malawi.
Bidding is open from 16 to 23 March and other items on sale include: T-shirts signed by Kaka and Bob Geldof, art by Monique Turk or a VIP arrangement for the KLM Open 2008 golfing plus the shoes of Italian footballer Francesco Totti.
In partnership with Dutch firm TNT , eBay is holding an on-line auction to raise money for WFP to feed schoolchildren in Malawi.
Bidding is open from 16 to 23 March and other items on sale include: T-shirts signed by Kaka and Bob Geldof, art by Monique Turk or a VIP arrangement for the KLM Open 2008 golfing plus the shoes of Italian footballer Francesco Totti.
Namibia/Malawi: New-Look Squad to Take On Malawi
Windhoek
The Namibian selectors have named a new-look squad in preparation for the friendly match against Malawi in Windhoek on March 26.
Only seven members of Namibia's squad for the AFCON finals in Ghana remain in the squad, while half of the 26-man squad consists of new call-ups. The only remaining members from Ghana are goalkeeper Athiel Mbaha, defenders Michael Pienaar, Franklin April and Gottlieb Nakuta, midfielders Brian Brendell and Jamu Ngatjizeko and striker Muna Katupose.
Amongst the goalkeepers, national Under 20 keeper Max Mbaeva joins Athiel Mbaha after a fine performance against South Africa U20 on March 8.
The newcomers in defence are Andrew Tjahikika and Dennis Ngueza of African Stars and Steve Goaxab of Orlando Pirates, while Ramblers defender Dylan Mieze is recalled to the squad after an absence of five years.
In midfield, Bradley Werman of Ramblers, Marco van Wyk of Cymot SKW and Da Costa Angula of Black Africa receive well-deserved call-ups after impressive performances in the Premier League.
Other newcomers include Percy Khairabeb of Mighty Gunners, Tobias Mekondjo of Blue Waters and Erastus Mpasi of Northern Stream first division outfit Rundu Chiefs.
Tara Katupose of Oshakati City and Nelson Akwenye of Ramblers who represented Namibia in friendly matches last year, but didn't make the final squad to Ghana, are both recalled to the squad.
Orlando Pirates' young striker Eusebio Fredericks gets his first call up to the senior team after an impressive performance for Namibia U20 against South Africa in the Namibian Challenge on March 8, where he won the Player of the Tournament award.
Another newcomer amongst the strikers is Sageus Narimab of Mighty Gunners, while Jerome Louis of Black Africa, who has yet to make his senior debut, is back in the training squad.
Eleven Arrows striker Reinhold Andimba, who won his only cap against Saudi Arabia last year is recalled to the squad.
The friendly against Malawi will give new coach Arie Schans an opportunity to assess the team ahead of a very busy schedule.
Hectic schedule On May 4 Namibia will play Zimbabwe away in Harare in the first leg of the new African Nations Championship (CHAN) competition, with the return leg taking place in Windhoek on the weekend of May 16-18.
If Namibia beats Zimbabwe, they will face the winner between South Africa and Mauritius away on November 28 and at home on December 13.
The winner will represent the Southern Zone at the CHAN finals in the Ivory Coast from February 22 to March 8, 2009.
The Confederation of African Football (CAF) decided to launch the CHAN competition to help develop local-based talent, since only local-based players are allowed to represent their countries in this competition.
World Cup qualifying Namibia start their World Cup African Group 2 qualifying campaign at home to Kenya on May 31.
On June 6 they once again face Zimbabwe in the World Cup qualifiers in Harare, to be followed by home and away matches against Guinea on June 13 and 20 respectively.
Their final World Cup preliminary qualifiers are against Kenya in Nairobi on September 5 and against Zimbabwe in Windhoek on October 10.
Only the winning team in Group 2 will progress to the next round of qualifiers for the 2010 World Cup in South Africa.
The Namibian selectors have named a new-look squad in preparation for the friendly match against Malawi in Windhoek on March 26.
Only seven members of Namibia's squad for the AFCON finals in Ghana remain in the squad, while half of the 26-man squad consists of new call-ups. The only remaining members from Ghana are goalkeeper Athiel Mbaha, defenders Michael Pienaar, Franklin April and Gottlieb Nakuta, midfielders Brian Brendell and Jamu Ngatjizeko and striker Muna Katupose.
Amongst the goalkeepers, national Under 20 keeper Max Mbaeva joins Athiel Mbaha after a fine performance against South Africa U20 on March 8.
The newcomers in defence are Andrew Tjahikika and Dennis Ngueza of African Stars and Steve Goaxab of Orlando Pirates, while Ramblers defender Dylan Mieze is recalled to the squad after an absence of five years.
In midfield, Bradley Werman of Ramblers, Marco van Wyk of Cymot SKW and Da Costa Angula of Black Africa receive well-deserved call-ups after impressive performances in the Premier League.
Other newcomers include Percy Khairabeb of Mighty Gunners, Tobias Mekondjo of Blue Waters and Erastus Mpasi of Northern Stream first division outfit Rundu Chiefs.
Tara Katupose of Oshakati City and Nelson Akwenye of Ramblers who represented Namibia in friendly matches last year, but didn't make the final squad to Ghana, are both recalled to the squad.
Orlando Pirates' young striker Eusebio Fredericks gets his first call up to the senior team after an impressive performance for Namibia U20 against South Africa in the Namibian Challenge on March 8, where he won the Player of the Tournament award.
Another newcomer amongst the strikers is Sageus Narimab of Mighty Gunners, while Jerome Louis of Black Africa, who has yet to make his senior debut, is back in the training squad.
Eleven Arrows striker Reinhold Andimba, who won his only cap against Saudi Arabia last year is recalled to the squad.
The friendly against Malawi will give new coach Arie Schans an opportunity to assess the team ahead of a very busy schedule.
Hectic schedule On May 4 Namibia will play Zimbabwe away in Harare in the first leg of the new African Nations Championship (CHAN) competition, with the return leg taking place in Windhoek on the weekend of May 16-18.
If Namibia beats Zimbabwe, they will face the winner between South Africa and Mauritius away on November 28 and at home on December 13.
The winner will represent the Southern Zone at the CHAN finals in the Ivory Coast from February 22 to March 8, 2009.
The Confederation of African Football (CAF) decided to launch the CHAN competition to help develop local-based talent, since only local-based players are allowed to represent their countries in this competition.
World Cup qualifying Namibia start their World Cup African Group 2 qualifying campaign at home to Kenya on May 31.
On June 6 they once again face Zimbabwe in the World Cup qualifiers in Harare, to be followed by home and away matches against Guinea on June 13 and 20 respectively.
Their final World Cup preliminary qualifiers are against Kenya in Nairobi on September 5 and against Zimbabwe in Windhoek on October 10.
Only the winning team in Group 2 will progress to the next round of qualifiers for the 2010 World Cup in South Africa.
Malawi suspends tobacco sales over falling prices
Malawi suspended a three-days-old tobacco auction on Thursday after farmers withdrew their crop in protest against a drop in prices, a senior official said.
Malawi opened its tobacco auction season on Monday with prices at record highs. Farmers sold their crop at between $6 and $11 per kg -- much higher than the minimum $2.20 set by the government last month.
Auctions were suspended on Thursday after the price dropped to $4 per kg, Tobacco Control Commission general manager Godfrey Chapola told Reuters.
"We have suspended the market until next week after we resolve the issue of prices between the growers and the buyers," he said.
Tobacco accounts for over 70 percent of Malawi's exports and 15 percent of its gross domestic product, but for the last two years low prices have led to several suspensions of sales and cuts in production.
"We don't want to sell our crop at such low prices because this is the same grade which sold between $6 and $11 three days ago," Wilson Chikalimba, a tobacco farmer in rural Lilongwe, said on Thursday.
Tobacco buyers could not be reached for comment.
Malawi opened its tobacco auction season on Monday with prices at record highs. Farmers sold their crop at between $6 and $11 per kg -- much higher than the minimum $2.20 set by the government last month.
Auctions were suspended on Thursday after the price dropped to $4 per kg, Tobacco Control Commission general manager Godfrey Chapola told Reuters.
"We have suspended the market until next week after we resolve the issue of prices between the growers and the buyers," he said.
Tobacco accounts for over 70 percent of Malawi's exports and 15 percent of its gross domestic product, but for the last two years low prices have led to several suspensions of sales and cuts in production.
"We don't want to sell our crop at such low prices because this is the same grade which sold between $6 and $11 three days ago," Wilson Chikalimba, a tobacco farmer in rural Lilongwe, said on Thursday.
Tobacco buyers could not be reached for comment.
Historic Visit of Bulgaria Delegation to Malawi
The first ever official visit of a Bulgarian delegation to the African country of Malawi in the history of the bilateral relations is taking place Thursday. The foreign ministries of the two states are conducting political negotiations in the Malawian capital Lilongwe.
The Bulgarian delegation is led by Bulgaria's Deputy Foreign Minister Feim Chaushev who is currently in the midst of a scandal because his alleged double identity.
On the Malawian side the talks are led by the country's Foreign Minister Joyce Banda, the press service of the Bulgarian Ministry of Foreign Affairs reported.
During his visit, Deputy Minister Chaushev had official working meetings with representatives of Malawi's Ministry of Industry and Trade, Ministry of Irrigation and Water Resources, Ministry of Energy and Mines, and Ministry of Agriculture.
The Bulgarian side presented specific offers and cooperation opportunities between Bulgaria and the landlocked African country in different fields of mutual interest. These include agriculture, processing industry, infrastructure development, mining, energy, especially the construction of dams, hydroelectric power plants, irrigation systems, import of pharmaceuticals.
The Malawian side informed the Bulgarian delegation about the needs of its economy, and about the opportunity that it sees for bilateral cooperation.
The Bulgarian delegation is led by Bulgaria's Deputy Foreign Minister Feim Chaushev who is currently in the midst of a scandal because his alleged double identity.
On the Malawian side the talks are led by the country's Foreign Minister Joyce Banda, the press service of the Bulgarian Ministry of Foreign Affairs reported.
During his visit, Deputy Minister Chaushev had official working meetings with representatives of Malawi's Ministry of Industry and Trade, Ministry of Irrigation and Water Resources, Ministry of Energy and Mines, and Ministry of Agriculture.
The Bulgarian side presented specific offers and cooperation opportunities between Bulgaria and the landlocked African country in different fields of mutual interest. These include agriculture, processing industry, infrastructure development, mining, energy, especially the construction of dams, hydroelectric power plants, irrigation systems, import of pharmaceuticals.
The Malawian side informed the Bulgarian delegation about the needs of its economy, and about the opportunity that it sees for bilateral cooperation.
Malawi civil society groups fear rigged elections in Zimbabwe
LEADING civil society organisations in Malawi have expressed deep concern about the conduct of the electoral process in Zimbabwe, ahead of harmonised elections on March 29.
The NGOs raised the concerns when they held discussions with British High Commissioner to Malawi, Richard Wildash at his official residence.
"Zimbabwe is in dire straits and the situation on the ground is not conducive to the holding of free and fair elections. The political leadership bars Zimbabweans from enjoying their civil and political liberties; civil society and opposition parties are prevented from operating freely", said Billy Banda, Executive Director of Malawi Watch Human Rights.
Undule Mwakasungura, Executive Director of the Centre, echoed his sentiments for Human Rights and Rehabilitation (CHRR), who bemoaned the reluctance of many African leaders to speak out as one of the factors aggravating the situation in Zimbabwe.
"Sadly, the situation is getting worse by every passing day. This calls for international solidarity to bring hope and optimism to the many Zimbabweans suffering under the Mugabe regime. We need to speak out openly about the serious violations of human rights and the flagrant disregard for the rule of law," said Mwakasungula.
Over the past few years, SADC has come under attack from pundits for its failure to publicly condemn the human rights abuses in Zimbabwe.
The hostile political environment has caused a devastating economic crisis that has sent inflation spiralling beyond 100,000 percent, unemployment rates in excess of 80 percent and life expectancy at 35 years.
Affordable basic commodities, food, water and fuel have disappeared from the market while foreign exchange shortages have crippled banks.
Wildash said Britain shared civil society's concerns about the serious governance problems in Zimbabwe.
While Britain did not support any candidate in the elections, he said it was regrettable that the Zimbabwean government had barred EU and Commonwealth observers, preferring to invite "only those with friendly ties with Harare".
"That the electoral process is flawed is clear. The voters' roll is in a shambles; over two million phantom voters, names of thousands of people in urban areas missing, hundreds of polling stations located in wrong constituencies and the creation of over 150 new constituencies without proper consultation," he said.
Wildash said that all accredited countries bore the key responsibility of assessing whether the elections met international norms and standards including the African Charter on Democracy, Elections and Governance and the Southern African Development Community (SADC) principles and guidelines concerning elections, of which Zimbabwe is a signatory.
The NGOs raised the concerns when they held discussions with British High Commissioner to Malawi, Richard Wildash at his official residence.
"Zimbabwe is in dire straits and the situation on the ground is not conducive to the holding of free and fair elections. The political leadership bars Zimbabweans from enjoying their civil and political liberties; civil society and opposition parties are prevented from operating freely", said Billy Banda, Executive Director of Malawi Watch Human Rights.
Undule Mwakasungura, Executive Director of the Centre, echoed his sentiments for Human Rights and Rehabilitation (CHRR), who bemoaned the reluctance of many African leaders to speak out as one of the factors aggravating the situation in Zimbabwe.
"Sadly, the situation is getting worse by every passing day. This calls for international solidarity to bring hope and optimism to the many Zimbabweans suffering under the Mugabe regime. We need to speak out openly about the serious violations of human rights and the flagrant disregard for the rule of law," said Mwakasungula.
Over the past few years, SADC has come under attack from pundits for its failure to publicly condemn the human rights abuses in Zimbabwe.
The hostile political environment has caused a devastating economic crisis that has sent inflation spiralling beyond 100,000 percent, unemployment rates in excess of 80 percent and life expectancy at 35 years.
Affordable basic commodities, food, water and fuel have disappeared from the market while foreign exchange shortages have crippled banks.
Wildash said Britain shared civil society's concerns about the serious governance problems in Zimbabwe.
While Britain did not support any candidate in the elections, he said it was regrettable that the Zimbabwean government had barred EU and Commonwealth observers, preferring to invite "only those with friendly ties with Harare".
"That the electoral process is flawed is clear. The voters' roll is in a shambles; over two million phantom voters, names of thousands of people in urban areas missing, hundreds of polling stations located in wrong constituencies and the creation of over 150 new constituencies without proper consultation," he said.
Wildash said that all accredited countries bore the key responsibility of assessing whether the elections met international norms and standards including the African Charter on Democracy, Elections and Governance and the Southern African Development Community (SADC) principles and guidelines concerning elections, of which Zimbabwe is a signatory.
R&B pop stars hold concert in Malawi
American R&B music icon KCI and Jojo will for the first time be performing in Malawi Thursday(today) in the southern African country's capital of Lilongwe.
KCI_Jojo American R&B music icon KCI and Jojo will for the first time be performing in Malawi Thursday(today) in the southern African country's capital of Lilongwe.
The duo is performing in the country courtesy of O-Towne Records and will be supported by local artists which include Limbani Kalilani aka Tay grin, Skeffa Chimoto, Dan Lufani, The Basement, George Mkandawire, Maluv and the country's Pop music winner Kenneth Kabwila.
O-Towne Records owner Jordan Mlotha said he was happy that the duo had finally made it to the warm heart of Africa for the concert.
The artists are on Africa tour and will also hold concerts in Tanzania, Uganda and Kenya.
KCI and Jojo is an American duo consisting of brothers Cedric KCI Hailey(born on September 2, 1969 and Joel Jojo Hailey(born June 10, 1971).
Both members, natives of Charlotte, North Carolina were also members of the chart topping R&B group Jodeci with the DeGrate brothers: Devante and Dalvin.
The artists who released their fifth album Love on February 6 last year in Japan, have atleast 10 international awards under their belt.
Meanwhile Malawi's 2007 Big Brother Africa II representative Code Admore Sangala has a baby girl with his fiancee Juna Verheji. The name of the baby is Jada who was born on March 12 at Mwaiwathu in the country's commercial city of Blantyre.
Lessons from Chinese Development?
What, if any, lessons does the example of Chinese development have for Africa? I recently attended a panel discussion on development research with reference to Africa, which came at the end of a World Bank workshop on growth and job creation in Africa (PREM), held at St. Catherine's College in Oxford. This workshop also marked the start of the Oxford Centre for the Study of African Economies' (CSAE) annual conference, which invites development economists primarily from African countries to present their work and offers them with a forum for exchange.
During the panel discussion there was mention of the "lessons from China's development for Africa" and I want to outline and assess the arguments.
aboIt was suggested that China's stellar rise at the end of the 70s, and throughout the 80s up to today was the outcome of, or at least considerably influenced, by three factors/events:
1. the increase in agricultural productivity, which came as 'the' first significant reform to the economic system in China;
2. the creation of non-farm employment opportunities in rural areas;
3. the opening up and rapid growth in the coastal region, coming some years after the first two events, and in part driven by the controlled migration of labour from inland ('central') provinces.
Given the complexity of the actual historical events, mentioning just three points certainly over-simplifies the whole affair. Still, I think not many people would argue with the central significance of these events for China's development.
The point I'd like to make in the following is that it is (for want of a better word) dangerous to draw conclusions from the Chinese experience for development in a typical African country - I will take Malawi as an example, as it is landlocked and resource-poor, although I don't think the comments would be much different if I had taken Ghana or Tanzania...
First, some more comments on the three factors/events:
Re (1): Agricultural productivity indeed rose significantly following the emergence of the 'household-responsibility' system in rural areas. As Justin Lin (1987) points out, this system was first introduced by a number of brave farmers in Anhui province, who took matters into their own hand, secretly privatising the land they were working on and detaching themselves from the production plan they were subject to. This reform, which was later given the blessing by the local authorities and eventually was rolled out across China, led to a massive productivity boost in agriculture and led to the emergence of rural markets.
So much for the event. But what was the situation prior to this reform?
Firstly, China's economic was de-facto operating in autarky. Secondly, agriculture, like the rest of the economy, was collectivised; productivity records were dire, and a lot of surplus labour was sitting around doing nothing. My first point is related to the system: a major share of the boost in agricultural productivity in China post-1978 was due to the inefficiency of the system that prevailed at the time. Without institutional constraints and given the right incentives, Chinese farmers destroyed the X-inefficiency which existed in the sector. My second point is related to price-controls: the smart thing about the household-responsibility system was that the central production 'plan' continued to exist (including price-controls) to satisfy minimum food requirements, but that the farmers could sell their surplus over and above the plan on the open market (shuangguizhi - dual track system with market prices prevailing on the margin). The price-controls safeguarded the farmers from excessive risks of going it alone in the market. Thirdly, as I pointed out, as China was a de-facto closed economy without any imports able to undercut the local produce prices, the system of price-controls could be maintained.
Re (2): The rural employment opportunities emerged in the form of Town and Village Enterprises (TVEs), which as one member of the panel pointed out were ingenious organisations in that they were collectively-owned at the local government level (we're talking counties or below), but run as profit-making enterprises, i.e. the incentive structures were just right. These enterprises could employ all those surplus workers in the agricultural sector, while producing the goods that were demanded locally (and in urban areas) in the aftermath of the agricultural productivity boom. It's simple: the peasants could earn more from their crop, so that their demand for other goods increased, and this demand was satisfied by the rural enterprises (recall, that there was no or hardly any international trade going on). The TVEs' management knew exactly what goods were demanded at the local level, they had access to credit whilst not being constrained by any production plan, and since they initially had no competition it didn't really matter that the goods produced were of relatively poor quality - they were available, and that's better than nothing. At the same time, the rural-based TVEs faced comparatively lower taxation, while urban enterprises remained state-owned (SOEs), continuing to operate within the production 'plan', so that TVEs, which were run as profit-maximising firms, could dig away at the former's monopoly-rents in the urban areas.
So, a number of factors were crucial for this explosion in profitable rural enterprises (Naughton, 2007 talks of the "Golden Age of TVE development" between 1978 and the mid-1990s: surplus labour, rising local demand for goods, limited competition from the urban enterprises or outside/imports, preferable taxation.*
Re (3): After a number of years, following a couple of experiments, by the early nineties China's economic development was safely under way. The unrest of 1989 caused some uncertainty, but at the latest following the Southern Trip by Deng Xiaoping in 1992 China's seaboard provinces were basically given the go-ahead to the outward-oriented industrialisation drive that has changed the country and has given it the 'workshop of the world' title. There were Special Economic Zones, followed by open ports, where domestic firms located and produced goods for export, and where foreign firms were invited to come and enjoy the tax-incentives and other benefits on offer. A lot of the goods produced here were (and to an extent still are) labour-intensive manufactures, which are assembled/stitched together by locals and more recently an estimated 150m migrant workers (young, and contrary to the developments in some developing countries both male and female) from central provinces, who spend a couple of years in the coastal boom areas and then return to their home counties to settle down. While the coastal areas and their manufacturing and services sectors have boomed over the last 10 to 15 years, the agricultural sector has not done so well. Equally, the TVEs, which can justly be regarded as the major drivers of the early development, have lost their force: many of them closed down or were turned into private enterprises. Much of the development in urban/sea-board areas has been linked to privatisation and the competitive market environment that evolved over time (plus of course export-production, FDI, etc.), but the foundations for this second phase were built in the first, rural development phase.
So what can Malawi learn from China's development? I would argue not very much, since the pre-conditions, as well as the environmental factors prevalent in China at the time are very different from those Malawi faces today. In order to illustrate this point, I would argue that Malawi could learn from China...
(a) if it had a grossly inefficient collective agricultural sector where incentives were so distorted that it eventually would lead the farmers to 'rebel' against the prevailing system;
(b) if the government were to agree to introduce price controls for agricultural goods;
(c) if Malawi were cut off from international trade (especially in interplay with (b));
(d) if the first stage of agricultural productivity increase were so successful that not only could peasant households afford the risk to send one of their members to work in a local factory/workshop, but also that they earned so much from their increased yield that their demand for goods would rise considerably; and if again, (c) there were no international traders that would offer all these goods at a cheaper price;
(e) if this local demand for non-farm products were so great that budding entrepreneurs would pinch themselves at the opportunities provided by an uncontested market with pretty strong demand;
(f) if there were entrepreneurship at the local level which could enter freely into producing goods at a profit without considerable administrative, business-environmental or contractual issues (access to land, buildings, power, water, virtually no taxation);
(g) if once all these things were going really well, after around 5 to 10 years, there would be more labour freed from the land to move across the border to neighbouring Tanzania, which (in a separate exciting development) suddenly exported heaps of labour-intensive manufacturing goods from its efficient ports and which crucially would not mind that all those Malawians suddenly came over the border and entered wage-employment in the coastal boom-regions (perhaps the South African entrepreneurs could play the equivalent role of the Hong Kong and Taiwanese in China, outsourcing their own manufacturing to Tanzania).
Essentially, I cannot see how Malawi could in any way pursue the same reforms as China, since the institutional, demographic, political and political economy environment between 'China then' and 'Malawi now' are just too different. I therefore believe that trying to draw policy implications from China's development course for African countries is not appropriate. Instead, if one were determined to learn from the Chinese, why not look at development strategies of individual provinces in the interior. Gansu, with its mix of ethnicities, for instance, or Sichuan, until recently (when parts of it was chopped off to create Chongqing municipality) the most populous province, could be argued more convincingly to act as examples for the struggle for development in African countries.
A final point in the China story: the household responsibility reforms was kick-started in Anhui province in 1978. Today, although it has some development cherries of its own (or rather "Cherys" - as one of China's most successful domestic automotive OEMs of that name is based in the province), the province is still rather backward compared with its superstar neighbours Shanghai, Jiangsu and Zhejiang (GDP pc in 2005 was around RMB 8,700, or just over US$1,000. This compares with RMB 51,000, RMB 24,500 and RMB27,700 for the three regions mentioned respectively; in 2005 only 3 out of 31 provinces/municipalities/autonomous regions had lower GDP pc; NBS 2006).
Footnotes
* We're suppressing that probably the level of education was relatively high in China [for its level of development], and that the existing administrative structure, with counties organised around county capitals etc. was conducive to the development of local markets
References
PREM: http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/EXTEMPSHAGRO/0,,contentMDK:21652959~pagePK:210058~piPK:210062~theSitePK:2743783,00.html
Justin Yifu Lin (1987) The Household Responsibility System Reform in China: A Peasant's Institutional Choice
American Journal of Agricultural Economics, Vol. 69, No. 2 (May, 1987), pp. 410-415.
Barry Naughton (2007) The Chinese Economy - Transitions and Growth. Cambridge/Mass. & London: MIT Press.
NBS [National Bureau of Statistics of the PRC] (2006) China Statistical Yearbook 2006, Table 3-9, Gross Regional Product (2005). China Statistics Press.
Posted by Mark Koyama on March 19, 2008 at 02:5
During the panel discussion there was mention of the "lessons from China's development for Africa" and I want to outline and assess the arguments.
aboIt was suggested that China's stellar rise at the end of the 70s, and throughout the 80s up to today was the outcome of, or at least considerably influenced, by three factors/events:
1. the increase in agricultural productivity, which came as 'the' first significant reform to the economic system in China;
2. the creation of non-farm employment opportunities in rural areas;
3. the opening up and rapid growth in the coastal region, coming some years after the first two events, and in part driven by the controlled migration of labour from inland ('central') provinces.
Given the complexity of the actual historical events, mentioning just three points certainly over-simplifies the whole affair. Still, I think not many people would argue with the central significance of these events for China's development.
The point I'd like to make in the following is that it is (for want of a better word) dangerous to draw conclusions from the Chinese experience for development in a typical African country - I will take Malawi as an example, as it is landlocked and resource-poor, although I don't think the comments would be much different if I had taken Ghana or Tanzania...
First, some more comments on the three factors/events:
Re (1): Agricultural productivity indeed rose significantly following the emergence of the 'household-responsibility' system in rural areas. As Justin Lin (1987) points out, this system was first introduced by a number of brave farmers in Anhui province, who took matters into their own hand, secretly privatising the land they were working on and detaching themselves from the production plan they were subject to. This reform, which was later given the blessing by the local authorities and eventually was rolled out across China, led to a massive productivity boost in agriculture and led to the emergence of rural markets.
So much for the event. But what was the situation prior to this reform?
Firstly, China's economic was de-facto operating in autarky. Secondly, agriculture, like the rest of the economy, was collectivised; productivity records were dire, and a lot of surplus labour was sitting around doing nothing. My first point is related to the system: a major share of the boost in agricultural productivity in China post-1978 was due to the inefficiency of the system that prevailed at the time. Without institutional constraints and given the right incentives, Chinese farmers destroyed the X-inefficiency which existed in the sector. My second point is related to price-controls: the smart thing about the household-responsibility system was that the central production 'plan' continued to exist (including price-controls) to satisfy minimum food requirements, but that the farmers could sell their surplus over and above the plan on the open market (shuangguizhi - dual track system with market prices prevailing on the margin). The price-controls safeguarded the farmers from excessive risks of going it alone in the market. Thirdly, as I pointed out, as China was a de-facto closed economy without any imports able to undercut the local produce prices, the system of price-controls could be maintained.
Re (2): The rural employment opportunities emerged in the form of Town and Village Enterprises (TVEs), which as one member of the panel pointed out were ingenious organisations in that they were collectively-owned at the local government level (we're talking counties or below), but run as profit-making enterprises, i.e. the incentive structures were just right. These enterprises could employ all those surplus workers in the agricultural sector, while producing the goods that were demanded locally (and in urban areas) in the aftermath of the agricultural productivity boom. It's simple: the peasants could earn more from their crop, so that their demand for other goods increased, and this demand was satisfied by the rural enterprises (recall, that there was no or hardly any international trade going on). The TVEs' management knew exactly what goods were demanded at the local level, they had access to credit whilst not being constrained by any production plan, and since they initially had no competition it didn't really matter that the goods produced were of relatively poor quality - they were available, and that's better than nothing. At the same time, the rural-based TVEs faced comparatively lower taxation, while urban enterprises remained state-owned (SOEs), continuing to operate within the production 'plan', so that TVEs, which were run as profit-maximising firms, could dig away at the former's monopoly-rents in the urban areas.
So, a number of factors were crucial for this explosion in profitable rural enterprises (Naughton, 2007 talks of the "Golden Age of TVE development" between 1978 and the mid-1990s: surplus labour, rising local demand for goods, limited competition from the urban enterprises or outside/imports, preferable taxation.*
Re (3): After a number of years, following a couple of experiments, by the early nineties China's economic development was safely under way. The unrest of 1989 caused some uncertainty, but at the latest following the Southern Trip by Deng Xiaoping in 1992 China's seaboard provinces were basically given the go-ahead to the outward-oriented industrialisation drive that has changed the country and has given it the 'workshop of the world' title. There were Special Economic Zones, followed by open ports, where domestic firms located and produced goods for export, and where foreign firms were invited to come and enjoy the tax-incentives and other benefits on offer. A lot of the goods produced here were (and to an extent still are) labour-intensive manufactures, which are assembled/stitched together by locals and more recently an estimated 150m migrant workers (young, and contrary to the developments in some developing countries both male and female) from central provinces, who spend a couple of years in the coastal boom areas and then return to their home counties to settle down. While the coastal areas and their manufacturing and services sectors have boomed over the last 10 to 15 years, the agricultural sector has not done so well. Equally, the TVEs, which can justly be regarded as the major drivers of the early development, have lost their force: many of them closed down or were turned into private enterprises. Much of the development in urban/sea-board areas has been linked to privatisation and the competitive market environment that evolved over time (plus of course export-production, FDI, etc.), but the foundations for this second phase were built in the first, rural development phase.
So what can Malawi learn from China's development? I would argue not very much, since the pre-conditions, as well as the environmental factors prevalent in China at the time are very different from those Malawi faces today. In order to illustrate this point, I would argue that Malawi could learn from China...
(a) if it had a grossly inefficient collective agricultural sector where incentives were so distorted that it eventually would lead the farmers to 'rebel' against the prevailing system;
(b) if the government were to agree to introduce price controls for agricultural goods;
(c) if Malawi were cut off from international trade (especially in interplay with (b));
(d) if the first stage of agricultural productivity increase were so successful that not only could peasant households afford the risk to send one of their members to work in a local factory/workshop, but also that they earned so much from their increased yield that their demand for goods would rise considerably; and if again, (c) there were no international traders that would offer all these goods at a cheaper price;
(e) if this local demand for non-farm products were so great that budding entrepreneurs would pinch themselves at the opportunities provided by an uncontested market with pretty strong demand;
(f) if there were entrepreneurship at the local level which could enter freely into producing goods at a profit without considerable administrative, business-environmental or contractual issues (access to land, buildings, power, water, virtually no taxation);
(g) if once all these things were going really well, after around 5 to 10 years, there would be more labour freed from the land to move across the border to neighbouring Tanzania, which (in a separate exciting development) suddenly exported heaps of labour-intensive manufacturing goods from its efficient ports and which crucially would not mind that all those Malawians suddenly came over the border and entered wage-employment in the coastal boom-regions (perhaps the South African entrepreneurs could play the equivalent role of the Hong Kong and Taiwanese in China, outsourcing their own manufacturing to Tanzania).
Essentially, I cannot see how Malawi could in any way pursue the same reforms as China, since the institutional, demographic, political and political economy environment between 'China then' and 'Malawi now' are just too different. I therefore believe that trying to draw policy implications from China's development course for African countries is not appropriate. Instead, if one were determined to learn from the Chinese, why not look at development strategies of individual provinces in the interior. Gansu, with its mix of ethnicities, for instance, or Sichuan, until recently (when parts of it was chopped off to create Chongqing municipality) the most populous province, could be argued more convincingly to act as examples for the struggle for development in African countries.
A final point in the China story: the household responsibility reforms was kick-started in Anhui province in 1978. Today, although it has some development cherries of its own (or rather "Cherys" - as one of China's most successful domestic automotive OEMs of that name is based in the province), the province is still rather backward compared with its superstar neighbours Shanghai, Jiangsu and Zhejiang (GDP pc in 2005 was around RMB 8,700, or just over US$1,000. This compares with RMB 51,000, RMB 24,500 and RMB27,700 for the three regions mentioned respectively; in 2005 only 3 out of 31 provinces/municipalities/autonomous regions had lower GDP pc; NBS 2006).
Footnotes
* We're suppressing that probably the level of education was relatively high in China [for its level of development], and that the existing administrative structure, with counties organised around county capitals etc. was conducive to the development of local markets
References
PREM: http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/EXTEMPSHAGRO/0,,contentMDK:21652959~pagePK:210058~piPK:210062~theSitePK:2743783,00.html
Justin Yifu Lin (1987) The Household Responsibility System Reform in China: A Peasant's Institutional Choice
American Journal of Agricultural Economics, Vol. 69, No. 2 (May, 1987), pp. 410-415.
Barry Naughton (2007) The Chinese Economy - Transitions and Growth. Cambridge/Mass. & London: MIT Press.
NBS [National Bureau of Statistics of the PRC] (2006) China Statistical Yearbook 2006, Table 3-9, Gross Regional Product (2005). China Statistics Press.
Posted by Mark Koyama on March 19, 2008 at 02:5
When will they ever learn?
History is repeating itself as the Anglican Central African Province House of Bishops under the 'guidance' of acting Dean Albert Chama of Northern Zambia, continues to force its programme of preferred candidates on the Dioceses of of Lake Malawi and Upper Shire. Meeting at the end of this month the Bishops will attempt to impose Henry M'baya on Lake Malawi and Alinafe Kalemba, Dean of Leonard Kamungu Theological College, Zomba on Upper Shire.
Both of these candidates are unpopular and both dioceses have already democratically indicated that they do not want imposed candidates. In the case of Lake Malawi the people have long since have voted overwhelmingly for the Rev'd Nicholas Henderson who was then declared to be of 'unsound faith' in a ridiculous decision by a contrived Court of Confirmation two years ago.
Subsequently, Bishop Chama sought to force new elections on Lake Malawi but courageously the people stopped these by appealing to a Civil Court, as reported by us in earlier releases. The House of Bishops' case is so weak that they have now had to resort to hiring professional lawyers at great and wasteful expense to try and assert that synodical procedures have been followed when they manifestly have not.
ANGLICAN-INFORMATION observes the scandal that precious church monies should be wasted by the bishops in attempting to prop up their foolish decision to force new elections when proper synodical procedures had already been agreed.
Herein is the problem, as the chosen successor (following the sacking of the Bishop of Botswana) to former Archbishop Bernard Malango, Bishop Chama, who is amusingly nicknamed in Malawi 'Son of Malango', has like his 'father', failed to understand the conciliar nature of Anglican episcopacy, which has as its basis the concept of 'Bishop in Synod'. Thus correct synodical procedures have constantly been flouted as Chama, following in Malango's footsteps has sought to crush any opposition and impose his own agenda. Ironically, this is exactly the style of Chama’s old friend Nolbert Kunonga former bishop of Harare, Zimbabwe, who despite the overwhelming wish of the people and clergy to rejoin the Province under the leadership of Bishop Sebastian Bakare, is holding out (literally) in St Mary's Cathedral and encouraging violence and intimidation in order to cling to power.
What is deeply sad is that the rest of the House of Bishops, embedded in a culture of deference and fearful of standing up, have allowed Chama to orchestrate such a mess in Malawi and to trample over correct procedures. In this respect we have been asked to publish the letter below from all the Archdeacons of Upper Shire Diocese protesting in a very reasonable way against the actions of Chama and the bishops.
Both of these candidates are unpopular and both dioceses have already democratically indicated that they do not want imposed candidates. In the case of Lake Malawi the people have long since have voted overwhelmingly for the Rev'd Nicholas Henderson who was then declared to be of 'unsound faith' in a ridiculous decision by a contrived Court of Confirmation two years ago.
Subsequently, Bishop Chama sought to force new elections on Lake Malawi but courageously the people stopped these by appealing to a Civil Court, as reported by us in earlier releases. The House of Bishops' case is so weak that they have now had to resort to hiring professional lawyers at great and wasteful expense to try and assert that synodical procedures have been followed when they manifestly have not.
ANGLICAN-INFORMATION observes the scandal that precious church monies should be wasted by the bishops in attempting to prop up their foolish decision to force new elections when proper synodical procedures had already been agreed.
Herein is the problem, as the chosen successor (following the sacking of the Bishop of Botswana) to former Archbishop Bernard Malango, Bishop Chama, who is amusingly nicknamed in Malawi 'Son of Malango', has like his 'father', failed to understand the conciliar nature of Anglican episcopacy, which has as its basis the concept of 'Bishop in Synod'. Thus correct synodical procedures have constantly been flouted as Chama, following in Malango's footsteps has sought to crush any opposition and impose his own agenda. Ironically, this is exactly the style of Chama’s old friend Nolbert Kunonga former bishop of Harare, Zimbabwe, who despite the overwhelming wish of the people and clergy to rejoin the Province under the leadership of Bishop Sebastian Bakare, is holding out (literally) in St Mary's Cathedral and encouraging violence and intimidation in order to cling to power.
What is deeply sad is that the rest of the House of Bishops, embedded in a culture of deference and fearful of standing up, have allowed Chama to orchestrate such a mess in Malawi and to trample over correct procedures. In this respect we have been asked to publish the letter below from all the Archdeacons of Upper Shire Diocese protesting in a very reasonable way against the actions of Chama and the bishops.
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