Positioning the State in the economy

When we talk of economic and social development these days, we must always begin with the position or role of the State. It is true that private sector is the engine of economic growth, but not in the laissez fair sense whereby the State confines itself to providing law and order.

Unless the State allocates a proportional role to itself, the private sector will not achieve much. The executive branch of the State also known as the government has as primary responsibility to see that necessary activities for the growth of the economy are taking place. In this case, it must borrow some techniques that are adopted by firms that wish to survive and grow.

Firms have missions to achieve. They achieve them by selecting products and services on which to build the business. The State too must pinpoint products and services that constitute the economy. Like firms, States must engage in questions like: where are we now and where do we want to be? It should visualise what the economy will be like during the next 10 or 12 years. Where there is no vision, there is no future.

Firms that survive and prosper never forget that products have a life cycle. The products are born, grow, mature, decline and die. Firms prepare for this irreversible trend by engaging in research and development of new products.

When Japan first entered the global economy, she depended on textiles like silk clothes. They were received; Japan had a monopoly as silkworms were not found outside Japan. The shrewd Japanese prepared themselves for the day when the world market would lose appetite for silk clothes and go for artificial fabrics like rayon. When indeed the demand for silk died, Japan was not caught napping. By that time, she had started the production of high-value industrial products such as cameras, watches, chemical ships, cars and so on.

Malawi too has experienced the product life cycle. At the beginning of the 20th century, coffee seemed to be even more promising as an export commodity than tea, tobacco and cotton. But the coffee industry died suddenly because of two factors. A certain disease attacked the plant at the very time that Brazil coffee flooded the global market with its coffee exports and ruined prices. The coffee industry has been reintroduced, let us hope now it will last longer but we must behave as if it will have brief existence and continue to search for other export commodities.

At the end of World War II, estate owners in Thyolo and Mulanje saw the possibility of starting the production of tung oil in the highland of Northern Province. The idea was taken up by the colonial office in London which started plantations near a stream called Mzuzu. Tung oil gave good promise when prices on the international market were buoyant. The government decided to build a new town there and call it Mzuzu. The name Mzuzu in the Ngoni (zulu) language means short time and the tung oil industry lived up the town name, a short time. However, the idea of transferring the capital of the Northern Province from Mzimba to Mzuzu was put into effect by the mid-1950s and Mzuzu is now a blossoming regional capital.

Economic planning in Malawi ought to include assessing life cycle of the various products and services that now constitute the economy. Danger signals about the tobacco industry have been seen many times. If the World Health Organisation (WHO) induces every country in the world to keep out tobacco imports, Malawians will not complain that they have been taken by surprise.

It is time to engage in active research and development in the primary and secondary levels. As far back as the year 1924, the Phelps Stokes Commission on African Education in Eastern Africa noted that Nyasaland (Malawi) had all the natural resources and its people had the intelligence that was equal with that of the best in Africa, yet at that time Sierra Leone, Zanzibar and Gambia, smaller countries had higher per capita incomes. In our own time, Rwanda with a population of six million and farther from the sea than Malawi is making headlines with its development programmes. Why are we not performing better? There is inertia somewhere in our culture.n