Industrialisation versus kaunjika
A week or so ago, I was watching the BBC Focus on Africa in which three Malawians were featured, a young lady who was directly in touch with the BBC announcer, a young man who was introduced as an expert on the problem to be discussed and a gentleman who took a grin view of the problem in question.
The issue was about the benefits and harms of the second-hand avalanche into Malawi. As it turned out, the second-hand clothes flood other African countries as well. It is a continental problem.
Should imports of second-hand clothes be banned? The young man gave a non-committal answer by saying, there should be a balance. Perhaps, he was talking about the interests of those who grow cotton and those who have set up textile industries on the one hand and the importers and buyers of second- hand clothes on the other hand.
When you are vague as to what you ought to do, you will end either doing nothing or doing anything that will give you no satisfaction of any type. We ought to crystallise the current and impending economic problems of Malawi.
Malawi’s development is top-sided and needs diversification if the economy is to avoid extremes of stagnation and poverty.
First, there must be diversification within the agricultural sector. Tobacco as the cash cow of the economy is under a death sentence of the World Health Organisation (WHO). We know that tobacco is a sunset industry, but we do not seem to do everything necessary and possible to replace it by an industry with a brighter future.
The second type of diversification is between sectors, primary, secondary and tertiary. It is true that agriculture has in the histories of many countries been the spring- board of economic development. However, countries that have tallied too long on agriculture have been left behind by those that have ventured into industrialisation.
Most of the latter have started with textile industries partly because they are labour intensive. They do not require the importation of capital goods of unusual and expensive type.
If we are serious about setting up secondary industries in Malawi, we must shield our textile industry from destructive imports such as the second-hand clothes and the junk from newly industrialising countries.
The history of industrialisation or economic growth and development is the history of what Harvard University professor Joseph Schumpeter called creative destruction. To create a new industry, you must destroy an existing one, which does not fully satisfy current needs. To make an omelet, you must break an egg.
From Malawi’s own economic history we can cite cases of creative destruction. In the period before the 20th century, loads were carried on men’s shoulders and women’s heads. Those foreigners who were setting up new centres of activity in Malawi such as missionaries and government officials used to hire hundreds of people to bring loads from Mozambique ports. When in 1908 the Shire Highlands Railway was completed, all the amtengatenga and the porters or carriers lost their jobs. But some managed to find alternative jobs on the railway and on estates. A new industry usually creates new jobs in place of the old ones.
The latest example of creative destruction is the advent of the mobile phone, which has made telegrahists redundant. But they have found alternative jobs.
There should be no such a thing as ‘balancing’ whatever this means. To industrialise Malawi, the importation of second-hand clothes should be steadily phased out. First raise import duties on second- hand clothes and use the proceeds to subsidies the cotton industry. All forms of dumping should be kept out of the country.
So long as the textile industry is growing, new jobs will be found for those who depend on the selling of second-hand clothes.
Prima facie the second hand stuff has improved the common person’s attire. But it is indirectly a weapon by developed countries to kill textile industries in Africa. From past experience, the growth of textile in India and Japan ruined textile industries in Britain and elsewhere.
There is no dignity for an individual or a nation surviving on left overs of other people or countries.
I love this article and I agree with it. Its time to move on and develop. Its also time to cut down on unnecessary forx outflows. There shd also be high import taxes on any fruits and vegetables and every other product that we can easily produce. If this cant be done coz of WTO, SADC etc, ask for them to be organic. Malawians’ health is not for sale.
A DD Phiri with a stroke of your pen on this article you have got my full attention! If we can get enough people to think industrialisation then I will come home and lead the revolution. A revolution must be led to be successful! Malawi cannot continue on primary production level.
I agree with you the economy is lopsided without diversification. All countries of the world started as subsistence agricultural economies –UK , US, Japan or China. Then they industrialised (started manufacturing). It does not mean stopping agriculture but boosting its productivity tenfold with mechanisation (tractors, fertilisers or insecticides – and throw away hoes, lol). I just want to emphasise one thing. Although textile is viewed as one of the early starter industries, in itself it is not the starting point. That is why Malawi previous attempt with David whitehead textiles ended in dead-end. There is a distinct starting point for an industrial revolution and that “source” has eluded Africa. On the suggestion of protecting our infant industries I completely agree with you.
Malawi cannot continue moving forward at the level it is at. The door is upwards so we need a lift to the secondary level through world- class manufacturing. I am particularly pleased to see that you are quoting people like Schumpter because like Smith, Ricardo, Malthus and Marshall these people were commentating on tectonic economic changes happening in Europe as their industrial revolution was raging on unlike modern Development Economists who only theorise! Malawi development does not need to take 200 years to develop as Europe did. With proper planning, we can do it in 20 years! I have a fail-safe framework and plan to revolutionise Malawi. We can soon reach the Lewis turning point (LTP) as China has just reached. LTP is when Malawi will run out of rural labour to work in industries.
Instead of starting with banning importation upfront that could cause pain to our people I suggest that we follow a pull system where we ban importation on commodities that we have already successfully started production. For example, every time we have a new textile company start in Malawi, we put up import duty on those products the company makes, targeting specific Standard Industrial Codes (SIC). Yes there will be conflict with other suppliers who will counter raise duties on Malawi made products but that is common everywhere. Here in Europe we are threatening duty on Chinese solar panels. The US has imposed duty on importation of steel from China. We need an ACT of parliament to ban dumping in the country.
Industrialisation is the only way known to man to transform economies from primary to secondary, tertiary through to quaternary sectors of knowledge economy. It is not true that it is God who will transform Malawi, we must do it. Some people think Malawi is poor because people are not working hard enough, in a mechanised economy productivity is not dependent on your toiling, but it depends on the machine capacity. If I may paraphrase it, productivity depends on the size of your machine. If 10 people produce soap with 5,000 soap units a day capacity machine their productivity will be surpassed by 10 people using 500,000 soaps a day capacity machine. New industries will always create jobs and is the basis of job creation in any country.
Wealth creation, economic growth and improved standard of living will soon happen. Malawians do not hate each other. The country is not poor because one tribe held the other tribe back or monopolise but because we have not industrialised. I reject as false any reference insinuation in political commentary that one tribe has kept the country down. The Lomwes under DPP (or indeed any tribes) did not hold back development. Let us move beyond simplistic petty politics and tribal divisions. Industrialisation will pull up every district, every tribe, every person, every child, into good standard of living. I do not accept this defeatist attitude that results in all countries overtaking. Malawi in GDP. Cars, helicopters, tractors, rail, modern buildings, textiles, Kevlar, modern schools, vessels on the lake, etc all made in Malawi not “imported”….!!! United we will transform Malawi.
Let’s destroy an industry that is vital to the well being of many Malawians and sell people clothes at a much higher price from behind the walls of import tariff barriers. Oh yeah! This has been tried before and failed dismally- it was called David Whitehead. Governments are useless the world over at picking winners and should confine themselves to making Malawi a low tax jurisdiction with an enabling environment towards business, No one knows which business will be successful- export textiles offers a good opportunity for Malawi but giving connected insiders a tariff protected hold over the domestic market is a failed theory from fifty years ago.