Political side of the business environment
Malawi just slipped 10 points on the World Bank ease of doing business prospects for 2014. It now has a rank of 171 amongst 189 countries in the world. It now ranks 183 out 189 countries in terms of getting electricity to a business place. Usually it is quite easy to discredit such surveys, just like our colleagues in India. True be told, truth hurts but in this country we all agree on the electricity issue. The overall ranking is not debatable in my opinion, but always a reminder of how, as a country we have fallen in love with the status quo.
Sadly, the status-quo is not static in the semantics of the term. It can be interpreted as stagnant for the ultra-nationalist Malawian. For the liberal minded thought, it is not stagnation but rather, an economy in steady and perpetual decline despite a myriad of platform-based policy utterances. Not really wanting to do comparisons, I did however notice that the country on the other side of Songwe ranks 145, and believe you me , a serious minded investor may opt for the “enemy”.
Now tales goes of some foreign investors that have come out in the public expressing their life most regret. Some of such regrets include bringing their money into this country and branding the country corrupt, nepotistic and various vices of cronyism at the core of business. Not many of us who would have the courage to oppose such sentiments because paying bribes has become a predominant norm and institionalised way of doing business of any kind.
Sometimes one is tempted that there exists some kind of docility to do with a dictatorial hangover of the brutal three decades of single party dictatorship. An element of excitement that followed in 1994 with various good governance institutions that got established but have not lived to their billing. Or it could be the excitement actually ignored that good governance is not just an aspect of politics but strong institutions that can check the abuse of executive power. Instead, the 1994 excitement did nothing to reduce executive power but even strengthened it.
The sad part of the story is that the strength of the executive has become so strong and institutions that exist to promote good governance including enforcing contracts and property rights are too ineffective. For example, Malawi now ranks 150 out of 189 countries in resolving insolvency for companies seek liquidation from 136 in 2012. In terms of starting of a new business, Malawi currently ranks 149 from a previous 142. Put it simple, it is not only difficult to start a business but also tough to close it down should issues of insolvency come into play. The only positive thing is that it takes a day to register for income tax. But again, who are we going to tax if we cant make it easy for direct foreigner investors to be in the market?
Getting back to the status-quo line, could we begin to get worried that either the country has resigned to some fatalism or is content in the free ride of public goods? Probably not, because the levels of individual confidence plus external perceptions are naturally key to lifting our spirits. While corruption has become some kind of norm and the economy steadily heading into some abyss, a kind of soul searching has to commence now than later. Our neighbours are moving very fast and all rank ahead of this country in terms of ease of doing business and a number of general well-being indicators.
We are a very corrupt country no doubt about that. Evidence exists to the effect that we have a whole institution dedicated to fighting this vice with its degree of success too embarrassing to mention. But as the ones that are governed, I suppose a change in the mindset for every person is not only a necessity but an imperative. In all this, Malawians must demand leadership that is progressive and ready to modernise the economy otherwise we shall remain the “sick-man” of Sadc.
