Interview: Chinese model of state market economy good for Africa
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E-mail Xinhua, October 5, 2012
by Justice Lee Adoboe
ACCRA, Oct. 5 (Xinhua) -- A Ghanaian academic and policy analyst proposes that African governments take a cue from China's modern development history to boost growth in their own economies.
Lloyd Amoah, an assistant professor at Ashesi University College, said that it would take the type of creative interaction between the state and market economy, which China's evolution has witnessed since 1978, for African countries to accelerate the development of their economies.
Amoah traced the history of China's development from the days of then Chinese leader Deng Xiaoping, when the country adopted a policy of opening up its economy to foreign investments.
"It was linked to the increased awareness among the Chinese leaders and their political elite that although putting the state as the main entity for development in the economy was profitable, there was the need to shift to market as an important partner in development," Amoah said in a telephone interview.
He cited the examples of financial crises in the United States and the European countries to vindicate the Chinese model, where their people held an "evangelical" belief that the market economy was the way forward.
"It is important to strike a balance between the state and market economies, especially with the recent recession, which started with the American sub-prime crisis and banking sector crisis and resulted in the global financial crisis," Amoah said.
Between the 1980s and 1990s, African countries, including Ghana, undertook economic reforms under the direction of the World Bank, the International Monetary Fund (IMF) and bilateral partners from the European countries to revive their ailing and collapsed economies.
The market economy was prescribed in a wholesale manner to the African countries as a way to deal with the debt crisis, weak manufacturing bases, and other economic woes that had plagued the continent.
But Amoah believed "the Chinese model teaches us that the market and state can coexist and work together for development."
That, Amoah believed, was only possible with strategic vision as the Chinese had demonstrated. At the beginning of the Chinese evolution, critical investment came from their compatriots, he explained.
"With this strategic maneuver, the returns on the investments became obvious at once," he said. Then other global manufacturing giants identified China as their next investment destination.
The second lesson African countries could learn from the Chinese model, he said, was the ability of their leaders to read the global economy and adjust to the new trends.
"By the turn of the 21st Century, China started reconfiguring its economy from manufacturing-based to more high-end technological approaches, including nano-technology and Information and Communication Technology (ICT)," Amoah said.
"Moreover, the Chinese leaders demonstrate independence. They are able to think for themselves after observing what others are doing," he said.
Amoah explained that the Chinese did not just follow the global trends and models, but learned from the best practices around the world and created what suited their own situation. He added that the African countries needed that kind of visionary alertness demonstrated by the Chinese.
From these, he believed Beijing was able to craft a market economy with Chinese characteristics.
Moreover, Amoah believed that the Chinese leadership type was also well suited for China's development agenda, as it ensured smooth transition from one leader to the other in a communist system termed socialism with Chinese characteristics.
He held that the wind of democracy blowing across Africa was gradually dealing with the leadership and succession crisis that had embroiled the continent in past decades.
"This is critical and so robust and responds to the leadership gap," he said.
Frankline Cudjoe, executive director of the local think-tank Imani Ghana, said one of the things helping China was the fact that they did due diligence.
"This is one thing that Africa and Ghana must emulate. They pay particular attention to every detail of information available on whatever they are doing," he said.
Cudjoe said discipline was another factor in China's development history, adding that they persisted in what they were doing until they got the required results.
The ability of China to open up to encourage cross-border trading, Cudjoe said, was another factor that precipitated its development.
Magnus Ebo Duncan, head of economic statistics at the Ghana Statistical Service (GSS), attributed China's development to political stability and boldness.
"China's development is attributable to political decisions," Duncan said. "They have been following one development agenda over the years with no disruption, and their political system enables them to take decisions which do not affect voting patterns."
"Ghanaian democratic practice has the ruling government take a decision that is good as a long-term measure, but would have some short-term unpalatable effects on the people," he said.
Duncan lamented that opponents of ruling governments capitalized on short-term difficulties to campaign against the ruling parties in order to get them voted out of power.
"That is the problem of Africa. We do not have one national development agenda. Manifestos of the different political parties are geared toward the same goal by different approaches, and strong sentiments are expressed on each side of the political divide," he said.
Duncan called for a development blueprint for Ghana and urged politicians not to shy away from difficult economic decisions, no matter how unpalatable they might be in the short-term. Enditem
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