A billionaire is worse off than a trillionaire. That is common sense, but don’t just run a logarithm of the two or even try to filter price effects or currency depreciations. It might kill the excitement. Once one is loaded that’s it. But the average dude on the street is not yet a “thousandaire”.
For the first time, the 2016/17 proposed National Budget has hit a trillion. Whoever imagined this day would come soon? Running the country requires a trillion, of course. I wonder which private business will match this soon or some entrepreneur. The kwacha has been on the roll for some time due to over documented reasons and theories. We got here anyway. No qualms and I reckon our trek to the next level is just a matter of time. Pray for the Malawi kwacha.
But our skins have to get thicker and especially in handling a trillion. The Germans developed one after the Treaty of Versailles awash with war reparations. In a typical Amin style, the Deutsche Mark was printed massively but rose to become some worthless piece of paper. The economics of money well misunderstood, but then the Chicago School was not yet born. But the beauty about it is that Germany is Europe’s biggest economy today, fourth globally after the United States (US), China and Japan.
So don’t worry about it but like them, we all have to grow up some day. While we may not have had the matching Marshall Plan style windfall, there are parallels we can draw from their experience. Growing comes with accepting responsibility and realising one is no longer in their youth. It comes with a realisation of doing the best for the future and avoiding the past mistakes, including finger dipping.
There are consequences for failing to grow.
Growth is sometimes a matter of choice and recognising that the landscape is not the same. After all, we do not operate in a vacuum. There are different types of growth. Biological growth cannot be suppressed. It is an act of nature for which there is no cure. Living things die. It is that simple. But growth in terms of making your own decisions about life is a different matter.
Think of huge corporations and track their history. Amazon, started from a house garage and has risen to become the icon of e-commerce. Facebook was an idea crafted in college dormitories and has matured to an enviable multi-billion dollar company. From a nation point view, I can say that nations also make choices. They can choose to grow or remain the same way.
The wave of industrialisation that started around the 1770’s in England and spread across western world is a living experience. The strides made over the years in Eastern Asia, is a modern version of industrialisation and the thick skin that comes with making such choices. Why were all these miracles possible?
It is not easy to explain all these things. On the contrary, we can as well think of businesses or institutions that once thrived. How many do you know that are now part of the history of corporate failure? There are many of them. Similarly today, we still have many countries that have been stuck in poverty and appear destined to do so for centuries to come.
On the African continent, two countries, Zambia and Ghana, have graduated into middle income country status. One is landlocked while the other is not. Both are peaceful countries. Their new status does not mean poverty and deprivation is gone. Their story gives hope to many, including us that it is possible to get the economics right.
Rising higher on development ranking has a lot of benefits. While attracting investment or capital is a complex thing, it becomes easier if a nation is perceived to have a good proportion of its citizens earning a decent income. Its consumption behaviour and pattern plays well into the growth.
Reflecting on the coming budget and the few that we have had, I am no wiser. I reckon to think that those calling the shots get a “dermatologist” just to check how thick our skin has become since the aid freeze fell upon the nation. The tag of that comes with being the least developed or poorest no matter how the semantics interplay is utmost demeaning.
It is unpalatable thing to say but understandable as well. The factors leading to an aid freeze are well documented. Stories of wasted aid and the taxpayer making refunds are too normal. This is the hard part but otherwise the aid freeze must remain a turning point for the nation to grow and determine its destination. Growing is a matter of choice.
Foreign aid, no matter its trappings of short-term boost to foreign reserves, shall never be the appropriate tool for getting us ahead. The foreign aid industry is as complex as its “clients”. The technical assistance money that we pay nationals of giving country is just a bait that entangles us to chronic dependence made complex with our next meal mentality.
As we look forward to the new budget cycle, there a lot of talking points. Now we have to manage a trillion. My first take is taking stock of how thick and creative are we becoming to manage our public finances with minimal external support. At the same time, I am interested to see how the headlines that sacred off our external support are history. It appears public finances can be used anyhow by anybody. I am really keen to see how our work ethic has revamped and our psyche rebooted to get all of us appreciate the “holiness” of public funds in national development.
The thick skin can develop and actually give us more leverage to determine the foreign aid agenda while not making it an obsession. No one should eat a dollar or a kwacha that does not belong to them or has worked for it. Balancing a budget using our local resources is a great opportunity to grow but can blossom only if those slippages are sealed.
Welcome the trillion. I just can’t wait for the next thing, which I believe will match the living standards of a trillionaire. The new reality. Love it, cheeky or not. n