The wealth of nations
If a nation is rich, its people will enjoy a high standard of life.
If a country is poor, the chances are that most of its citizens are also poor.
We have to talk of ‘most’ and not ‘all’ because even in rich countries there are inequalities of wealth and opportunities.
The wealth of a nation and that of its people are intertwined. You destroy one, you destroy the other.
When an envoy from the People’s Republic of China came to establish an embassy in Lilongwe, we were told that some Malawians were pestering him with requests for donations to their organisations.
I am not sure if these people were representing non-governmental organisations or they wanted to start such bodies themselves.
Now that we have a new administration and presidency installed, chances are that some people will call upon the President with a bowl of requests and demands.
These requests may involve grievances over salary increments or plain financial assistance.
It is better to proceed gently instead of forcing the President into making decisions before their impact on the economy are examined. This is particularly the case where salary hikes are concerned.
We know that this was one of the challenges the late president Bingu wa Mutharika found most difficult to deal with.
It is an issue of what to do when people are demanding more than you can afford.
Globally, countries are in competition with each other.
When Japan started exporting her products, she pursued a low or competitive price policy.
Japanese exports were affordable that even those who had loyalties with European and American brands were enticed to buy from Japan.
The Four Tigers of the Far East—Singapore, Taiwan, South Korea and Malaysia—adopted the same policy to penetrate foreign markets.
Price was one of selling points of the products they placed before their foreign buyers.
As these countries became prosperous, they started paying their workers higher wages, hence; costs of their products increased.
Taiwanese firms started shifting their factories to the People’s Republic of China.
China, too, a curved chunk of the global market, thanks to its affordable prices.
Japan has planted some of its factories in China to benefit from lower labour costs.
While it is highly laudable to award increments, we must not forget that if Malawi is to succeed on the export market, she must be competitive both on quality and prices.
Arguing like this may not make an economist popular with trade union leaders. The fact remains that in the long run, workers can only earn more wages in a growing economy.
No products Malawi exports are unique on the international market.
She can win customers if her exports are competitive in terms of prices.
At this level of the development of our country, we must concentrate on maximising production rather than distribution.
Out of increased production, there is more to share. Out of a stagnant production, you only share misery.
Economists tell us that a country grows faster if it has better machines and equipment (capital and goods), increases its human capital (education and health) and have better means of organisation as well as management.
We must organise ourselves for success in the economic field. We are still in the pioneer stage. We must understand what brings about economic transformation and strive to achieve that.
