Why is Nigeria not like China?
After the death of Mao Zedong in September 1976, China faced a critical choice. Mao’s chosen successor, Hua Guofeng, decided to maintain the status quo with a policy that came to be known as the ‘Two Whatevers’ (“We will resolutely uphold whatever policy decisions Chairman Mao made, and unswervingly follow whatever instructions Chairman Mao gave”). But the crafty tactician, Deng Xiaoping, had other ideas. He countered Hua by using a statement that Mao himself had come up with – ‘seeking truth from facts’. But he added a clever rider that ‘practice should be sole criterion for testing truth’. Thus began an ideological battle and by 1978, Deng had completely outmanoeuvred Hua to become China’s leader.
We’ve all seen pictures of the transformation of China from a terribly poor country in the 1970s to a rich country with shiny tall buildings and very fast trains today. But how did they manage this stunning feat? That is the subject of a new and very interesting book – Unlikely Partners – by Julian Gewirtz. As an insight into how a country can rapidly move from poverty to development, I commend this book to you, dear reader.
Mao’s Cultural Revolution carried within it the seeds of its own destruction. To punish people for thinking ‘wrong thoughts’, they were sent to the rural areas to be ‘reeducated’. What they ended up learning was almost the opposite. They saw in graphic detail how the policies sent down from Beijing were creating abject and grinding poverty and costing lives. In the end, they returned to Beijing somewhat radicalised and were thus open to new ideas. Deng was one of such people. As soon as he had outmanoeuvred Hua, he began what is now commonly known as ‘reform and opening up’. First things first, he elevated economics to the very centre of policymaking by calling for ‘more talk about economics and less about politics.’ An example to illustrate this – one of the economists who would go on to play a very big role in Chinese reforms, Xue Muqiao, wrote a book in 1979 called, ‘Research on Questions about China’s Socialist Economy’ and it sold a staggering 10 million copies.
Chinese economists began to speak to economists from around the world of every ideological leaning they could find looking for ideas. They spoke to radical free marketers as well as hardcore communists. But it was a Hungarian economist named Janos Kornai who really captured their imagination by speaking to the core of what was wrong with them. His theory of the ‘soft budget constraint (when the source of an organisation’s funding is unable to keep the organisation in check financially and ends up costing more than budgeted for. Perfect example – NNPC) sent the Chinese guys into raptures to the extent that among economists, it came to be known as ‘Kornai fever’. All of this culminated in the Bashan Boat Conference in 1985 where a group of Chinese and foreign economists got on a luxury boat sailing around China for 1 week discussing Chinese economics. The Premier, Zhao Ziyang, asked them to use the boat to avoid distractions.
Chinese diplomats were also sent abroad on fact finding missions to look for ideas. One of them was a guy called Gu Mu who had never been outside China before. He toured Western Europe for over 1 month and was struck by something he saw in Belgium – parts of the country that were dedicated strictly to industrial production. He presented his report to China’s senior leaders and the idea was taken up by Xi Zhongxun (the father of the current president, Xi Jingping) and he was allowed to seek foreign investment for a special economic zone in Guangdong where market rules would be allowed to apply to production strictly for exports (at this time, the Chinese government controlled the prices of over 1,000 products). This idea was a smash hit and was later allowed to spread to other parts of China. ‘Stones from other hills can be used to carve jade’ as Jiang Zemin later said i.e borrowing ideas from abroad could help China develop quicker.
The World Bank also played an important role. They appealed to China to let them do a comprehensive country report. The Chinese reluctantly agreed and in 1983 (after 3 years of work), the World Bank presented a 1,000 page report to the Chinese government. Premier Ziyang was so impressed by it that he ordered a second report. Between 1981 and 1989, the World Bank lent over $7.25bn to China for around 70 projects.
So we come to Nigeria. By my rough calculation, I’d say 90% of what the Chinese did, Nigeria has also done. If it is by ‘fact finding missions’, Nigeria is a gold medal winner. Is it World Bank loans we haven’t collected or policy ideas we haven’t tried? Or has Nigeria not invited foreign economists to come and talk shop? We’ve done almost everything they did and the results are embarrassingly different. Why?
I put the remaining 10% down to luck. If a country is lucky enough to have a Deng Xiaoping as its leader, it will see change. But if it manages to get a Deng and a Zhao Ziyang at the same time, it will see transformation. Zhao was an incredibly energetic reformer who faced so many battles from the anti-reformers. He lost out in the end but by then it was too late to reverse his ideas. If a country follows up the Deng-Zhao double act with a reformer like Zhu Rongji, as China did, it will never be poor again. When reforms were at risk of being reversed, Deng intervened and said ‘Zhu is the only one who understands economics’ and ensured he became Premier.
There’s no good explanation as to why someone like Lee Kuan Yew turned up in Singapore and not Malaysia. Or why Seretse Khama was a Botswanan and not a Zimbabwean. Why did Spain get Franco and not Portugal?
And so my conclusion that Nigeria has been successively unlucky and that bad luck is now replicating itself in a way that makes it difficult to get good luck. Maybe one day we will get a leader who carries reform ‘on his head’ and forcefully drags the country, kicking and screaming, out of poverty and backwardness.
Soon come, maybe.