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Economic Take-Off is Possible in the Congo

 

By JONATHAN POWER

LONDON-- Let's imagine what post-Mobutu Congo could become. It has diamonds, copper and gold. It has rain and sunshine in abundance. It is not, given its immense size, overpopulated. It has wise political leadership, a stable democracy, economic and financial discipline and good governance. It is the heart of Africa, not Conrad's "The Heart of Darkness." In a word it is not the Congo it is Botswana which, bar the rain (Botswana is a desert country), could be the Congo's twin.

Botswana in the 1960s was one of the poorest African countries, far poorer than the Congo. Today it is a prosperous middle-income country. During the 1970s it grew at a world record breaking 16% a year and in the 1980s a handsome 11%. in the 1990s it suffered a few bumps when it was blighted by the worst drought of the century and the diamond market hit the floor. (Diamonds account for a third of national income.) But it successfully changed gears and poured its energy and resources into non-traditional exports--vehicle assembly, textiles and food processing. Again the economy is on the up, growing at a healthy 6-7% a year.

Today, Botswana exudes well-being. Over 30 years, life expectancy, school enrollment and health care have improved nothing less than dramatically. It is cutting its tax rates, privatizing even government departments, eliminating crop subsidies and turning its attention, more seriously than it has in the past, to the plight of rural and low-income urban households.

Despite the setbacks of the early 1990s Botswana still maintains a sizeable current account surplus. It has more than $5 billion in official reserves. It maintains a competitive and stable exchange rate that is stimulating non-traditional exports.

This is the challenge for the new ruler of the Congo, Laurent Kabila. The Congo has all of Botswana's material resources--and more. There is no economic reason, albeit plenty of political reasons, why the Congo shouldn't go in the same direction as Botswana. Such beckoning possibilities influenced Kabila's friend and patron, Yoweri Museveni, president of Uganda. Uganda too was once a country laid low by decades of civil war and corrupt dictatorial leadership. In recent years it has been growing at "tiger" rates, emulating the early days of South Korea which when it began its economic take-off in the 1960s was just as poor as much of Africa.

In truth, these days, there is a new economic mood percolating through much of black Africa. Last month the World Bank reported that half of the 48 sub-Saharan African countries had economic growth of 5% over the last two years. This is a quite remarkable transformation after so many years of declining growth, economic derangement and a gross misuse of opportunities. The World Bank/International Monetary Fund prescriptions on privatization, trade liberalization and the scrapping of capital restrictions, so long derided and ignored, are now coming into their own. Much of Africa is now ready to go forward and Mr Kabila has the choice to join the march or remain in the swamps.

Some will argue, as do the authors of a recent study, "Agenda for African Economic Renewal" published by the Washington-based Overseas Development Council, that I'm being over-sanguine about Africa's prospects. It rightly points out that if economic growth does not accelerate beyond 5% a year there will be no visible positive impact on the living standards of a large majority of Africans until well into the future.

Moreover, the hurdles still to be traversed are both numerous and difficult, ranging from correct macro-economic policies to secure property rights, effective legal systems, better transport and the universal provision of basic health and educational services. Also needed is an effective civil service, not to mention the democratic political reform that is absolutely necessary if over time there is to be improved economic supervision, reduced corruption and increased government accountability.

Then there is the sore subject of the legacy of decades of mismanagement and bad western banking practices, a load of "unpayable" debt whose interest payments are consuming every spare penny of the budget of many African countries.

But there is progress. Democracy and probity are spreading. The industrialized, debt-lending, countries, as now with Uganda, are starting to ease the squeeze. And there are many African countries that could do more themselves to find the money to pay off much of their debt, by a more rapid rate of privatization.

Nevertheless, "slow but steady growth" is this study's down-to-earth best prognosis for Africa, as if this is anything to be ashamed of, since this is just what today's industrialized countries did in the nineteenth century. What is more, set against the last 20 years of African decline, it would be a triumph of recovery.

But I find such modesty unbecoming. Botswana has shown that "man's reach must exceed his grasp or what is heaven for." And Uganda, Lesotho, Malawi, the Ivory Coast and Angola, with growth rates at east Asian levels, have done a pretty good job of walking in Botswana's tracks. If I were Mr Kabila, with a country like the Congo in my hands, I would reach for the sky and go for it.

 

May 28, 1997, LONDON

Copyright © 1997 By JONATHAN POWER

Note: I can be reached by phone +44 385 351172
and e-mail: JonatPower@aol.com

 

 


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