at the Hilton Hotel, Vienna Austria
Saturday, 10 September 2005
Mr. Chairman, H.E. the Ambassador, your Excellencies, the distinguished delegates from Nigeria - you may not know that Vienna is one of the most beautiful and imperial cities of Europe, I hope you will be able to take some time to see the city -, leaders of the different Organisations of the Nigerian Community, distinguished Guests, ladies and gentlemen, on behalf of NIDOE Austria Chapter, I warmly welcome you to this event, which without the generous financing of the Nigerian Embassy under the leadership of H.E. Ambassador Biodun Owoseni, would have been impossible. May I also thank Mr. Musawa, the Minister at the Nigerian Embassy for his tireless efforts and contributions to make this event possible. Thanks also to other members of the Embassy for their contributions. Our appreciation goes to OPEC for the financial assistance rendered. My thanks also go to members of the planning committee of NIDOE.
Well, you might recall that President Olusegun Obasanjo, was barely a year in office, when he convened a meeting of Nigerians in the Diaspora, first in Atlanta, USA for those in the Americas and later in London, for those in Europe. During both meetings he called out to Nigerians in Diaspora to come and assist in rebuilding our country. Both dialogues with Nigerians in the Diaspora lead to the creation of both NIDOE Europe and NIDOE America. The purpose of creating NIDOE was to create a vehicle or shall I say a mechanism through which Nigerian professionals in the Diaspora can actively and effectively participate in Nigeria's development process. We know that the task of rebuilding Nigeria requires a long term commitment and dedications that require collective efforts. But how are we to fulfil that task, if not more Nigerian professionals see the wisdom in working collectively as a group instead of the rather individual efforts, no matter how well meant. We tend not to realize as the President supposedly recently stated, I quote "It would take the involvement of a critical mass of the Nigerians in Diaspora to make any significant impact in Nigeria" unquote. I should think that what he was saying is that given our physical absence from home, it is only when we join hands together can we move such a colossal as Nigeria from afar. We members of NIDOE have answered the President's call and are ready to make our contributions. May I use this opportunity to once again invite all patriotic Nigerians in Austria to join this effort. NIDOE is in no way a threat to any existing Organisation. You are invited to join NIDOE, but let me quickly add that NIDOE's agenda is not about what Nigeria can do for us but about what we can do for Nigeria.
May I mention that one of the numerous tasks of NIDOE is to compile a database of Nigerian professionals in the diaspora. I should think that such a database could be useful in many ways, particularly in the event that the Federal and State Governments urgently need someone for a particular project or to fill up a vacancy, there's a database ready to tap into.
For Nigeria to develop there is the need of all of us in the Diaspora, despite the comfort we might be enjoying in our different places of abhor or the fulfilment in our respective occupations, to appreciate that only us Nigerians can change whatever we consider lacking in our country. May I ask, what is our knowledge worth, if we cannot put them to the use and betterment of our people. I should think that the value of anything is in its usage. However, as the objective of this seminar is to discuss and seek ways of making Nigeria grow economically, may I remind you that it is the commitment of the people in our respective places of living that have transformed their countries to what they are that we seem so appreciative of.
Your Excellencies, Distinguished Guests, Ladies and Gentlemen, this kind of seminar, no doubt, will go a long way to correct our image and sensitize the Austrian public of the enormous potentials in our people and country. We know that our problems are not necessarily that of lack of qualified people as Nigerians are excelling in almost all walks of life outside Nigeria. We also know that our problems are not lack of resources as we are endowed with all resources necessary for sustainable development, so our problems must lie in our human nature, culture and value system. However, at some point we would have to develop a strategy to stop and then begin to reverse the brain and manpower drain that is affecting us so badly. We shall have to re-design those policies to attract Nigerians abroad to return home to fully participate in the Nigerian dream. It is not enough to transfer money home; money transfers of us individuals without knowledge transfer is certainly not the path to a sustainable future.
As this Seminar is about Economic and Investment Opportunities in Nigeria, permit me to take this opportunity to briefly discuss some of the prerequisites necessary to attract foreign investors in the global environment and ask the question, do we have any reason to be afraid of the globalisation process?
We know that before globalisation became a household term not many countries, particularly in developing countries, including Nigeria, thought beyond the primary protectionist policies as to seriously consider modernising their infrastructures, economic policies and structures, social policies, etc., to meet the demands of a modern economy and society. Because globalisation is intensifying competition amongst countries to attract investments and other scarce resources, it is demanding of us that we address issues that were once considered local or even non issues from a global point of view, as everything is becoming important and having global dimension. I should think that, if we see the challenges posed by globalisation as being facilitators to upgrading our infrastructures and policies quickly, we would welcome and see its potentials to significantly reduce poverty.
When we talk of foreign investments coming to our country, we are obviously saying that globalisation is good and that means that manufacturers or investors are free to move their money and plants to any part of the world to take advantage of cheap labour and other production factors. We know that as more production resources are migrating to countries with cheaper production factors, employment and wealth (see some Asian countries) are being created there as well.
However, to tap into these emerging opportunities, we would have to face the challenges of globalisation, by first properly addressing and putting in place those primary factors that may be attractive to investors; these are infrastructures such as permanent energy supply, proper communication infrastructures, good roads and rail ways to move goods and other inputs around quickly and cheaply. We would have to pay attention to the availability of properly trained manpower, and create that required confidence in our judiciary system. Above all, a culture of continuity in government policies, particularly on foreign investments policies that do not swing with every change of government shall be required.
When these infrastructures are taken seriously, foreign companies are likely to want to locate to take advantage of the good infrastructures and other cheap production factors. Government's responsibility in all this is to create and maintain such infrastructures to the highest possible standards and also to encourage local producers in the form of guaranteeing mid term loans with low interest rates to enable local manufacturers to transform their industries fast, from exporters of raw materials to exporting finished products, first because finished products are more profitable, know-how intensive and better for our trade balance sheet and second because the concentration and even specialization of local manufacturers in producing such finished products, specifically in those areas we have geographical advantage shall give us comparative advantage on the international market.
In Nigeria's case, it does appear that instead of exporting crude oil, specializing in refining oil and related products (downstream activities in the petroleum industry) particularly for export purposes appears an area in which Nigeria should have some natural competitive advantage.
We have always known that the protectionist systems whereby, every country attempts to export as much as possible but hinder imports by using such tools as quotas, prohibitive customs duties, other import taxes, import licences, currency devaluation etc., were all policies that attempted to exploit the other trading partners. This system had in the past created enormous trade imbalance to the disadvantage of the developing economies. We know that in developing countries attempts to use such tools as currency devaluations to stimulate exports have woefully failed and have often only lead to inflationary distortions, closure of local plants, higher unemployment and to more devaluation as real income declines and the people get poorer. Whilst developing countries are liberalizing their markets, they must be united in their demands on the developed economies to lift all subsidies; particularly in those areas they would have comparative advantage, like agricultural products.
We shall have to stabilize the exchange rate of our currency. I have proposed to the Nigerian government to introduce a policy of pegging the exchange rate of our currency to a mixed basket of the currencies of our most important trading partners. The advantage of this approach is that the exchange rate of our currency shall not swing with our trade balance sheets. Pegging our exchange rate to a basket of foreign currencies would guarantee foreign exchange stability that is required for long term planning and for the storage of value. Unfortunately, I have no response from Nigeria for which I developed the model till now. In the meantime, China has adopted it and some other Asian countries are planning its implementation.
The Internet as facilitator of the globalisation process
The internet is turning out to be a major facilitator of the globalisation process. Through the access and availability of the medium, the transfer and spread of know-how and technologies are being facilitated at an unprecedented rate. In addition to the spread of knowledge, the internet is increasingly becoming a market place for all sorts of products and services for both rich and poor countries, as it offers equal opportunities for all to show case and present their products to the global market. In order to fully reap the benefits and potentials of the internet, internet usage and infrastructures must be encouraged and should initially be subsidized by governments in developing countries.
Technology and innovation
In today's highly competitive world, innovation, technology and management are becoming imperatives and facilitators that must be addressed collectively to achieve economic advancement. The high performance of immigrants from Nigeria in industrialized nations is showing that our people are basically not less innovative than our counterparts in industrialized nations but that our low performance in our native environment is simply a factor of our unsupportive environment and culture.
Thus, I should think that one of the challenges facing Nigeria in the future shall be how to deal with those aspects of our cultures that appear to hinder or impair judgement and open-mindedness that are the pre-requisite for change and innovation. In the absence of the right attitude, people tend not to think ahead and build in those quick reflexes and responses that are required to manage and fit into a changing and ever more competitive world. It is that desire to change and improve on the way things are done that leads to innovation and subsequently to growth.
No society can grow and successfully compete in a global environment without some home-grown innovations. Foreign investors are most likely to give preference to locating a high-tech factory in a country that has a climate that encourages innovation and technology.
Ethics and Environment
When we promise, what we promise, we must deliver. We must adhere to doing things the right way. We must be propelled by the drive for excellence and to become known for quality and reliability. As the drive for excellence becomes part of our culture, we would have to be more conscious that it is the sum of us individuals performing at the top of our abilities that translates into a nation performing close to its full potentials and capacity. When a people perform near capacity growth automatically sets in. And foreign investors would naturally want to be a part of the process.
Environmental degradation is not only a hazard for present generation but limits the chances for future prosperity. We would have to pay attention to our environment, not to rob ourselves of the enormous benefits of an intact ecology and clean environment. We know by now that the economic and social costs can be enormous as people from degraded environments tend to have a shorter average life expectancy than those from cleaner environments. We also know that the tourist industry, that offers enormous potentials for employment and growth in developing countries can only be built on a rather clean environment and near intact ecology.
As energy is the motor or main engine of economic growth, then more energy is required as the economy grows. As energy is required to run production facilities and other aspects of the economy, shortage directly hinders economic activities to the extent that it may even halt and ground the economy altogether. Because energy is vital for growth, energy supply must be adequately available for economic growth to take place. But even in an ideal situation where energy is sufficiently available, as population grows and commerce expands, the energy supply must grow at least by the average percentage of both parameters to maintain the status quo. Proper energy management, including periodic forecasts that are followed by the necessary investments are required to meet the needs of the economy.
In the absence of uninterrupted energy supply, businesses that are energy intensive are unlikely to be competitive as the cost of putting independent energy infrastructures in place and servicing them could raise costs of production to such level that they become uncompetitive. We know that uninterrupted energy supply can stimulate creativity, productivity and efficiency as it can propel the economy to full capacity.
If globalisation is to be rewarding, such tough questions as the following must be addressed: How do we meet the energy need of our country as population and commerce are growing? And what role should renewable and alternative energy source such as solar and windmill play? What must we do to enhance the production and distribution of energy to reach all corners of our land? What can we do to revitalize the present infrastructure to reduce wastage and loss during transportation? Is decentralisation of production, distribution and consumption an alternative? If energy remains scarce and unreliable, the benefits of energy rich environment is unlikely to be reaped and foreign companies may be reluctant to site their factories in an energy poor environment. Energy is a significant production factor that requires sufficient resources allocated to it.
Mass transportation infrastructure across the country is a responsibility of government that must be put on top of the agenda. Mass transportation cannot be completely left to private initiatives. A master plan for national mass transportation systems must be quickly put in place. Mass transportation systems within and connecting large cities are likely to create several thousands of sustainable employment opportunities. If Nigeria is to develop, we must think of how to phase out our present deplorable "mini buses" in which we choke like sardines during transportation and the so-called "Okadas" transportation system with a commuter train and proper bus services for our commuters within the major cities of the country. A commuter train service is more economical because; first, it is more comfortable, efficient and safer, as it takes passengers off the road, reducing the social costs emanating from large numbers of poorly serviced vehicles polluting the environment and the several fatal accidents they are involved in and two, because it reduces the costs of constructing ever new roads and maintaining them and third, because it gets one around in big cities more quickly as they run without traffic jams and potholes. Economic activities are likely to speed up as the turn around time needed for activities outside offices are likely to be reduced substantially. Nigeria is strongly advised to shift emphasis from the construction of new roads to an inter-city and inter-State national railway-network. In addition to the benefits mentioned above, a functioning national railway network is likely to create several thousand of sustainable employment and help facilitate growth. By now, we should know that there can be no significant development without a functioning and a reliable railway network. No nation has made significant economic development without large scale investment in her railway system. We know that one of the reasons this is so is because national railway projects tend to cut deep into the land and through uninhabited terrain (opening new opportunities and sometimes leading to the discovery of new resources) to connect the cities and industrial infrastructures. Now, if unemployment is as a result of the imbalance in the number of people willing to work and the number of people that the labour market can employ, then emphasis must be on such projects and activities that can generate employment opportunities. Governments must concentrate on such projects that have multiplication-effects, spin-offs and spill-over effects for growth and sustainability. We also know that government can not employ everyone, but government must create those infrastructures that individuals can build their initiatives on. Major roads must connect the main towns along its way. It is indeed short-sighted planning to plan a major road such as the new Benin - Warri Express road that cuts off a major town as big as Sapele that is between them. Since major roads and railways are important for commerce and growth, such infrastructures must be all encompassing and not exclusive.
The availability of manpower in sufficient numbers alone is often not good enough as the quality of the manpower is essential. It does appear we are laying too much emphasis on University and theoretical education. We know that, whilst a reasonable number of university graduates is desirable, the foundation of any sound economic growth is often built on the quality of such trained and skilled workers as carpenters, tailors, iron smith, mechanics, welders, plumbers, electricians and other professional trades.
To raise quality, sufficient professional learning centres shall have to be put in place. It should be mandatory that apprenticeship lasts at least three years with a professional exam at the end. These exams of each trade should be run and managed by their respective professional bodies. Only those certified graduates should be allowed to practice the trade or allowed to run own independent businesses. These sub professional bodies should be charged with the responsibilities for trade ethics, quality control and other matters concerning the trade.
COMPREHENSIVE ECONOMIC DEVELOPMENT MODEL
Your Excellencies, distinguished guests, ladies and gentlemen, permit me to briefly share with you a "Model for measuring economic sustainability" I have under development.
We know that though the GDP or BNP does give us information on the market value of the total output of the final consumable goods and services including the incomes of the different sectors (minus all foreign contents) in a given accounting period and thus on national economic growth or decline, but we know that it is not an ideal model to measure the level of sustainable development of individual developing countries, as it is a momentary monetary measurement of consumable products.
Thus, the GDP does not give us information on the infrastructures that are in place that are vital for sustainable development. For us to know whether a country is on her way to good health and sustainable development, we shall need a model that takes the quality and availability of such vital infrastructures as: Health care infrastructures, Energy generated per head, income per capita, quality and length of road infrastructure per square meter in relation to population density, communication infrastructure (telephone lines per head), internet access per household, railway infrastructure in total kilometre to land mass in square meters, the percentage of people in higher education and trade centres in relation to under 27, number of patents registered in the observation period, etc.. The ratios of the different parameters as above mentioned shall be computed onto a table. All added together should give us the average economic and social indicators to enable us measure the sustainability of development. This model, I call "Comprehensive Economic Development Model or CEDM". This model should provide us with the instrument to compare the sustainability of economic development in different and also amongst countries. The details of this Model shall be presented in a separate paper.
In conclusion, in fact, all those developing countries shall have reasons to be afraid of globalisation, if they continued with wastage of their resources, paying little attention to vital infrastructures, keeping their monies in foreign accounts instead of investing them locally, chronically preventing the best minds amongst them to ascend to key offices to design their policies, and avoid thriving in what seem short-sighted policies and excessive mismanagement. The challenges of globalisation can only be taken successfully, if all of us take a collective decision to contribute our individual quotas towards making our country great. As economics is basically about improving the lots of the people, economic policies make no sense at all, if they do not touch and better the lives of the ordinary people.
Lastly, I argue strongly that it is economically more reasonable for a developing country to run a short term budget deficit putting required infrastructures in place than pursuing a policy of balanced budget when so many critical infrastructures required for sustainable development are lacking. These things are expensive and take time to amortize and have no short cut. I call on our leaders both politicians and leaders of industry and every citizen to be part of this crusade as only collectively can we move ourselves from the present stagnation and qualify our country to be taken more seriously.
Once again, I heartily welcome and wish you all a successful seminar.
Thank you for your time.
Dr. Jones O. Edobor
Vienna - Austria