Success comes from openness, not erecting barriers
Africa should follow the example of Asia, which benefited enormously from outside influences
In our recently published book we write that the lesson from East Asia’s development is that “an open nation is bigger than the sum of its parts”.
Now, less than a month after the book’s release, we find ourselves in a world where borders are closing, isolationism is making a comeback and governments are trying to limit international trade. Our globalised world, as we know it, is closing in on itself.
In one respect, the past month has shone a light on just how globalised our planet is: that a disease could have spread from Wuhan, China to Venice, Italy, and right around the globe in such a frighteningly short time shows us that we are intimately interconnected.
At the same time it reveals the disparities in this connected world, and thus the relevance of our original thesis: Africa is still less connected, relatively, than the rest of the world. As far as proxies for connectivity go, Africa is (or was, before the outbreak of Covid-19) where East Asia found itself in the early 2000s in terms of trade flows (exports as a percentage of GDP) and internet usage (percentage of individuals using the internet).
But whereas East Asia’s closure until the mid-20th century was largely the result of ideology (communism, socialism and nationalism in various guises), Africa’s enduring isolation is a result of more physical barriers, particularly infrastructure. We still lack the means of inserting ourselves into the global economy, irrespective of our intentions to do so.
We wrote: “The debates on whether globalisation is good or evil have become irrelevant and the consensus has been reached that the most successful countries were those that opened up their borders to the world. The ideological claptrap of ‘America first’ is equally inapt for a country where trade makes up a third of GDP. Many Asian countries recognise that the economic growth necessary to achieve their development goals is contingent on a healthy, dynamic private sector that is globally competitive. This requires the state to get out of the way.”
Liberalisation and openness, as successful Asian examples have shown, are a necessary step and countries that have been more open have generally fared better. This is the lesson not only from Asia’s successful export-driven growth model, which has spurred competitiveness to the benefit of domestic consumers, but also from countries that have liberalised in terms of fundamental rights, democracy and freedoms.
“Openness” relates also to a willingness to learn, and to permit and even encourage external influences. This was the fundamental lesson from Japan throughout the Meiji Restoration, which provided the catalyst for the entire region to develop and prosper. Singapore relied heavily on external advisers and deliberately sought to attract multinational companies, given that they brought with them not only skills, capital and technology, but logistics and ready markets.
A decade before the US withdrawal from Vietnam in 1978, Ho Chi Minh said of the Americans: “We will spread a red carpet for you to leave Vietnam. And when the war is over, you are welcome to come back because you have technology and we will need your help.”
We might be experiencing a temporary discontinuation of global integration, prompting us to think carefully about the world we live in and how we limit the spread of negative shocks, similar to what previous financial crises did. However, when this passes, as it surely will, African nations will need to reconsider their position in the world.
Hans Rosling, the renowned Swedish academic, spoke of the world’s contemporary pin code being 1114: roughly 1-billion each live in Europe, the Americas and Africa, and 4-billion in Asia, to make a population of 7-billion. By 2050 it will be 1125, with Africa and Asia each adding 1-billion people.
Africa has the largest population of young people in the world. While other regions continue to age, Africa will in the coming decades become the world’s energy centre — the human battery, if you like. To take advantage of worldwide shifts in production and economic activity it will have to take deliberate steps to enable its youth to enter the global economy.
The temporary Covid-19 bywords might be isolation and insulation; Africa’s future prosperity — indeed, its very stability — depends on deepening global integration. We must not lose sight of this reform imperative.
• Obasanjo and Desalegn are members of the advisory board; Van der Merwe an environmental and development economist; and Mills director at The Brenthurst Foundation. They are co-authors of The Asian Aspiration: Why and How Africa Should Emulate Asia.