Development Loopholes

The history of economic development tells us that there is no one-size-fits-all model to accomplish the transformation from an agricultural economy to an industrialised one. For some East Asian countries, colonisation played an important role in the developmental learning process. The same process in Africa, however, created economic dependency, leading countries to be exporters of primary goods.

Neoclassical economists argue that for fast learning and rapid industrialisation to happen, free trade and the open flow of capital between countries are essential. On the other hand, the alternative infant industry argument states that the role played by the state is important in the learning process.

In the Ethiopian case, the huge government spending in infrastructure, agriculture and education, and the establishment of manufacturing corporations – such as the Ethiopian Sugar Corporation, the Metal amp Engineering Corporation (MetEC) and others – indicate that the government has adopted the alternative model. Of course, with the gradual opening of the economy and increasing inflows of capital, our nation is struggling to stake out its share in the global market. It is clear that in funding the mega projects being undertaken by the flourishing corporations, the government requires taxes and citizens need the services.

In the past, the nationalisation of land abolished the feudal system and addressed the popular question of “land to the tiller”. Yet, it could not bring progressive development because of tax burden, unfulfilled promises and the exploitation of farmers by local appointees.

The challenge now lies in ensuring bureaucracies learn fast and deliver optimum results. How much benefit are the able to bring to societies is also important in measuring the effectiveness of bureaucracies. This is because transformation can only be accomplished by man, not hardware.

But, our culture seems to be distant from the essential culture that transformation demands. Instead of working on details, we are accustomed to working superficially.

Most employees work to please their bosses. In turn, most bosses focus on paperwork without owning the work.

Instead of improving processes, we tend to focus on increasing manpower, gadgets and issuing memos as a solution. Eventually, untidy tasks reveal themselves to push us to the edge of failure.

A simple look at our football team clearly displays to us the problems within our culture. It was after 31 years that the national team – the Walias – managed to take part in the African Championship. But. then came the embarrassing “yellow card effect”. Members of the team were seen serving their short-term interests, rather than the long-term vision of the nation. It all occurred because we live for the superficial, more so than the substantial.

Do we have a long-term vision of establishing training centres and g clubs, in order to ensure the continuous supply of players? Do we have standards to measure the capacity of our players? How far is our institutional system integrated?

The case is no different in our economic institutions. Our approach is incomprehensive and uncompetitive.

The corporations we hope to facilitate our transformation process with seem to have learning problems. They seem to be trapped in their rigidity, rather than embracing flexibility in this era of globalisation.

The recent mainstreaming of Kaizen – a Japanese industrial improvement process – might be considered as a step in the right direction. Yet, instead of wrangling over the delivery of electric transformers, for instance, the MetEC and the Ethiopian Electric Corporation ought to sit together and work out the demand and supply planning for transformers. They could even apply a Just-in-time (JIT) delivery method.

By and large, our corporations ought to have understood that corporate competition is no more between enterprises, but rather between value chains. Inefficient value chains will certainly be outcompeted from the market.

Correcting the problems of our institutions, culture, work force and management will be important to realising our economic transformation. It is only then that we can repeat the success story of East Asia.

Yohannes Abebe He Is a Procurement Specialist. He Used to Work for the Commercial Bank of Ethiopia (cbe). He Can Be Contacted At

Source : Addis Fortune

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