The Nobel
laureate in economics, Robert Lucas, once said that when you begin thinking
about development, you cannot stop. I suffer this disease as well. One subject
that intrigues me is the constant comparison of the rate of economic
transformation achieved by the so-called Asian Tigers; Hong Kong, Singapore,
Taiwan, and South Korea with that of Sub-Saharan Africa countries.
The African
countries are often condemned for failing to perform as its counterparts in
East Asia. I used to be an adherent of this view and reached the road to
Damascus only slowly.
No ruler of
any traditional African kingdom of the 1880s; like the Kabakas of Buganda,
however visionary and great, could have launched an industrial revolution then
taking place in Europe. Equally no king of Britain in 400AD (when the last
Roman troops left that island) could have initiated the internet revolution.
A common
argument in this debate is that South Korea and Ghana had almost the same per
capita income in 1960. Today, South Korea’s per capita income is ten times that
of Ghana; US$32,000 to US$3,200.
Since the
advocates of this view discuss South Korea, Taiwan, Ghana or Uganda as if it
were a black box, the purpose of this article is to open it and at least take a
peek at a small part of its inside. But this is a newspaper article and not a
book.
I will,
therefore, select a few factors to illustrate my point, recognising that there
are many others that have shaped the development outcomes of these two regions
than can be compressed in 1,000, leave alone two pages. I am also aware that
there are exceptions and divergences or even counter-narratives to the story I
am going to tell. However, these don’t take away the fundamental basis of
my argument.
Taiwan and
South Korea were poor in 1960 in terms of per capita income, but many studies
show that their social indicators placed them among the ranks of countries at
several times their income levels. For example, in 1967, Adelman and Morris did
an index of social-economic development for a range of countries as measured in
the late 1950s and 60s.
The index was
derived from factor analysis and was based on a large number of indicators
meant to capture characteristics such as social structure and social
organisation. They included the level of urbanisation, importance of an
indigenous middleclass, social mobility, literacy levels (availability of human
capital), mass communications, cultural and ethnic homogeneity, national
integration, and a sense of national unity and modernisation outlook.
Aldeman and
Morris’ index placed Taiwan and South Korea in the most advanced group of
countries even though their per capita income was considerably below average.
This study showed that they had the “initial conditions” necessary for rapid
development; their governments only needed to remove coordination bottlenecks.
All Sub
Sahara African countries in the study were at the bottom of the pile in the
index. One illustrative factor was school enrollment and literacy rates (human
capital), which we can use as a proxy for availability of skills to manage
complex modern institutions but also an important basis for sustaining
progressive politics.
By 1940,
Taiwan had 60 percent of primary school age going kids (both girls and boys)
enrolled in school; same as South Korea, which also had 43% secondary school
enrollment. Uganda had 10% primary school enrollment in 1940, 2% in junior
secondary and less than 0.3% in technical education and senior secondary.
In fact,
student enrolment as a percentage of overall population in South Korea in 1954
(at the end of the civil war) was 17%; higher than England and Wales (15%),
Germany (13%) and only lower than USA (22%) and Japan (23%).
Student
enrolment as a percentage of the population in 1954 in Uganda was less than 2%.
And Uganda was one of the most “highly” educated nations in Africa.
Take the example of other African countries: at independence in 1960, the whole
of DRC had only 15 university graduates, Tanzania 9, Rwanda and Burundi zero.
Assuming any
of the presidents in these countries wanted to industrialise their country,
they would have had to rely on illiterate peasants to build and run not just
factories but a complex set of modern institutions to manage industrial policy
– which is an absurd proposition.
There were no
skills to sustain rapid technical change. But this also means that Africa
lacked basic social infrastructure (in form of a critical mass of exposed and
enlightened population) to sustain civilised politics.
At
independence in 1962, Uganda had only one battalion of 700 illiterate and
semi-educated soldiers under the Kings African Rifles. Idi Amin, with only
three years of schooling, was the most senior officer in the Uganda army and
was among the most educated.
At the time
of the Amin coup in 1971, the Ugandan army had grown “rapidly” to 8,500
officers and men – mostly of little or no education. The educated were a tiny
fraction. It should not surprise anyone that any military coup in Uganda at
that time could only produce rule by a lumpen militariat. When in 1997, I
interviewed Gen. Mustapha Idris, he told me that he learnt to write his name
after Amin had appointed him vice president and minister of defense.
At the time
of the 1961 coup by Park Chung Hee, the South Korean army could boast of more
than tens of thousands of university graduates in its ranks including
engineers, doctors, lawyers and other professionals. Park was surrounded by
officers with a high level of formal education many of who had been with him in
South Korean, Japanese and American military academies.
The South
Korean army was large and mechanised; its officers had experience in managing a
large, complex, and highly resourced institution. In 1965 South Korea deployed
over 320,000 troops to support the American army in Vietnam against the
communist guerrillas.
By 1940,
South Korea had a well-developed manufacturing sector. Even though most
industries were owned by the Japanese, about 25% of manufacturing plants were
owned, run, and managed by Koreans. So different was the structure of the
economy of South Korea compared to that of any African country that by 1965
agriculture contributed 16% of that nation’s exports, manufacturing 63%;
agricultural exports contributed only 12% of total export earnings in 1949 and
5.6% in 1955.
The
comparable figures for Uganda in 1965 were agriculture contributing 90% of all
export earnings (of this, 70% came from cotton and coffee alone) while
manufacturing was at 4%. In the same year, 90% of all Ugandans depended on
agriculture for their incomes – 75% were involved in subsistence
farming. The difference between Taiwan and South Korea vis a vis
Uganda could partly be the level of development of the society in 1960.
But it is
also due to the nature of the colonial regime. South Korea and Taiwan under
Japanese colonialism went through land reform that swept away the power of
absentee landlords while the British consolidated these in Uganda. According to
Robert Wade, a good communications infrastructure was laid down in Taiwan
during Japanese rule designed not with the narrow purpose of extracting some
primary raw materials (as British colonialism did) but with the aim of
increasing production of smallholder rice and sugar, that were demanded in
Japan.
Wade’s study
shows that under these policies, expansion in irrigation and drainage,
dissemination of improved or better seeds and the spread in the use of
fertilizers and manures were all energetically done sometimes even with the aid
of the police. He also shows that farmers were grouped into farmers’
cooperatives, irrigation associations and landlord-tenant associations, which
accelerated the spread of technical knowledge.
Meanwhile,
colonialism in Africa resisted such organisation. This promotion of an
agriculture based on a smallholder cultivation of the staple food crops in
Taiwan by the Japanese differs from other colonial experiences. In Uganda, only
the cultivation of cotton and coffee, which were not locally consumed, were
enforced.
Wade also
shows that in case of industrial development, Japanese colonialism differed
from others by bringing industry to labour and raw materials rather than the
other way round. “During the 1930s, prompted by raising wages in Japan and by
government’s plan for war, the Japanese in Taiwan developed such industries as
fruit processing, textiles, pulp and paper, cement, chemical fertilisers,
aluminum and copper refining, petroleum refining and ship building.”
Thus,
manufacturing grew in real terms at 6% per year during the long period from
1912 to 1940 and by more than 7% per annum in the 1930s. Both Taiwan and Korea
had a higher rate of GDP growth than Japan between 1911 and 1938 (Japan 3.4%,
Korea 3.6 and Taiwan 3.8%). Because of Japanese investment in
manufacturing in South Korea, combined with an earlier presence of high
education for centuries, managerial and technical resources were very high.
This
abundance of human capital was the factor that propelled rapid
change. For example, in South Korea in 1960, the manufacturing
sector alone had 4,424 engineers, 31,350 managers, 5,025 sales executives,
13,660 white collar workers, 17,330 workers classified as “clerical” and
404,735 workers in industrial plants (blue collar jobs). Indeed, the education
level of the South Korean work force in 1963 was high by any standard; only 5.5
percent of all workers lacked formal schooling.
However, 53%
had finished primary school, 34% had completed secondary school. To add to
this, there were one million South Korean migrant workers in Japan and another
one million in China, a significant percentage of whom worked in Japanese
factories and therefore had technical skills to support rapid industrialisation
when they returned home after the civil war.
Compare this
with Uganda, at the time one of the most educated countries in Africa. A survey
was done in 1963 on Uganda’s stock of “high level manpower.” It set out to
cover all people in Uganda who had a minimum of 12 years of formal education or
who were in posts that, for replacement purposes, would be filled by someone
with 12 years of formal education.
Note: 12
years corresponded with 6 years primary, 2 years junior secondary and 4 years
senior secondary schooling. The survey covered all sectors of the economy
except the army i.e. it included central and local government, parastatal
bodies, the private sector, the self-employed and churches and missions. The
total came to a 20,440 people most of who were non-Ugandan and left the country
after independence – i.e. left Uganda with limited skilled manpower.
In 1960,
Uganda’s entire public service excluding nurses, police and all but a few
hundred teachers was a little more than 5,000 strong in a country of more than
six million people. Out of the top 10 percent of the civil service jobs
categorised as “professional”, Ugandans occupied only 10 percent i.e. 90
percent were non-nationals – Europeans and Asians.
Then out of
the next tier 30 percent categorised as “technical” jobs, only 40 percent were
Ugandans; and out of third tier 30 percent categorised as “sub-technical”, 65
percent were Ugandans. The rest of the jobs categorised as clerical were
largely occupied by Ugandans; showing limited managerial skills.
Looking at
Taiwan, many studies show that the welfare of the Taiwanese peasant in the
first half of the 20th century may have exceeded that of the Japanese peasants;
their colonial masters. As part of the agricultural development effort, the
Japanese instituted agriculturally oriented two-year secondary schools in the
more populous parts of the country – one in each township.
Nor were
Taiwanese excluded from modern professions as was happening in European
colonies in Africa. By 1940, there were five times as many Taiwanese managers
as there were Japanese, three times as many agricultural technicians and
medical technicians and the same number of professional workers. By 1945,
Taiwan was probably the most agriculturally, commercially and industrially
advanced of all the provinces of China.
Taiwan and
South Korea had long been involved in international trade. By the end of the
1930s, Taiwan was the biggest trader in East Asia even though most of this was
with Japan. The annual per capita trade of Taiwan was $39, Korea $26 and Japan
$23, Philippines $18 and China $1. For Korea, the proportion of international
trade to GNP in 1929 was 69.6%; in 1920s, the proportion of international trade
to GNP in UK was 38%, France 51%, Japan 35%, USA 11%, Germany 31%, Denmark 57%
and Norway 53%.
I have seen
studies (one of them by Dani Rodrick – How South Korea and Taiwan Grew Rich),
which, relying on economic regressions suggests that 90 of the growth of Taiwan
and South Korea after 1960 was a result of these “initial conditions”. African
countries did not have this social infrastructure.
It did not
matter really how good a president was, what public policies he promoted, what
institutions he put in place. Without a critical mass of of engineers and other
skilled professionals in marketing, management, accounting and architecture,
you cannot build a manufacturing industry. But more critically, limited
education creates grounds for bad politics.
Taiwan and
South Korea had a large skilled work force relative to their physical capital
and income levels. So the latent return on capital accumulation was high. This
means their rapid transformation was not a miracle. It is consistent with their
initial endowments.
The country
that has actually been a miracle is Botswana because at independence in 1966,
it lacked almost everything – level of education, attitudes for modernisation,
an indigenous middle class, etc. It only had social cohesion and a sense of
common identity. This means that it is Rwanda, Burundi, Lethotho, Swaziland and
Somalia, which shared this quality that lacked good leadership.
Since 1960,
Africa has been putting in place these initial conditions. A sense of
nationhood has taken root; education has greatly expanded with primary and
secondary schools being built and university education becoming commonplace.
Technology, its diffusion and the willingness to apply it is now widely spread.
No wonder
most Sub Saharan African economies are now growing rapidly. And it seems the
form of government does not matter; democracies and dictatorships; strong ruler
governments versus weak-fragmented leadership governments; corrupt and honest
governments and natural resources rich and natural resources poor countries are
all growing just as rapidly.
So Ghana and
Rwanda, Zambia and Eritrea, Angola, Kenya and Uganda, Liberia and Sierra Leone,
Malawi, Senegal, Ivory Coast and Chad – all are growing just as rapidly even
though their political arrangements differ. It is all possibly because African
leaders of today have a rich inheritance from post-independence leaders.
amwenda@independent.co.ug
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