The Eagle in a Storm

The following is a post (and ‘afterthoughts’) from the Facebook Page of Strive Masiyiwa, the Zimbabwean billionaire and  businessman wh is an inspiration to many Africans.

From reading the advice in his post, you have to wonder why many of our leaders in Africa are not thinking or approaching governance and development with such principles/ attitude:-

The Eagle in a storm (Part 2a).
__Changing our “wealth creation model.”

Ever since I started school, my teachers taught me that our country was “rich” because we had many minerals, and we’d recite the list of minerals. By the time I finished secondary school, I not only knew my country was “rich,” but that Africa itself was “rich” because we had so many natural resources.

Even though I didn’t study geology, I could almost tell you where all these precious minerals and other resources were found: oil, diamonds, platinum, gold, copper… in places like Congo, there were names of some things I couldn’t even pronounce.

__Yes, Africa is so rich!!!

As a young student, if I thought about what the global buyers of Africa’s natural resources then did with them, it was only ever a superficial thought. But I soon realized something didn’t add up…

__Sometimes it almost seemed that the “richer” a country, the poorer the people! But how could this be?

“1+1=2”! My primary school teacher drummed it into my head, right?

Then I got to secondary school and one day the teacher came in and said, “You know, there are situations when 1+1 does not always add up to 2.” ?!

“I’m here to talk about mathematics,” the teacher said. “It’s time to put away the arithmetic; this is senior school!”

“Senior school!”

I didn’t end my study of mathematics in secondary school. I also studied it at university where I majored in engineering.

What was it the Apostle Paul said about putting away childish things?!

Let me return to the wealth of our nations: I left university in the early 1980’s. In those days, it was not China that was rising into an economic giant, it was Japan! It was rising and overtaking every European country, until Japan was second only to America… It was so spectacular!

I first met a Japanese person when I was in my twenties and already working, yet I read every single book I could find about their prowess.

“Tell me about the minerals of your country?” I asked my Japanese friend.

“We have no minerals to talk of,” he said emphatically and proudly.

“What do you mean you have no minerals?”

As we talked about the Japanese rise, I was reminded of my lessons in mathematics!

And so I had discovered it was possible for a nation to be “rich” without minerals!

“We buy your minerals as cheaply as we can, and then we turn them into high-value products.”

“You mean you exploit us?”

“That’s not the way we see it. After all, what would you do with them if we didn’t buy them? Do you know what we do with your platinum or your oil?”

Then he added:
# “Our wealth creation model as a nation is not based on raw materials and minerals.”

“WEALTH CREATION MODEL?” What do you mean “WEALTH CREATION MODEL???”

Deeply troubled (even insulted) initially, I knew there was something more to learn if I avoided becoming emotional. The conclusions I reached changed the way I look at wealth, and totally empowered me. It changed my mindset.

The Tentmaker once said that our greatest battle is always in our minds… changing the way see things, particularly if we have held on to a certain perspective for a long time.

I hope it will do the same for you.

***

Afterthought 1. There’s a story told about a young Christian who was praying one day, and he asked God, “Why did you create the Universe?” And in his heart he heard God say to him, “Son, your mind is too small to contain my answer.” He’d ask the question again and again, making the subject of his interest ever smaller: “What about an ant?” Again the Lord answered him, saying, “Your mind is too small to contain my answer.” Finally frustrated, he picked up a peanut. Then (as the story goes) the Lord said to him, “let me give you a list of just 100 applications of the peanut that are yet to come!”

What do you know of the cocoa bean and its uses today? There are billion-dollar industries waiting to be created with the raw materials of your country, that the world doesn’t even know about today.

***

Afterthought 2. If you’re a school teacher, why not ask your students today to draw up lists of all the innovative things that are made from your country’s raw material exports.

__In just this alone, you will have taken the first step to changing our wealth creation model. If they’re in high school, ask them to draw up a list of nations that are very successful and yet do not have natural resources. In this you will change their mindsets about wealth creation.

***

Afterthought 3. If you’re a policymaker, ask yourself what incentives your country has put in place to encourage entrepreneurs, innovators and inventors to develop exciting new products and services, and to invest in industries that use your raw materials? What policies encourage investors to come in and set up industries that rely on those raw materials? What tax breaks will you give me if I set up a manufacturing business that uses the oil, platinum or cocoa of your country?

Thinking out aloud: Wealth redistribution and other crazy / ordinary ideas

false-idols

If you talk to members of the Far left in Britain you’ll encounter all sorts of strange characters. Colourful figures who would make Jeremy Corbyn come across as a Conservative. And for some of them, you must wear a certain hat to be able to sympathise with their politics – or at least not dismiss them as totally insane.

Similar things can be said of people to the right of the political spectrum. Picture the following Scenarios

Scenario 1

Mark is a son of a truck driver and carer, and grandson of a miner. He comes from a relatively big family of 5 children. Parents are low-skilled workers who never went to University, but are hard-working, otherwise known as ‘mortgage slaves’. Classed as poor, at least on paper, Mark managed to get into university – on a government loan/ grant, and had to work to support himself and pay his rent, even during his holidays.  He came away from University with a second class degree in a social science or arts subject. Throughout his childhood, his family took holidays at home, although once they went to Spain, and at another time they went to Ireland. But they had no money for him to travel in his twenties, so after a number of stints in several part-time jobs (including pouring pints in bars), he managed to spend a few weeks in Uganda and Tanzania with a friend, travelling to ‘experience other cultures’. Mark doesn’t like posh people, and has never been to the city of Oxford. He’s had to use public hospitals all his life. Nearing 40 years, Mark still lives in a shared house, with 3 other housemates, renting a room for about £375 a month. He’s worked in a library and is now a teacher, although it took him a while to find a stable job. Mark stands to inherit very little, probably less than £10,000 from his father and mother, money which his brother (who could inhereit similar amounts) wants to use for his Mortgage. But Mark doesn’t like the idea of a mortgage, and calls it  ‘being chained to a death tax for 40 odd years just to have a roof over your head in a rubbish part of town’. He would prefer living on a boat, or better – retiring to Uganda (where he thinks he can run a trendy bar serving tourists and expats). Throughout his late teens and twenties, he’s been fascinated by Marxism and Philosophy, and at some point came to the somewhat inevitable conclusion that the rich and wealthy are to blame for  most global problems. So, invited by a friend, an anarchist, he’s joined other like-minded types who believe that change can only come if we break down all social hierarchies and structures, and let everyone be at the same level. Is most at ease at anti-government demonstrations.

Scenario 2

Virginia is a daughter of a commercial farmer and a medical doctor. 3 siblings. Mother is a general practitioner and parents own acres and acres of land, and have a portfolio of real estate. Most of the land was inherited, although much of it has not been utilised for any purpose in recent years.  She’s a great grand-daughter of a Marquess, niece to an heir of a billion dollar fashion empire, second cousin once removed to at least one Lord, and has a sizeable list of rich Uncles, Aunts and other relatives – most of whom are nobility and hold titles. She’s dined with members of the British Royal family and stands to inherit at least £5 million pounds from her parents, and tens of thousands of pounds from her other relatives, let alone land – lots of land. Virginia’s Parents are hard-working, but you can hardly call them self-made. They had the advantage of Aristocracy, established networks with movers and shakers of the City of London, and a plentiful supply of Capital with which to expand the family’s farms and their wealth. Both Parents went to University (father @ Cambridge, Mother @ University of St. Andrews). They’ve never had a need for a Mortgage and are classed within the richest 5% of the UK’s population. So it seemed appropriate for Virginia to be privately educated. She’s never had a part-time job, but spent her free time in University taking dancing, music and acting lessons and generally having a good time. For Virginia’s convenience, her parents bought a 3 bed house near her University, so that  Virginia could live in it during the time of her studies. She studied Classics and Religion and came away with a 1st class degree. Throughout her childhood, Virginia’s family took holidays abroad, in the US, in Canada, Germany, Switzerland, Russia, Egypt, South Africa, Australia, New Zealand, Japan, Hong Kong, Brazil and once they even took a holiday in Venezuela. She’s been to at least 40 countries, travelling with her family, cousins or on her own, often in first class or business class. Once or twice in her life, the family took their major holiday in Cornwall. She’s the embodiment of an affluent upper middle-class woman and thinks most poor people either deserve their lot, or are poor because of laziness. She’s never really got to know anyone from a disadvantaged background on a personal level. Instead she’s proud of her snobbery – calling it ‘positively bigoted’. They’ve got private health insurance, every one of their family members and anyone who uses the National Health Service only does so out of choice. Like Mark, she’s nearly 40 years old, but unlike Mark, she lives in her own house in Berkshire – worth £2million. She has a husband (a Scion of a prominent family that owns a billion pound Real Estate empire) and two adorable kids, both boys. Virginia runs her own business which employs 12 people full-time, but it goes without saying that her parents gave her over £400,000 as Capital, and plenty of help and assistance, to enable her to launch her business. Lucky for her, she’s worked hard to make it into a success. Virginia takes at least 3 long holidays a year, (skiing, in the sun, or visiting a part of the world she’s not previously seen before) on top of all the short breaks she squeezes into weekends and long weekends, and as such she relies heavily on her business’ manager – another woman who has a background that in some respects is similar to that of Mark. Virginia treats her staff well, and whenever she can, she gives money to charitable causes, especially those supported by some of her friends and family, or which are connected to someone she knows. She’s passionate about women empowerment and entrepreneurship, and sees the wealth gap as a necessary ‘motivation factor’. She wants to grow her business into a £20million plus turnover company and with her networks and hard-work, is on course to achieving such a goal within a few years. She’s never been to an anti-government demonstration.

~ * ~ * ~ * ~

Mark and Virginia are not as far-fetched a character as they may seem to some. Infact they are based on real pople, obviously with some details changed, to protect their persons. And if the real Mark and Virginia saw this article, they’d recognise themselves, and they’d know I know a lot more about their lives.

There are many people who are worse-off than Mark, but equally, there are many people who are better-off than Virginia. But I don’t think inequality can be overcome without getting people from what could be described as divergent backgrounds to understand each other.

So, how do you get people from such very different backgrounds to understand each other? To really get each other? Is it fair for example to claim hard work pays when so many people are unable of overcome hardship? Is the argument for wealth redistribution really valid when there are many hard-working rich people who have worked hard to grow and maintain their wealth? Will prosperity and wealth always largely depend on who you know?

Since on a practical level the wealth of your parents (and their parents) can help, has helped, and will help make a child’s own wealth, how do you help those people whose parent’s never had any considerable amount of wealth (or were poor)? Is it really honest to say people should know their place, and be ‘content’ with what they have – when so many people inherited what they own?

I find it as equally unconvincing to demand wealth redistribution, as is to say poor people deserve to be poor. Because with wealth redistribution, where do you draw the line? Do you measure what the father had, or what the grandfather owned, or what the great grandparents owned? Where do you draw the line? What about if there are no records? Further, with poor people, there are too many different sets of circumstances that cause poverty, and to dismiss it all as down to laziness is rather shallow, and very unfair – especially to those affected by circumstances beyond their control.

But ultimately, I don’t think making one group of people angry or bitter will have the desired effect of making the world a better less unequal place. In fact there’s every reason to believe it would have the opposite effect, if not creating a leftist aristocracy ( if such a thing can be said to exist) – where those newly enriched – who it must be assumed will hold political power, become the abusers of those dispossessed.

And nobody I know would want to live in that kind of society.

That’s not to throw water on the idea of a general / common wage, it’s just I think more thought needs to go into such ‘schemes’ before they are proposed as workable.

While I would advocate an end to exploitation – of any kind, and while I know that despite claims to the contrary, it is nigh impossible for the wealthy (with all their networks and family connections) to become poor ( or to become poor to the same level as most poor people. In my view the wealthy can only become less wealthy), I also know it is hard to convince someone who has given-up on a concept such as prosperity (or ‘financial security’) to try something different in pursuit of such a concept, especially if such a person has a warped attitude towards wealth and believes the rich are the devils.

Here, a disclaimer is necessary: There are some nasty wealthy people who want to see the world burn, just as there are many poor lazy people. But generalisations (i.e. all rich people want poor people to die…or all poor people are lazy) will fail to explain why poor women in countries such as Malawi wake up early in the morning, in the cold, every day, for years and years, to make a fire to prepare food for their families. If all poor people were lazy, they wouldn’t walk miles to fetch water, or venture into the wilderness, where there are wild animals – including poisonous snakes, to collect firewood.

Anyway, without digressing too far, my point is that there has to be some sensible middle ground somewhere…where both wealthy and not-wealthy can relate. And maybe it begins with both Mark and Virginia, getting to know each other better, or getting to know more people in a much worse situation…

poverty1

…or getting to know more people in a much better position??

I don’t know, I’m just thinking out aloud… unfortunately, there are no easy answers with this one.

America’s rotting empire: Billionaires galore and a crumbling infrastructure

This is an article from May 2014 by CJ Werleman, which appeared on Salon.com, which I think is quite interesting, and some of the observations therein probably apply to African countries more than it applies to the US Education system:-

…There is a defined correlation between literacy, numeracy and technology skills with jobs, rising wages and productivity, good health, and even civic participation and political engagement. Inequality of skills is closely correlated to inequality of income. In short, our education system is not meeting the demands of the new global environment, and the outlook is grim,

But the correlation between a strong public education system and social mobility is demonstrated clearly in the OECD report. A 2006 report by Michael A. McDaniel of Virginia Commonwealth University showed that states with higher estimated collective IQ have greater gross state product, citizens with better health, more effective state governments, and less violent crime. In other words, were we to invest more in public education, we’d be instantly more intelligent, healthy, safe, and financially sound….

But the conclusion sums it up best:

…The principal force for convergence [of wealth] — the diffusion of knowledge — is only partly natural and spontaneous. It also depends in large part on educational policies,” writes Thomas Piketty in his 700-page bestseller Capital in the Twenty-First Century. In other words, if we really want to reduce inequality, and if we really want to be a global leader in the 21st century, we need to invest more into our education system, which requires the federal government to ensure the rich and the mega-corporations pay their share…

Zambia gov’t in talks with mining firms over sharing of mineral wealth – Xinhua | English.news.cn

http://news.xinhuanet.com/english/africa/2014-12/31/c_133890430.htm

Ok, so we’ll shut down the mine because of an 8% tax????!
Can you see how absurd that sounds? Are they saying that they make 8% in profit? The huge profits mining companies make (which BTW are wired out of the country) are not fairy distributed in the country that owns the resource,  yet they make it sound as if they are doing Zambians a favour??? The very definition of Greed… in other words,  we’ve got a contract,  our priority is to make as much profit,  we don’t care about the consequences of our tax evasion,  profit shifting or unfair contract terms on Zambia. If we can’t make the maximum possible profit, it’s not worth continuing the operation. 

Let the Canadian mining company leave. Let the Zambian government nationalise the mine, and take control of it. There are many educated people in Zambia,  they can manage. It will give them increased income and will help poor people in Zambia. Let them create a cooperative and provide employment to people who want to help African countries,  unlike wasting time with such leeches who only care for profit…
Also, I wonder whether they would have left if it were the government of Australia for example which increased the taxes. A part of me thinks it’s partly a bias towards African governments who are often bullied into accepting unfair contract terms, to the detriment of their people…

Biko would not vote for Ramphele

….Biko’s prophetic observation from 1972 explains the new South Africa: “This is one country where it would be possible to create a capitalist black society, if whites were intelligent, if the nationalists were intelligent. And that capitalist black society, black middle class, would be very effective … South Africa could succeed in putting across to the world a pretty convincing, integrated picture, with still 70% of the population being underdogs.” …

…Biko’s philosophy, profoundly influenced by radical philosophers such as Frantz Fanon and Paulo Freire, was grounded in the necessity for the oppressed to lead and liberate themselves. Thus, not only were the minds of the oppressed a key site of struggle, but true liberation could only happen with the dismantling of the oppressive institutions of colonialism and apartheid….

….And yet, as Biko predicted at the height of apartheid, replacing the managers creates only the illusion of change: “I think there is no running away from the fact that now in South Africa there is such an ill distribution of wealth that any form of political freedom which doesn’t touch on the proper distribution of wealth will be meaningless,” he said. “If we have a mere change of face of those in governing positions, what is likely to happen is that black people will continue to be poor, and you will see a few blacks filtering through into the so-called bourgeoisie. Our society will be run almost as of yesterday.”

Full article at Biko would not vote for Ramphele  via Mail & Guardian

Similar Links

Global 100 Voices: No 6

My next guest is a good friend who I have known for just over 13 years now. He’s a Malawian businessman who currently is the manager of Phalombe Hardware in Limbe. Mr Ibrahim Nathanie, thank you very much for taking the time to do the 100 Voices interview.

IbrahimNathanie

farmers

  1. As a Malawian, how important is Malawi’s Socio-Economic stability to you and your family?

As a Malawian, Malawi’s socio economic stability is very important. I am a fourth generation Malawian and all my immediate family has been born and bred in Malawi. We have businesses running in Malawi that have recently struggled when dollars were scarce, fuel queues were rife and inflation was high. Things have now stabilised and as a result business is slowly improving. When things are not stable it directly affects how I can provide for my family.

2. After nearly 50 years since independence, what visible progress do you think Malawi has made since independence, and in your view, what pressing challenges remain? In view of those challenges, what do you think is the role of government and the people in tackling those challenges?

Since independence there has been progress in a few areas. For example we have now more graduates in various fields than we had then, more hospitals, more hotels. However, a lot of the progress mentioned has been donor funded.

Our pressing challenge is to try to reduce our dependence on being donor funded. One way this can be made possible is to take advantage of the natural beauty and fertile land we have in Malawi. Government has to improve infrastructure and provide incentives to the tourism industry. Improve airports, improve electricity generation.

ibs      3. As someone who lived(or has lived) outside Malawi for some time, and has been exposed to modern and progressive ideas, what symbols of development in the foreign country in which you lived have had the greatest impact on you, and why?

I studied in London, and a major symbol of development that had an impact on me was the transport facilities. As a student I could catch a bus or train and travel throughout London and not be dependent on anyone.

Another thing I thought was quite impressive was the NHS (Although I know the British people don’t think it is). Although, I have never had to use the service while I was studying; coming from Malawi I found it very impressive that anyone living in the UK has access to free hospital care.

    4.  What lessons do you think Malawians and the Malawian leadership can learn from those ideas?

Malawi and its leaders really need to look at ways to improve our transport sector. We need to improve our rail link and our airports. We need to break the monopoly South African Airways has on the Malawian market. For example if I wanted to fly Johannesburg from Blantyre it would cost me 450,000 MWK (~£859). If I wanted to fly from Johannesburg to London it would cost me the same. Surely government should realise that they need to open up the skies so that there is competition in aviation field and that potential tourists are not priced out of coming to Malawi.

5. When you last returned to Malawi, what struck you the most as the greatest sign of improvement or development since the last time you left?

When I returned to Malawi in 2006 , the greatest sign of improvement was the opening up of banks and businesses in rural trading areas such as Mangochi, Balaka, Dedza, Ntcheu, Mulanje, etc.

“For example how can employees at the National Food Reserve Agency fail to realise that a silo had a leak. If this happened in the UK the guy who was responsible would have resigned. “

    6. What struck you the most as the biggest sign of stagnation or regression?

The fact that I had to use a paper driving licence for a year as Road Traffic had run of cards to print them on. The fact that nobody in the government is being held accountable for wrongs being done. For example how can employees at the National Food Reserve Agency fail to realise that a silo had a leak. If this happened in the UK the guy who was responsible would have resigned.

7.  Malawians will be going to the polls in 2014, to elect a new president. In your view what kind of leader does Malawi NEED, considering the country’s current challenges? And specifically, how should that leader approach the top job in terms of creating sustainable development and foreign reducing aid dependency?

I find the work that Joyce Banda has done in the short time she has been president is commendable. There is now forex in Malawi, no shortage of goods and no fuel queues. My only criticism of her presidency is that she has not taken any active steps to reduce our dependency on foreign aid.

I would vote for Joyce Banda but would advise her to introduce incentives for investors to come and invest in Malawi. Provide incentives for our farmers to add value to their crop before exporting their crop. For example instead of Malawi importing cigarettes we should encourage cigarette companies to come and open manufacturing plants in Malawi.

factory

8.  As you know, Tobacco is Malawi’s biggest source of export revenue. Looking at the problems that have plagued the tobacco industry in recent times, what alternatives do you think Malawi has besides Tobacco, and why are they viable alternatives?

Tourism sector really needs to be exploited, you only have to look at how Zambia and Kenya are benefitting from exposing themselves to the rest of the world. We are blessed with beauty that is unmatched in the world; we however are not blessed with people in power who can see this.

This slideshow requires JavaScript.

They need to build international airports at the lake, and domestic airports dotted along the lake shore. We need to attract tourists who actually spend money in Malawi not just back packers who are looking to get stoned on Malawi Gold (On a side note we could actually legalize the export of marijuana and rake in substantial forex). We need to reduce the cost of coming to Malawi. I gave an example earlier of how expensive it is for us to fly to Johannesburg.

9.   Considering our troubled history with donors and funders such as the IMF and World Bank, most recently when Bingu Wa Mutharika was president, how do you see Malawi progressing from this relationship in view of the criticisms these organisations have received in the media across the world?

To be honest I feel we have already progressed from this relationship. The donors are in love with the donors.

Without a doubt we have to reduce our dependence on the donors as we all know it’s a vicious cycle. It is not in their interest for Malawi to be self-sufficient; as if we were they could not enforce their views and western cultures upon us.

10. We now know that Malawi has some precious minerals, including Uranium, possibly oil and other natural resources. How do you think the present government is doing regarding managing Malawi’s natural resources?

The people in charge in my opinion have done nothing with regards to managing our resources. This is evident in that Paladin got a great deal from the government for our uranium???

The guys in charge have to look at how Zambia is doing with it copper resources, Ghana with its oil and even other European Countries with their natural resources such as Norway to realise we have got it horribly wrong.

11. In your view, can the government do better to manage natural resources? If so, how can it do better?

Yes. Government needs to follow Norway’s example. I have copied an article that I have read recently and feel this is EXACTLY what government needs to do with our resources, in order to manage it sustainably. This article below is copied from “http://www.theglobeandmail.com/report-on-business/economy/canada-competes/what-norway-did-with-its-oil-and-we-didnt/article11959362/

****************************************************************************************

“When oil was discovered in the Norwegian continental shelf in 1969, Norway was very aware of the finite nature of petroleum, and didn’t waste any time legislating policies to manage the new-found resource in a way that would give Norwegians long-term wealth, benefit their entire society and make them competitive beyond just a commodities exporter.
“Norway got the basics right quite early on,” says John Calvert, a political science professor at Simon Fraser University. “They understood what this was about and they put in place public policy that they have benefited so much from.”
This is in contrast to Canada’s free-market approach, he contends, where our government is discouraged from long-term public planning, in favour of allowing the market to determine the pace and scope of development.
“I would argue quite strongly that the Norwegians have done a much better job of managing their [petroleum] resource,” Prof. Calvert says.
While No. 15 on the World Economic Forum’s global competitiveness rankings, Norway is ranked third out of all countries on its macroeconomic environment (up from fourth last year), “driven by windfall oil revenues combined with prudent fiscal management,” according to the Forum.
Before oil was discovered, the Act of 21 June 1963 was already in place for managing the Norwegian continental shelf. This legislation has since been updated several times, most recently in 1996, now considered Norway’s Petroleum Act, which includes protection for fisheries, communities and the environment.
In 1972, the government founded the precursor of Statoil ASA, an integrated petroleum company. (In 2012, Statoil dividends from government shares was $2.4-billion). In the same year, the Norwegian Petroleum Directorate was also established, a government administrative body that has the objective of “creating the greatest possible values for society from the oil and gas activities by means of prudent resource management.”
In 1990, the precursor of the Government Pension Fund – Global (GPFG), a sovereign wealth fund, was established for surplus oil revenues. Today the GPFG is worth more than $700-billion.
While there’s no question that Norway has done well from its oil and gas, unlike many resource-based nations, Norway has invested its petro dollars in such a way as to create and sustain other industries where it is also globally competitive.
The second largest export of Norway is supplies for the petroleum industry, points out Ole Anders Lindseth, the director general of the Ministry of Petroleum and Energy in Norway.
“So the oil and gas activities have rendered more than just revenue for the benefit of the future generations, but has also rendered employment, workplaces and highly skilled industries,” Mr. Lindseth says.
Maximizing the resource is also very important.
Because the government is highly invested, (oil profits are taxed at 78 per cent, and in 2011 tax revenues were $36-billion), it is as interested as oil companies, which want to maximize their profits, in extracting the maximum amount of hydrocarbons from the reservoirs. This has inspired technological advances such as parallel drilling, Mr. Lindseth says.
“The extraction rate in Norway is around 50 per cent, which is extremely high in the world average,” he adds.
Norway has also managed to largely avoid so-called Dutch disease (a decline in other exports due to a strong currency) for two reasons, Mr. Lindseth says. The GPFG wealth fund is largely invested outside Norway by legislation, and the annual maximum withdrawal is 4 per cent. Through these two measures, Norway has avoided hyper-inflation, and has been able to sustain its traditional industries.
In Norway, there’s no industry more traditional than fishing.
“As far back as the 12th century they were already exporting stock fish to places in Europe,” explains Rashid Sumaila, director of the Fisheries Economics Research Unit at the University of British Columbia Fisheries Centre.
Prof. Sumaila spent seven years studying economics in Norway and uses game theory to study fish stocks and ecosystems. Fish don’t heed international borders and his research shows how co-operative behaviour is economically beneficial.
“Ninety per cent of the fish stocks that Norway depends on are shared with other countries. It’s a country that has more co-operation and collaboration with other countries than any other country I know,” Prof. Sumaila says.
“That’s [partly] why they still have their cod and we’ve lost ours,” he adds, pointing out that not only are quotas and illegal fishing heavily monitored, policy in Norway is based on scientific evidence and consideration for the sustainability of the ecosystem as a whole.
Prof. Sumaila cites the recent changes to Canada’s Fisheries Act, as a counter-example: “To protect the habitat, you have to show a direct link between the habitat, the fish and the economy,” he says, adding, “That’s the kind of weakening that the Norwegians don’t do.”
Svein Jentoft is a professor in the faculty of Bioscience, Fisheries and Economics at the University of Tromso. He adds that Norway’s co-operative management style, particularly domestically, has been key to the continued success of the fisheries.
“The management system [for fish stock] is an outcome of the positive, constructive and trustful relationship between the industry on the one hand and the government on the other hand,” Prof. Jentoft says. “They have been able to agree on issues that you and many other countries haven’t been able to, largely because the government has listened to the fishermen.”
However, Prof. Jentoft isn’t on board with all of his government’s policies. He’s concerned about how the quota and licensing system is concentrating wealth and the impact that this will have on fishing communities.
He predicts that Norway’s wild stocks will remain healthy in the foreseeable future and that the aquaculture industry (fish farms), where Norwegians are world leaders, will continue to grow.
In 2009, Norway’s total fish and seafood export was $7.1-billion, $3.8-billion was in aquaculture. By 2011, Norwegian aquaculture exports grew to $4.9-billion. In Canada, total fish and seafood exports in 2011 were $3.6-billion, with approximately one-third from aquaculture.
Norway’s forests are another important natural resource, and its pulp-and-paper industry has many parallels to Canada’s. Both nations are heavy exporters of newsprint. With much less demand since the wide adoption of the Internet and competition from modern mills from emerging markets, both nations have suffered through down-sizing and mill closures over the past decade. Both have been looking for ways to adapt.
The Borregaard pulp and paper mill in Sarpsborg has become one of the world’s most advanced biorefineries. From wood, it creates four main products: specialty cellulose, lignosuphonates, vanillin and ethanol, along with 200 GWh a year of bioenergy.
“You have a diversified portfolio of products,” explains Karin Oyaas, research manager at the Paper and Fibre Research Institute in Trondheim. “The Borregaard mill uses all parts of the wood and they have a variety of products, so if one of the products is priced low for a few years, then maybe some of the other products are priced high.”
She feels this is a key change in direction for the industry in Norway. She doesn’t want to see the industry putting all of its eggs in one basket, as it did with newsprint.
Dr. Oyaas also thinks that rebranding the industry is key to its survival and success in Norway. The forestry industry doesn’t get the same kind of attention as the oil industry, nor does it have the high-tech image. But it is just as high-tech, and it has the bonus of being a renewable resource.
“You can make anything from the forest. You can make the same products that you can make from oil,” explains Dr. Oyaas.”

******************************************************************************************

Malawi-Norway-government-resources-industry-development-world-improve-challenges-export-dependency

12. What is your answer to increasing transparency and eradicating corruption which is plaguing most governments across Africa?

Corruption is prevalent everywhere. It is just more prevalent in Africa. The reason being is that our civil servants e.g. the cops, the guy connecting your water or ESCOM metres are not paid well enough. We need to improve wages.

Consumers also need to change the way we operate. In order to get things “done” we feel we need to bribe. This enables people who do simple things like process your driver’s license or come to inspect your imported goods being offloaded not even being shy about asking for a bribe.

I reckon we need to start with these small steps and then look at the bigger bribes.

prprty

13. Any famous last words?

I manage Phalombe Hardware in Limbe – directly opposite Standard Bank in Limbe. At the moment investing in Malawi by building a house or commercial property is the way to go. We can provide all building materials from the foundation right up to the finishing stages for your house. Please visit us on face book or email us for a quote. Phalombe@africa-online.net

Global 100 Voices is a collection of reflections, views, opinions, ideas and thoughts by Malawians across the world, regarding the past, present and future of Malawi