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Published On: Mon, May 12th, 2014

Issues in the World Economic Forum

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Founder-Executive Chairman, WEF, Professor KlausBy Charles Onunaiju

The dense media hype following the convocation of the World Economic Forum on Africa in Abuja leaves an impression that the yearly round table of world leading business people, political and government figures, and academics is a solution bank to the numerous challenges and problems in Africa in general and Nigeria in particular.

Africa’s economic growth prospects, which are widely considered a top flier have turned the continent into a beautiful bride for world investors and sundry business people.

The forum’s theme of “forging an inclusive growth: creating jobs” was considered apt for Africa, where growth is yet to precipitate any meaningful economic recovery especially in generating jobs for millions of young people.

The social tension created already by the ballooning job market is beginning to manifest in high profile terrorist activities, that gripped the region’s most populous and biggest economy, Nigeria.

The world economic forum for Africa, especially its 24th edition held in Abuja from the 7th to the 9th of May, is heavily glamorized as having the key to unlock Africa’s potentials especially in absorbing the large number of unemployed persons.

Most business and government leaders participating in the forum identified the private sector and flow of enormous foreign investment as the crucial driver of the envisaged economic Eldorado. However, to assess the prospects of this widely held official view, it might be pertinent to examine the background of the world’s most glamorous roundtable.

The first world economic forum was convened in 1971 by the then European economic commission, under the chairmanship of a German-born academic, Mr. Klaus Schwab, who was then a professor of Business policy at the university of Geneva, as European Management Forum (EMF). It was convened essentially as a business strategy session for European leading business firms and corporations to catch up with the latest business practices, especially those of the American practices, whose firms were clearly world leaders. After the first meeting, which the European commission meant as a one event, professor Schwab decided to institute the meeting as a yearly affair, which holds at the Swiss resort of Davos.

From the time of its convocation in the early 1970s, the world has changed, the emergence of Asia tigers, the growing strength of emerging economies all contributed to a shake up of the economic order in the 1970s and even up to 1980s.

Thanks largely to its flexibility, the European management forum which changed its name to the world economic forum in 1987, accommodated these trends and expanded its scope to become a global round table of world leading business leaders, government officials and academics.

In recent times, the forum has opened its platform to Africa, accommodated the surge of mineral-resource fuelled growth in the region. From an originally business development and strategy session to, the Forum is now a global resource and policy engine to debate and capture world most crucial economic trends and incorporate it into policies, practices and planning.

The theme of the latest meeting held in Abuja, “forging inclusive growth: creating jobs”, came particularly at a time when the much famed growth in Africa is yet to translate into a general improvement in the living standard of the majority of the population.

Africa’s mineral-resource growth would have to require a strong democratic state to interprete growth into a roadmap of development strategy. A strong state, for the avoidance of doubt is not necessarily an authoritarian state-a single party or military dictatorship, but a democratic state with a minimum framework of national consensus and legitimacy whose institutions are reasonably above the prebendal manipulations of factional syndicates.

Only such a democratic disciplined state has the capacity to drive growth on a sustainable basis with anchor for development and social inclusion. The mantra of private investment as the engine of growth is the most auspicious economic trend of our time, but the danger remains that under a weak state as in most of Africa, private sector could most likely transmute to a state within a state, with the possibility of defining its vision of profit-making and other particularistic concerns as that of general society.

Only a strong state can secure a germane and enabling environment for private investment to thrive but would also rein-in, the excesses of private sector and maximize its activities for the benefit of the larger society. A private sector untamed by a strong state with a bolder vision for the larger society could create a bitterly divided and unequal society, brimming with social exclusion and its consequences like the rise of several anti-social behaviours, crimes whose most bitter expression is terrorism.

Africa’s growth prospects as succinctly captured by the just concluded economic forum is bright but to turn growth into fruits of mass prosperity is the strategy of national states and the co-ordinated efforts of regional organizations especially the African Union . Africa should not be complacent and contended with growth.

The experience of South America in the 1970s and 80s showed similar trajectory of growth fuelled by industrialization but such growth never fully translated into development and the consequence was left wing politics and armed insurgency.

Regrettably, Africa’s similar malaise have not fuelled left wing insurgence and politics but has led to extremist and purposeless violence inspired by nihilist interpretation of religion by such groups as the Lords Resistance Army (LRA) in Uganda and the Boko Haram in Nigeria, just to name a few. Growth is an essentially narrow economic phenomenon that needed enormous and bold political will to drive into tangible material benefit and therefore, while the private sector activities can drive growth, its nature, structure and operations is not necessarily conducive to the more strategic agenda of development.

In South America, in the 1980s, the critical lacuna of its growth without development was the massive social exclusion and dis-connection that led some radical clergy to re-interpret the gospel to accommodate left wing politics and insurgency in the popular liberation theology, though, frowned by the catholic establishment in the Vatican. A most formidable example of the then glaring hiatus between the official gospel and the currents of radical liberation theology was the Columbian priest, father Camilo Torres, who abandoned the priestly cassock to join the left wing guerrillas with a gun. He was shortly killed but his example resonated in the region as another folk hero in the revolutionary tradition, following in the steps of iconoclastic Argentine-born Ernesto ‘Che’ Guevara.

If Africa’s growth prospect in the contemporary times is not to be fritted away, reminiscent of South America in the 1980s, a deliberate policy of social inclusion and popular participation will have to follow.

It is interesting and note worthy that only such states in Africa now, characterized as developmental states-Rwanda, Ethiopia and Eritrea are taping from growth and engendering social inclusion.

The experience of South America in latter tapping from growth to engender social inclusion and development from the building of a strong, independent and democratic state would be helpful.

The workers party in Brazil under former president Lula, pulled more than 30 million people from absolute poverty in a period of ten years even as Brazil’s famed industrialization in the 1970s, under a neo-dependent and weak state only spawned social inequality and conflicts.

The world economic forum, a public relation platform for the global neo-liberal establishment, does not hold any absolute key to unlock world prosperity but its perspectives are however, not to be dismissed lightly, as it offers profoundly informed insights to global economic trends and practices.

Onunaiju is a journalist based in Abuja.

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