Pictures and Words in Practical Economics

Picture this: The Chidweya is a Malawian first in the aeronautics export sector. And it is doing roaring business around the world. The Chidweya is an ultrasonic airplane—designed on the ‘chidude’ principle—that has broken all supreme-sonic records by flying between Lilongwe and London in the blink of an eye! President Obama and his Chinese counterpart are reportedly keen to travel on the newly launched Malawian Chidude Airways—shortened ‘Chidweya’—and there are rumors they may place orders—in their hundreds—for this airplane. Finally, forex in bucket loads!

Manufactured in a brand new factory somewhere in the middle of Malawi—state laws forbid me saying exactly where: because since flight testing, global spies, governments and national airlines have been making a beeline to Malawi. Our hotels—recently suffering 60% vacancy rates—are reportedly doing ‘kutapa kutaya’ business; which is an aberation really given with the Chidweya foreign visitors to Malawi can literary come and go on the same day. But tentative research suggests most visitors are staying on to perform one or two ‘Aunt Tiwo and Chimbalanga’ escapades. We really ought to market that aspect strongly too!

Did you picture that? Words, words, words just to describe the Chidweya. Why didn’t I just draw you a Chidweya picture? There is a popular observation that a ‘picture replaces a thousand words’ and sometimes words can actually distort reality. I want now to use that to demonstrate what is happening around this country of ours in terms of economics and related social development.

The diagram below is, in fact, the popular three-part ‘value-chain’ that everyone in Malawi—drunk or otherwise—is finding quite popular to mouth about! Words, terms and pictures! However, in this blog I will deal with the Import Substitution Industrialization [ISI] value chain and the plethora of terminologies and mis-policies it has spawned.

We inherited the ISI model from Dr. Hastings Kamuzu Banda [aka Kamuzu] when he decided, in 1964, this would be the means to our ‘strategic independence’. Back then Kamuzu reasoned—to a lot of ululation [for ‘kicking out Roy Welensky and his British cousins’]—the more we manufactured the more politically independent we would become. Note, I did not say what was to be ‘manufactured’, did I? Neither did he see the subtle diffrence!

The ISI model was not as novel as Kamuzu would have us believe. Neither had it been properly tested elsewhere. However—when it did rounds in State Houses of the day—it was also called the ‘Take off’ or ‘Catch Up’ model. All the more reason a decent man should be worried with a model that comes packaged in such simplistic names!

But not Kamuzu. He was grandiosely convinced that through local industrialization—at Makata and Kanengo—Malawi would ‘take off’ and ‘catch up’ with Britain. Then, it would be payback time to the British for incarcerating him at Gweru! Besides, ‘take off’ had other ulterior attractions to Kamuzu. More later.

But, ISI model had requirements and caveats that Kamuzu—the ‘one-eyed-philosopher-king-among-the-blind’—chose to ignore. For instance, ISI industrialization—as applied to Japan—that bare piece of rock, prone to earthquakes and Tsunamis—seemed to work quite efficiently. So Kamuzu’s ‘one-eyed mind’ reasoned imported critical inputs would arrive from abroad, get manufactured into finished products and then sent back into the global market! That was his definition of  value-addition. Indeed, some clever oaks—‘talking faces’ on radio, TV and media in Malawi—are currently calling it by the same name. Warning to you 'false prophets' on our 'lies box', we all cheru!

But, Kamuzu's ISI model needed ‘forex’. Silly! So, where do you start? Manufacture finished goods and sell them and acquire more inputs? A typical ‘chicken-before-egg’ assumption. Or—and this is the reality check—you take the egg-before-chicken approach: i.e. find forex for inputs, manufacture and then sell to complete the cycle. The latter approach needs a prior egg nest though. In 1964, Malawi—mineral challenged as it was assumed—simply did not have a hidden penny box somewhere. So, anyway, the one-eyed philosopher king decided: ‘Chicken-first!’

It was messed up logic which is why—when reason intervened—Kamuzu would occassionally say, in public speeches: ‘Malawi must develop its agriculture so that we can process some of these agricultural commodities into finished products’.

And the guy who used to translate such confused ‘Kamuzuist Economics’ into Chichewa would further garbled the message. And we all ululated in confused exhilaration! But here is the catch...

Generally, Kamuzu didn’t mean ‘we’ [all Malawians] were required to lay the eggs for his ‘industrial dream’ in Makata etc to be ‘processed’ [hatched] into real chickens! Instead, Kamuzu utterances were confusingly famous for the three pillars for ‘His’ people—the villagers by the way. These were: food, clothes and shelter. Just yesterday a ‘lies box face’ said this is just what we need in the forthcoming cabinet appointments!

Yet, in the same breathe, Kamuzu was infamous for the Special Crops Act of 1972. This stopped peasant farmers—outside his established tobacco estates—from growing tobacco, sugar and tea. He practically stopped 400,000 Malawian peasants from participating in processes of delivering the valuable eggs he needed for his ‘industrial chicken’ to succeed! Indeed—even when it became obvious that the ‘trickle down’ associated with ‘take off’ was not happening—Kamuzu remained ‘nga-nga-nga’ tied his unworkable chicken-before-egg approach because for an unexplainable reason ‘His’ people were to seriously remain outside his grand design of developing Malawi.

In the above diagram you can see that the rural poor in their homesteads, villages and periodic markets. That's where he wanted them; generally enjoying the fruits of susbsistence production and traditional dances after the rain season. If the poor worked hard, it was to find Kamuzu’s ‘poll tax’ just so we would avoid being chased around by his ‘andumiles’!

But, it got worse over time. Once we—especially those in cities—tasted our tickey’s worth of imported soft drink we would not let go. So, more soft drink inputs were brought into the country and foreign salesmen—once back home—announced to packed board meeting: ‘They’re barefooted but, boy, do they lap up our stuff!’

The vicious circle we live in today—import, feed and import with no exports—had begun in earnest. Just this month Coca-cola was off the shelves. Blame it on the confused white supply chain manager in that organization but the truth remains forex to import the concentrates had run dry. Meantime, Kamuzu really needed to rule Malawi for over thirty years hence his desperation to make his ISI ‘chicken-without-eggs’ model work. So, he adopted the qualities of a chameleon changing his tune as he saw fit. ISI came to mean: ‘autarky’ guarantees ‘self-sufficiency’. In reality, autarky sought to isolate Malawi—you and me—from the prying eyes of foreigners. So ring-fenced, Kamuzu—‘the one-eyed philosopher-king-gone-policy-blind’—could lead his ’blind’ sheep into oblivion. It is at this point he perfected his double-speak approaches—making him, next to Hitler’s Goebbels, the best propagandist to walk the shores of Malawi!

But down in the vilages, a bottle of imported soft drink was enough to have most of us resolve, there and there, that 'in town was where we would die'. I practically went to school so I could write the rubbish you are now reading. And live in a city as the reward for my sweat. In the diagram above, We still live in Kamuzu's district centers, rural growth centers, secondary towns and his ISI cities. Not a lot has changed since the guy departed! But, because this was not Communist Russia where one needed gate passes to live anywhere, also came to town my other unschooled friends. Soon, in droves we arrived into Kamuzu’s ISI cities—including his brand new capital city in Lilongwe. The cities all had one thing in common: directionless import-driven citadels, lacking in a veritable economic engine to sustain them.

But, the arrival of country bumpkins—messing up the central tenant of his ‘Take off’ ISI model—didn’t much please Kamuzu. Remember, the ISI model was built on the ‘spearhead’ principle: only the spear's head—not the shaft—was supposed to strike the victim dead. In creating the critical ISI capital furniture, only a few and select members of Kamuzu’s ‘Malawian community’ were required. Kamuzu’s spearhead policies—never mind the Goebbels tactics—were very specific: 'the majority mitu bhi-i-i! should be kept in the countryside.

ISI was colonialism again. But for a bit of ‘thangata’ here and there, the British colonial system had really not had much else to do with Malawian villagers. Neither was Kamuzu’s Capitalist model. It was about and for the urban Malawians. It was at best anti-people, at worst un-people. In the processes it took away opportunities for ‘real Malawians’ to fully participate in processes of national development.

Otherwise, how do you explain away: the Special Crops Act 1972 or the 'total punishment of rural Malawi' through the logic that removed Asian traders from rural Malawi in 1972? Was it not to deny the rural poor easy access to goods and services? The subsequent rural urbanization excuses called ‘National Rural Development Program [NRDP], launched in 1981, and its sister Rural Growth Centers [RGCs] Program, launched in 1984, were part admissions of failure—or is it guilt—about ISI!

In the cities, Kamuzu favored his so called ‘emerging middle class’ to realize his funnel-and-bottleneck ‘take off/ catch up’ policies. You and I—especially you and I who made it to Kamuzu’s University campuses—became his ‘pampered’ emerging middle class. We were Kamuzu’s ISI canon-fodder. We all internalized his ISI language. To this day it oozes out of our ears.

Just go back to the diagram above and speak aloud the terms in there. What is 'subsistence', 'traditional', 'rural', 'urban', 'dormitory towns', 'satellite towns', 'self-sufficiency', 'inputs' etc? These terms—some pretty meaningless [and colonial too] and some coined very recently too—are pretty innocuous. Yet they are part of our everyday vocabulary—so familiar they have no alternative meanings. Trully speaking they have some sort of meaning... Oh! Watch my subsequent blogs when I will unpack these. Meantime, are you not Kamuzu’s ‘middle class’ henchman against the Malawian rural and poor? How many times do you use the terms and concepts as your streetwise speak and proxies for national development policies. Would you like to abandon them and look stupid to your neighbors—at worst lose your job and all the ISI benefits Kamuzu bestowed on you? You dare not!

Henchmen and tools for Kamuzu? Remember, Kamuzu did not single handedly design and implement ISI policies. We were there and are still here—post 2007 and the MGDS—when we were supposed to abandon ISI. We are still championing these ‘useless’ terminology policies—dividing our society into rural and urban, rich and poor; even though, by comparison, what we consider ‘rich’ doesn’t even begin to shake the Richter scales of wealth elsewhere.

Makes you wonder: is life absolute or relative?

While we feverishly work to sort out the "comments' problem, please feel free to contact the author at zivaiclaude@gmail.com